May 17/”MEMO-GATE” CRASHES MARKETS ALL OVER THE GLOBE/GOLD UP $22.00 AND SILVER IS UP 15 CENTS/FOR THE 13TH CONSECUTIVE TRADING DAY, THE AMOUNT OF SILVER STANDING AT THE COMEX INCREASES/CHANCES FOR A RATE HIKE IN JUNE TUMBLES/

GOLD: $1236.75  UP $22.00

Silver: $16.92  UP 15  cent(s)

Closing access prices:

Gold $1260.00

silver: $16.90

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: $1254.42 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1242.15

PREMIUM FIRST FIX:  $12.27

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

SECOND SHANGHAI GOLD FIX: $1253.43

NY GOLD PRICE AT THE EXACT SAME TIME: 1243.90

Premium of Shanghai 2nd fix/NY:$9.53

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

LONDON FIRST GOLD FIX:  5:30 am est  $1244.60

NY PRICING AT THE EXACT SAME TIME: $1244.60

LONDON SECOND GOLD FIX  10 AM: $1234.20

NY PRICING AT THE EXACT SAME TIME. $1234.15

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  0 NOTICE(S) FOR 0 OZ. 

 TOTAL NOTICES SO FAR: 491 FOR 49100 OZ    (1.5272 TONNES)

For silver:

For silver: MAY

28 NOTICES FILED TODAY FOR 140,000  OZ/

Total number of notices filed so far this month: 4467 for 22,335,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

For 13 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing; tonight 22.75 million oz. It looks to me that sovereign China wants its silver back.

 

Gold had a stellar day up 22.00 dollars but silver again was paper hacked by the criminals and it had only a 15 cent gain. The reason for the gold/silver gain was “MEMO GATE” and you will find copious stories alarming investors….

 

Let us have a look at the data for today

.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

In silver, the total open interest  FELL  BY a TINY 100  contracts DOWN to 215,127  DESPITE THE HUGE   RISE IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (UP  20 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.075 BILLION TO BE EXACT or 154% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 28 NOTICE(S) FOR 140,000  OZ OF SILVER

In gold, the total comex gold FELL BY 3.487  contracts WITH THE RISE IN THE PRICE OF GOLD ($6.10 with YESTERDAY’S TRADING). The total gold OI stands at 435.021 contracts. WE MUST HAVE HAD CONSIDERABLE BANKER SHORT COVERING YESTERDAY.

we had 0 notice(s) filed upon for NIL oz of gold.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD:

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

Inventory rests tonight: 851.89 tonnes

.

SLV

Today: no change in inventory/

THE SLV Inventory rests at: 342.395 million oz

 

end

.

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

1. Today, we had the open interest in silver FELL BY 100 contracts DOWN TO 215,127, (AND NOW CLOSER TO  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE GOOD SIZED  RISE IN PRICE FOR SILVER ON YESTERDAY  (15 CENTS).

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 8.52 POINTS OR .27%  OR / /Hang Sang CLOSED DOWN 42.31 POINTS OR 0.17% .  The Nikkei closed DOWN 104.94 POINTS OR 0.53%/Australia’s all ordinaires  CLOSED DOWN  1.04%/Chinese yuan (ONSHORE) closed UP at 6.8885/Oil DOWN to 48.78 dollars per barrel for WTI and 51.91 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED    ..Offshore yuan trades  6.8777 yuan to the dollar vs 6.8885 for onshore yuan. NOW  THE OFFSHORE IS MUCH  STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE  WEAKER DOLLAR. CHINA IS A MUCH HAPPIER THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

EU/Turkey/Greece

The EU issues a stern warning to Turkey after 141 Greek airspace violations in one day

( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

i)very popular Michael Snyder comments that the top 25 USA banks have over 222 trillion dollars of derivative exposure.

( Michael Snyder)
ii)The following should give us a clear picture of the global economy:

all 3 major auto markets in the world contract year over year together for the first time since Jan 2009

( zero hedge)

7. OIL ISSUES

8. EMERGING MARKETS

9.   PHYSICAL MARKETS

i)Gold trading early last night:
( zero hedge)
ii)Gold trading this morning:( zerohedge)
iii)A good analysis on silver
( Steve St Angelo/SRSRocco report)
iv)Zimbabwe has the right idea except one problem:  the country has sold all of its official gold and produces only 7 tonnes a year. The former Rhodesia was a huge producer of gold bringing out 100 tonnes per year.   They seek to restore its currency with gold backing!

( the Herald/Zimbabwe/GATA)

v)This was unknown to most of us.  Central bankers conspired in 1979 to create another market rigging “gold pool” to keep gold prices in check

(courtesy Ronan Manly/Bullionstar/GATA)

vi)Chris Powell comments on this explosive finding:

( Chris Powell/GATA)

 

10. USA stories

i)Trading early last night: RISK IS OFF AS ALL MARKETS AROUND THE GLOBE FALTER: USA/YEN DROPS ON MEMOGATE

( ZERO HEDGE)

i b) Banks battered

(zerohedge)

ic)Chances for a June rate hike tumbles;

( zero hedge)

No doubt that this memo was leaked by Comey in which Trump supposedly asks Comey to end the Flynn Investigation

( zerohedge)

iii)Jason Chaffetz demands the FBI hand over all of Comey’s notes, memos and recordings related to Donald Trmp

( zero hedge)

 

iiib  1.  the FBI for all memos correspondence etc of Comey with Obama, Trump, Sessions, Lynch Rosenstein Boente and Yates.

Let us head over to the comex:

The total gold comex open interest FELL BY 3487 CONTRACTS DOWN to an OI level of 435,021 WITH THE  RISE IN THE PRICE OF GOLD ( $6.10 with YESTERDAY’S trading).   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 1 contract(s) LOWERING TO  32. We had 8 notices filed yesterday so we GAINED 7 contracts or an additional 700 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 8754 contracts DOWN to 204,229.  The non active July contract GAINED another 17 contracts to stand at 768 contracts. The next big active month is August and here the OI gained 5,263 contracts up to 132,767.

To give you a good idea of the devastation of open interest contracts, last year on May 16 2016 we had at this exact time:    338,908 contracts of JUNE 2016 CONTRACTS OPEN.( compared to JUNE 2017: 204,229)

For the June 2016 contract month initially 48.189 tonnes stood for delivery. Eventually a huge 48.552 tonnes stood.

We had 0 notice(s) filed upon today for NIL oz

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
And now for the wild silver comex results.  Total silver OI FELL BY 100 contracts FROM  215,227 DOWN TO 215,127 WITH YESTERDAY’S 15 CENT PRICE GAIN.  IT SURE LOOKS LIKE OUR BANKERS HAVE CAPITULATED AS THEY HAVE STARTED TO COVER THEIR SHORTS
Below is a little background on the EFP contracts  initiated by our bankers:
(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 their 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 GAINED 28 contracts RISING TO 111 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 0 notices filed yesterday, so we gained another 28 notices or an additional 140,000 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 13 straight days of the delivery cycle starting immediately after first day notice. No wonder JPMorgan is getting ready for a physical attack at the comex. I have never seen anything like this!!

The non active June contract LOST 174 contracts to stand at 918. The next big active month will be July and here the OI  LOST 289 contracts up to 163,265.

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 28 notice(s) filed for 140,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 361,708 contracts which is excellent

Yesterday’s confirmed volume was 228,347 contracts  which is  good.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 17/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
nil  oz
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
0 notice(s)
NIL OZ
No of oz to be served (notices)
32 contracts
3200 oz
Total monthly oz gold served (contracts) so far this month
491 notices
49100 oz
1.5272 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   214,922.2 oz
Today we HAD  0 kilobar transaction(s)/
total dealer deposits: nil oz
We had NIL dealer withdrawals:
total dealer withdrawals:  NIL oz
we had no dealer deposits:
total dealer deposits:  nil oz
we had 0  customer deposit(s):
total customer deposits; nil  oz
We had 0 customer withdrawal(s)
total customer withdrawal: 9998.95 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 0 contract(s)  of which 0 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the initial total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (491) x 100 oz or 49100 oz, to which we add the difference between the open interest for the front month of MAY (33 contracts) minus the number of notices served upon today (0) x 100 oz per contract equals 52,300 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 (491) x 100 oz  or ounces + {(32)OI for the front month  minus the number of  notices served upon today (0) x 100 oz which equals 52,300 oz standing in this non active delivery month of MAY  (1.6267 tonnes).  We gained 7 contracts or an additional 700 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.
 
 
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
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/  1.6267 TONNES
total for the 17 months;  249.545 tonnes
average 14.737 tonnes per month
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Total dealer inventory 877,817.092 or 27.303 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,762,195.982 or 272.54 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 272.54 tonnes for a  loss of 30  tonnes over that period.  Since August 8/2016 we have lost 81 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 12 MONTHS  81 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
MAY INITIAL standings
 May 17. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
75,037.410 oz
Scotia
CNT
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 506,821.06  oz
Scotia
No of oz served today (contracts)
 28 CONTRACT(S)
(140,000 OZ)
No of oz to be served (notices)
83 contracts
( 415,000 oz)
Total monthly oz silver served (contracts) 4467 contracts (22,335,000 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  5,917,684.3 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 2 customer withdrawal(s):
i) Out of Scotia: 35,092.200 oz
ii) Out of CNT:  39,945.210 oz
TOTAL CUSTOMER WITHDRAWALS: 75,037.410  oz
 We had 1 Customer deposits:
i) Into Scotia:506,821.06
***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  506,821.06 oz
 
 we had 2 adjustment(s)
i) out of CNT: 377,950.110 oz leaves the dealer and enters the customer account of CNT
ii) out of Scotia; 35,092.20 oz leaves the dealer and enters the customer account of Scotia
The total number of notices filed today for the MAY. contract month is represented by 28 contract(s) for 140,000 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 4467 x 5,000 oz  = 22,335,000 oz to which we add the difference between the open interest for the front month of MAY (111) and the number of notices served upon today (28) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  4467(notices served so far)x 5000 oz  + OI for front month of APRIL.(111 ) -number of notices served upon today (28)x 5000 oz  equals  22,750,000 oz  of silver standing for the MAY contract month.
We actually gained another 28 contracts or an additional 140,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 22.75 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 13 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 110,783 which is gigantic
Yesterday’s  confirmed volume was 76,072 contracts which is  huge
TODAY’S ESTIMATED VOLUME OF 110,783 CONTRACTS EQUATES TO 550 MILLION OZ OF SILVER OR 79% 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:  33.538 million (close to record low inventory  
Total number of dealer and customer silver:   200.438 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 5.6 percent to NAV usa funds and Negative 5.5% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.1%
Percentage of fund in silver:37.8%
cash .+0.1%( May 17/2017) 
 
2. Sprott silver fund (PSLV): Premium RISES TO   +.68%!!!! NAV (May 17/2017) 
3. Sprott gold fund (PHYS): premium to NAV FALLS to -0.76% to NAV  (May 17/2017 )
Note: Sprott silver trust back  into POSITIVE territory at +.68% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.76%/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 17/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 16./ no change in the GLD inventory/inventory rests at 851.89 tonnes

May 15/no change in the GLD inventory/inventory rests at 851.89 tonnes

May 12/no changes in GLD/inventory rests at 851.89 tonnes

may 11/no changes in GLD inventory/inventory rests at 851.89 tonnes

May 10/no changes in GLD inventory/inventory rests at 851.89 tonnes/

May 9/a withdrawal of 1.19 tonnes from the GLD/Inventory rests tonight at 851.89 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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
May 17 /2017/ Inventory rests tonight at 851.89 tonnes
*IN LAST 153 TRADING DAYS: 96.24 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 96 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 17/no change in silver inventory at the SLV/Inventory rests at 342.395 million oz/

May 16./we had a huge addition of 1.416 million oz of silver into the SLV/inventory rests at 342.395 million oz

May 15/no changes in silver inventory/inventory rests at 340.979 million oz/

May 12/a huge change in silver: a deposit of 2.369 million oz/inventory rests at 340.979 million oz

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 17.2017: Inventory 342.395  million oz
 end

Major gold/silver trading/commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Gold Spikes On Heavy Volume On Trump, U.S. Political “Mess”

Gold prices rose for a fifth day to a two week high in early European trading on increasing U.S. political risk pertaining to the Trump Presidency and the increasing risk of impeachment and a U.S. political civil war.

Stocks and U.S. Treasury bond yields tumbled as investors moved cash into safe-haven gold amid a global market selloff.

Gold moved higher on very heavy volume yesterday and is now 1.5% higher for the week. Over one billion dollars of gold futures were bought in late afternoon trade yesterday contributing to gold’s fifth day of gains, its best run since April.

Gold’s gains may have been due to “memo gate” and allegations that President Donald Trump sought to shut down a federal investigation linked to his former National Security Adviser Michael Flynn.

Gold prices rose more than $6 an ounce in early London trading today to change hands at $1,247 per ounce, the highest level since May 3.

Concerns about political turmoil in the U.S. and poor U.S. housing data heightened risk aversion which is leading to dollar weakness.

The weaker than expected housing data added to recent negative economic data that is raising doubts over how many times the Federal Reserve will be able to raise interest rates this year.

The dollar traded at the lowest levels since the November elections against a basket of other fiat currencies after it was reported that President Trump asked former FBI Director James Comey to drop his probe into Flynn. Flynn was forced to resign on Feb. 13 amid questions over his contact with the Russian ambassador to the United States and discussions of U.S. sanctions.

The political mess in the U.S. is finally impacting U.S. and global markets and ‘Trumpquake’ should lead to a new bout of risk aversion resulting in a reversal of recent trends and gold prices eking out gains again.

Related Content

Ransonware Attacks Show Vulnerability of Digital Financial System

Cyber Attacks Growing In Frequency – Entire Financial System Is Vulnerable

Cyber Fraud At SWIFT – $81 Million Stolen From Central Bank

“Cyber Security Loophole”- Bank Hackers “Unfettered Access” To Accounts

Number One Reason To Buy Gold and Silver Is “Cyber Financial Warfare”

News and Commentary

Gold Spikes On Heavy Volume As ‘Memo-Gate’ Fears Spread (ZeroHedge.com)

Gold hits 2-wk high on Trump concerns, weaker US housing data (Reuters.com)

U.S. Stocks Fluctuate Near Records as Dollar Drops (Bloomberg.com)

London suffers the fastest fall in house prices of anywhere in the UK (Standard.co.uk)

Men who stole $60,000 worth of gold while having a barbecue hit with $5,000 fines (ABC.net.au)

Caution Reigns as U.S. Politics Takes Center Stage (Bloomberg.com)

You’d Think We’d Be A Little More Worried… (DollarCollapse.com)

Just A Quick Reminder: The Federal Reserve Is Almost Insolvent. (ValueWalk.com)

Zimbabwe contemplates restoring its own currency with gold backing (Herald.co.zw)

Cyber attacks positive for bitcoin in long term but may burst crypto “mini bubble” (MoneyWeek.com)

end
Gold trading early last night:
(courtesy zero hedge)

Gold Spikes On Heavy Volume As ‘Memo-Gate’ Fears Spread

While the dollar is treading water in aftermath of NYT’s ‘memo-gate’ story…

 

Another safe-haven is heavily bid. Over one billion dollars notional just pushed through gold futures, lifting the barbarous relic to 2-week highs…

 

US Equity futures are fading…

At the very least the view is that Trump’s economic policies will be delayed over this, and the dollar is being sold,” said Tomoichiro Kubota, an analyst at Matsui Securities Co. in Tokyo. “At the moment there’s a strong sense of investors trying to gauge how far this will go. It’s a situation where you can’t completely rule out the possibility of impeachment down the road, so it’s difficult for investors to buy.”

Gold Nears $1250, Breaks Key Technical Resistance As Trump-Turmoil Safe-Haven Buying Escalates

Gold’s initial spike after the NYT story last night has extended this morning with another heavy volume buying spike lifting the precious metal back near the $1250 level (and well above a key technical support level).

 

 

Breaking above its 50-day moving average

 

Silver is also running higher for the sixth straight day…

A good analysis on silver

(courtesy Steve St Angelo/SRSRocco report)

Zimbabwe has the right idea except one problem:  the country has sold all of its official gold and produces only 7 tonnes a year. The former Rhodesia was a huge producer of gold bringing out 100 tonnes per year.   They seek to restore its currency with gold backing!

(courtesy the Herald/Zimbabwe)

Zimbabwe contemplates restoring its own currency with gold backing

Section:

At least until the International Monetary Fund finds out.

* * *

Gold Reserves to Anchor Local Currency

By Walter Nyamukondiwa
The Herald, Harare, Zimbabwe
Tuesday, May 16, 2017

The government is working on a plan to establish a gold reserve to anchor the introduction of a local currency when the right time comes for the return to the Zimbabwe dollar, it has been learnt.

This comes at a time when the country is grappling with cash shortages and economists believe that the issuance of a gold-backed local currency would help stimulate economic activity.

Modeled around the $200 million Afreximback facility, which is backing the current bond notes in circulation, the local currency, economists believe, will ease liquidity challenges and stimulate aggregate demand.

Plans to create a gold reserve involve investing in the efficient operations of the government’s gold-mining firms, including the Sabi, Elvington, and Jena gold mines. …

Mines and Mining Development Minister Walter Chidhakwa said the gold reserve would complement the Sovereign Wealth Fund, where a set of minerals would be reserved for future generations.

The legal processes that will give effect to the fund are still before Parliament.

“Naturally, in order to support the introduction of your own currency, you want to have mineral resources that you hold in reserve,” said Chidhakwa. …

Once all the companies owned by the government start operating, Chidhakwa said, they would be required to set aside part of their gold output to be kept as reserve by the Reserve Bank of Zimbabwe. …

Confederations of Zimbabwe Industries President Busisa Moyo said a gold-backed currency was a sound economic intervention. “If it is along the lines of the Afreximbank facility, then it will give a lot of credibility to the currency because there is depressed demand for goods and products, as people have no cash,” said Moyo. …

… For the remainder of the report:

http://www.herald.co.zw/gold-reserves-to-anchor-local-currency/

END

This was unknown to most of us.  Central bankers conspired in 1979 to create another market rigging “gold pool” to keep gold prices in check

(courtesy Ronan Manly/Bullionstar)

Ronan Manly: Central bankers conspired in 1979 for another market-rigging gold pool

Section:

12:51p ET Tuesday, May 16, 2017

Dear Friend of GATA and Gold:

Western central bankers operating through the Bank for International Settlements conspired in 1979 and 1980 to try to create another “gold pool” like the one they operated in London in the 1960s to control gold’s price, according to records published today by gold researcher Ronan Manly at Bullion Star:

https://www.bullionstar.com/blogs/ronan-manly/new-gold-pool-at-the-bis-b…

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

END

Chris Powell comments on this explosive finding:

(courtesy Chris Powell/GATA)

Central banks kept conspiring against gold long after it left the financial system

Section:

10:21p ET Tuesday, May 16, 2017

Dear Friend of GATA and Gold:

The documents from the Bank of England’s archive published today by gold researcher Ronan Manly —

https://www.bullionstar.com/blogs/ronan-manly/new-gold-pool-at-the-bis-b…

— showing an attempt by central bankers in 1979 to create a second “gold pool” to control the price of the monetary metal, may be most important because, while they are 37 years old, they show the central bankers conspiring against the monetary metal long after it was officially removed from the international financial system.
That is, in 1971 the United States revoked convertibility of the dollar to gold for other nations and in 1976 the Jamaica Accords confirmed that currencies were no longer officially tied to gold under the Bretton Woods system. These circumstances continue to prevail today, at least nominally.

But in 1979, the documents show, central bankers still feared gold’s influence on currencies, commodities, and the general price level. A conspirator from the Bank of England wrote of the need of central banks to sell gold “to break the psychology” of a rising gold market market, as they had done during the first gold pool, the London Gold Pool of 1961-68.

Signifying the interest of the United States particularly in breaking the gold price, U.S. Federal Reserve Chairman Paul Volcker is recorded as proposing a central-bank gold-selling operation involving up to 10 percent of the gold reserves of the participating nations.

Saudi Arabia is described as very concerned about the relationship of gold and oil prices and fearful that gold is getting ahead of oil. Central banks are said to have discussed rumors that the United States is secretly selling gold to Saudi Arabia to assuage its concerns that oil was too cheap.

The Bank for International Settlements is described as prepared to function as the gold broker for the major central banks if they decided to undertake a new gold pool, the first having been the London Gold Pool of 1961 to 1968.

Central bankers are recorded as favoring selling gold when it was strong and repurchasing when it was weak, a policy that disappointed the United States, which, predictably enough, wanted the European central banks to sell their gold outright and let it go, presumably to eliminate competition for the U.S. dollar and its hybrid, the Special Drawing Rights of the U.S.-controlled International Monetary Fund, in accordance with longstanding U.S. policy:

http://www.gata.org/node/17361

Later this week Manly will publish more documents about the central bank conspiracy to establish a second gold pool.

Given the secrecy and unaccountability of central bank policy on gold today and the additional documentation compiled by GATA here —

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

— can anyone really believe that central banks have lost interest in gold, that they no longer believe that gold is a mortal threat to their power over the world, and that they no longer do whatever they can to prevent its functioning as a reserve currency in a free market?

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

END

 

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

 
 

1 Chinese yuan vs USA dollar/yuan A LOT STRONGER  6.8885(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES A LOT STRONGER TO ONSHORE AT   6.8777/ Shanghai bourse CLOSED DOWN 8.52 POINTS OR .27%   / HANG SANG CLOSED DOWN 42.31 POINTS OR 0.17% 

2. Nikkei closed DOWN 104.94  POINTS OR 0.53%   /USA: YEN FALLS TO 112.46

3. Europe stocks OPENED ALL IN THE RED        ( /USA dollar index FALLS TO  97.98/Euro UP to 1.1101

3b Japan 10 year bond yield: RISES TO   +.046%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 112.46/ 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::  48.98 and Brent: 51.91

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO  +.42%/Italian 10 yr bond yield DOWN  to 2.193%    

3j Greek 10 year bond yield RISES to  : 5.73% ???  

3k Gold at $1247.10/silver $16.93 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 15/100 in  roubles/dollar) 56.73-

3m oil into the 48 dollar handle for WTI and 51 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 112.46 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  0.9841 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0926 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLS to  +0.42%

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 2.299% early this morning. Thirty year rate  at 2.968% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Trumpquake: Futures Wipe Out Month’s Gains In One Session, VIX Spikes

A risk-off mood dominated the overnight session amid growing concern over the turmoil engulfing the Trump administration, as fresh allegations add to deepening political scandals in Washington, the latest coming from Tuesday’s NYT report citing former FBI director Comey’s memo which raises possibility of obstruction of justice, an impeachable offense. The dollar, already in retreat after a report that the U.S. president shared terrorism intelligence with Russian officials, decline again and the Bloomberg Dollar Spot Index dropped for a sixth day, while the VIX index surged over 10% in early trading.

Still, we can’t help but wonder how long until the BTFD algos emerge from their overnight stupor and send futs back to the green. The reason is that while the move lower in S&P futures does not appear overly dramatic, the 12 point drop has wiped out the past month’s market gains and more importantly, for the first time since his inauguration, a scandal impacting Trump has spilled over into the broader market as the probability of Trump passing virtually any legislation in the foreseeable future now appears virtually non-existent.

The political chaos is finally shifting to markets

This morning Bloomberg agreed with our Twitter-take from last night, writing that “after a protracted period of dormancy, financial markets are beginning to react to developments in Washington in a more unified manner. With stock and bond volatility muted, investors have looked for a clearer reaction to the political din in currency markets. The U.S. currency now sits at its lowest level since the day of Trump’s shock win, a retracement some blame on perceptions his legislative agenda faces deeper challenges.”

And after recently crashing to record lows, and staying below 11 for the longest stretch on record, global volatility appears to be stirring.

The US futures selloff has been broadly in line with major index movements in Europe and Asia. In other assets, T-note futures rally while the Bloomberg Dollar Index slumped for a sixth consecutive day, falling to lowest since November. Meanwhile, over in China the PBOC continues to add liquidity injecting 140 billion yuan with reverse repos, setting the CNY fixing at the strongest level since February. WTI crude drops one percent; iron ore futures gain on hope for an imminent Chinese rebound.

“If he’s preoccupied defending himself and if it goes a lot further, then any hope of his legislative agenda coming to the fore is going to be reduced,” John Stopford, the London-based head of fixed-income at Investec Asset Management Ltd., said in an interview with Bloomberg TV. “Clearly at the margin it’s a negative. At the moment there’s a classic environment for yields to rally a bit further and for the dollar to sell off.”

So far, broadly upbeat global growth has underpinned risky assets and supported the multi-year lows in measures of market volatility. But the retreat in the dollar which has now given up all the gains it made since Trump’s election and a pull-back from record highs for world stocks points to investor unease about this week’s headlines, Reuters writes.

“The Trump issue seems to come in waves, and now we have another wave,” said Hans Peterson, global head of asset allocation, at SEB Investments.

“I have been asked if he is going to be impeached. I think that is the type of discussion some (investors) are having,” Peterson said, pointing out that institutional clients are turning cautious.

Meanwhile, the euro zone economy started the year with robust growth that outstripped that of the United States and set the stage for a strong 2017. “At the moment everyone is focusing on the political relief in Europe and the political unrest in the U.S.,” ING’s senior rates strategist Martin van Vliet said.

This is how SocGen’s Kit Juckes summarizes today’s action”

In ‘market Top Trumps’ the US President trumps just about everything else, at least in the very short term. “Comey memo says Trump asked FBI Chief to drop Flynn probe” is the FT headline on the story doing the damage overnight, though we do also have softer oil prices after the release of strong US inventory data. 10-year Treasury yields are 4bp lower than when markets closed yesterday evening, 10bp lower than they were on Thursday before the US CPI and retail sales data releases. European yields are opening lower too, but the 10year has narrowed to 189bp, and the Treasury/JGB spread to 226bp.

Then there is the Fed: while traders continue to price in two interest rate increases by the Federal Reserve this year, speculation is rising that European counterparts are preparing to withdraw their own stimulus measures. “The only political calibration the Fed has is how much Trumponomics we were going to get that they can’t see yet,” Neil Dwane, global strategist at Allianz Global Investors, said in an interview with Bloomberg TV. Even so, U.S. policymakers “are in the mindset to raise as long as the markets are prepared for it.”

To be sure, pressure on the ECB rose as Eurozone Core CPI jumped to a 3 year high of 1.2%. Inflation ex energy and  food showed notable rise across countries, adding to Draghi’s list of reasons why a taper, and eventual rate hike, appear inevitable.

Looking at global stocks, the Stoxx Europe 600 Index fell 0.3 percent, after ending little changed in the previous session. Futures on the S&P 500 Index fell 0.5 percent, after the underlying gauge on Tuesday touched an all-time high of 2,405.77. The MSCI All-Country World Index fell 0.1 percent from a record, with banks having the biggest impact across all regions.

In commodity markets, safe-haven gold hit a two-week high, climbing 0.6 percent to $1,243.31. The precious metal has risen for five straight days.

Data showing an increase in U.S. crude investors hit oil prices as concerns about oversupply despite efforts by top producers Saudi Arabia and Russia to extend output cuts once again weighed.

The yield on 10-year Treasuries slipped four basis points to 2.29 percent after dropping two basis points Tuesday. Benchmark yields in France lost two basis points to 0.87 percent, while those in Germany declined two basis points to 0.42 percent.

MBA Mortgage Applications data due, along with earnings from companies including Target and Cisco.

Global Market Snapshot

  • S&P 500 futures down 0.5% to 2,384.75
  • STOXX Europe 600 down 0.3% to 394.7
  • MXAP down 0.3% to 151.42
  • MXAPJ down 0.5% to 494.57
  • Nikkei down 0.5% to 19,814.88
  • Topix down 0.5% to 1,575.82
  • Hang Seng Index down 0.2% to 25,293.63
  • Shanghai Composite down 0.3% to 3,104.44
  • Sensex up 0.3% to 30,659.65
  • Australia S&P/ASX 200 down 1.1% to 5,786.03
  • Kospi down 0.1% to 2,293.08
  • German 10Y yield fell 2.7 bps to 0.408%
  • Euro up 0.08% to 1.1092 per US$
  • Brent Futures down 0.4% to $51.45/bbl
  • Italian 10Y yield fell 3.9 bps to 1.943%
  • Spanish 10Y yield fell 1.4 bps to 1.614%
  • Gold spot up 0.5% to $1,243.73
  • U.S. Dollar Index down 0.05% to 98.06

Top Global News from Bloomberg

  • Comey memo says Trump asked him to drop FBI’s Flynn investigation
  • Donald Trump is facing the deepest crisis of his presidency after a memo written by then-FBI Director James Comey surfaced Tuesday, alleging that the president asked him to drop an investigation of former National Security Adviser Michael Flynn.
  • Republicans in Congress are increasingly dispirited over the chaos surrounding Donald Trump, with several saying the nonstop revelations are imperiling their legislative agenda and the top Senate Republican signaling he would go his own way on some of the president’s top priorities.
  • The terms of debate between the ECB’s 25 Governing Council members over announcing and implementing an exit from unconventional stimulus have coalesced around the pace. In one camp are those who want to move slowly. In the opposite camp: those who want to move extremely slowly.
  • Merkel, Macron plan road map for harmonized corporate taxation, Bild reports
  • Brexit talks can’t be secret, negotiating documents will be made public: EU draft
  • S&P affirms Australia AAA sovereign credit rating; outlook remains negative
  • API inventories according to people familiar w/data: Crude +0.9m; Cushing -0.5m; Gasoline -1.8m; Distillates +1.8m
  • No Matter What Trump Does, Big Cities Pressing for Cleaner Cars
  • Turkey’s Erdogan Met Company Executives in Washington, DC: AA
  • Marc Faber Says Invest in Europe Stocks Over ‘High- Priced U.S.’
  • Meitu Falls After MSCI Decides Against Adding to Indexes
  • IATA Says Wider Laptop Ban Could Impose $1B Costs on Passengers
  • Philip Morris Japan to Raise Prices of Marlboro From Sept.
  • Dexia, Cognizant in Talks for Long-Term Pact on Info Technology
  • Elbit Subsidiary Wins $166m Contract for U.S. Army Platform
  • Cheniere Says 9 of Its U.S. LNG Exports Have Gone to China
  • 3SBio Gains on Eli Lilly Insulin Distribution Rights in China
  • DuPont Wins Patent-Infringement Jury Verdict Against Unifrax
  • AbbVie Loses Ruling on Validity of One Patent for Humira

Asian equities traded cautious amid weakness in energy and US political concerns after reports of a memo from former-FBI Director Comey which stated that President Trump urged him to drop the investigation into former National Security Adviser Flynn. This pressured US equity futures across the board and set the negative tone for both the ASX 200 (-1.1%) and Nikkei 225 (-0.6%), while touted profit taking by pension funds and poor Machinery Orders added to the disappointment in Japan. Shanghai Comp. (-0.3%) and Hang Seng (-0.2%) traded choppy, although somewhat outperformed their regional counterparts after the PBoC injected CNY 140bIn via open market operations and regulators approved the Bond Connect scheme which would allow foreign investors access to mainland China’s USD 9.5tIn bond market. 10yr JGBs were initially supported alongside gains in T-notes as the risk averse sentiment spurred a flight to safety, while the BoJ were also in the market for a total of JPY 1.03fin of JGBs with 1yr-10yr maturities. However, JGBs then failed to sustain the upside, with prices retreating throughout the session. Mainland China and Hong Kong regulators approved the cross-border link that will allow overseas investors access to the mainland’s USD 9.5tIn bond market. The program will run alongside the 2 connect schemes already in place and will begin with ‘northbound’ trading first, with the official launch date of the scheme and timing for `southbound’ trade to be announced at a later date.

Top Asian News

  • Hong Kong Sells Car Park to Developer for Record $3 Billion
  • Webb’s Caution List Sinks Dozens of Hong Kong Small-Cap Stocks
  • Caution Reigns as U.S. Politics Takes Center Stage: Markets Wrap
  • Citi to Bolster Brokerage Business for Hedge Funds in Japan
  • Lumen Capital Hires Pictet’s Fluri, Trident’s Lim in Singapore
  • Reports on Trump Weigh on Japanese Equities as Yen Strengthens
  • HSBC Sees 6% Upside for Emerging-Market Stocks Through End-2017

Likewise in Europe, sentiment for riskier assets soured this morning amid an escalation of US political uncertainty. Amid reports that Trump asked former FBI Director Comey to end investigation into ties between former White House national security adviser Flynn and Russia. This comes days after reports that Trump discussed sensitive national security information with Russian Foreign Minister Lavrov. In turn, this has led to broad based selling across major EU bourses (Eurostoxx -0.4%) with some suggesting that this may fuel fears over Trump’s economic agenda. Energy names sag following the slip in crude prices as the latest API showed unexpected build of over 800k, which comes ahead of weekly DoE’s. EGB’s supported by FTQ trade, although there has been a mild pull back in recent trade, additionally underperformance seen in the German 2yr with the curve showing some mild flattening.

Top European News

  • Brexit Talks Can’t Be Secret, EU Says in Transparency Push
  • Britons See First Drop in Real Wages Since 2014 as Prices Bite
  • European Bonds’ Populism Lull Proves Short as Austria Vote Looms
  • EU Financial Transaction Tax Said to Overcome Pensions Rift
  • Russia Plans Biggest Debt Sale in Four Years as Yields Decline
  • Treasuries Lead European Bonds Higher as Trump’s Woes Mount
  • VW CE0 Mueller Probed Over Porsche-Shares, Prosecutors Confirm
  • EU-U.K. FTA Won’t Be the Same As Single Market Access, Tusk Says
  • Euro Long-Term Bearish Bets Versus Dollar Hit Lowest Since 2009

In currencies, the Bloomberg Dollar Spot Index was little slightly down in early trading, bacl to the lowest level since Nov. 8. The yen rose 0.7 percent to 112.35 per dollar, after climbing 0.6 percent on Tuesday. The euro added 0.1 percent to $1.1094, extending Tuesday’s 1 percent surge  An active 24 hours in the FX markets as fresh revelations of president Trump’s ‘involvement’ in the Flynn probe has set off a fresh wave of risk aversion. USD/JPY has fallen through 113.00 as a result, but fresh demand ahead of 112.00 as arrested the move for now, but stronger support not seen until 111.20-35 lower down. The USD based moves sent the EUR up to the initial resistance area at 1.1120-25, and this has held so far, but the pullback has been shallow as yet. The final reading of EU wide inflation confirmed yoy Apr CPI at 1.9%, so this may underpin the uptrend to a degree, but we have some large 1.1000 expiries today and tomorrow (much larger tomorrow — in excess of 3.5 yards), which could rein in the move.
This has seen EUR/GBP pierce the 0.8600 level, but with the UK wage date this morning more or less in line with expectations, Cable bulls are pressing on the highs again in the quest to push on 1.3000. We did see the claimant count rise, but the unemployment rate in to 4.6%, so all in all, the market feels comfortable with this as we look to the retail sales number tomorrow.

In commodities, there has been some decent price action over the last 24 hours, with focus on the precious metals in light of the latest news on Trump. Impeachment fears are back ‘on the table’ and this has lifted Gold up to levels just shy of USD1245.00, while Silver is now eying a move on USD17.00. Elsewhere, Oil prices are struggling against some notable levels, and USD50.00 is proving a tough obstacle for WTI. USD48.00 is the initial point of support, while Brent is looking comfortable as the backdrop of the output cut extension serves as a prop. Metals all meandering in well-worn territory, with little negative impact from the risk off mood this morning. Copper off better levels though, and in line with modest losses seen across the board with the exception of Platinum.

Looking at the day ahead, the NY Fed is due to the release its Q1 household debt and credit report, while this afternoon former Fed Chair Ben Bernanke is scheduled to speak at a conference. German Chancellor Merkel also speaks at a labour conference. Earnings reports due in the US today include Target and Cisco. It’s likely that US political developments will continue to be a big focus for markets also today.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior 2.4%
  • 11am: New York Fed to Release 1Q Household Debt and Credit Report
  • 11:10am: Former Fed Chairman Bernanke to Speak at Conference

DB’s Jim Reid concludes the overnight wrap

Markets have displayed a level of trepidation over the last 24 hours with politics being the dominant theme. The Trump headlines concerning the revealing of sensitive information to Russian officials were initially at the forefront of that. That was largely attributed to the big drop in the US Dollar yesterday with the Dollar index falling -0.81% and to the lowest level since November 8th. Trump’s national security advisor H.R. McMaster addressed the reports in a press conference downplaying the security leak by saying that the disclosure was “wholly appropriate” and also calling the Washington Post article “false”. Treasuries were a little firmer with the 10y yield down just under 2bps to 2.327% while equities had actually kicked off in positive territory for the first hour or so, before fading into the close with the S&P 500 ending down a modest -0.07%.

There are more developments to report this morning though, and perhaps more serious for markets. After markets closed last night, a story emerged in the NY Times (and now being reported in other press outlets) suggesting that the President had attempted to get former FBI Director James Comey to end the FBI’s investigation into former Trump aide and national security advisor Michael Flynn. The story concerns a memo written by Comey back in February following a conversation with Trump at the White House. Trump’s administration is denying that the President asked Comey to  end the investigation. The Chairman of the House Oversight Committee has now requested all documents from all meetings between Trump and Comey. The Chairman also said that the reports in the press “raise questions as to whether the President attempted to influence or impede the FBI’s investigation as it relates to Flynn”. The question of this being an impeachable offense through obstructing justice has been raised in several news reports and by members of the Democratic Party.

That news has sparked a wave of risk off moves in markets since it broke. Gold (+0.53%) has rallied along with US Treasuries (10y yield down 2.6bps) while S&P 500 futures have dropped -0.60%. The Yen is  also +0.60% firmer versus the Dollar. In Asia major bourses are lower with the Nikkei (-0.63%), Hang Seng (-0.27%), Shanghai Comp (-0.10%), Kospi (-0.33%) and ASX (-0.90%) all in the red. It’s worth noting that China equity markets have been choppy this morning and this follows a dramatic u-turn for China bourses yesterday when after we went to print the Shanghai Comp turned a decline of as much as -0.95% at one stage into a gain of +0.74% by the closing bell. That followed the news that the PBoC had injected 170bn of yuan liquidity into the system, the biggest injection in four months. So worth keeping an eye how markets finish up there.

Back to yesterday where, away from the politics, the US retail sector was back in the spotlight too with a few earnings releases. TJX (-4.08%) delivered a disappointing outlook for Q2 despite Q1 earnings coming in slightly ahead of market expectations. Staples (-3.54%) was a similar story although there was better news to come from Home Depot’s (+0.61%) latest quarterly report. Target and L Brands are next to report today, while Wal-Mart is scheduled to release results tomorrow. Over in Europe yesterday it wasn’t much more exciting for equity markets with the Stoxx 600 (-0.02%) ending the day more or less unchanged following a raft of economic data which for the most part was relatively solid. Credit spreads were however a bit tighter (iTraxx Main 0.5bps,  iTraxx Crossover -4bps). The big news in bond markets was the bumper demand for the 40y Gilt and 30y OAT new issues. The latter attracted over €31bn of orders with the final size coming at €7bn while the Gilt issue attracted £26bn of orders for a £5bn deal. With the French election now in the past there was similarly strong demand for French corporate issuance yesterday too with Rallye attracting €3bn of orders for a €350m bond and LVMH taking in €14bn of orders for its €4.5bn multi-tranche bond deal. Bloomberg was in fact reporting that yesterday was the strongest day for Euro primary issuance volumes since at least 2014 which probably makes it one of the strongest days on record.

Digging through the economic data yesterday, in Europe there was no change in the second reading of Q1 GDP for the Euro area at +0.5% qoq and +1.7% yoy. Germany’s ZEW survey revealed an increase in the both the current situations index (+3.8pts to 83.9) and expectations index (+1.1pts to 20.6) in May. Meanwhile in the UK the April inflation data docket was released. Headline CPI was confirmed as rising +0.5% mom in April (vs. +0.4% expected) with the annual rate nudging up to +2.7% yoy from +2.3% and to the highest level since September 2013. The core rate also rose six-tenths to +2.4% yoy which is the joint highest since March 2013. The timing of Easter holidays was largely cited as explaining the large surge in inflation in April and while we saw Sterling trade in a decent 0.70% range through the day, it closed up a much more modest +0.16% by the end of the day.

In the US the data was a lot more mixed. On the positive side, industrial production was confirmed as rising a much better than expected +1.0% mom in April (vs. +0.4% expected) which was the biggest monthly rise since February 2014. Capacity utilization also bounced to a 20-month high of 76.7% (from 76.1%) with a boost in auto production seemingly being the biggest contributor to the surge. On the other hand data in the housing sector was soft. Housing starts unexpectedly fell in April (-2.6% mom vs. +3.7% expected) along with building permits (-2.5% mom vs. +0.2% expected). It’s worth noting that the Atlanta Fed now have their Q2 GDP growth forecast at 4.1%, up from 3.6% last week.

Looking at the day ahead now. With little of note in the US this afternoon, the focus datawise will be in Europe this morning where we receive the March and April employment indicators in the UK (unemployment rate expected to hold at 4.7%) and the final CPI revisions for the Euro area. Away from the data, the NY Fed is due to the release its Q1 household debt and credit report, while this afternoon former Fed Chair Ben Bernanke is scheduled to speak at a conference. German Chancellor Merkel also speaks at a labour conference. Earnings reports due in the US today include Target and Cisco. It’s likely that US political developments will continue to be a big focus for markets also today.

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed DOWN 8.52 POINTS OR .27%  OR / /Hang Sang CLOSED DOWN 42.31 POINTS OR 0.17% .  The Nikkei closed DOWN 104.94 POINTS OR 0.53%/Australia’s all ordinaires  CLOSED DOWN  1.04%/Chinese yuan (ONSHORE) closed UP at 6.8885/Oil DOWN to 48.78 dollars per barrel for WTI and 51.91 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED    ..Offshore yuan trades  6.8777 yuan to the dollar vs 6.8885 for onshore yuan. NOW  THE OFFSHORE IS MUCH  STRONGER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE  WEAKER DOLLAR. CHINA IS A MUCH HAPPIER THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

EU/Turkey/Greece

The EU issues a stern warning to Turkey after 141 Greek airspace violations in one day

(courtesy zero hedge)

EU Warns Turkey After 141 Greek Airspace Violations In Single Day

Turkish aircraft and helicopters illegally entered Greece’s airspace 141 times on May 15, the Hellenic National Defence General Staff reported.

As KeepTalkingGreece reports, airspace violations are a common practice by Ankara to reiterates its unfounded claims in the Aegean Sea.

20 Turkish F-16, 5 CN-235 maritime surveillance aircraft and 19 helicopters entered the Athens flight information region (FIR) without submitting a flight plan.

The  Turkish aircraft were identified and intercepted by Greek fighters, while in nine cases the interception process resulted in near combat situations (dog fights).

In addition, two Turkish missile boats entered Greek territorial waters off the southeast Aegean island of Agathonisi.

The vessels, which were taking part in a maritime exercise code-named Deniz Kurdu (Seawolf), stayed in Greek territorial waters for about 20 minutes.

Contacted by EURACTIV.com, an EU spokesperson sent a strict message to Turkey, urging that it respect the sovereignty of the EU’s member states.

“The EU underlines that Turkey needs to commit itself unequivocally to good neighbourly relations and urges Turkey to avoid any kind of source of friction, threat or action directed against a member state, which damages good neighbourly relations and the peaceful settlement of disputes,” the spokesperson said.

The same official added that negative statements that damage good neighbourly relations should also be avoided.

“Moreover, the EU also stresses the need to respect the sovereignty of member states over their territorial sea and airspace,” the spokesperson told EURACTIV.

 

“At the Informal Meeting of Foreign Ministers (Gymnich) of last 28 April, the EU High-Representative and Vice-President Federica Mogherini recalled that good neighbourly relations are one of the core principles which Turkey is called upon to respect as a candidate country,” the EU official concluded.

Will now Turkey stop Greece’s airspace violations? On the contrary. Greeks expect ‘intensive activity’ due to the Turkish naval exercise Seawolf.

On May 16, a pair of Turkish F-16 and of F-4E as well as one CN-235 violated the Greek airspace three times.

end

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

very popular Michael Snyder comments that the top 25 USA banks have over 222 trillion dollars of derivative exposure.

(courtesy Michael Snyder)

 

Financial Weapons Of Mass Destruction: Top 25 US Banks Have 222 Trillion Dollars Derivatives Exposure

Authored by Michael Snyder via The Economic Collapse blog,

The recklessness of the “too big to fail” banks almost doomed them the last time around, but apparently they still haven’t learned from their past mistakes.  Today, the top 25 U.S. banks have 222 trillion dollars of exposure to derivatives.  In other words, the exposure that these banks have to derivatives contracts is approximately equivalent to the gross domestic product of the United States times twelve.  As long as stock prices continue to rise and the U.S. economy stays fairly stable, these extremely risky financial weapons of mass destruction will probably not take down our entire financial system.  But someday another major crisis will inevitably happen, and when that day arrives the devastation that these financial instruments will cause will be absolutely unprecedented.

During the great financial crisis of 2008, derivatives played a starring role, and U.S. taxpayers were forced to step in and bail out companies such as AIG that were on the verge of collapse because the risks that they took were just too great.

But now it is happening again, and nobody is really talking very much about it.  In a desperate search for higher profits, all of the “too big to fail” banks are gambling like crazy, and at some point a lot of these bets are going to go really bad.  The following numbers regarding exposure to derivatives contracts come directly from the OCC’s most recent quarterly report (see Table 2), and as you can see the level of recklessness that we are currently witnessing is more than just a little bit alarming…

Citigroup

Total Assets: $1,792,077,000,000 (slightly less than 1.8 trillion dollars)

Total Exposure To Derivatives: $47,092,584,000,000 (more than 47 trillion dollars)

JPMorgan Chase

Total Assets: $2,490,972,000,000 (just under 2.5 trillion dollars)

Total Exposure To Derivatives: $46,992,293,000,000 (nearly 47 trillion dollars)

Goldman Sachs

Total Assets: $860,185,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $41,227,878,000,000 (more than 41 trillion dollars)

Bank Of America

Total Assets: $2,189,266,000,000 (a little bit more than 2.1 trillion dollars)

Total Exposure To Derivatives: $33,132,582,000,000 (more than 33 trillion dollars)

Morgan Stanley

Total Assets: $814,949,000,000 (less than a trillion dollars)

Total Exposure To Derivatives: $28,569,553,000,000 (more than 28 trillion dollars)

Wells Fargo

Total Assets: $1,930,115,000,000 (more than 1.9 trillion dollars)

Total Exposure To Derivatives: $7,098,952,000,000 (more than 7 trillion dollars)

Collectively, the top 25 banks have a total of 222 trillion dollars of exposure to derivatives.

 

If you are new to all of this, you might be wondering what a “derivative” actually is.

When you buy a stock you are purchasing an ownership interest in a company, and when you buy a bond you are purchasing the debt of a company.  But when you buy a derivative, you are not actually getting anything tangible.  Instead, you are simply making a side bet about whether something will or will not happen in the future.  These side bets can be extraordinarily complex, but at their core they are basically just wagers.  The following is a pretty good definition of derivatives that comes from Investopedia

A derivative is a security with a price that is dependent upon or derived from one or more underlying assets. The derivative itself is a contract between two or more parties based upon the asset or assets. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes.

Those that trade derivatives are essentially engaged in a form of legalized gambling, and some of the brightest names in the financial world have been warning about the potentially destructive nature of these financial instruments for a very long time.

In a letter that he wrote to shareholders of Berkshire Hathaway in 2003, Warren Buffett actually referred to derivatives as “financial weapons of mass destruction”…

The derivatives genie is now well out of the bottle, and these instruments will almost certainly multiply in variety and number until some event makes their toxicity clear. Central banks and governments have so far found no effective way to control, or even monitor, the risks posed by these contracts. In my view, derivatives are financial weapons of mass destruction, carrying dangers that, while now latent, are potentially lethal.

Warren Buffett was right on the money when he made that statement, and of course the derivatives bubble is far larger today than it was back then.

In fact, the total notional value of derivatives contracts globally is in excess of 500 trillion dollars.

(Harvey:  I think the real total is over 2 quadrillion)

This is a disaster that is just waiting to happen, and investors such as Buffett are quietly positioning themselves to take advantage of the giant crash that is inevitably coming.

According to financial expert Jim Rickards, Buffett’s Berkshire Hathaway Inc. is hoarding 86 billion dollars in cash because he is likely anticipating a major stock market downturn…

Far from a bullish sign, Buffett’s cash hoard could mean he’s preparing for a market crash. When the crash comes, Buffett can walk through the wreckage with his checkbook open and buy great companies for a fraction of their current value.

 

That’s the real Buffett style, but you won’t hear that from your broker or wealth manager. If Buffett has a huge cash allocation, shouldn’t you?

 

He knows what’s coming. Now you do too.

Warren Buffett didn’t become one of the wealthiest men in the entire world by being stupid.  He knows that stocks are ridiculously overvalued at this point, and he is poised to make his move after the pendulum swings in the other direction.

And he might not have too long to wait.  In recent weeks I have been writing about many of the signs that the U.S. economy is slowing down substantially, and today we received even more bad news

Despite high levels of economic confidence expressed by business owners and consumers, one key indicator shows that it has not translated into much action yet.

 

Loan issuance declined in the first quarter from the previous three-month period, the first time that has happened in four years, according to an SNL Financial analysis of bank earnings reports filed for the period. The total of recorded loans and leases fell to $9.297 trillion from $9.305 trillion in the fourth quarter of 2016.

This is precisely what we would expect to see if a new economic downturn was beginning.  Our economy is very highly dependent on the flow of credit, and when that flow begins to diminish that is a very bad sign.

For the moment, financial markets continue to remain completely disconnected from the hard economic data, but as we saw in 2008 the markets can plunge very rapidly once they start catching up with the real economy.

 

Warren Buffett is clearly getting prepared for the crisis that is ahead.

Are you?

end

The following should give us a clear picture of the global economy:

all 3 major auto markets in the world contract year over year together for the first time since Jan 2009

(courtesy zero hedge)

Carmageddon: All 3 Major Auto Markets Contract YoY For The First Time Since January 2009

For the first time since January 2009, sales of cars declined year-over-year in all three of the world’s largest auto markets of Western Europe (-6.8%), China (-1.8%) and the United States (-3.7%).  Combined, these three markets account for roughly 70% of the world’s auto sales (chart per Bloomberg).

 

And while auto OEMs spent the first part of 2017 ignoring the growing signs of trouble facing their industry, some are finally starting to admit that all is not well in autoland.  As we noted a couple of days ago (see “How Is This Not A Recession? Ford To Slash 10% Of Global Workforce“), Ford just announced plans to cut about 10% of its global workforce.  Meanwhile Nissan Motor is forecasting a surprise drop in profit this year and Toyota Motor expects an 18% decline as well.

As we’ve been saying for months, this is likely just the beginning of what may be a very painful several quarters for the auto industry.  So what else could go wrong?  Here is a just a short summary from Morgan Stanley’s auto team, led by Adam Jonas, of the things that could cause used car prices to crash by up to 50% over the next 4-5 years…which, of course, is probably not great news for new car prices either (Executive Summary:  flood of supply, poor lending standards and desperate OEMs who need to keep new car sales elevated at all costs):

  • Off-lease supply: This has already more than doubled since 2012 and is set to rise another 25% over the next 2 years.
  • Extended credit terms: Auto loans are at record lengths and lease assumptions (residuals, money factor) are at record levels of accommodation.
  • Rising rates: Starting from record low levels in auto loans.
  • Overdependency on auto ABS: The outstanding balance of auto securitizations has surpassed last cycle’s peak.
  • Record high deep subprime participation: 32% of subprime auto ABS deals were deep subprime (weighted average FICO < 550) in 2016 vs. 5% in 2010.
  • Record high units of new car inventory: 2016YE unit inventory levels were near 10% higher than 2015YE, and are continuing to trend higher in 2017.
  • OEM price competition: Car manufacturers have capacitized to a 19mm or 20mm SAAR. At this point in the cycle we start seeing more money ‘on the hood’ to move the metal. As new car prices fall, used prices look relatively more expensive, which necessitates a decline in used prices to equilibrate the supply/demand imbalance.
  • Increased ADAS penetration: We expect auto firms to achieve nearly 100% active safety penetration by 2020, creating an unprecedented safety gap between new and used vehicles, accelerating obsolescence of the used stock. Rising insurance premiums on older cars could accelerate this shift.
  • Trouble in the car rental market: Due to a number of secular shifts, including how consumers access transportation options (e.g. ride sharing), car rental firms are facing stagnant growth, weak pricing and over-fleeted conditions. As these cars hit the auction, the impact on prices could be significant.

And here are the stats…

Off-lease volumes have already doubled since 2012 and are only expected to get worse…meanwhile, lending standards have gradually gotten worse and worse…

 

…as further revealed by the growing share of ‘deep subprime’ loans in auto ABS deals.

 

But lenders are starting to get worried and are tightening lending standards for the first time since the great recession.  (Note: Shows net percentage of respondents reporting tightening standards on consumer loans for new and used autos. Negative numbers indicate loosening standards.)

 

Meanwhile, none of the warnings about a flood of used car volumes about to hit the market has impacted new car volumes being pumped out by the OEMs and pushed on to dealer lots.

 

All of which results in this fairly brutal outlook for used car prices and, by extension, the auto market generally.

Used Car Prices

 

Dear OEMs, the first step is admitting you have a problem.

7. OIL ISSUES

8. EMERGING MARKETS

end

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

Euro/USA   1.1101 UP .0008/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 ALL IN THE RED 

USA/JAPAN YEN 112.46 DOWN 0.228(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 1.2961 UP .0045 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.36310 DOWN .0009 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS WEDNESDAY morning in Europe, the Euro ROSE by 8 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1101; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 8.52 POINTS OR .27%     / Hang Sang  CLOSED  DOWN 42.31 POINTS OR 0.17% /AUSTRALIA  CLOSED DOWN 1.04% / EUROPEAN BOURSES OPENED IN THE RED 

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

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

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

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

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

The NIKKEI: this WEDNESDAY morning CLOSED DOWN 104.94 POINTS OR 0.53%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 42.31 POINTS OR 0.17%  / SHANGHAI CLOSED DOWN 8.52 POINTS OR .27% /Australia BOURSE CLOSED DOWN 1.04% /Nikkei (Japan)CLOSED  DOWN 104.94 POINTS OR 0.53%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1245.80

silver:$16.91

Early WEDNESDAY morning USA 10 year bond yield: 2.299% !!! DOWN 3 IN POINTS from TUESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.968, DOWN  3  IN BASIS POINTS  from TUESDAY night.

USA dollar index early WEDNESDAY morning: 97.98 DOWN 12  CENT(S) from TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing WEDNESDAY NUMBERS

Portuguese 10 year bond yield: 3.211%  DOWN 8 in basis point(s) yield from TUESDAY 

JAPANESE BOND YIELD: +.046%  UP 0   in   basis point yield from TUESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.563%  DOWN 6  IN basis point yield from TUESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.155 DOWN 8   POINTS  in basis point yield from TUESDAY 

the Italian 10 yr bond yield is trading 60 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.378% DOWN 5 IN  BASIS POINTS ON THE DAY

END

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY

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

Euro/USA 1.1139 UP .0047 (Euro UP 47 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.35 DOWN  1.337 (Yen UP 134 basis points/ 

Great Britain/USA 1.2949 UP 0.0033( POUND UP 33 basis points)

USA/Canada 1.3603 UP 0.0010(Canadian dollar DOWN 10 basis points AS OIL ROSE TO $49.21

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP by 47 basis points to trade at 1.1139

The Yen ROSE to 111.35 for a GAIN of 134 Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 33  basis points, trading at 1.2949/

The Canadian dollar FELL by 10 basis points to 1.3603,  WITH WTI OIL RISING TO :  $49.21

The USA/Yuan closed at 6.8780/
the 10 yr Japanese bond yield closed at +.046% UP 0  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 9  IN basis points from TUESDAY at 2.239% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.916  DOWN 7 in basis points on the day /

Your closing USA dollar index, 97,65 DOWN 46  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 18.56 POINTS OR .25%
German Dax :CLOSED DOWN 172.92 POINTS OR 1.35% 
Paris Cac  CLOSED DOWN  88.21 POINTS OR 1.63% 
Spain IBEX CLOSED  DOWN 196.20 POINTS OR 1.79%

Italian MIB: CLOSED  DOWN 504.18 POINTS/OR 2.31%

The Dow closed DOWN 372.82 OR 1.78%

NASDAQ WAS closed down 158.64 POINTS OR 2.57%  4.00 PM EST
WTI Oil price;  49.21 at 1:00 pm; 

Brent Oil: 52.29 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  56.84 DOWN 26/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS T0  +0.378%  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:$49.01

BRENT: $52.13

USA 10 YR BOND YIELD: 2.219%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.904%

EURO/USA DOLLAR CROSS:  1.1158 up .0066

USA/JAPANESE YEN:110.96  down 1.725

USA DOLLAR INDEX: 97.48  DOWN  63  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2967 : up .0050  OR 50 BASIS POINTS.

Canadian dollar: 1.3606  down .0008(CAN DOLLAR up 8 BASIS PTS)

German 10 yr bond yield at 5 pm: +.378%

END

 

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

TRADING IN GRAPH FORM FOR THE DAY

Trump Turmoil Sparks Bank Bloodbath As Dollar, Bond Yields Tumble

It’s been a while since we used this one…

 

This happened…

 

And appears to be the straw that broke the complacency camel’s back….

 

Quite a day…

  • S&P 500 biggest drop since Sept 2016 (broke below 50-dma)
  • Small Caps biggest drop since Brexit June 2016 (broke below 50-, 100-dma)
  • Nasdaq biggest drop since Brexit June 2016
  • Dow Industrials biggest drop since Sept 2016 (broke below 50-dma)
  • Dow Transports biggest drop since June 2016 (broke below 50-, 100-dma, and near 200-dma) – now negative year-to-date

And across asset-classes…

  • VIX biggest jump since Brexit June 2016 (smashed through 50-, 100- and 200-dma) above 15

  • Short-Term VIX jumped by the most on record (up 115% to the highest since the election)

 

VIX > 15, I’m sorry, I need to do some hedging trades

 

  • 30Y US Treasury Fut biggest gain since June 2016
  • USD Index down 6th day in a row to lowest since trump election
  • USDJPY’s biggest drop since July 2016 (broke below 50- and 100-dma) to 110 handle

Safe-haven buying gold and bonds as the dollar was dumped along with banks…

And we actually heard someone say “This is nonsense, the fundamentals are solid, Trump doesn’t matter”… Well if it wasn’t Trump hope holding stocks up – what was it?

 

All major US equity indices were red todayNOT OFF THE LOWS!!

 

“Sell In May” after all…

 

Trannies are back in the red year-to-date and Small Caps tested unch…

 

VIX soared over 15 – filling the gap from the French Election…

 

Financials back in the red year-to-date…

 

Led by a collapse in The Big Four…

 

AAPL was hammered… worst day since April 2016

 

Treasury yields collapse most since the first trading day of the year… Yields crashed 8-10bps today pushing them all down for the month…

 

30Y Yield crashed back below 3.00%, back to pre-French election levels…

 

The Dollar Index was clubbed again – 6th down day in a row to pre-Trump election levels…

 

Since the election, Yen is down the most (5%) but Cable (up 4.5%) and Euro (up 2.3%) have dragged the dollar red…

 

Gold was heavily bid back above its key technical resistance levels…

 

The trumpflation trades are all breaking…

 

And June rate hike odds are tumbling…

 

Gold regains the lead year-to-date as banks go red…

 

Trading early last night: RISK IS OFF AS ALL MARKETS AROUND THE GLOBE FALTER: USA/YEN DROPS ON MEMOGATE

(COURTESY ZERO HEDGE)

“Risk Off”: Futures Slide, USDJPY Drops As Trump “Memo-Gate” Spooks Markets

It’s been called the teflon market: no matter how seemingly huge the scandal thrown at Donald Trump, risk assets simply ignored it and marched onward to new all time highs.

This time, however, it may be different: with news that FBI Director James Comey wrote down in a memo that Trump asked him to end the Flynn probe – whether this is credible or not remains to be seen, and can be verified with one simple Congressional subpoena –  things are suddenly serious for Trump, and that “Impeachment” word first mentioned by Heights Securities earlier today, is being thrown around far more casually over the past hour.

Of course, whether this is an impeachable offense remains to be seen, as does the evidentiary process –  with the White House openly denying the Comey memo story, someone is lying  – however for the first time this year we have seen a clear risk off reaction across assets in response to a Trump scandal, as the potential severity of this latest one could have quite dire consequences on the administration.

Here is USDJPY, which has slide 40 pips since the news broke…

… followed closely by S&P futures.

No doubt that this memo was leaked by Comey in which Trump supposedly asks Comey to end the Flynn Investigation

(courtesy zerohedge)

Comey’s Revenge: Leaks Memo To NYT Saying Trump Asked Him To End Flynn Investigation

Update 1:

And just like yesterday, it was just a matter of minutes before CNN and NBC ‘independently’ corroborated the New York Times’ story.

Source confirms to CNN’s @PamelaBrownCNN Comey wrote in memo that President Trump asked him to end Flynn investigation

NBC News confirms Comey says Trump asked him to drop the Flynn investigation

 

Meanwhile, Independent Senator Angus King of Maine is now considering calling for impeachment proceedings for “obstruction of justice.”

“Obstruction of justice is such a serious event.  And I say it with sadness and reluctance.  This is not something that I’ve advocated for.”

 

“But, if indeed the President tried to tell the Director of the FBI, who worked for him, that he should drop an investigation, whether it was Michael Flynn or some investigation that had nothing to do with Russia or politics or the election, that’s a very serious matter.”

* * *

In what is seemingly becoming a daily event, the New York Times has just dropped yet another anonymously sourced bombshell on the White House.  The latest provocative headline implies that President Trump directly asked former FBI Director James Comey to shut down an ongoing investigation of Trump’s former national security adviser, Michael Flynn, in an Oval Office meeting back in February shortly after Flynn was fired by the White House.

This latest story allegedly comes from a memo that Comey wrote shortly after the meeting in question and is just part of a larger paper trail that he created documenting what he perceived as the president’s improper efforts to influence an ongoing investigation. As the New York Times notes, an FBI agent’s contemporaneous notes are widely held up in court as credible evidence of conversations.

Mr. Comey wrote the memo detailing his conversation with the president immediately after the meeting, which took place the day after Mr. Flynn resigned, according to two people who read the memo. The memo was part of a paper trail Mr. Comey created documenting what he perceived as the president’s improper efforts to influence an ongoing investigation. An F.B.I. agent’s contemporaneous notes are widely held up in court as credible evidence of conversations.

 

“I hope you can see your way clear to letting this go, to letting Flynn go,” Mr. Trump told Mr. Comey, according to the memo. “He is a good guy. I hope you can let this go.”

 

Mr. Trump told Mr. Comey that Mr. Flynn had done nothing wrong, according to the memo.

 

Mr. Comey did not say anything to Mr. Trump about curtailing the investigation, only replying: “I agree he is a good guy.”

 

Mr. Comey created similar memos — including some that are classified — about every phone call and meeting he had with the president, the two people said. It is unclear whether Mr. Comey told the Justice Department about the conversation or his memos.

Of course, if there is an unclassified paper trail created by Comey then
we suspect hundreds of FOIA requests will be filed by the end of the
day.

Oddly, this memo seems to directly contradict statements that Andrew McCabe recently made under oath before the Senate Intelligence Committee.  In the following exchange with Marco Rubio, McCabe said:  “There has been no effort to impede our investigation to date.”  So either McCabe was lying or Comey had serious trust issues with his second in command.

Rubio:  “Has the dismissal of Mr. Comey in any way impeded, interrupted, stopped, or negatively impacted any of the work, any of the investigations or any ongoing projects at the Federal Bureau of Investigation?”

 

McCabe“There has been no effort to impede our investigation to date.”

 

Meanwhile, according the NYT, Comey shared the existence of the memo with senior FBI officials and close associates. The New York Times admitted it had not viewed a copy of the memo but portions of the letter were apparently read to a reporter covering the story.

According to details in the memo, Comey had been invited to the Oval Office with other senior national security officials for a terrorism threat briefing. When the meeting ended, Trump asked all present — including Vice President Pence and Attorney General Sessions — to leave the room except for Comey.  It was at that time that Trump condemned the continued leaks to the media before turning the conversation to Flynn’s fate.

Alone in the Oval Office, Mr. Trump began the discussion by condemning leaks to the news media, saying that Mr. Comey should consider putting reporters in prison for publishing classified information, according to one of Mr. Comey’s associates.

 

Mr. Trump then turned the discussion to Mr. Flynn.

It seems that Comey just outed himself as one of the leakers the White House was looking for.

I have been asking Director Comey & others, from the beginning of my administration, to find the LEAKERS in the intelligence community…..

Meanwhile, in a statement, the White House denied the version of events as writing in the memo.

“While the president has repeatedly expressed his view that General Flynn is a decent man who served and protected our country, the president has never asked Mr. Comey or anyone else to end any investigation, including any investigation involving General Flynn,” the statement said. “The president has the utmost respect for our law enforcement agencies, and all investigations. This is not a truthful or accurate portrayal of the conversation between the president and Mr. Comey.”

If Trump does have Oval Office recordings, as he suggested in the tweet below, now might be a good time to introduce them into the public record as it looks as though Comey just called his bluff.

James Comey better hope that there are no “tapes” of our conversations before he starts leaking to the press!

Jason Chaffetz demands the FBI hand over all of Comey’s notes, memos and recordings related to Donald Trmp

(courtesy zero hedge)

Chaffetz Demands FBI Hand Over All Comey’s Notes, Memos, & Recordings Related To Trump

Update:Jason Chaffetz office just released the letter sent to the FBI’s Andrew McCabe demanding all Comey-Trump related memos

Today, the New York Times reported former Federal Bureau of Investigation Director James Comey memorialized the content of phone calls and meetings with the President in a series of internal memoranda. At least one such memorandum reportedly describes a conversation in which the President referenced the FBI investigation of former National Security Advisor Lt. Gen. Michael Flynn and said to Comey, “I hope you can let this go.”

 

According to the report, “Mr. Comey created similar memos — including some that are classified — about every phone call and meeting he had with the president.” If true, these memoranda raise questions as to whether the President attempted to influence or impede the FBI’s investigation as it relates to Lt. Gen. Flynn. So the Committee can consider that question, and others, provide, no later than May 24, 2017, all memoranda, notes, summaries, and recordings referring or relating to any communications between Comey and the President.

 

The Committee on Oversight and Government Reform is the principal oversight committee of the House of Representatives and may at “any time” investigate “any matter” as set forth in House Rule X. An attachment to this letter provides additional information about responding to the Committee’s request. Thank you for your attention to this matter.

Original…

Trump and/or Comey are getting increasingly boxed in here – one or other is going to be proved a liar soon enough.

*  *  *

As we detailed earlier, following the New York Times latest Trump bombshell (see “Comey’s Revenge: Leaks Memo To NYT Saying Trump Asked Him To End Flynn Investigation“), the impeachment word seems to be getting tossed around a little more loosely this evening.  And, given the serious accusations levied by former FBI Director James Comey, the Chairman of the House Oversight Committee, Jason Chaffetz, has  just promised that he will get the Comey memo, if it exists,” which was backed up by the not so thinly veiled threat: “I have my subpoena pen ready.”

.@GOPoversight is going to get the Comey memo, if it exists. I need to see it sooner rather than later. I have my subpoena pen ready.

 

Meanwhile, in the following Q&A with NBC, Chaffetz says his committee has already started “drafting the necessary paperwork” to get Comey’s memo to the extent it is not handed over voluntarily.

“If the memo exists, I need to see it and I need to see it right away.  We are drafting the necessary paperwork to get the mom so we will find out in a hurry if its out there.”

 

“I want to read the memo first but on the surface that seems like an extraordinary use of influence to try to shutdown an investigation being done by the FBI.  I don’t know if it’s true yet but I want to find out if that’s actually out there.”

View image on TwitterView image on Twitter

🚨Chaffetz to NBC:”If the memo exists, I need to see it and I need to see it right away. We are drafting the necessary paperwork to get [it]”

Putin ready to come to the rescue to Trump by providing transcript of talks between Lavrov and Trump

 

(courtesy zerohedge)

 

Putin Trolls US, Ready To Give Transcript Of Conversation Between Trump And Lavrov To Congress

As the quest to unearth just what Trump told Lavrov continues, an unexpected development emerged moments ago when none other than Russian president Vladimir Putin said that Trump did not pass any secrets to foreign minister Sergey Lavrov, and that he was willing to give a transcript of the talks between Putin and Lavrov to Congress if the US requests it, the Russian president said during a news conference with Italian Prime Minister Paolo Gentiloni.

While initially Reuters reported that Putin was ready to give a recording, a subsequent clarification by Reuters noted that a “Kremlin aide says Putin prepared to provide transcript, not audio recording, of Trump and Lavrov meeting”

The reason for Putin’s generous offer: the Russian president believes that reports about Trump allegedly revealing security secrets to Russian Foreign Minister Sergey Lavrov have become “political schizophrenia” and that Russia highly appreciates results of Trump-Lavrov talks.

Some other headlines from Reuters:

  • PUTIN: RUSSIA READY TO GIVE RECORDING OF TALKS IF U.S. AGREES

Putin also said that Lavrov did not share any secrets with either him or the secret service:

  • PUTIN: LAVROV DIDN’T SHARE SECRETS WITH ME NOR SECRET SERVICE

… And concluded that the US is losing its mind over Russia:

  • PUTIN: POLITICAL SCHIZOPHRENIA IS DEVELOPING IN U.S OVER RUSSIA

As soon as more information is available, we will update this report of what is emerging as some pretty impressive trolling of the US by the Russian president.

 

END

 

One Republican breaks away from his party (Rep. Amash (Michigan) saying that if the memo is true, then impeachment is merited

(courtesy zero hedge)

 

Republican Amash Breaks With Party, Says If True Comey Memo Merits Impeachment

In what may be the most material development of the day, moments ago GOP Representative Justin Amash (R-Mich.) said the report that President Trump pressured ousted FBI Director James Comey to end an investigation would merit impeachment if true, becoming the first Republican lawmaker to break from the party and hint at impeachment.

Amash tells reporters that if Comey memo allegations are true, it’s grounds for impeachment. Says he trusts Comey more than Trump.

Subseqeuentlly, when asked by The Hill if the details in the memo would merit impeachment if they’re true, Amash reiterated “Yes…. But everybody gets a fair trial in this country,” Amash added as he left a House GOP conference meeting.

When asked by another reporter whether he trusted Comey’s word or Trump’s, Amash said: “I think it’s pretty clear I have more confidence in Director Comey.”

According to the Hill, Amash has been one of only two House Republicans to cosponsor a Democratic bill to establish an independent commission to investigate Russia’s role in the election. Rep. Walter Jones (R-N.C.) has also endorsed the legislation.

Amash is a frequent conservative critic of the Trump administration, and in the past has broken with the White House on a variety of issues, including healthcare reform, NSA surveillance and the Justice Department’s new tougher sentencing guidelines.

And now all eyes on John McCain who many speculated would be the most vocal Republican opponents of Trump, and the first GOPer to recommend impeachment of his old nemesis.

Following the report, the USD tumbled to fresh intraday lows.

(courtesy zero hedge)

Cisco Plunges After Slashing Revenue Guidance

With Cisco reporting quarterly earnings moments ago, traditionally one of the closers of earnings season, few were expecting big fireworks out of the company, and based on what the company reported for the just concluded quarter, there should not have been any: in its fiscal Q3 the company earned $0.50 in GAAP EPS, which however after some aggressive fudging was pushed up to $0.60 non-GAAP, beating expectations by 2 cents. Revenue of $11.94 billion likewise beat estimates by $50 million.

However, it was the company’s projections that stunned the market, because while the company predicted Q4 EPS of $0.60 to $0.62 (or $0.46-$0.51 GAAP), on the low end of consensus estimates of $0.62 (in a range of $0.58 to $0.66), despite a subpar gross margin forecast of 63-64%, below the 64.2% estimate,  the company now expects revenue to plunge between 4 and 6% in its last fiscal quarter. Wall Street’s estimate: a modest 1% drop.

Putting the projected revenue drop in context, this would be the worst top-line drop in years.

CSCO CEO Chuck Robbins: “I am pleased with the progress we are making on the multi-year transformation of our business. The Network is becoming even more critical to business success as our customers add billions of new connections to their enterprises. We are laser focused on delivering unparalleled value through highly secure, software-defined, automated and intelligent infrastructure.”

Unfortunately, Robbins did not elaborate on what is causing the dramatic cut to the company’s guidance, which immediately has led to speculation that the cyclical rebound in the global economy is now over, at least when it comes to CSCO and its tech peers, sending CSCO stock tumbling after hours.

Needless to say, nobody could have possibly seen this coming: here is how the sellside came into today’s earnings: 21 buys, 15 holds, 0 sells.

And today’s last word goes to David Stockman who now correctly claims that the Fed has run out of dry powder as the huge debt is stifling the economic environment.

(courtesy David Stockman/Daily Reckoning)

Part I

 

“Look Ma, No Hands!”

The Deep State is escalating its war on President Trump but the Wall Street partiers apparently couldn’t care less. When the machines tagged 2402 on the S&P 500 yesterday, it was surely a historic case of “look ma, no hands!”

It’s hard to imagine what more will be needed to ignite an eruption of fear and panic in the casino amidst Wall Street’s record and wholly irrational state of somnolence.

After all, the Fed is sidelined and out of dry powder. The Red Ponzi is tottering. The U.S. retail sector is descending into an apocalypse. The giant auto bubble is fracturing. The Trump Stimulus is dead in the water, and Washington is heading for an extended stretch of complete dysfunction and acrimonious combat.

And if that isn’t that enough to upset the applecart — there are a lot more headwinds coming down the pike.

But the point is the insane governance process in Washington, which is completely unhinged, is combined with a level of insane complacency on Wall Street. Which is literally off the charts.

It would be one thing if our current fantastically inflated financial markets were reflective of a gusher of private sector growth, investment and productivity. That is, something like a new gilded age of invention and raw capitalist energy like occurred in the 1880s or 1920s.

The opposite is more likely the case, however. We have a mutant outbreak of financialization, debt, falsified financial prices and biblical levels of speculation and money shuffling — artificial economic conditions which are absolutely dependent upon agencies of the state.

Without treasury bailouts and endless central bank credit infusions, today’s massive financial bubbles would have splattered long ago.

Stated differently, with Washington heading into terminal breakdown, the boys and girls and robo-machines on Wall Street are now home alone. When they discover that there are no more bailouts and stimulus injections coming down the pike, they will panic like it’s October 1987 and then some.

The Fed’s persistent and drastic falsification of interest rates and all other financial asset prices has caused a monumental mis-allocation of capital and other economic resources into unproductive speculation and money shuffling.

That’s the long-run consequence of “pump-priming” with permanent deficit-financed tax cuts under both GOP and Democrat administrations since the 1980s.

Unfortunately, The Donald seems to be falling for the same Keynesian sludge “pump-priming” with deficits.

While cutting taxes is always a good idea in theory — that’s only true in practice if you pay for it (and “earn” it politically) with off-setting spending cuts or a more benign form of taxation. And tax cutting is also likely to be more timely and potent if the tax burden has been steadily creeping higher.

The Federal tax burden today is no higher than it was in 1977 under Jimmy Carter.  The Federal tax extraction was 17.5% of GDP in 2016 — the same level as in 1979.

As it happened, real GDP grew by only 1.8% last year compared to 6.0% in 1979. So it just might be the case that too high taxes are not the main roadblock holding back the economy in 2017.

In fact, I think deficit-financed tax cuts are being peddled by the Donald not based on any rational analysis at all. But mainly because Wall Street is very desperate for a new Stimulus fix to supplant the Fed’s sidelined printing presses.

There can be little doubt that the Donald’s advocacy of this old Keynesian snake oil has been foisted upon him by Gary Cohn, the Goldman Sachs heavy assigned to this particular White House.

Needless to say, Goldman has long been a source of powerful agents for the Keynesian Stimulus panacea — from Bob Rubin through Hank Paulson and William Dudley at the New York Fed.

But it also goes without saying that Goldman’s perma-stimulus advocacy has nothing at all to do with economic logic or historical evidence. It’s just the carrot they hang in front of the mule to keep it buying Goldman’s (marked-up) inventories of “risk assets.”

What is wildly different today than in 1977, however, is that the headroom for Wall Street-pleasuring Stimulus has been all used up on both the fiscal and monetary fronts.

The Goldman folks just haven’t bothered to inform the Donald. Perhaps that’s because their marching orders are to keep it a secret as long as possible — the better to call the retail sheep to the final slaughter.

In any event, the fiscal equation went to hell in a hand basket when the old time GOP lost its religion of fiscal rectitude.

Accordingly, the GOP’s most potent political weapon — mobilizing the middle class against Washington spend, tax and borrow policies — was unilaterally surrendered to the permanent beltway establishment.

In fact, during the past 40 years, the public debt soared by 29X (from $675 billion to $19.8 trillion), and from 32% of GDP to 106%. And based on built-in tax and spending policies it is destined to reach $35 trillion and 145% of GDP over the next decade — before taking into account a single dollar of the Donald’s planned additional spending.

The day of reckoning has been forestalled by massive monetization of the Federal debt during the interim. Some 40 years ago, the Fed’s balance sheet was just $100 billion. And it had taken its first six decades of existence to get there.

At $4.5 trillion today, the Fed’s balance sheet has grown 45X during the last four decades or by about 10% per year. The truth is, you cannot pump money that long at that rate with impunity.

So the Donald is now confronted by the worst of all possible worlds. That is, an economy that has been ruined by debt and massive financial inflation, but one that would actually be made worse by attempting to spend even more.

That’s because the U.S. economy has become saturated by debt in every sector.

Compared to roughly 150% of GDP and $2.5 trillion back in 1977, total credit market debt — business, household, government and financial — is now $64 trillion and 350% of GDP.

Accordingly, even small increases in interest rates would cause huge dislocations throughout the economy.

The skunk in the woodpile, of course, is that the worlds’ the central banks are finally out of dry powder. The monumental fraud of government debt and securities monetization that has been conducted during the last several decades for all practical purposes is finally over and done.

Therefore, attempting to add more debt under present conditions will actually blow the casino sky high. Even the Donald’s Goldman handlers don’t really understand that — but the Great Disrupter is surely fixing to prove the case in spades.

I’d tell you to get out of the casino immediately. But if you haven’t so far, I doubt I can convince you today.

Regards,

David Stockman
for The Daily Reckoning

END

Part ii

The Deep State Moves on Trump

 

I began yesterday’s post with a warning about the ludicrous complacency rampant on Wall Street, and that its days were numbered. And that was before the New York Times’ incendiary story about Comey’s butt-covering notes on his alleged conversations with the Donald:

The Deep State has just dramatically escalated its war on President Trump but the Wall Street revilers apparently couldn’t care less. Indeed, when the machines tagged 2402 on the S&P 500 yesterday, it was surely a historic case of “look ma, no hands!”

So here follows some ruminations on why the gamblers will rue the day, and soon…..

Needless to say, it appears that the rueing has already begun.

The overnight media feeding frenzy has finally struck Wall Street in the manner of a two-by-four landing squarely between the eyes.

The Dow has actually dropped by 325 points and the VIX “fear index” has shot back way above 11 for the first time after dwelling a record three weeks in the sub-basement of history.

To be sure, this latest “bombshell” is just another installment of the Deep State’s campaign to remove the Donald from office based on the trumped-up Russia meddling story. In this case, it’s even focussed on the thinnest aspect of the entire cock-and-bull narrative.

The bogus allegation charges that General Flynn jeopardized national security by offering an olive branch during his late December call to Russian Ambassador Kislyak after Obama’s final temper tantrum about the Dems election disaster.

So if Flynn had the good sense to suggest that Putin not respond in kind because the adults would be arriving in the Oval Office three weeks hence — more power to him. And if that gesture was meant as a first step toward peace with Russia that Trump had advocated during his successful campaign — that would have been all the better.

But alas, the Deep State was having none of it. It was not only wire-taping the calls of the national security council director-designate, but also concocting the ridiculous story that Flynn was now susceptible to Russian blackmail because he had not told VP Pence every word from the unmasked transcripts.

The idea that the Russians could exert undue leverage on Flynn after the inauguration because of these brief conversations is just plain loony. It only makes sense if you assume that Russia is a dangerous world-scale enemy and that peaceful relations amounts to treason.

In fact, Russian is a pipsqueak economy only 7% as large as the US, and has no military capability whatsoever to threaten the safety and security of the American people. It has only one ancient, smoke-belching aircraft carrier tied up in the Eastern Mediterranean and would therefore need to invade the New Jersey shores in a fleet of fishing boats.

At the same time, Washington confrontated Russia at every turn. Even an uninformed outsider with a 140-character attention span like Donald Trump could see that Washington’s Russian policy needed a drastic makeover.

But all of this was beyond the pay and grade of Sally Yates, the nightmare refugee from Hillary’s Harpies that someone in the Trump organization made the mistake of appointing as acting Attorney General.

But the political greenhorns on Team Trump did not recognize that Yates was a career apparatchik of the Deep State, and had been commissioned by the DNC to set them up.

Don’t get me wrong. I think General Flynn was essentially a dangerous nutcase and militarist, but at least he was right about Russia. What Trump should have done was to launch his own witch hunt to identify and prosecute the Obama officials who had authorized the wire-tapping of Flynn and other members of his campaign staff in the first place.

As it happened, the Donald really had no clue why he had hastily fired General Flynn because the man had done exactly nothing wrong. He actually praised him effusively at the very moment he lowered the boom.

In any event, since there was no reason for the FBI’s Russia investigation in the first place. It was patently a political Trojan horse left behind by the Obama/Clinton Democrats. And the Donald apparently made a fatal human gesture of remorse.

That is, after an Oval Office meeting with national security officials the day after he fired Flynn, Trump asked Comey to stay behind apparently to relieve his guilty conscience:

“I hope you can see your way clear to letting this go, to letting Flynn go … He is a good guy. I hope you can let this go.”

And now 90 days after that surely innocent request, we are suddenly on the doorstep of Watergate. Just ask one of the Deep State’s most insidious operators, Senator McWar of Arizona.

His response to the New York Times story tells you all you need to know about how far the Imperial City has come off the rails of sanity:

“I think we’ve seen this movie before. I think it appears at a point where it’s of  Watergate size and scale… the shoes continue to drop, and every couple days there’s a new aspect,” McCain told Bob Schieffer, the legendary former host of CBS’ Face the Nation, at a dinner where McCain was receiving the International Republican Institute’s Freedom Award.

That’s rich. The Republican Institute is a taxpayer funded propaganda arm of the Warfare State, which is a huge waste and has nothing at all to do with freedom. In fact, its purpose is to fund the same kind of bellicose war-mongering in which Senator McCain specializes.

Nor is McCain alone in his senility and vengeful war-mongering. According to the leading propaganda outlet for the permanent Congressional ruling class, The Hill, the GOP establishment is already losing it nerve, too.

“A whole new door has opened,” said a well-known Republican operative who has worked to help the Trump White House. “A week ago, we were talking about the agenda grinding to a halt,” the Republican said. “Now, the train is going down the hill backwards.”

Yes, and tumbling down the drain with it is Trump’s purported pro-growth Fiscal Stimulus.

Likewise, any prospect whatsoever that Washington can avoid an endless bloodbath on the budget front has surely now been deep-sixed, to reintroduce a term from the Nixon era now upon us.

That is, raising the debt ceiling will be practically impossible. And keeping the Washington Monument open will entail repeated shutdown battles over short-term continuing resolutions.

Still, it is not the exceedingly dim prospects of the ballyhooed Trump Tax Cut that constitutes the real two-by-four about to land upside the head of Wall Street.

What will really send the stock averages plummeting is the accompanying evidence that the so-called recovery since July 2009 is entirely phony and unsustainable. The U.S. economy is tottering precariously on a foundation of economic rot.

I have warned repeatedly that the business cycle has not been abolished by the Fed. And that at nearly 100 months, the current expansion is exceedingly long-in-the-tooth and exposed to every headwind from both domestic and global developments.

To be sure, the rot which will bring on the next recession has been hiding in plain sight all along. But it was Wall Street’s expectation of perpetual stimulus that kept it obscured.

But with the Fed resolutely on the path toward policy normalization and Washington plunging into the nightmare of impeachment, the evidence won’t stay in the shadows for long — even in the deep canyons of Wall Street.

Today’s market bloodbath suggests that the message is finally getting through. But there’s plenty more to follow.

Regards,

David Stockman
for The Daily Reckoning

end

 

Well that about does it for tonight

I will see you tomorrow night

H.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: