May 18/Another precious metals raid today: gold down $4.85 and silver down 26 cents/amt standing for silver at the comex rises again to 22.94 million oz/Big Chinese insurer warns of huge defaults in WMP’s/A biggy: Deutsche bank being tried in Italian court as being a global criminal organization/Brazil in turmoil again as new allegations surface against the new President/More stories on Trump vs the Deep state/

GOLD: $1252.65  down $4.85

Silver: $16.66  down 26  cent(s)

Closing access prices:

Gold $1247.00

silver: $16.60

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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: $1269.02 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  1259.75

PREMIUM FIRST FIX:  $9.27

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SECOND SHANGHAI GOLD FIX: $1262.28

NY GOLD PRICE AT THE EXACT SAME TIME: 1257.95

Premium of Shanghai 2nd fix/NY:$4.33

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LONDON FIRST GOLD FIX:  5:30 am est  $1261.35

NY PRICING AT THE EXACT SAME TIME: $1262.15

LONDON SECOND GOLD FIX  10 AM: $1255.90

NY PRICING AT THE EXACT SAME TIME. $1256.75

For comex gold:

MAY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  17 NOTICE(S) FOR 1700 0 OZ. 

 TOTAL NOTICES SO FAR: 508 FOR 50800 OZ    (1.5800 TONNES)

For silver:

For silver: MAY

47 NOTICES FILED TODAY FOR 235,000  OZ/

Total number of notices filed so far this month: 4514 for 22,570,000 oz

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END

For 14 consecutive days, the amount standing for physical has risen.  On First day notice 16.8 million oz were standing; tonight 22.94 million oz. It looks to me that sovereign China wants its silver back as it looks like we have a determined player with deep pockets willing to take silver away from the comex.

Interestingly enough, the premium on Sprott’s silver funds reached a positive 1.19% on a raid day.  Even his gold premium went up.

 

As I pointed out to you yesterday, whenever you see gold up appreciably coupled with silver lagging  and a poor performance of the gold/silver equities,  this is a sure sign that they orchestrate a raid the next day.  They probably had everything set up to raid yesterday but the Trump disasters delayed the attack by one day.

 

Let us have a look at the data for today

.

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In silver, the total open interest  FELL  BY 2220  contracts DOWN to 212,907 DESPITE THE RISE IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (UP  15 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.064 BILLION TO BE EXACT or 152% of annual global silver production (ex Russia & ex China). WE MUST HAVE HAD CONSIDERABLE BANKER SHORT COVERING YESTERDAY IN THE SILVER ARENA.

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 47 NOTICE(S) FOR 235,000  OZ OF SILVER

In gold, the total comex gold ROSE BY A WHOPPING 10,858  contracts WITH THE RISE IN THE PRICE OF GOLD ($22.00 with YESTERDAY’S TRADING). The total gold OI stands at 445,979 contracts.

we had 17 notice(s) filed upon for 1700 oz of gold.

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

GLD:

We had a big changes in tonnes of gold at the GLD: a withdrawal of 1.18 tonnes of gold which was probably used in the paper attack on gold today

Inventory rests tonight: 850.71 tonnes

.

SLV

Today: a big change in inventory/ a deposit of 1.42 million oz into the SLV

THE SLV Inventory rests at: 343.815 million oz

Here is a strange fact for the CFTC to price discover:

when the record OI occurred on April 21, the price of silver was at 18.42  (OI record 234,000 contracts.  Interestingly the SLV inventory on  April 21 was 325 million oz and today it is 343 million dollars and  the price of silver is $1.82 less.  And the comex is a price discovery mechanism????

end

.

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

1. Today, we had the open interest in silver FELL BY 2220 contracts DOWN TO 212.907, (AND STILL CLOSE TO  THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), DESPITE THE GOOD SIZED  RISE IN PRICE FOR SILVER  YESTERDAY  (15 CENTS). NO QUESTION WE HAD SHORT COVERING BY THE BANKERS

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 14.30 POINTS OR .46%  OR / /Hang Sang CLOSED DOWN 157.11 POINTS OR 0.62% The Nikkei closed DOWN 261.02 POINTS OR 1.32%/Australia’s all ordinaires  CLOSED DOWN  0.79%/Chinese yuan (ONSHORE) closed DOWN at 6.8917/Oil DOWN to 48.44 dollars per barrel for WTI and 51.50 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED    ..Offshore yuan trades  6.8842 yuan to the dollar vs 6.8917 for onshore yuan. NOW  THE OFFSHORE IS A TOUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS NOT HAPPY WITH WORLDY EVENTS THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

Japan reports a strong 2.2% rise year over year on its GDP growth.  This is not necessarily good news as Kuroda is looking for an excuse to taper his bond purchases and he now has one

( zero hedge)

c) REPORT ON CHINA

A big Chinese insurer warns of mass defaults and social unrest due to a mass redemption on Wealth Management Products (WMP)

The total amount of debt in these vehicles is 10 trillion or about 1/3 of the total Chinese debt.It seems that Forsea has been told not to issue new debt as much of what they hold is non performing. Forsea claims that they will default unless the sign up new stuff:  the class definition of a Ponzi scheme

( zero hedge)

4. EUROPEAN AFFAIRS

i)German based Aldi/and Lidl/USA (Wal-Mart)

Wal-Mart is now facing stiff competition from the likes of German grocer Aldi as WalMart prices are still higher.  Now a new German grocer is set to enter the uSA, Lidl and together with USA competitor Kroger the following entry will cause a huge deflationary spiral in food prices in the USA

( zero hedge)

ii)Deutsche bank/Germany

Deutsche bank is now being sued in an Italian court for running an international criminal organization.  Under USA law this would be RICO

( zerohedge)

iii)GREECE

You know it is bad when the police join in on the protests

Greek citizens are protesting Brussels’ new austerity measures

( zero hedge)

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7. OIL ISSUES

My goodness: Venezuela’s oil production is now on the brink of collapse.  What is amazing is that Venezuela has the world’s largest reserves of oil in the ground

( Nick Cunningham/OilPrice.com)

8. EMERGING MARKETS

i)Brazil in turmoil last night after President Temer has been recorded offering hush money to jailed former speaker of the house Cunha. This was followed with massive protests by the populace.

( zero hedge)

ii)Wow!! the Brazilian real crashes by 6% and then is HALTED!!!!! Brazilian bonds tumble by the most on record
( zero hedge)
iii)Then the Brazilian stock market crashes. It is now halted after plunging 10%(courtesy zero hedge)
iv)Late in the day Temer speaks and down does the Brazilian real again: He will not resign:( zero hedge)

9.   PHYSICAL MARKETS

i)Your crime scene today:

( zero hedge)

ii)Enjoyable reading as to why every Indian government scheme to kill gold purchases (and relieve gold from citizens) has failed

(courtesy Asthana/MoneyControl.com/Mumbai India/GATA)

James Turk continues with his interview with Kingworldnews and talks about a short squeeze in gold

( zero hedge)

iii) The Shanghai gold exchange has just provided their data for gold withdrawals which equals gold demand in China.

As you will recall, total withdrawal in 2016 we recorded at 1970 tonnes.  So far in the first 4 months we have  witnessed a demand of 727 tonnes or annualized at 2181 tonnes which is now signalling increasing demand for gold in China. If demand continues then we will come close to the 2013 demand total of 2197 tonnes.

( Ronan Manly./Bullionstar/GATA)

 

10. USA stories

i)Rosenstein  appoints a special prosecutor with respect to the Russian probe.  We now no that Trump was unaware of this development until after the  fact

( zero hedge)

ii)This is the question that I am also asking:  If Trump was so forceful in asking for an end to the Flynn probe: why was Comey so silent for two months?

( zerohedge/Peter King/)

iii)this should be fun:  Rosenstein is to be grilled by the entire senate today.  However it is a closed door session

( zero hedge)

iv)Trump comments that the deep state is after him and it is the single greatest witch hunt in American history. Interestingly enough it was not Trump who initiated the special prosecutor.  Will he now ask for a special prosecutor to look into the crimes of Hillary Clinton?

( zero hedge)

v)USA Mortgage applications tumble the most in one year:

( zero hedge)

( zero hedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY 10,858 CONTRACTS UP to an OI level of 445,879 WITH THE  RISE IN THE PRICE OF GOLD ( $22.00 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 GAIN OF 8 contract(s) RISING TO  40. We had 0 notices filed yesterday so we GAINED 8 contracts or an additional 800 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 GAINED 4702 contracts UP to 208.931.  The non active July contract GAINED another 275 contracts to stand at 1043 contracts. The next big active month is August and here the OI gained 5,068 contracts up to 137,835.

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:    321,216 contracts of JUNE 2016 CONTRACTS OPEN.( compared to JUNE 2017: 208,931)

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

We had 17 notice(s) filed upon today for 1700 oz

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And now for the wild silver comex results.  Total silver OI FELL BY 2220 contracts FROM  215,127 DOWN TO 212,907 WITH YESTERDAY’S 15 CENT PRICE GAIN.  IT SURE LOOKS LIKE OUR BANKERS HAVE CAPITULATED AGAIN AS THEY HAVE STARTED TO COVER THEIR SHORTS IN EARNEST. IT ALSO EXPLAINS THE REASON FOR THE RAID TODAY
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 10 contracts RISING TO 121 contracts. MY GOODNESS!! IT HAPPENED AGAIN!! We had 28 notices filed yesterday, so we gained another 38 notices or an additional 190,000 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 14 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 121 contracts to stand at 797. The next big active month will be July and here the OI  LOST 1830 contracts DOWN to 161.435.

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 47 notice(s) filed for 235,000 oz for the MAY 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 202,505 contracts which is good

Yesterday’s confirmed volume was 411,657 contracts  which is huge.

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for MAY
 May 18/2017.
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
 
17 notice(s)
1700 OZ
No of oz to be served (notices)
23 contracts
2300 oz
Total monthly oz gold served (contracts) so far this month
508 notices
50,800 oz
1.5800 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 17 notices were stopped (received) by jPMorgan dealer and 0 notice(s) was (were) stopped/ Received) by jPMorgan customer account.

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To calculate the initial total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (508) x 100 oz or 49100 oz, to which we add the difference between the open interest for the front month of MAY (40 contracts) minus the number of notices served upon today (17) x 100 oz per contract equals 53,100 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 (508) x 100 oz  or ounces + {(32)OI for the front month  minus the number of  notices served upon today (17) x 100 oz which equals 53,100 oz standing in this non active delivery month of MAY  (1.6516 tonnes).  We gained 8 contracts or an additional 800 oz are standing for delivery and 0 contracts were cash settled through the EFP route where they received a fiat bonus plus a futures contract in a private deal with the bankers.
 
 
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I have now gone over all of the final deliveries for this year and it is startling.
Here are the final deliveries for all of 2016 and the first 5 months of  2017
Jan 2016:  .5349 tonnes  (Jan is a non delivery month)
Feb 2016:  7.9876 tonnes (Feb is a delivery month/deliveries this month very low)
March 2016: 2.311 tonnes (March is a non delivery month)
April:  12.3917 tonnes (April is a delivery month/levels on the low side
And then something happens and from May forward deliveries boom!
May; 6.889 tonnes (May is a non delivery month)
June; 48.552 tonnes ( June is a very big delivery month and in the end deliveries were huge)
July: 21.452 tonnes (July is a non delivery month and generally a poor one/not this time!)
August: 44.358 tonnes (August is a good delivery month and it came to fruition)
Sept:  8.4167 tonnes (Sept is a non delivery month)
Oct; 30.407 tonnes
Nov.    8.3950 tonnes.
DEC/2016.   29.931 tonnes
JAN/2017     3.9004 tonnes
FEB/ 18.734 tonnes
March: 0.5816 tonnes
April/2017: 2.8678
MAY:2017/  1.6516 TONNES
total for the 17 months;  249.569 tonnes
average 14.680 tonnes per month
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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 18. 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
183,164.00 oz
Brinks
HSBC
Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory 
 457,152.01  oz
brinks
No of oz served today (contracts)
 47 CONTRACT(S)
(235,000 OZ)
No of oz to be served (notices)
74 contracts
( 370,000 oz)
Total monthly oz silver served (contracts) 4514 contracts (22,570,000 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  5,936,048.3 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 brinks: 28,045.600 oz
ii) Out of HSBC:  155,118.400 oz
TOTAL CUSTOMER WITHDRAWALS:  183,164.000  oz
 We had 1 Customer deposits:
i) Into Brinks:   457,152.01 oz
***deposits into JPMorgan have now stopped 
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits  457,152.01 oz
 
 we had 1 adjustment(s)
i) out of JPMorgan: 1,990.0000 oz ?? as a counting error???
The total number of notices filed today for the MAY. contract month is represented by 47 contract(s) for 235,000 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 4514 x 5,000 oz  = 22,570,000 oz to which we add the difference between the open interest for the front month of MAY (121) and the number of notices served upon today (47) x 5000 oz equals the number of ounces standing

 

.
 
Thus the initial standings for silver for the MAY contract month:  4514(notices served so far)x 5000 oz  + OI for front month of APRIL.(121 ) -number of notices served upon today (47)x 5000 oz  equals  22,940,000 oz  of silver standing for the MAY contract month.
We actually gained another 38 contracts or an additional 190,000 oz will stand for delivery and again nobody wished to accept an EFP contract for a fiat bonus. It probably means that the entire 22.94 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 14 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 58,586 which is excellent
Yesterday’s  confirmed volume was 135,758 contracts which is simply out of this world
TODAY’S ESTIMATED VOLUME OF 135,758 CONTRACTS EQUATES TO 679 MILLION OZ OF SILVER OR 97% 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:   200.755 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 6.5 percent to NAV usa funds and Negative 6.2% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.2%
Percentage of fund in silver:37.7%
cash .+0.1%( May 18/2017) 
 
2. Sprott silver fund (PSLV): Premium RISES TO   +1.19%!!!! NAV (May 18/2017) 
3. Sprott gold fund (PHYS): premium to NAV rises to -0.33% to NAV  (May 18/2017 )
Note: Sprott silver trust back  into POSITIVE territory at +1.19% /Sprott physical gold trust is back into NEGATIVE/ territory at -0.33%/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 18/a withdrawal of 1.18 tonnes of gold from the GLD/Inventory rests at 850.71

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

 

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May 18 /2017/ Inventory rests tonight at 850.71 tonnes
*IN LAST 154 TRADING DAYS: 97.42 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 97 TRADING DAYS: A NET  30.01 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  55.35 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

may 18/2017/another big deposit of 1.42 million oz added to the SLV/inventory rests at 343.815 million oz.

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

 

May 18.2017: Inventory 343.395  million oz
 end

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Gold Investment Is the Ultimate Guide for Tech Investors In 500 Words

Gold Investment Is the Ultimate Guide for Tech Investors In 500 Words

by Jan Skoyles, Editor Mark O’Byrne

Tech is the umbrella word for all things fashionable to invest in right now. Take the recent flotation of Snap Inc. (parent company of teen and narcissists’ favourite app SnapChat), everyone wanted in on the $20 billion flotation.

Snap is likely a sign of a tech bubble that will cost a lot of savers and investors huge amounts of money … again.

Before putting your savings into the likes of SnapInc we think there are some major lessons wannabe investors need to learn. Lessons not just from experienced tech investors but also from gold investment. Lessons which should lead one to consider investing in physical, allocated, segregated gold to secure your portfolio in a world of massive financial bubbles, significant geopolitical uncertainty and huge investment hype.

Is this an investment in a product or an application?

In tech, there are two main things – the product and application.

For example, blockchain is the application, bitcoin is a product. Linux is an application, a website built using Linux is the product. Both blockchain and linux have shown they have endless use-cases and carry significant value in their fields. But the products can vary.

In a similar vein there are many different gold products, whether ETFs, digital gold, gold futures however these all rest on the application of physical gold. However there is much intermediation and they are many tech and legal layers away from the real thing.

In a world of massive technological and systemic risk – as seen this week – why not own the real thing?

Is there competition?

SnapChat, like any new company, faces a battle here as Facebook and Instagram successfully copy the very things that drew first-movers to the application.

When it comes to gold, there is competition between gold investment products, but there is no competition to real, physical gold.

Physical gold cannot be mimicked by fiat money nor can gold products mimic the qualities that direct ownership offers to investors looking to protect their portfolios.

Is this something others are likely to buy?

New tech companies can rarely demonstrate a proof-of-concept. When it comes to SnapChat the jury’s out. The company is built around a single product and it’s losing users and money daily.

Gold is a different story, for thousands of years gold has been used in a variety of ways but primarily as money and a store of value. Increasing numbers of people around the world and especially in Asia want to own it. It crosses many international borders – economic and even political.

Demand continues to increase and yet supply is anaemic at best – so much that we are facing peak gold. Never can a tech company state that they are at ‘peak share’ or ‘peak application.’

Conclusion

When over $20 billion is flowing into just one tech company that has no profits, it is clearly not about real value but instead that there is an abundance of credit in the system and rampant speculation.

Savers get nothing from depositing their hard earned cash in banks (maybe less than nothing with near negative rates and increasing charges) and so whilst they perhaps wouldn’t normally invest in companies like SnapInc they are doing so, with risky consequences.

Gold investors can be assured that not only is it a form of insurance against financial bubbles but that it has no competition, it has a variety of use-cases, is hugely in demand and that it holds its value over time.

We’re pretty sure no tech stock can guarantee those things.

Now might be a good time for tech investors to reduce their allocations to tech stocks and increase allocations and hedge their tech stocks with a gold investment.

News and Commentary

“Political mess in the U.S. is finally impacting U.S. and global markets” – GoldCore (MarketWatch.com)

Gold holds gains as U.S. political worries hit dollar (Reuters.com)

Billion-Dollar Gold Dream Lures Mining Maverick Out of Hiatus (Bloomberg.com)

Buyers Flee VanEck Gold ETF as Barrick Slip Dims Mining View (Bloomberg.com)

Ex-FBI chief Mueller named special prosecutor for Trump-Russia probe (Reuters.com)

Prudent retirees are saving for a rainy day (Bloomberg.com)

The Deep State Moves on Trump (DailyReckoning.com)

Financial Bubbles To Burst as Washington Completely Dysfunction and Heading for Combat (DailyReckoning.com)

What the Heck’s Going on With Cryptocurrencies? (WolfStreet.com)

EU grab on euro clearing would be “vastly damaging” for Europe and global financial system (CityAM.com)

Gold Prices (LBMA AM)

18 May: USD 1,261.35, GBP 968.21 & EUR 1,133.95 per ounce
17 May: USD 1,244.60, GBP 961.70 & EUR 1,122.13 per ounce
16 May: USD 1,234.05, GBP 958.98 & EUR 1,117.93 per ounce
15 May: USD 1,231.50, GBP 952.32 & EUR 1,124.61 per ounce
12 May: USD 1,227.90, GBP 955.06 & EUR 1,129.55 per ounce
11 May: USD 1,221.00, GBP 945.66 & EUR 1,122.95 per ounce
10 May: USD 1,222.95, GBP 944.61 & EUR 1,124.99 per ounce

Silver Prices (LBMA)

18 May: USD 16.81, GBP 12.90 & EUR 15.10 per ounce
17 May: USD 16.90, GBP 13.03 & EUR 15.22 per ounce
16 May: USD 16.72, GBP 12.97 & EUR 15.13 per ounce
15 May: USD 16.59, GBP 12.83 & EUR 15.12 per ounce
12 May: USD 16.30, GBP 12.68 & EUR 14.99 per ounce
11 May: USD 16.37, GBP 12.70 & EUR 15.06 per ounce
10 May: USD 16.29, GBP 12.59 & EUR 14.99 per ounce


Recent Market Updates

– Gold Spikes On Heavy Volume On Trump, U.S. Political “Mess”
– Cyber Wars Could Crash Markets and Threat To Humanity – Rickards and Buffett
– Cyber Attacks Show Vulnerability of Digital Systems and Digital Currencies
– History of Gold – Interesting Facts and Changes Over 50 Years
– U.S. Gold Exports To China and India Surge In 2017
– The Dream of the Central Banker
– Silver Investment Case Remains Extremely Compelling
– Gold Coins, Bars In Demand – +9% In Q1, 2017
– Irish Property Bubble – 38pc Believe Housing Market Will Crash
– Silver Bullion On Sale After 10.6% Fall In Two Weeks
– London Property Bubble Vulnerable To Crash
– Silver price manipulation, is regulation putting a stop to it?
– Trump 100, Margin Debt Stock Bubble and Gold

Mark O’Byrne
Executive Director

END

Your crime scene today:

(courtesy zero hedge)

 

“Everything’s Fixed”? Silver Slammed As Black Gold Bounces

With the dollar index dribbling higher…

It appears someone is more than happy to dump safe-havens like gold and silver (-2%) and buy-the-dip in WTI and RBOB this morning…

Gold and Silver dumped -because everything’s awesome again?

And WTI and RBOB bid, because growth?

Whether this is macro-fund shakeout from yesterday is unclear but the moves are chaotic to say the least.

end

Enjoyable reading as to why every Indian government scheme to kill gold purchases (and relieve gold from citizens) has failed

(courtesy Asthana/MoneyControl.com/Mumbai India/GATA)

 

Why Indian government’s schemes to kill gold have failed

Section:

By Shishir Asthana
MoneyControl.com, Mumbai, India
Wednesday, May 17, 2017

One area where this government doesn’t seem to want to learn from its mistakes is gold schemes. Its fixation with launching these schemes despite repeated failures makes one wonder if it is pride that stands in the way of accepting that these have been duds.

To be fair there is nothing wrong with the idea of seeking gold hoarded at homes or in bank lockers to be brought into the economy. It was an innovative idea that the government dared to test. Being the second largest buyers of gold, which accounts for more than 25 percent of India’s trade deficit, Indians have persisted in investing in an unproductive asset. …

The fact is that the product itself is faulty. Gold bond buyers do not enjoy the liquidity that a physical gold buyer does. There is a lock-in period for gold bonds of eight years. On the other hand, someone buying physical gold does not have to follow any such restrictions.

Though selling in exchanges is allowed, there is no secondary market for gold bonds. Finally a gold bond buyer exposes himself to scrutiny, while there is still room for anonymity for physical gold buyers.

Unless these issues are addressed, the gold bonds are unlikely to pick up. …

… For the remainder of the report:

http://www.moneycontrol.com/news/business/economy/why-modis-gold-schemes…

END

 

James Turk continues with his interview with Kingworldnews and talks about a short squeeze in gold

(courtesy zero hedge)

 

In KWN interview, Turk muses about short squeeze in gold

Section:

8:07p ET Wednesday, May 17, 2017

Dear Friend of GATA and Gold:

In the second part of his recent interview with King World News, GoldMoney founder and GATA consultant James Turk says a short squeeze may have just started in the gold market. If it has started, Turk says, it will be apparent from “a series of back-to-back daily gains much larger than what we are seeing today.” Turk’s comments are excerpted at KWN here:

http://kingworldnews.com/james-turk-we-may-now-be-in-the-early-stages-of…

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

END

The Shanghai gold exchange has just provided their data for gold withdrawals which equals gold demand in China.

As you will recall, total withdrawal in 2016 we recorded at 1970 tonnes.  So far in the first 4 months we have  witnessed a demand of 727 tonnes or annualized at 2181 tonnes which is now signalling increasing demand for gold in China. If demand continues then we will come close to the 2013 demand total of 2197 tonnes.

(courtesy Ronan Manly./Bullionstar/GATA)

 

Ronan Manly: An update on SGE vault withdrawals and price premiums

Section:

10:26p ET Wednesday, May 17, 2017

Dear Friend of GATA and Gold:

Whatever the Chinese government is trying to accomplish in the gold market, gold researcher Ronan Manly writes tonight, its policies seem to be sustaining steady premiums for gold sold on the Shanghai Gold Exchange. Manly’s report is headlined “An Update on SGE Vault Withdrawals and SGE Price Premiums” and it’s posted at Bullion Star here:

https://www.bullionstar.com/blogs/ronan-manly/update-sge-vault-withdrawa…

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

END

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

 
 

1 Chinese yuan vs USA dollar/yuan A LITTLE WEAKER  6.8917(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES A LOT WEAKER TO ONSHORE AT   6.8842/ Shanghai bourse CLOSED DOWN 14.30 POINTS OR .46%   / HANG SANG CLOSED DOWN 157.11 POINTS OR 0.62% 

2. Nikkei closed DOWN 261.02  POINTS OR 1.32%   /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: FALLS TO   +.047%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.69/ 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::  48.44 and Brent: 51.50

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  +.327%/Italian 10 yr bond yield DOWN  to 2.113%    

3j Greek 10 year bond yield RISES to  : 5.76% ???  

3k Gold at $1260.90/silver $16.70 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 84/100 in  roubles/dollar) 57.96-

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 DEVALUATION SOUTHBOUND 

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 110.69 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  0.9786 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0882 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  +0.327%

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 2.205% early this morning. Thirty year rate  at 2.892% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Selloff Accelerates As Trump Fears Mount: “The Market Will Revert To Much Higher Volatility”

European and Asian stocks slumped on Thursday following the worst one-day drop in US stocks in 8 months, while S&P futures tumbled to session lows, down 0.3% to 2,350 after initially posting a modest rebound, following a new Reuters report alleging that Trump campaign members communication with Russians on at least 18 occasions, and which prompted today’s risk off mood sending the USDJPY crashing by 100 pips from overnight highs of 111.40.

As stocks fells, yields dropped to the lowest in a month, while volatility, artificially subdued for the past month, exploded higher. Should vol continue to rise rapidly, there is a threat that vol-neutral and directional systematic funds such as CTAs and risk-parity will be forced to liquidate positions, as explained yesterday.

“The market will revert to much higher volatility and this could be the start of it,” said Richard Haworth, chief investment officer of 36 South Capital Advisors, a London-based hedge fund which bets on rising price swings. “The sharp move this week reflects how short volatility the market was – how complacent.”

Asian stocks fell sharply after Wall Street suffered its worst day in over eight months overnight and Europe’s main bourses dropped between 0.8 and 1.3 percent as the selling momentum built again. The MSCI Asia Pacific Index slid 0.8 percent, the most since April 6. Japan’s Topix slumped 1.3 percent while a volatility measure on the Nikkei 225 Stock Average jumped to the highest this month.  The Hang Seng China Enterprises Index of mainland shares traded in Hong Kong retreated 1.1 percent.

Rabobank strategist Michael Every said the key question was whether markets would “calm down, or panic more.”

“The obvious point we’ve made before repeatedly is that Trump now has much less political capital to spend in the Capitol, and that makes Trumpflation far less likely. Yet things seem to be rapidly moving beyond that point, opening up other scenarios,” he said. He was referring to the threat of impeachment.  A mini-recovery in Asia as Japan posted its best economic performance in a year also ran out of steam however.

And while stocks flashed warning lights again, the dollar seemed to be going for the ‘calm down’ option, pulling out of a six-day dive that had taken it to its lowest level in six months against other top currencies including the euro and the yen.

Even as the euro fell, there was more support for the common currency as one of the European Central Bank’s most influential policymakers, Executive Board member Benoit Coeure, said it should not delay paring back its stimulus once it was convinced inflation has recovered. “Too much gradualism in monetary policy bears the risk of larger market adjustments when the decision is eventually taken,” Coeure told Reuters in an interview in which he also said the bank’s bond-buying program was “not set in stone”.

For now, however, the political jitters coming out of the United States remained the dominant factor for traders.

In Europe, UK retail sales were the major economic release, and they beat expectations decisively with headline retail sales rising 4.0% in April vs. Exp. 2.1% (Rev. 2.0%), while retail sales ex fuel (Apr) rose 4.5% Y/Y vs. Exp. 2.5% (Prey. 2.6%, Rev. 2.8%). This sent the Sterling surging above 1.30 for the first time since October.

It’s not just US political woes that are in focus: trouble mounted for Brazilian President Michel Temer, who was recorded discussing payments to silence testimony by a potential witness in the country’s biggest-ever graft probe, sources told media including Reuters. An exchange-traded fund of Brazilian equities fell more about 8 percent in Tokyo after the Brazilian real had dropped more than 1.2 percent in local markets.

In commodity markets, which have also been highly volatile in recent weeks but due mainly to supply and demand issues, there were steadier signals. Brent oil futures dipped back to $52.05 a barrel after hitting a two-week high overnight on the back of an ongoing effort by OPEC to cut production.

In rates, the yield on 10-year Treasuries dropped four basis points to 2.19 percent, heading for the lowest since April 18. Yields in France fell three basis points, while German yields lost five basis points. Bonds of state-controlled energy company Petroleo Brasileiro SA dropped by the most in six months amid the previously discussed political crisis in Brazil. The company’s 800 million euros of notes due in January 2025 led the slump, falling 4.5 cents on the euro to 102 cents, the biggest decline since November.

Today we get jobless claims data and the Philadelphia Fed Business Outlook. Earnings expected from Wal-Mart, Gap, Salesforce

Bulletin Headline Summary from RanSquawk

  • Equity markets sour on fresh Trump revelations.
  • GBP reaches highest since Sep’16 following strong retail sales.
  • Looking ahead, highlights include Philadelphia Fed Manufacturing Index, as well as comments from Draghi.

Global Markets Snapshot

  • S&P 500 futures down 0.3% to 2,350
  • STOXX Europe 600 down 0.5% to 389.20
  • MXAP down 0.8% to 150.76
  • MXAPJ down 0.6% to 491.18
  • Nikkei down 1.3% to 19,553.86
  • Topix down 1.3% to 1,555.01
  • Hang Seng Index down 0.6% to 25,136.52
  • Shanghai Composite down 0.5% to 3,090.14
  • Sensex down 0.4% to 30,549.86
  • Australia S&P/ASX 200 down 0.8% to 5,738.31
  • Kospi down 0.3% to 2,286.82
  • German 10Y yield fell 2.3 bps to 0.355%
  • Euro down 0.2% to 1.1135 per US$
  • Italian 10Y yield fell 8.2 bps to 1.861%
  • Spanish 10Y yield unchanged at 1.565%
  • Brent Futures down 0.7% to $51.85/bbl
  • Gold spot up 0.06% to $1,261.85
  • U.S. Dollar Index down 0.02% to 97.56

Top Headline News

  • The U.S. Justice Department has named former FBI Director Robert Mueller as special counsel to oversee the bureau’s investigation of Russia’s efforts to influence the 2016 election, as well as possible collusion by Trump campaign associates, and to prosecute any federal crimes uncovered
  • Brazil was plunged back into a political crisis reminiscent of last year’s impeachment saga following reports that President Michel Temer was embroiled in an alleged cover-up scheme involving the jailed former speaker of the lower house of Congress
  • Carlyle Group LP is seeking to raise about $280 million in debt for its acquisition of more than 1 gigawatt of natural gas-fired power plants in Illinois
  • Noble Group Ltd.’s stock fell while its bonds rose Thursday after people familiar with the matter said the embattled commodity trader has approached lenders to replace a credit facility with a $2 billion borrowing base facility
  • As political turmoil in Washington roils financial markets and throws doubt over prospects for a Trump bump to growth, Japan is enjoying a stability dividend
  • Japan Gets Growth Under Abe’s Stable Hand as Trump Roils U.S.
  • Oil Stuck in Trump Slump as Risk Aversion Damps U.S. Supply Drop
  • Venezuela’s Oil Woes Give OPEC a Hand as Crisis Cuts Supply
  • U.S. Said to Ready Lawsuit Over Fiat Chrysler Diesel Emissions
  • Carlyle Said to Seek $280 Million Debt for Gas-Plant Purchase
  • GM to Cease India Sales, Offload South African Assets to Isuzu
  • Citi Appoints Rajashekaran as Country Officer for Bangladesh
  • National Grid Considers Electric Vehicle Charging in U.K., U.S.
  • Medtronic’s New Stent Succeeds in Coronary Artery Disease Study
  • James Hardie in Final Stages of U.S. Sales Chief Search: CEO
  • Argenx Raises About $100m in Gross Proceeds From Nasdaq IPO
  • CSX Says CEO ‘Actively and Deeply Involved’ in Daily Management
  • Chicken Outlook Positive as B&G Eyes M&A: BMO Conference Wrap
  • L Brands Sees Year Comp. Sales Down in Low-Single Digits
  • Noble Group Said to Seek $2 Billion Loan Amid Turmoil

Asia equity markets maintained the downbeat tone from Wall St, where US stocks posted their worst performance in 8 months and financials slumped as the ongoing Trump-Comey-Flynn situation led to an unwinding of the Trump trade. This pressured ASX 200 (-1.2%) and Nikkei 225 (-1.5%) from the get-go, while the latter also suffered from the ill-effects of a firmer currency. Shanghai Comp. (-0.6%) and Hang Seng (-0.5%) conformed to the downbeat tone, although losses have been stemmed as participants mulled over the latest property price data and government steps to support businesses. 10yr JGBs were initially higher to track the gains in T-notes with demand supported amid a flight to safety. However, prices then failed to sustain the upside and returned flat in the 2nd half of trade, amid a lack of drivers and after a muted 20yr auction where the results were broadly in line with the prior month.

Top Asia News

  • China’s Leverage Campaign Is Turning Bond Market Upside Down
  • Indonesia Keeps Rates Steady as Inflation Pressures Increase
  • Japan Apartment Loans Drop as Regulators Monitor Transactions
  • Cogobuy Slumps; Spokesperson Says Unaware of Reason for Decline
  • AAC Technologies Suspends Trading in Hong Kong
  • Subaru Is Said to Weigh Sweden’s Autoliv as Camera Supplier

European equities continue to take direction from events stateside whereby Trump is coming under increasing pressure given recent revelations surrounding former FBI Director Comey. The latest reports suggest that Trump Adviser Flynn and a Russian ambassador discussed setting up a back channel Between Trump and Putin in 2016 with records of 18 calls between Trump campaign and people linked to Putin currently being reviewed by investigators. Given that a bulk of the focus for the market is on developments in the US, some participants may await the US entrance to market for any further clarity but nonetheless EU investors are unwilling to currently support stocks with the Eurostoxx 50 lower by 0.7%. On a sector breakdown, losses are largely broad-based with the exception of the energy sector which is being hampered by a modest pullback in prices and Shell (-3.0%) who trade ex-div. Given the price action in equities, fixed income markets trade broadly higher in Europe with markets choosing to look through rhetoric from ECB’s Mersch, Coeure, Weidmann, Vasiliauskas and Jazbec. This subsequently saw German paper break through yesterday’s highs with potential upside initially capped by a raft of EU supply. From a core perspective, focus was on French paper given impending supply as the lines on offer were the first 5yrs placed in the market since the Macron victory. While in peripheral markets, Spain came to market with prices modestly lower heading into the bidding deadline. Both auctions were perceived as well received with attention in the fixed income space now turning to the US and the noted flattening of the US curve.

Top European News

  • Prudential Says First-Quarter Profit Jumps 25%, Names New CFO
  • Brazil-Exposed EU Shares Fall After Latest Political Crisis
  • Former FBI Chief Mueller Named Special Counsel on Russia Probe
  • Vitol Has Physical Sales of 4.5m Tons of LNG So Far in 2017
  • Commerzbank Said to Exit Physical Precious Metals Business
  • Achleitner Says Ex-Deutsche Executives to Pay for Past Missteps
  • ECB’s Weidmann Says Political Risks Have Diminished in Euro Area
  • If Germany Wants to Leave Incirlik, Turkey Will Say ‘Bye’: FM
  • Goldman ‘Myths’ Skewered in Danish Probe, CEO of Dong Says

In currencies, USD/JPY saw a move back under 111.00 as late Asia reversed the move down to 110.53. There was no urgency in retesting these levels based on the price action this morning, but with the latest news of communications with Russia during his campaign, risk (off) sentiment takes another battering just after it looked as though the dust was settling. Treasury yields had been stabilising, but are now under pressure again, with the 10yr testing 2.20%. 110.00 next support of note. In Europe, UK retail sales were the major release, and as have noted in the past week or so, the evidence based on the BRC and CBI monitors on consumer spending pointed to a strong number today. Gaining 2.3% over April, we beat consensus expectations by more than double this, so it is no surprise to see Cable taking out 1.3000 on the upside, as has been threatening in recent weeks. EUR/GBP has been knocked back into the lower half of the 0.8500’s, but with the EUR showing strong gains elsewhere, we anticipate limited downside here unless EUR/USD loses its relentless bid tone. Pressure on the commodity currencies continues, and more so on CAD after failing to take advantage of USD weakness yesterday. This looks squarely down to the hesitancy in Oil prices where WTI struggles in the mid USD49.00’s, but reclaiming USD50.00 will go some way in alleviating some of the pressure on CAD.

In commodities, in light of the ongoing Trump saga, which has taken another turn for the worse, all risk assets are and will remain under pressure. Whether this takes its toll on Oil and metals is in the balance, but Gold is certainly looking more attractive by the day, but we are still trading well off the recent highs, with Silver still trading on a USD16.00 handle. For WTI, the resistance ahead of USD50.00 now dictates trade, but consolidation circa USD49.00 suggests we are in for further upside tests, especially with the major producers all agreeing (in principle) on an extension to the output deal. The DoE was also supportive yesterday, so technical factors largely at play, but demand — as ever —contains excessive moves on the upside. Copper is back at USD2.50 this morning — down around 1.5% on the day -losses outpaced by Lead only.

Looking at the day ahead, the data includes initial jobless claims, Philly Fed business outlook for May and conference board’s leading index for April. Away from the data there is a fair amount of central bank speak scheduled. Over at the Fed we’re due to hear from Mester at 6.15pm BST when she is due to speak on the US economy and monetary policy. ECB President Draghi also speaks this evening at 6pm BST while other ECB speakers scattered throughout the day include Weidmann, Mersch, Lautenschlaeger and Nowotny. Away from that, US Treasury Secretary Steven Mnuchin is due to offer his first congressional testimony since taking office when he appears before the Senate this afternoon. A pre-release of the testimony suggests that Mnuchin will say that he wants “free and fair” trade deals for US businesses and workers, make banking rules more  efficient, and also that he wants to make sure there is ample credit available for housing. Finally this evening UK politicians (not including PM May) are due to take part in a live televised debate.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 240,000, prior 236,000; Continuing Claims, est. 1.95m, prior 1.92m
  • 8:30am: Philadelphia Fed Business Outlook, est. 18.5, prior 22
  • 9:45am: Bloomberg Consumer Comfort, prior 49.7
  • 10am: Leading Index, est. 0.4%, prior 0.4%
  • 1:15pm: Fed’s Mester Speaks on Economy and Monetary Policy

DB’s Jim Reid concludes the overnight wrap

In a hotel room in Berlin I was glued to the TV watching events unfold with regards to the US ‘MasterChief’ Mr Trump. As we discussed yesterday it all started just after the close on Tuesday with reports that Trump was potentially interfering with an FBI investigation based on a memo written by the recently sacked FBI director James Comey back in February. The White House denied Comey’s version of events in an emailed statement saying that the President “has never asked Mr Comey or anyone else to end any investigations”. House Speaker Paul Ryan backed Trump yesterday and told reporters that “now is time to  gather all the pertinent information” and that “our job is to be responsible, sober and focus only on gathering the facts”. Ryan also questioned why Comey didn’t take action at the time if the allegations are true. He also said that “it is obvious that there are some people out there that want to harm the president”. Trump himself echoed similar comments when he spoke at an event in the afternoon, saying that “no politician in history…has been treated worse or more unfairly”.

The debate in the press and in markets is whether or not there is an obstruction of justice with the ‘impeachment’ word now spreading through various press outlets and through lawmakers. The House oversight committee has requested from the FBI all memoranda, notes and information regarding any communication between Trump and Comey with the Chairman of the committee giving the FBI bureau’s acting director until May 24th to comply. There have also been requests made by the Senate Intelligence Committee and Senate Judiciary Panel for material. Numerous lawmakers have also called for Comey to appear before Congress to resolve the dispute however we are yet to hear of any confirmation from Comey. Remember that all of this is coming as the Trump administration also deals with the issue of revealing potentially sensitive information to Russian ambassadors, and also the alleged interference by Russia into the US election campaign. On that it was noted that Russian President Putin yesterday said that allegations over Trump passing classified information to Russia is intended to incite “anti-Russian sentiment”.

Overnight, the only real significant news concerns the appointment of ex-FBI Director Robert Mueller as the special counsel to oversee the investigation into the allegations of interference by Russia into the 2016 US election. The appointment was made by US deputy attorney-general Rod Rosenstein and who said that the decision to appoint Mueller “is not a finding that crimes have been committed or that any prosecution is warranted” but that “the public interest requires me to place this investigation under the authority of a person who exercise a degree of independence from the normal chain of command”.

Rosenstein is due to brief the Senate behind closed doors today. The appointment of Mueller has brought about bipartisan support, while President Trump also welcomed the appointment. No surprise then that all this culminated in a perfect storm for risk assets and one of their worst days for many months. The S&P 500 was hit to the tune of -1.82% which was the biggest one-day decline since September 9th last year. The Dow (-1.78%) was hit by a similar amount while the Nasdaq (-2.57%) suffered its worst day since the aftermath of the Brexit vote back on June 24th. Financials were also hit hard with the S&P 500 Banks index plummeting -4.00% which was also its worst day since June 24th. US small caps also tumbled with the Russell 2000 falling -2.78%. At the same time measures of volatility surged with the VIX climbing nearly 5pts (or 46%) to close at 15.59 and the highest since April 13th.

It was also the biggest one day climb in % terms since June 24th. Credit spreads were hit even harder with CDX IG just shy of 4bps wider by the end of play. That big risk-off move fuelled a strong bid for safe havens. Gold (+1.95%) rose by the most since Brexit. The Yen (+2.02%) rallied by the most since July 29th. Meanwhile in Treasuries 2y, 10y, and 30y yields finished the day 5.3bps, 10.1bps and 7.6bps lower, respectively. That rally for the 10y to 2.224% is the biggest since March 15th. The odds of a June Fed rate hike also dipped as low as 58% at one stage according to Bloomberg’s calculator (which slightly  overstates) from 100% as recently a go as May 10th. It is back at 82% this morning though. The  USD index (-0.54%) fell for the fifth day in a row and hit its lowest level since November 4th.

It wasn’t just US assets which saw wild moves yesterday. In Europe the Stoxx 600 (-1.20%), DAX (-1.35%), FTSE MIB (-2.31%) and CAC (-1.63%) all sold off sharply. The MSCI EM equity index finished -0.63%. European credit indices were wider particularly in financials with senior and sub iTraxx indices closing 3.5bps and 10.0bps wider, respectively. Sovereign bond yields across Europe were also anywhere from 3-9bps tighter depending on the country (10y Bunds rallied 5.7bps and the most since January 23rd).

In Asia this morning the fallout in markets from the Trump headlines over the past 24 hours has continued. The Nikkei (-1.44%) and ASX (-1.24%) have seen the biggest falls, while there have been much more modest moves for the Hang Seng (-0.25%), Shanghai Comp (-0.05%) and Kospi (-0.53%). US equity futures are however slightly positive. Data this morning showed that property price growth in China’s biggest cities eased in April. New home prices rose in 58 of the 70 cities, down from 62 cities in March. Meanwhile in Japan GDP printed at +0.5% qoq for Q1, matching consensus estimates. The annualized rate was  +2.2% qoq which is up a full percentage point from Q4. That makes it 5 continuous quarters of growth in Japan, the longest run since 2006. Finally it’s worth noting that Brazil is back in the spotlight overnight after the country’s O Globo newspaper ran a story suggesting that President Temer was involved in an alleged cover up scheme involving paying a witness to stay silent during a testimony.

Before we look at the day ahead, it was a pretty quiet day for data yesterday but for completeness, in Europe the HICP inflation rate for the Euro area was confirmed to have risen +0.4% mom in April, putting the annual rate at +1.9% yoy (vs. +1.5% in March). The core rate was confirmed to have increased +1.2% yoy, up from +0.7% in March. Here in the UK we learned that employment climbed a better than expected 122k in the 3 months to March, while the ILO unemployment nudged down one-tenth to 4.6%. Average weekly earnings were also confirmed as rising one-tenth to +2.4% yoy although ex-bonus growth was down one-tenth to +2.1% yoy. There were no data releases in the US yesterday. We did however hear from the Fed’s Kashkari who warned against using rate hikes to address unwanted asset bubbles. Also speaking was former Fed Chair Ben Bernanke. He said that the US economy has already approached the limits of its capacity and that unemployment is as low as it can go

Looking at today’s calendar, while it’s likely that the US political developments dominate much of the newsflow, there is also some economic data due out. This morning in Europe we’re due to receive the Q1 employment indicators in France, while later on this morning we get the April retail sales report in the UK. Due out just after midday are the ECB minutes from the last policy meeting. In the US this afternoon the data includes initial jobless claims, Philly Fed business outlook for May and conference board’s leading index for April. Away from the data there is a fair amount of central bank speak scheduled. Over at the Fed we’re due to hear from Mester at 6.15pm BST when she is due to speak on the US economy and monetary policy. ECB President Draghi also speaks this evening at 6pm BST while other ECB speakers scattered throughout the day include Weidmann, Mersch, Lautenschlaeger and Nowotny. Away from that, US Treasury Secretary Steven Mnuchin is due to offer his first congressional testimony since taking office when he appears before the Senate this afternoon. A pre-release of the testimony suggests that Mnuchin will say that he wants “free and fair” trade deals for US businesses and workers, make banking rules more  efficient, and also that he wants to make sure there is ample credit available for housing. Finally this evening UK politicians (not including PM May) are due to take part in a live televised debate

3. ASIAN AFFAIRS

i)Late WEDNESDAY night/THURSDAY morning: Shanghai closed DOWN 14.30 POINTS OR .46%  OR / /Hang Sang CLOSED DOWN 157.11 POINTS OR 0.62% The Nikkei closed DOWN 261.02 POINTS OR 1.32%/Australia’s all ordinaires  CLOSED DOWN  0.79%/Chinese yuan (ONSHORE) closed DOWN at 6.8917/Oil DOWN to 48.44 dollars per barrel for WTI and 51.50 for Brent. Stocks in Europe OPENED DEEPLY IN THE RED    ..Offshore yuan trades  6.8842 yuan to the dollar vs 6.8917 for onshore yuan. NOW  THE OFFSHORE IS A TOUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LITTLE WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY STRONGER DOLLAR. CHINA IS NOT HAPPY WITH WORLDY EVENTS THIS MORNING

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

b) REPORT ON JAPAN

Japan reports a strong 2.2% rise year over year on its GDP growth.  This is not necessarily good news as Kuroda is looking for an excuse to taper his bond purchases and he now has one

(courtesy zerp hedge)

Japan GDP Rises 2.2%; Longest Growth Stretch In 11 Years

In the same quarter in which the US teetered on the verge of contraction (supposedly due to inclement weather despite not one but two seasonal adjustments meant to eliminate “residual seasonality”), Japan grew at the fastest pace in a year and nearly triple that of the US.

On Thursday morning, Japan’s Cabinet Office reported that Japan’s Q1 GDP rose at a 2.2% annualized pace, beating estimates of 1.7% growth, and up from the 1.2% SAAR growth in Q4 of 2016. It was also Japan’s 5th consecutive quarter of positive GDP, the longest stretch of growth going back 11 years.

On a sequential basis, Japan’s economy grew by 0.5% in Q1, up from 0.3% in Q4, and in line with expectations (which begs a question, how did economists who predicted 0.5% sequential growth get 1.7% annualized, while the actual number was indeed 0.5%, yet when annualized resulted in 2.2%. The answer is probably in non-GAAP rounding).

Broken down by components, domestic demand rose 0.4% in Q4 compared to the previous quarter, when consumption posted a modest decline. Residential investment was the biggest growth component of private demand, rising by 0.7%, while public demand was a more modest 0.1%. Private inventories added 0.1%, while net exports rose 2.1% in the quarter, down modestly from 3.4%, due to the 5% increase in the Yen over the time period. Imports were a 0.2% offset to annualized GDP growth, after growing by 1.4% sequentially.

The number easily beat Goldman’s expectations. This is what the bank said ahead of the report: “We forecast +1.7% qoq annualized real GDP growth in Q1, accelerating from +1.2% in 2016Q4. Steady export growth, recovering consumer spending and inventory accumulation are the main contributors to Q1 growth, while we expect small correction to private capex, which advanced +8.4% qoq annualized in the prior quarter. Positive GDP growth in Q1 would mark a fifth quarter of sequential growth, for the first time in 11 years, confirming the solid state of Japanese economy.”

Some other economist reactions via Bloomberg:

  • “Exports have taken the lead in the recovery, and domestic demand wasn’t bad, showing resilience with household spending turning positive,” said Masaki Kuwahara, senior economist at Nomura Securities Co., which correctly forecast the 2.2 percent expansion.
  • “Looking ahead, the growth rate will slow a bit, if not turn negative, toward the second half of this year as China’s economic indicators are weakening a bit. I’m expecting exports to slow down, weighing on the overall growth rate,” said Kuwahara.
  • “It’s a pretty impressive number but I don’t think this can continue for a while,” said Takashi Shiono, an economist at Credit Suisse Group AG.
  • “Uncertainties are increasing rapidly with the chaos at the White House and a pickup cycle in global production could end soon,” said Shiono. “The risk-off sentiment in the market will put pressure on the yen to strengthen and that will weigh on Japan’s economy.”

The strong GDP growth may come as disappointment for Japan bulls, however. Already the BOJ has quietly tapered its bond purchases from JPY80 trillion/year to JPY60 trillion, and Kuroda, with less than a year left on his tenure, will be looking for excuses to not only officially taper purchases – here he has no choice as the BOJ has about 1 year left of eligible bonds to monetize – but to potentially give the old rate hike experiment another try, even if the BOJ’s latest minute reluctantly admitted that despite labor shortages the economy has failed to generate the much needed inflation. Today’s strong GDP print just gave Kuroda the excuse he needs to hint at even more monetary tightening, assuming of course the the threat of US presidential impeachment has been postponed indefinitely.

c) REPORT ON CHINA

A big Chinese insurer warns of mass defaults and social unrest due to a mass redemption on Wealth Management Products (WMP)

The total amount of debt in these vehicles is 10 trillion or about 1/3 of the total Chinese debt.It seems that Forsea has been told not to issue new debt as much of what they hold is non performing. Forsea claims that they will default unless the sign up new stuff:  the class definition of a Ponzi scheme

(courtesy zero hedge)

Chinese Insurer Warns Of “Mass Defaults, Social Unrest” Due To “Mass Redemption” Run

One month ago, China came “this close” to the one event which terrifies Beijing more than anything: a run on China’s shadow banks.

As a quick reminder, 150 customers of China’s Mingsheng Bank, the country’s largest private bank, were furious in mid-April when they learned that some 3 trillion yuan invested in Wealth Management Products, the backbone of China’s shadow banking system, had vaporized after bank employees had engaged in fraud and embezzled the funds without ever investing it (later it emerged that Mingsheng employees had put the money into “cultural relics” and jewelry, for their own use).

And while fraud and embezzlement are both endemic in China, the bigger concern raised by the article was the threat of a bank run across China’s massive and unregulated, nearly $10 trillion shadow banking system. Indeed, while there have been numerous allegations and warnings that China’s entire shadow banking facade, dominated by WMPs and other “investment products”, is nothing but a giant ponzi scheme in which  recoveries – should there be a bank run, a topic recently discussed on Bloomberg – would be non-existent if there is ever a bank run, defaults of WMPs issued by big banks – and this case an unapproved WMP – are rare, as are shadow bank runs.

For now.

However, in a stunning announcement made by one of China’s largest insurers, Foresea Life has warned of “mass defaults and social unrest” unless China’s regulator lifts a recent ban on its issuance of new products. In a letter to China’s insurance regulator, first reported by the Financial Times, Foresea Life Insurance which is a heavy investor in WMPs, has warned  that the company expects “redemptions” of 60 billion yuan, or $8.7 billion, this year and might be unable to meet payouts unless it is able to sell new products.

Jut so there is no confusion, this is the definition of a ponzi scheme, and now that it has been so explicitly framed the result could be even greater redemptions, i.e., “bank runs” across companies that invest in WMPs.

Foresea’s displeasure is linked to a December decision by the China Insurance Regulatory Commission (CIRC), which banned Foresea for three months from applying to sell new products. Two months later, in February, the agency banned Foresea chairman Yao Zhenhua, China’s fourth-richest man, from the industry for 10 years.

Questions about potential fraud at the company have remained unanswered, however the life insurer which allocated billions to WMPs in pursuit of yield (what else) was all too vocal in a letter dated April 28, in which Foresea asked the CIRC to resume new product approvals “in order to avoid inciting mass incidents by clients and localised and systemic risks, producing greater damage to the industry”. According to the FT, the term “mass incidents” is commonly used in China to describe demonstrations, protests and riots. It was also used by Hank Paulson in 2008 when demanding a blank check from Congress threatening the US with widespread panic unless the US banking sector was bailed out.

That this warning has now moved to Chinese users of shadow banking is troubling.

To be sure, this is not the first time a near-insolvent Chinese company has threatened with social unrest if it does not get a bailout. One month ago, China’s – and the world’s – biggest aluminum producer China Hongqiao Group demanded that both the Chinese Non-Ferrous Metals Industry Association and the Chinese government come to its aid, warning in its March 4 letter of “serious effects” if nothing is done, including “regional systemic financial risks” and “dramatic social unrest.” Yet while the fallout from one major commodity company would be largely contained, mostly to its own angry workers, the social panic and mass defaults resulting from the failure of China’s $4 trillion Wealth Management Industry, would have far more dire implications.

Some more background on the troubled life insurer courtesy of the FT:

Foresea is a unit of Baoneng Group, a property and financial conglomerate that Mr Yao also chairs. Baoneng made headlines last year by attempting a hostile takeover of China Vanke, one of China’s largest residential developers.  Baoneng has used the sale of so-called “universal insurance” products to finance its stake in Vanke and other listed companies. Such policies are, essentially, investment vehicles offering high yields and guaranteed payouts on maturities. Distributed through banks, they bear little resemblance to traditional insurance, which pays out only in the event of a risk incident such as death, illness, or accident.

The mass proliferation of such “shadow banking” products, largely as a result of deregulation of the insurance industry in recent years, has led to the sharp rise of universal insurance sales, which has helped groups such as Foresea and Anbang Insurance Group to grow. As a reminder, Anbang – which has a very questionable reputation – is also one of the most prolific acquirers of global corporations as it seeks to find high yielding targets for its “shadow” funds.

As the FT also notes, while Foresea’s premiums soared from Rmb32bn in 2014 to Rmb100bn last year they since tumbled 61% in the first quarter this year.

More troubling is that the date of Foresea’s letter indicates that, by late April, the regulator had not yet approved new Foresea products, despite the expiration of the three-month ban. In a statement on its website late on Wednesday, Foresea said that “the company’s operations are normal and its cash flow is stable”, adding that it earned Rmb1.4bn in profits in the first quarter.  Needless to say, it wouldn’t say anything else until it was too late (see Canada’s Home Capital Group).

On one hand, the Chinese regulator’s initiative to limit WMPs is a welcome change to the Chinese funding “wild west.” It was observed in the latest PBOC monthly credit update, which revealed that for the first time in a decade, a key component of China’s shadow funding, Entrusted Loans, declined.

 

The FT adds that in addition to Foresea, the CIRC has moved to contain universal insurance in recent months, amid President Xi’s call to curb financial risk. Analysts warn that the high yields offered by universal insurance force issuers to take risks in order to earn the returns necessary to meet promised payouts.

Many universal insurance products ostensibly carry long durations of five or even 10 years but the policies often include generous redemption terms, enabling investors to cash out of the products with minimal penalties.

Meanwhile, Foresea’s warning that mass redemptions” could leave the group unable to meet payouts highlights the liquidity risk created by taking on short-term liabilities to purchase long-term, illiquid assets.  In a further crackdown on China’s unsustainable shadow banking system, in May the CIRC imposed a similar three-month ban on Anbang and accused the group of “wreaking havoc” in the market with aggressive sales tactics. The agency specifically criticized Anbang for selling products with short maturities.

On the other hand, however, while such a regulatory crackdown is long overdue, should the “shadow” funding of “insurers” like Foresea (and Anbang) be halted, the company  – which by its own admission is a ponzi scheme – would disintegrate.

For now, however, it faces a more immediate challenge: what happens if Foresea is not granted regulatory relief as it demands? If the insurer is unable to resume issuance of its traditional shadow funding products, and should the “redemption run” accelerate, the company will have no choice but to eventually demand a PBOC liquidity injection or outright bailout. Considering how generous the Chinese central bank has been, this request will likely be satisfied.

But a far bigger problem, one which not even the PBOC would be able to contain, is what happens if accelerated “redemption” problems, currently limited to just Foresea, spread to the rest of the nearly $10 trillion shadow banking industry.

4. EUROPEAN AFFAIRS

German based Aldi/and Lidl/USA (Wal-Mart)

Wal-Mart is now facing stiff competition from the likes of German grocer Aldi as WalMart prices are still higher.  Now a new German grocer is set to enter the uSA, Lidl and together with USA competitor Kroger the following entry will cause a huge deflationary spiral in food prices in the USA

(courtesy zero hedge)

 

The Germans Are Coming… And Their Groceries Will Cost Up To 50% Less Than Wal-Mart

Back in February we reported that as America’s deflationary wave spread through the grocery store supply chain, the scramble for America’s bottom dollar was on, and it prompted America’s largest low-cost retailer Wal-Mart to not only cut prices, but to squeeze suppliers in a stealthy war for market share and maximizing profits, a scramble for market share which is oddly reminiscent of the OPEC 2014 price fiasco and is certain to unleash a deflationary shock across wide portions of the US economy.

As Reuters reported at the time, Wal-Mart had been running a “price-comparison” test in at least 1,200 U.S. stores and squeezing packaged goods suppliers in a bid to close a pricing gap with German-based discount grocery chain Aldi and domestic rivals like Kroger. Citing vendor sources, Reuters said that Wal-Mart launched the price test across 11 Midwest and Southeastern states such as Iowa, Illinois and Florida, focusing on price competition in the grocery business that accounts for 56% of the company’s revenue.

Notably, while Wal-Mart was considering cutting prices to match its competition, the near-monopoly retailer was also seeking offseting cost cuts from its own vendors, in what could lead to a deflationary shock that would ripple across the entire US grocery store supply-chain, with dropping prices leading to margin collapse inside the entire industry, and eventually a default domino effect.

And, as we also reported, as part of the relentless competition among the largest grocers Wal-Mart would have no choice but to proceed with even more aggressive price cuts in the future. The reason for this is that Germany-based discount grocer Aldi had emerged as one of the relatively new rivals quickly gaining market share in the hotly competitive US grocery sector, which already boasts Kroger, Albertsons Cos Inc and Publix Super Markets as stiff competitors on price.

A second Germany-based discount grocer, Lidl, was planning to enter the U.S. market this year, which together with German Aldi would pose a serious threat to Wal-Mart’s U.S. grocery business.

Now, thanks to a follow up by Reuters, we can safely assume that the upcoming grocer price war is about to turn nuclear because the abovementioned German discount grocery chain Lidl, which is opening its first U.S. stores this summer and is eager to capture US market share at all costs, said its products would be up to 50% cheaper than competitors… which are already caught up in a margin-crushing price war.

“This is the right time for us to enter the United States,” Brendan Proctor, chief executive officer for Lidl U.S., told Reuters at a media event in New York late on Tuesday. “We are confident in our model. We adapt quickly, so it’s not about whether a market works for us but really about what we will do to make it work.”

And as first order of business, what Lidl will do is generate huge losses by massively undercutting prices in hopes of capturing market share from established names like Walmart, Kroger and Albertsons. Think Uber but for grocery stores.

There is already a case study of what happenes next, should the two German invaders prove successful. Lidl, which runs 10,000 stores in 27 countries, and German rival Aldi Inc have already upended Britain’s grocery retail market, hurting incumbents like Tesco Plc and Wal-Mart Stores Inc’s ASDA supermarket chain.

Looking ahead, Lidl said it would open its first 20 U.S. stores in North Carolina, South Carolina and Virginia, starting on June 15. Eighty more will follow in the United States within the first year, which Procter said would create 5,000 jobs. Analysts cited by Reuters estimate the company will have more than 330 U.S. stores by 2020.

The stores will be 20,000 square feet in size and have only six aisles. The retailer’s in-house brands will account for 90 percent of the products.

And while the latest German invasion may lead to dramatic changes within the hierarchy of established US grocers, one thing is certain: the US consumer is about to be the biggest winner yet again, as prices for (subsidized) groceries are about to plunge across the nation.

 

END

Deutsche bank/Germany

Deutsche bank is now being sued in an Italian court for running an international criminal organization.  Under USA law this would be RICO

(courtesy zerohedge)

Deutsche Bank Sued For Running An “International Criminal Organization” In Italian Court

Having been accused, and found guilty, of rigging and manipulating virtually every possible asset class, perhaps it was inevitable that Deutsche Bank, currently on trial in Milan for helping Banca Monte dei Paschi conceal losses (as first reported last October in “Deutsche Bank Charged By Italy For Market Manipulation, Creating False Accounts“) is now facing accusations that it was actually running an international criminal organization at the time.

In the closely watched lawsuit, prosecutors used internal Deutsche Bank documents and emails to persuade a three-judge panel to rule that there were additional, aggravating circumstances to the charges the German lender already faces related to various derivatives transactions. As Bloomberg reported overnight, the material included a London trader’s “well done!” message to a banker who is now on trial.

The reason why prosecutors are seeking expanded charges against the German banking giants is that by allowing prosecutors to argue that the bank’s market manipulation crimes were committed by an organization operating in several countries would lead to higher penalties if they win a conviction.

Predictably, Deutsche Bank’s lawyer, Giuseppe Iannaccone, sought to block the move at Tuesday’s hearing, saying there wasn’t a clear connection between the original charge of market manipulation and the alleged aggravating circumstances.  “The trial for Deutsche Bank managers becomes more problematic after the judge’s decision,” said Giampiero Biancolella, an attorney specializing in financial crime who isn’t involved in the case. “If proven, the aggravating circumstance may increase the eventual jail sentence for the market manipulation to a maximum of nine years.”

As a reminder, Deutsche Bank and Japan’s Nomura both went on trial in Milan in December, accused of colluding with Monte Paschi to cover up losses that almost toppled the Italian lender before its current battle for survival. Thirteen former managers of Deutsche Bank, Nomura and Monte Paschi were charged for alleged false accounting and market manipulation. Focuing on the German bank, six current and former managers of Deutsche Bank, including Michele Faissola, Michele Foresti and Ivor Dunbar, were charged in Milan last year for colluding to falsify the accounts of Monte Paschi (which itself is so insolvent it recentl got its third state-funded bailout) and manipulate the market.


Michele Faissola

As a further reminder, Michele Faissola is the DB banker who was implicated in the death of DB’s senior risk manager, William S. Broeksmit, who was found dead in 2014 after committing a still unexplained suicide.

Going back to the accusation that Deutsche Bank is a global criminal cartel, the prosecution’s request to label Deutsche Bank an international criminal association hinged on events that occurred in other parts of the globe, including the possible manipulation of an index, which isn’t the subject of charges in the Milan case. Specifically, as Bloomberg previously reported, a 2014 confidential audit commissioned by German regulator Bafin said that Deutsche Bank employees may have manipulated internal indexes to help ensure the success of the deal. The study, requested by Bafin, said an internal Deutsche Bank review described “abnormalities” in the values of proprietary indexes used to set the price for the Monte Paschi deal in December 2008.

The internal Deutsche Bank report, which has never been made public, is cited in the Italian court documents seen by Bloomberg. “DB’s own trading activities were a significant factor in the observed ‘spike’ in prices and volumes,” a portion of the bank’s document says.

 

On the afternoon of Dec. 5, 2008, just one minute and 57 seconds after the futures price underlying the index had spiked to a level required for the deal to succeed, a trader in London pushed the button on the “well done!” email, evidence introduced to the Milan court shows. The recipient was Michele Foresti, then the bank’s head of European fixed income.

Iannaccone, the lawyer for Deutsche Bank who is also defending Foresti, said the judge’s decision had to be respected and declined to comment on it. “We will clarify everything during the trial.” While investigators at the Frankfurt-based bank couldn’t “unequivocally” link the spike to manipulation or the deal’s outcome, according to the Bafin-commissioned audit, the communications among the Deutsche Bank employees “provide a connection between the trading activity and the MPS transaction,” the bank’s internal probe concluded.

Should the judge in the Milan case find Deutsche guilty of “running an international criminal organization”, it will be a new low for the bank whose actions over the past several years have attracted global attention due to its criminal breach of laws and regulations in every market in which it has participated, resulting in dramatic and periodic executive changes, as well as the non-payment of bonuses for virtually all employees in 2016 as the bank’s stock briefly crashed to all time lows last summer.

end

 

GREECE

 

You know it is bad when the police join in on the protests

Greek citizens are protesting Brussels’ new austerity measures

(courtesy zero hedge)

Meanwhile… In Greece

You know it’s bad when the police are rioting against the new austerity measures assigned from Brussels…

As KeepTalkingGreece reports, tension between protesters from police, fire brigades and coast guard on one side and riot police on the other side broke out shortly after 8 o’ clock in the evening on Wednesday when the angry protesters tried to break the police cordon and enter the Greek Parliament.

Riot policemen and protesters pushed and shouted at each other, with protesters shouting “Disgrace! Disgrace!”

Members of of the Greek Police, the Fire Brigades and the Coast Guard marched to the Parliament on the general strike day protesting the new austerity package that will be voted on Thursday at the Parliament.

Three squads of riot police were deployed outside the Parliament to prevent their colleagues to enter the House.

It was due to the intervention of the coolest among the people form both sides that the situation did not get out of control.

Protesters were furious at Defense Minister Panos Kammenos, who had promised that there would be no wage cuts in the special payrolls. Kammenos had also promised them they would be paid retrospectively the wages cuts they had suffered due to the previous bailout agreements. The Supreme Court had ruled that they should be exempted from the cuts.

They chanted slogans against the Defense ?inister.

A day earlier, the Police Union had warned that the government will find them on the opposite side. According to Greek media, the government considers to add some last minutes modifications in the 4.90-billion euro omnibus bill to exempt the Armed Forces from further cuts in wages, pensions and some benefits.

On wonders, when police officers occupy a public building, what should the average unemployed, the low-pensioner and the mother in need do?

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

6 .GLOBAL ISSUES

7. OIL ISSUES

My goodness: Venezuela’s oil production is now on the brink of collapse.  What is amazing is that Venezuela has the world’s largest reserves of oil in the ground

(courtesy Nick Cunningham/OilPrice.com)

 

Venezuela’s Oil Production On The Brink Of Collapse

Authored by Nick Cunningham via OilPrice.com,

Desperation is spreading in Venezuela as violent protests continue to paralyze the country, further damaging the country’s shattered economy. Venezuela’s already-decrepit oil industry is deteriorating by the day, and an outright implosion is no longer out of the question.

The inflation rate, according to the IMF, will balloon to 720 percent this year. Food shortages have been common for quite some time, but are deepening and wearing down the population. Three out of four people surveyed by the WSJ reported involuntary weight loss last year. Hospitals have completely broken down.

Venezuela has been crippled by protests since late March, with more than three dozen people having been killed over the past two months, and there is no sign of improvement. This meltdown is taking a toll on Venezuela’s oil production, the last thing keeping the country from becoming a failed state. Venezuela’s oil production has been declining for more than a decade, mainly because oil revenues are used to finance the government, leaving little for state-owned PDVSA to reinvest in its operations.

But things are getting worse. The cash shortage is accelerating the decline. As of April, oil production stood at 1.956 million barrels per day (mb/d), down 10 percent from last year, and down more than 17 percent from 2015 levels – and output continues to trend downward. James Williams, energy economist at WTRG Economics, told Marketwatch in March that he expects Venezuela to lose another 200,000 to 300,000 bpd this year, another 10 to 15 percent decline from 1Q2017 levels.

The problem is downstream as well, as the shortage of refined products worsens. Three out of Venezuela’s four oil refineries are operating significantly below capacity because of the inability to find spare parts for maintenance, according to Reuters. The Paraguana Refining Center, for example, is only producing 409,000 bpd compared to its nameplate capacity of 955,000 bpd. PDVSA’s third largest refinery, which has a capacity of 187,000 bpd, is operating “at minimum levels due to problems at two of its three distillation units,” Reuters says.

With cash drying up, PDVSA is also struggling to import lighter fuels that are necessary to blend with the country’s heavy oil. Some ships are sitting off the Venezuelan coast because of unpaid bills. Meanwhile, because of obligations to creditors, PDVSA is sending crude abroad, leaving little for domestic refining.

But PDVSA’s financial and operational problems have a compounding effect. Falling production at refineries mean more gasoline needs to be imported from abroad, putting a tighter squeeze on state finances, which in turn leaves even less for everything else the country needs, from food to healthcare.

The possibility of all hell breaking loose is not zero. The WSJ reports that Venezuelan security forces are at their breaking point. Young, underpaid members of the national police are often not given food or water while on duty, and are asked to constantly beat back rapidly escalating protests in scorching heat, around the clock. Also, police and soldiers are not immune to the food shortages and economic collapse that the rest of the country is suffering through. The loyalty of the security services to the President no longer appears rock solid.

PDVSA and the national government avoided a debt default a few weeks ago, but with obligations looming later this year and a dwindling pile of cash with which to draw upon, the problem is not going away.

As far as the oil sector goes, the best case scenario for Venezuela is steady, if rapid, decline in production – a loss of 200,000 to 300,000 bpd this year. But the darker scenario is a much more sudden disruption if the country implodes. There is no way of knowing if this will happen, but analysts are growing increasingly concerned about the possibility. “Oil production continues its downward drift due to service provider cuts, power shortages, inability to obtain imports and irregular salary payments,” Helima Croft, commodities strategist at RBC Capital Markets, wrote in a recent report. “The oil question is whether current conditions could set the stage for the type of industrial action that cut exports by nearly 80 percent in the early 2000s.”

8. EMERGING MARKETS

Brazil in turmoil last night after President Temer has been recorded offering hush money to jailed former speaker of the house Cunha. This was followed with massive protests by the populace.

(courtesy zero hedge)

Brazil Plunges Into Fresh Political Crisis After Temer “Hush Money” Recordings Emerge; Market Crashes

The presidency of Brazil’s Michel Temer, who replaced disgraced and impeached predecessor Dilma Rouseff last summer, lasted about one year without a major corruption scandal.

That changed tonight, when Brazil’s O Globo newspaper which was instrumental in exposing the Carwash scandal which ultimately led to Rouseff’s downfall and the arrest and incarceration of countless politicians, reported that the chairman of meatpacking giant JBS secretly recorded his discussion with Temer about “hush money” payments to jailed former House Speaker Eduardo Cunha in return for his silence.


Brazil’s President Michel Temer

The allegations are the latest development in Operation Carwash, a sprawling corruption probe that has implicated many of Brazil’s business and political elite, including some in the president’s own party. Temer has repeatedly denied any wrongdoing.

Readers may recall that in a delightfully ironic case study of political irony and power vacuum, Eduardo Cunha, the conservative Brazilian political leader who led the push in 2016 to oust Dilma Rousseff, was sentenced in March to more than 15 years in prison himself, when a Brazil judge found him guilty of corruption, money laundering and illegally sending money abroad, all in connection with the sprawling graft investigation involving the state-run oil company Petrobras, and which Cunha himself used as a pretext to dispose of Rouseff.

The tragically ironic Cunha was the highest-profile politician to be sentenced as a result of the Operation Car Wash investigation into corruption at Petrobras, which has shaken Brazil’s political and business establishments to their core. Ultimately, he was convicted of charges that included receiving bribes during Petrobras’ acquisition of a Benin oil field for $35.5 million in 2011, and of money laundering crimes between 2011 and 2014. Yet somehow he was the man tasked with bringing justice to Rouseff.

Furthermore, Cunha, once a powerful member of Temer’s ruling party, has previously said he had compromising information about a host of senior politicians linked to a vast political bribery scandal at state oil firm Petrobras. And yet he never spokeup.

Now, not only do we know why Cunha kept silent, but there is finally proof of a corruption link between Cunha and Temer himself.

According to the O Globo report, JBS Chairman Joseley Batista recorded the discussion with Temer about hush money the executive paid to Cunha, according to the newspaper. The report did not say what Cunha was asked to keep quiet about. When Batista told Temer he was paying Cunha to remain silent, the president was recorded saying, “You need to keep that up, okay?”


Batista and Temer

Temer on Wednesday acknowledged he had met with the JBS Chairman in March but denied any part in alleged efforts to keep jailed former House Speaker Eduardo Cunha from testifying.

According to O Globo, executives from JBS submitted a tape to the Supreme Court of a secret recording of Temer approving a payment to the abovementioned Cunha. Batista and his brother, JBS Chief Executive Wesley Batista, presented the recording to prosecutors as part of plea bargain negotiations underway since March.

Reuters adds that  JBS also hired a law firm to discuss a leniency deal with the U.S. Department of Justice. JBS declined to comment immediately.

To be sure, the presidential press office immediately issued a statement vehemently denying the allegations. “President Michel Temer never requested payments to obtain the silence of ex-deputy Eduardo Cunha,” it said. “The president defends a deep and wide investigation to get to the bottom of the claims put forward in the media.”

Unfortunately for Temer, Brazil appears to no longer believe politician lies, especially of Temer, whose approval rating is in the single digits. As a result, as Bloomberg writes, “Brazil has plunged back into political crisis, reminiscent of the chaos surrounding last year’s impeachment process.”

Bloomberg adds that O Globo’s report caused an immediate stir in Congress, where opposition congressmen started to shout anti-government slogans. The session was subsequently suspended. Legislators from five opposition parties called for Temer’s resignation and early elections, according to a statement sent by the opposition leader in the lower house. Temer went to his official residence after an emergency meeting with some of his closest aides.

According to further press reports, legislators from 5 opposition parties have demanded Temer’s resignation and call for new elections, according to statement from lower house opposition leader’s press office. And while the US spent much of the day talking about impeachment, in Brazil they actually did it: Rede party deputy Alessandro Molon filed an impeachment request against Temer, according to his press office.

The local authorities already know what’s coming: amid growing protests in Brasilia on Wednesday evening, military police have moved into position around the presidential palace and one of the judges on Brazil’s Supreme Court has called for calm. “It’s a moment for calm, moderation and watching the institutions work,” said Marco Aurelio Mello.

“We still need more information, but on the face of it there’s enough to say that it weakens substantially the government,” said Andre Cesar, an independent political analyst. “I see a huge increase in the difficulties in approving reforms. Pension reform could take a step back.”

The head of the Brazilian Bar Association, Claudio Lamachia, said in a statement that society needs immediate answers and that the alleged recordings need to be made public as soon as possible. “Brazilians can no longer live with doubts regarding their representatives,” Lamachia said.

On Wednesday evening, people were already lining up on the streets of Sao Paolo, preparing to protest against Temer:

People in are already out demanding for ‘s President, Michel Temer, to be impeached following corruption allegation. pic.twitter.com/hk0ZAwQ4ky

Anti-Temer protests gathering numbers in following audio showing ‘s president endorsing the payment for silence. pic.twitter.com/LB48zOHJgk

View image on Twitter

now in against caught negotiating kickbacks & for direct elections in the country (photo: Dani Sampaio)

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

Spontaneous protest against President Temer on Avenida Paulista after new recordings emerge. São Paulo, Brazil. ©LOST ART

Meanwhile, the same market which soared last year after the Rouseff impeachment, for some still unknown reason, is now plunging on the news. A Brazilian ETF trading in Tokyo, tumbled more than 8% on the O Globo news, its biggest drop since September 2015.


At this point it is unclear if there is any politician left in Brazil who has not been tainted by the Carwash scandal; it is also not clear who could possibly replace Temer when he too is kicked out of office, in light of the unprecedented power vacuum on all sides that currently exists in the Latin American country.

end
Wow!! the Brazilian real crashes by 6% and then is HALTED!!!!! Brazilian bonds tumble by the most on record
(courtesy zero hedge)

Brazilian Bloodbath: Currency Halted, Futures Crash, Bonds Tumble Most On Record

As first reported last night, Brazil has plunged back into yet another political crisis less than a year after the impeachment of Dilma Rouseff, when a report in Brazil’s O Globo newspaper revealed that President Michel Temer was involved in an “hush money” cover-up scheme involving the jailed former speaker of the lower house of Congress, Eduardo Cunha, who was the mastermind behind the impeachment of Rouseff.

Already an impeachment request against Temer has been filed by the opposition, although it was unclear who would replace him or what the process would look like. If Temer resigns or is impeached, Congress would elect an interim president until the next scheduled vote in October of 2018. An early election could only be held with a constitutional amendment approved by lawmakers.

 

And while most Brazilian asset markets were closed at the time, a Brazilian stock ETF trading in Japan, gave an indication of what to expect: a drop of about -8%.

In retrospect it may have been optimistic, as moments ago the Brazilian real was halted for trading after crashing 6%…

… Bovespa futures plunged 10%…

… and Brazil’s Eurobonds due 2021 tumbled the most on record.

… and Brazil’s ETF (EWZ) has collapse.

The collapse promptly dragged the Brazilian Central Bank which tried to assure markets, stating it was “monitoring the impact of recent information published by the press and will act to maintain full functionality of markets” adding that “this monitoring and action are focused on the good functionality of markets.”

So far it is failing.

 

 

end

 

Then the Brazilian stock market crashes. It is now halted after plunging 10%(courtesy zero hedge)

Brazil Stock Market Halted After Plunging 10%: What Happens Next

With Brazilian Bovespa futures already halted for trading earlier after crashing 10% at the open…

… the circuit breakers has moved to the cash market, where moments ago the Bovespa was similarly halted after crashing 10% at the open.

For those asking, here are the Brazilian circuit breaker mechanics:

Cash:

  • Rule 1: IBOV down 10% (60,786) triggers 30 minutes pause
  • Rule 2: IBOV down 15% (57,409) triggers 1 hour pause
  • Rule 3: IBOV down 20% (54,032) will be subject to Stock Exchange evaluation, likely it shuts down for the day

And this is how Brazil just erased all of the year’s gains in an instant (and per the EWZ which is down -15%, more pain is coming once the circuit breaker unlocks).

Just before the circuit breaker was triggered, state controlled companies Cemig, Banco do Brasil and Petrobras fell 42%, 25% and 19%, respectively according to BBG. Banks Itau and Bradesco fell 18% and 19%, respectively, and JBS fell 15% as the Brazilian Bdloobath continued..

And even more dramatic chart is the 3x Levered Brazil ETF, BRZU, which was down 50% moments ago:

At the same time Brazil’s default risk is soaring, as shown by the country’s CDS>

So what now?

According to the Citi EM Strategy team there will be a quick enough resolution of this issue to take the other side of those large moves in the short term and would stay on the sidelines for now.

We expect joint intervention by the National Treasury in the form of bond buybacks and BCB through FX swaps, similar to actions taken during the peak of the political crisis in September 2015. However, they will not be enough to stop the sell-off, in our view.

And some additional thoughts from Citi FX:

EM FX is closely watching BRL, with the FX open ahead at 08:00 EDT / 13:00 BST. This is no surprise after we explained What happened to BRL here. Since that update, there’s more headlines coming out with talk of impeachment calls, and Senator Neves being suspended. However nothing confirmed yet. A full blown political crisis may just be unfolding.

 

There are concerns about the circuit breaker. Note that the Brazil circuit breaker allows only trading on the exchange at the limit price for the day (6% on the day). It can trade lower than that but not higher, for the rest of the day.

 

In the meantime, Brazilian assets continue to suffer. Check out the chart below from Bloomberg on Brazil’s EUR bonds. Meanwhile Brazil CDS is absolutely soaring even as we type, with the 10y spiking to 356, after staying around the 299 level earlier today.

 

And for the BRL market open, it’s hard to say. USDBRL closed at 3.1395 and we’re certainly in for a wild ride. Our trader notes that on the first future, 3.30/3.33 is being eyed. As a reminder of what our local trader said overnight: “I would expect a round of stops at the opening, can imagine little initial fading appetite from investors who still have ammo (mostly foreigners, I would guess) and a potential joint intervention by BCB and NT (in case price action is as bad as some people are saying).”

 

Brazil’s Temer: “I Will Not Resign, I Have Nothing To Hide”

Tyler Durden's picture

In a press conference held moments ago by Brazil’s embattled president Michel Temer, unable to scapegoat the latest political scandal rocking Brazil on Russia, he said that contrary to what some were expecting, he would not resign as he has “nothing to hide”, and that he “never bought anyone’s silence”, meaning that once again Brazil is faced with the daunting prospect of having a painfully unpopular president who will most likely be impeached, yet who refuses to step down voluntarily, or quietly.

Here are the highlights from his brief address to the nation via BBG:

  • TEMER: I WANT TO MAKE DECLARATION
  • TEMER: I REQUESTED TO HEAR AUDIOS FROM BRAZIL TOP COURT
  • TEMER: YESTERDAY’S REVELATION BROUGHT BACK GHOST OF POL. CRISIS
  • TEMER: WE CAN’T THROW OUT OUR WORK
  • TEMER: I NEVER AUTHORIZED BRIBES TO STAY QUIET
  • TEMER: I DON’T HAVE ANYTHING TO HIDE
  • TEMER: I NEVER BOUGHT ANYONE’S SILENCE
  • TEMER: I WILL NOT STEP DOWN
  • TEMER: I WILL NOT RESIGN

Temer also said the he will fight the corruption charges in court, which means that instead of reform, Brazil now faces a long, painful legal process in which the highly unpopular president will instead focus on preserving his career, even as the formal impeachment protocol was started earlier today with a filing by the Brazilian opposition.

The Brazilian Real, having regained some lost ground during the day, dropped again during the Temer address.

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

Euro/USA   1.1120 DOWN .0033/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 110.69 DOWN 0.354(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 1.3021 UP .0051 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

USA/CAN 1.36490 UP .0047 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS THURSDAY morning in Europe, the Euro FELL by 33 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 14.30 POINTS OR .46%     / Hang Sang  CLOSED  DOWN 157.11 POINTS OR 0.62% /AUSTRALIA  CLOSED DOWN 0.79% / 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 THURSDAY morning CLOSED DOWN 261.02 POINTS OR 1.32%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 157.11 POINTS OR 0.62%  / SHANGHAI CLOSED DOWN 14.30 POINTS OR .46% /Australia BOURSE CLOSED DOWN 0.79% /Nikkei (Japan)CLOSED  DOWN 261.02 POINTS OR 1.32%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1260.90

silver:$16.74

Early THURSDAY morning USA 10 year bond yield: 2.205% !!! DOWN 1 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.892, DOWN  1  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 97.61 UP 4  CENT(S) from WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 3.203%  DOWN 1 in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.047%  UP 1/10   in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.567%  UP 1/2  IN basis point yield from WEDNESDAY (this is totally nuts!!/

ITALIAN 10 YR BOND YIELD: 2.148 DOWN 1   POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 58 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.343% DOWN 3 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.1129 DOWN .0023 (Euro DOWN 23 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.99 DOWN  0.054 (Yen UP 5 basis points/ 

Great Britain/USA 1.3001 UP 0.0031( POUND UP 31 basis points)

USA/Canada 1.3599 UP 0.0001(Canadian dollar DOWN 1 basis points AS OIL ROSE TO $49.44

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This afternoon, the Euro was DOWN by 23 basis points to trade at 1.1129

The Yen ROSE to 110.99 for a GAIN of 5 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 31  basis points, trading at 1.3001/

The Canadian dollar FELL by 1 basis points to 1.3599,  WITH WTI OIL RISING TO :  $49.44

The USA/Yuan closed at 6.8892/
the 10 yr Japanese bond yield closed at +.047% UP 1/10  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN 1  IN basis points from WEDNESDAY at 2.222% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.903  DOWN 2 in basis points on the day /

Your closing USA dollar index, 97,54 DOWN 4  CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 6.705 POINTS OR .89%
German Dax :CLOSED DOWN 41.55 POINTS OR 0.33% 
Paris Cac  CLOSED DOWN  28.16 POINTS OR 0.53% 
Spain IBEX CLOSED  DOWN 101.20 POINTS OR 0.94%

Italian MIB: CLOSED  DOWN 504.18 POINTS/OR 2.31%

The Dow closed UP 56.09 OR 0.27%

NASDAQ WAS closed down 43.89 POINTS OR 0.73%  4.00 PM EST
WTI Oil price;  49.44 at 1:00 pm; 

Brent Oil: 52.01 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  57.59 DOWN 47/100 ROUBLES/DOLLAR 

TODAY THE GERMAN YIELD FALLS T0  +0.343%  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:$49.34

BRENT: $52.41

USA 10 YR BOND YIELD: 2.228%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.90%

EURO/USA DOLLAR CROSS:  1.1097 down .0056

USA/JAPANESE YEN:111.51  up 0.469

USA DOLLAR INDEX: 97.89  up  32  cents ( HUGE resistance at 101.80 broken TO THE DOWNSIDE)

The British pound at 5 pm: Great Britain Pound/USA: 1.2929 : down .0042  OR 42 BASIS POINTS.

Canadian dollar: 1.3601  up .0005(CAN DOLLAR down 5 BASIS PTS)

German 10 yr bond yield at 5 pm: +.343%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks, Dollar Bounce After Comey Clip Sparks Trump Bump

 

Old news is good news…

 

The day started off ugly with a bloodbath in Brazil…

 

Today’s bounce back in the dollar and stocks was brought to you by a clip from two weeks ago – that was public knowledge – showing Comey admitting under oath that obstructions of his investigations “never happened.”

 

The Comey Clip bounce however faded into the close…

 

Notably financials are still the laggard over the two days and only Utes are higher…

 

Banks pumped at the open, dropped after Europe closed then rallied after comments from Mnuchin on 21st Century Glass-Steagal and not breaking up banks…

 

Of course this is happening as breadth collapses… the last time this happened was in 2015 and led to the crash surrounding the china devaluation.

 

Treasury yields bounced higher after overnight buying in bonds leaving yields marginally higher on the day (+1-2bps) apart from the long end (30Y -1bps)…

 

30Y closed below 2.90% – below pre-Macron win levels…

 

 

2s30s tumbled to its lowest since Oct 13th 2016… (despite small bounce on Comey)

 

The Dollar Index remains down 1% on the week, though bounced today on the Comey clip (note the flash crash in cable)

 

Spot the difference… Stocks or USDJPY…

 

 

 

Silver was hit relatively hard today and gold drifted lower as the dollar gained – however, Noble Group liquidation fingerprints were all over Silver…

 

WTI and RBOB ended the day higher but had quite a ride after Saudi stockpiles surge sent prices lower below OPEC headlines jawboning bounced them higher…

END

 

NY Trading: early afternoon:

Stocks Sink As Big Banks Stumble Deeper Into Red

US equity markets have given up most of their early gains… Trannies and Nasdaq are holding gains

 

…as financials fade…

 

As the big banks roll over hard..

end

late afternoon: the second wave caused gold and silver to crash again

(courtesy zero hedge)

Cable Flash-Crashes Below 1.30

Having surged back above the Maginot Line of 1.30- this morning, GBPUSD just flash-crashed back below it after oscillating in a narrow band for two hours…

1.30 has come and gone…

 

Close Up…

 

 

 

 

And in futures – showing the heavy volume…

 

Rosenstein  appoints a special prosecutor with respect to the Russian probe.  We now no that Trump was unaware of this development until after the  fact

(courtesy zero hedge)

Former FBI Director Mueller Appointed Special Counsel Of Russia Probe

The Department of Justice has just announced the appointment of former FBI Director Robert Mueller as special counsel to oversee the federal investigation into Russian interference in the 2016 election, including potential collusion between Trump campaign associates and Russian officials.

According to a letter obtained by CNN, Mueller was appointed by Deputy Attorney General Rod Rosenstein who has promised that Meuller will operate with a “degree of independence” from the DOJ.

“In my capacity as acting Attorney General, I determined that it is in the public interest for me to exercise my authority and appoint a Special Counsel to assume responsibility for this matter.  My decision is not a finding that crimes have been committed or that nay prosecution is warranted.  I have made no such determination.  What I have determined is that based upon the unique circumstances, the public interest requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command.”

 

“Considering the unique circumstances of this matter, however, I determined that a Special Counsel is necessary in order for the American people to have full confidence in the outcome.  Our nation is grounded on the rule of law, and the public must be assured that government officials administer the law fairly.  Special Counsel Mueller will have all appropriate resources to conduct a thorough and complete investigation, and I am confident that he will follow the facts, apply the law and reach a just result.”

Here is the full press release from the DOJ:

DOJ

 

Mueller, 72, served as FBI director under Presidents George W. Bush and Barack Obama and was the longest serving head of the bureau since J. Edgar Hoover. In the aftermath of the Sept. 11 attacks, as the U.S. was ramping up security, he joined then-Deputy Attorney General Comey in threatening to resign if the White House overruled a Justice Department opinion that domestic wiretapping without a warrant was unconstitutional.

Attorney General Jeff Sessions previously recused himself from any involvement in the Russia investigation due to is role as a prominent campaign adviser and surrogate.

Mueller’s appointment aims to quell the wave of criticism that President Donald Trump and his administration have faced since Trump fired FBI Director James Comey last week in the middle of the FBI’s intensifying investigation into contacts between Trump campaign associates and Russian officials. That criticism swelled on Tuesday evening as excerpts of a memo Comey wrote in February surfaced, in which Comey writes Trump asked him to drop the FBI investigation into former national security adviser Michael Flynn.

While it’s unclear how Democrats will feel about Mueller specifically, Jason Chaffetz seems to like the selection:

Mueller is a great selection. Impeccable credentials. Should be widely accepted.

end

This is the question that I am also asking:  If Trump was so forceful in asking for an end to the Flynn probe: why was Comey so silent for two months?

(courtesy zerohedge/Peter King/)

The Most Important Question That No One Is Asking…

With every mainstream media orifice chock full of prognosticators speculating on what Trump must have done given the anonymously-sourced reports about Comey, Russia, and Cock-holsters; there appears to be one question that very few dare ask…

If Trump indeed asked Comey to end the Flynn probe, why was Comey so silent about the meeting for two months?

One such American who dared to ask the question is infamous neocon Rep. Peter King (R-NY), who told Fox News tonight that he has “real questions” for Comey…

“If Director Comey in any way thought that he was being intimidated or the president was trying to interfere with an investigation, I believe that Director Comey had an obligation to report that, report it to the Justice Department, to tell those around him,” King said.

 

“Because that could be considered a crime, and as director of the FBI, he had an obligation to make that known.”

He added that Comey also had an obligation to share that information with the House and Senate intelligence committees when he testified before them.

King said he is not aware of Comey speaking to anyone in Congress about any interference in any ongoing investigations into Flynn, Russia or the Trump campaign.

“If this was as serious as it’s now being made out to be, why has Director Comey been so silent for the last two months?” King said.

Next week’s Comey hearing could be more exciting than we thought as the answer to those questions is unlikley to be covered by the standard “that’s classified” response.

We note that King’s comments – somewhat defending President Trump – come shortly after Senator McCain’s Trump-defending comments… did Trump ‘cross the aisle’ to the neocons?

 

END

This video was just released where Comey on May 5 said that Trump did not impede the Flynn or any other investigation.
If Comey lie under oath during this closed door session then we perjured himself
Attachments area

Preview YouTube video TRUMP IS DANCING!!! WHAT COMEY SAID UNDER OATH HAS DEMS SCRAMBLING THIS CHANGES EVERYTHING!!!

TRUMP IS DANCING!!! WHAT COMEY SAID UNDER OATH HAS DEMS SCRAMBLING THIS CHANGES EVERYTHING!!!
 end
Zero hedge picks up the above story: stocks in the uSA then soar!
(courtesy zerohedge)

Comey Admits Under Oath That Obstructions To Investigations “Never Happened”

Update: Citi’s Aerin Williams notes that the USD is higher on the Comey video below:

DXY is rallying as traders pass around a CSPAN video of Comey testimony from May 3. This is not a new testimony. Under oath, he suggests that there have been no obstructions by saying that a President did not seem to be telling Comey to stop investigations for political reason.

 

One could imagine that the deputy Attorney General saw this testimony before appointing a special prosecutor, but it adds to the puzzle investors are trying to put together.

Bloomberg Dollar Index:

Note – 10Y Yields are not moving on this.

*  *  *

As we detailed earlier, next week’s James Comey hearing is certainly setting up as a ‘grab yr popcorn’ moment with Democrats lining up for their 5 minutes of fame to ask the question that ‘proves’ Trump deserves impeachment. However, it appears there is no need for the hearing as Mr. Comey already confirmed – under oath – that “he has not been pressured to close an investigation for political purposes.”

Testifying under oath in front of the Senate Judiciary Committee on May 3rd, Comey states that he has not been pressured to close an investigation for political purposes, “not in my experience.”

COMEY: Not in my experience. Because it would be a big deal to tell the FBI to stop doing something like that — without an appropriate purpose.

 

I mean where oftentimes they give us opinions that we don’t see a case there and so you ought to stop investing resources in it. But I’m talking about a situation where we were told to stop something for a political reason, that would be a very big deal.

 

It’s not happened in my experience.

Caught on tape?

end

this should be fun:  Rosenstein is to be grilled by the entire senate today.  However it is a closed door session

(courtesy zero hedge)

Deputy AG Rosenstein To Be Grilled By Senate Today In Closed Door Session

After dropping a bombshell last night in the form of an announcement that Former FBI Director Mueller had been appointed as Special Counsel to look into alleged collusion between the Trump campaign and Russia (see details here), Deputy Attorney General Rod Rosenstein goes before the entire Senate today to take questions in a closed-door session.

Of course, the meeting was scheduled well before last night’s revelations and was originally intended to discuss the controversial letter (which can be read here) that Rosenstein wrote to President Trump in recommendation of Comey’s dismissal as FBI Director.  The White House originally cited Rosenstein’s letter as the primary reason for Comey’s dismissal though Trump later walked back those assertions amid unverified rumors that Rosenstein had threatened to resign over a mischaracterization of the events leading up to the firing.

Of course, in light of the volatile developments of the past couple of days, a number of topics are likely to be discussed, including the following:

Comey Firing:  Senators will undoubtedly want to better understand the circumstances leading up to Comey’s dismissal, whether Rosenstein was supportive of the decision and whether he faced any pressure from the White House to draft his controversial letter published on May 9th

 

Senator Lindsey Graham summarized his thoughts as follows going into today’s hearing:

 

“It’s pretty simple: Did you support the decision to fire [Comey] and tell us about the letter and how it came about.”

 

Comey Memos:  Rosenstein will also likely face questions over whether he was aware of the memo(s) that Comey reportedly wrote after Trump allegedly suggested that the FBI director back off a probe of former national security adviser Michael Flynn.  Senators will also likely be looking to better understand whether allegations that have been made in the media about Trump’s interactions with Comey rise to such a level that would merit an obstruction of justice charge and potential impeachment proceedings.

 

Mueller Appointment:  Then, of course, much of today’s discussion will center around last night’s surprise announcement that Rosenstein had decided to appoint Former FBI Director Mueller as Special Counsel to look into alleged collusion between the Trump campaign and Russia.

 

Here is how Rosenstein characterized his decision in a press release issued by the Department of Justice last night:

 

“In my capacity as acting Attorney General, I determined that it is in the public interest for me to exercise my authority and appoint a Special Counsel to assume responsibility for this matter.  My decision is not a finding that crimes have been committed or that nay prosecution is warranted.  I have made no such determination.  What I have determined is that based upon the unique circumstances, the public interest requires me to place this investigation under the authority of a person who exercises a degree of independence from the normal chain of command.”

 

“Considering the unique circumstances of this matter, however, I determined that a Special Counsel is necessary in order for the American people to have full confidence in the outcome.  Our nation is grounded on the rule of law, and the public must be assured that government officials administer the law fairly.  Special Counsel Mueller will have all appropriate resources to conduct a thorough and complete investigation, and I am confident that he will follow the facts, apply the law and reach a just result.”

Rosenstein

 

As The Hill points out, today’s hearing will be a sharp contrast to Rosensteins confirmation process in which he received biparsitan praise and coasted to approval on a 94-6 vote.

The political landmines awaiting Rosenstein are a dramatic shift from the bipartisan praise he received during his confirmation hearing. Democrats lauded him as a potential check on Sessions, whom they don’t trust with the Russia investigation and worry will steer the administration to the hard right.

 

Only six Democrats — four of whom are viewed as potential 2020 presidential candidates — voted against Rosenstein’s nomination. By comparison, only one — Sen. Joe Manchin (W.Va.) — voted for Sessions. All Republicans backed Rosenstein in the 94-6 roll call.

While Attorney General Jeff Sessions has also been asked to tesitfy before the Senate, he recused himself from the Russia investigation previously to avoid any appearance of a conflict of interest.

Of course, the real fun won’t begin until former FBI Director James Comey finally decides to give Jason Chaffetz’s his new phone number so they can schedule a hearing.

end

 

Trump comments that the deep state is after him and it is the single greatest witch hunt in American history. Interestingly enough it was not Trump who initiated the special prosecutor.  Will he now ask for a special prosecutor to look into the crimes of Hillary Clinton?

(courtesy zero hedge)

 

Trump Explodes: “This Is The Single Greatest Witch Hunt In American History”

Last night, after the White House dropped a highly-scripted statement ‘welcoming’ the appointment of former FBI director Mueller as Special Counsel on the “Russia Probe”, we questioned whether Trump would offer any other, less-scripted thoughts via Twitter.  We now have our answer:

“With all of the illegal acts that took place in the Clinton campaign & Obama Administration, there was never a special councel appointed!”

 

“This is the single greatest witch hunt of a politician in American history!”

With all of the illegal acts that took place in the Clinton campaign & Obama Administration, there was never a special councel appointed!

This is the single greatest witch hunt of a politician in American history!

 

Guess we now also know for sure that Trump was unaware of Rosenstein’s efforts to appoint a Special Counsel until after the order to do so had already been signed, as the DOJ intimated last night.

Of course, he does seem to have a point that after all the revelations of intentional evidence destruction (remember BleachBit), despite the known existence of a Congressional subpoena, intentional violations of the Federal Records Retention Act, secret Bill Clinton meetings with the Attorney General on Phoenix tarmacs and the passing out of immunity deals “like they were candy” by former FBI Director Comey, it does seem curious that no special counsel was ever appointed to look into Hillary’s case.  Will Trump now insist that one be appointed?

 

end

 

USA Mortgage applications tumble the most in one year:

(courtesy zero hedge)

Housing Recovery? US Mortgage Applications Tumble Most Since 2016

After dismal housing starts and permits data yesterday, the ‘housing recovery’ narrative took another knock this morning as mortgage applications tumbled 4.1% last week – the biggest drop since December 2016.

While mortgage rates were unchanged, both purchases and refis fell notably…

  • Purchases down 2.7% after rising 1.7% in prior week
  • Refis fell 5.7% after rising 3.3% in prior week

 

Perhaps additionally of note the government’s programs saw a dramatic drop off in the last week…

(courtesy zero hedge)

Philly Fed Smashes Expectations Despite Tumbling New Orders & Employment

With ‘soft’ data broadly tumbling to catch down to ‘hard’ data’s demise, today’s Philly Fed exuberance stands out like badly-adjusted sore thumb. Beating expectations by 6 standard deviations (38.8 vs 18.5 exp),

the breakdown shows employment dropped, new orders dropped, prices paid dropped, but shipments surged.

 

Looking at the full breakdown of the Philly sentiment print, most of the component and especially future indicators fell. For example, the 6m outlook fell to 34.8 from 45.4 previously…

“Seasonal” adjustments to the rescue?

end

Well that about does it for tonight

I will see you tomorrow night

h.

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