June 27/DOW FALLS 98.89/NASDAQ FALLS 100.53 AFTER IMF SAYS THAT THE DOLLAR IS 20% OVERVALUED AND THAT THE USA WILL EXPERIENCE TEPID GROWTH/GOLD UP A FRACTION AND SO IS SILVER/SWITZERLAND EXPORTS HUGE AMOUNT OF SILVER INTO CHINA/EXPORTS HUGE AMOUNTS OF GOLD TO ALL SOURCES/DRAGHI GOES HAWKISH WHICH SENDS THE EURO HIGHER (AND GOLD/SILVER)

GOLD: $1246.40  UP $0.10

Silver: $16.58  UP 2  cent(s)

Closing access prices:

Gold $1247.50

silver: $16.68

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: $1253.94 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1243.80

PREMIUM FIRST FIX:  $10.03

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SECOND SHANGHAI GOLD FIX: $1262.15

NY GOLD PRICE AT THE EXACT SAME TIME: $1250.00

Premium of Shanghai 2nd fix/NY:$12.15

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LONDON FIRST GOLD FIX:  5:30 am est  $1240.85

NY PRICING AT THE EXACT SAME TIME: $1241.85  

LONDON SECOND GOLD FIX  10 AM: $1245.25

NY PRICING AT THE EXACT SAME TIME. $1244.25 

For comex gold:

JUNE/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  77 NOTICE(S) FOR 7700  OZ.

TOTAL NOTICES SO FAR: 2850 FOR 285,000 OZ    (8.8646 TONNES)

For silver:

JUNE

 2 NOTICES FILED TODAY FOR

10,000  OZ/

Total number of notices filed so far this month: 993 for 4,915,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

END

We have now officially entered options expiry week:

comex options expiry : Tuesday June 27  finished tonight

London options expiry: Friday June 30

first day notice  Friday June 30

The big news is the fact that the mainstream media are commenting on the unusual trading of gold and silver.

Also the IMF stated that the dollar is overvalued by 20% and that their growth is quite anemic. This should be the catalyst to explode the price of gold and silver.

end

Let us have a look at the data for today

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In silver, the total open interest SURPRISINGLY FELL BY ONLY 1479 contract(s) DOWN to 203,137 DESPITE THE RAID AND THE FALL IN PRICE OF SILVER THAT TOOK PLACE WITH YESTERDAY’S TRADING (DOWN 7 CENT(S). In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.0150 BILLION TO BE EXACT or 145% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 2 NOTICE(S) FOR 10,000  OZ OF SILVER

In gold, the total comex gold  SURPRISINGLY ROSE BY  214 CONTRACTS DESPITE THE RAID IN THE PRICE OF GOLD   ($9.90 with YESTERDAY’S TRADING). The total gold OI stands at 450,301 contracts.

we had 77 notice(s) filed upon for 7,700 oz of gold.

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

GLD:

We had a big change in tonnes of gold at the GLD: a withdrawal of 2.64 tonnes from the GLD

Inventory rests tonight: 853.66 tonnes

.

SLV

Today: no change  in silver inventory at the SLV:

THE SLV Inventory rests at: 339.888 million oz

end

.

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

1. Today, we had the open interest in silver FELL BY 1479 contracts DOWN TO 203,137 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), DESPITE THE FALL IN PRICE FOR SILVER WITH YESTERDAY’S TRADING  (DOWN 7 CENTS).We LOST A FEW BUT MOST EVERYBODY remains firm and determined.

(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 MONDAY night/TUESDAY morning: Shanghai closed UP 5.75 POINTS OR 0.18%   / /Hang Sang CLOSED DOWN 31.90 POINTS OR 0.12% The Nikkei closed UP 71,74 POINTS OR 0.36%/Australia’s all ordinaires CLOSED DOWN 0.10%/Chinese yuan (ONSHORE) closed UP at 6.8145/Oil UP to 43.79 dollars per barrel for WTI and 46.33 for Brent. Stocks in Europe OPENED ALL IN THE RED,,   Offshore yuan trades  6.8176 yuan to the dollar vs 6.8176 for onshore yuan. NOW THE OFFSHORE IS MUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

.This is big news:  Trump is getting increasingly frustrated with China as they deal with North Korea. They may increase steel tariffs or even initiate sanctions against China

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

 Last night some of the small caps crashed in price amidst a huge margin call due to lack of good collateral( zero hedge)

4. EUROPEAN AFFAIRS

EU

i) Early this morning, the Euro surged as Draghi for the first time sounded hawkish in that stimulus for the markets may be tapered.  He states that the deflation scare is over and that lack of inflation is only temporary( zero hedge)

ii)later in the morning:  The euro and bund yields spike  right after Draghi’s hawkish speech shocked the markets

( zero hedge)

iii)Italy

A terrific commentary from Simon Black on the true cost of the bailout of the two small Italian banks.  At 17 billion euros it is 1% of GDP and that equates to its annual defense budget.

Two important facts to consider:

  1. Italy’s non performing loans are 360 billion euros or 18% of GDP
  2. Italy’s debt to GDP is around 135%

now what happens when the next Italian banks fail?

( Simon Black/SovereignMan.com)

iv)ANOTHER EUROPEAN CYPERATTACK

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)GERMANY/TURKEY

This is shaping up to being a very interesting G20 summit.  Germany who is hosting the event in Hamburg has now told Turkish President Erdogan not to bring his bodyguards as they are not welcome.

(courtesy zero hedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

More bad news for WTI and gasoline after an unexpected inventory gain

( zerohedge)

8. EMERGING MARKET

Last evening, President Temer of Brazil has officially been charged with corruption and he is deeply involved in providing “hush money” to silence individuals in the car wash scandal/ and receiving bribes.

( zero hedge)

9.   PHYSICAL MARKETS

i)Wow!! Mainstream media picking up that something is seriously wrong with how gold is trading.  It is “ not a “mistake” but longstanding policy”

( Bloomberg news)

ii)The huge flash crash in gold yesterday

( Shabalala/Reuters)

iii)My goodness the all realize something that we have noticed 10 years ago: that central banks have been intervening in ALL markets

a must read..

( Haggith/GATA)

iv)Mysterious my foot!!

( GATA/London’s Financial times)

v)the anatomy of the huge gold raid foisted upon us yesterday: why 4 am was chosen

( Dave Kranzler/IRD)

vi)This is huge:  China imported 407 tonnes  (13.1 million oz) last month. If they continue at this pace:  156 million oz or 22% of annual production is heading their way!!

( Scrap Register/Shanghai)

vii)Two important points here:

  1. India has imported 236 tonnes over a 5 month period from Switzerland. Switzerland represents I believe around 50% of their official imports. So ti looks like they are on tap to import on a yearly basis: 1132 tonnes.  This does not include smuggled gold from other areas.
  2. Switzerland exported 170 tonnes total to China and others. If we extrapolate that number;  2040 tonnes or 100% of annual gold production ex China ex Russia

( ScrapRegister/Shanghai)

10. USA Stories

i)Well respected Seymour Hersh has now written that the USA lied to the American people concerning the Syrian Chemical Attack and the resultant bombing of Syria

( Seymour Hersh/zero hedge)

ii)What timing!  The White House now accuses Syria of planning another chemical attack and Trump warns that they will pay a heavy price

( zero hedge)

iii)Syria denies that it has plans for a new chemical attack.  Russia slams the uSA warning claiming that this action is totally unacceptable

( zero hedge)

iv)What a riot!  The democratic aligned firm that did that wonderful false dossier on Trump somehow refuses to cooperate with Senate investigators…I wonder why?

( zero hedge)

v)Now it is the IMF’s turn to slash USA GDP growth from 2.3% to 2.1% in 2017

( zero hedge/IMF)

vi)Soft data conference board consumer confidence falters to a 5 month low

( zerohedge)

vii)The Case Shiller home price growth slows as the San Francisco market deflates:

( zero hedge/Case Shiller)

ix)CNN  caught red handed in an undercover sting..the producer admits the Russian fake news stories were done for ratings

( zerohedge/Project Veritas)

Let us head over to the comex:

The total gold comex open interest SURPRISINGLY ROSE BY 214 CONTRACTS UP to an OI level of 449,378 DESPITE THE FALL(WHACK) IN THE PRICE OF GOLD ($9.90 with YESTERDAY’S trading). An open interest of around 390,000 to 400,000 is core and nothing will move these guys from their contracts.

We are now in the contract month of JUNE and it is one of the BETTER delivery months  of the year. In this JUNE delivery month we had A LOSS OF 179 contract(s)FALLING TO  219.  We had 103 notices filed yesterday so we LOST 76  contract(s) or an additional 7600 oz will NOT stand for delivery in this very active delivery month of June AND  76 CONTRACT(S) RECEIVED AN EFP CONTRACT WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURE GOLD CONTRACT/OR A LONG CALL OR MOST LIKELY A LONDON BASED FORWARD GOLD CONTRACT. THESE EFP’S ARE PRIVATE OFF COMEX TRANSACTIONS. THE STUBBORN LONGS WHO ARE REMAINING STOIC AT THE COMEX ARE SO FAR REFUSING THAT FIAT BONUS (JUST UNDER 10 TONNES STANDING)

Below is a little background on the EFP contracts  initiated by our bankers:
We now know for certain that private EFP contracts are given by the bankers when faced with an upcoming active delivery month and they state that this is for emergency purposes only and that they do not have actual physical metal to deliver upon in the front month.  We just do not know the makeup of that private deal.  It is my contention that the longs in GOLD FOR INSTANCE at the end of MAY(for June contracts) were given a fiat bonus plus a long “in the money” call for a  future July contract or a August FUTURE contract or MAYBE EVEN A LONDON BASED FORWARD GOLD CONTRACT. . and this is why the total comex open interest complex obliterates as we enter first day notice.  So now everything makes sense: the obliteration of OI as we enter first day notice has not really occurred in the real sense but replaced with a future long contract call and/or an off -comex London based gold contract  with some bonus money for their effort.

The non active July contract LOST 277 contracts to stand at 644 contracts. The next big active month is August and here the OI LOST 1164 contracts DOWN to 299,282, as the bankers trying to keep this month down to manageable size.

We had 77 notice(s) filed upon today for 7700 oz

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And now for the wild silver comex results.  Total silver OI SURPRISINGLY FELL BY ONLY 1479 contracts FROM 204,616 DOWN TO 203,137 DESPITE YESTERDAY’S 7 CENT LOSS AND RAID ON GOLD. OUR BANKER FRIENDS ARE DESPERATELY TRYING TO COVER THEIR SHORTS IN SILVER BUT AS YOU CAN SEE  THEY HAVE NOT BEEN AS SUCCESSFUL AS THEY WOULD HAVE LIKED.
We are in the NON active delivery month is JUNE  Here the open interest LOST 2 contract(s) FALLING TO 0 contracts. We had 0 notices served upon yesterday so we  LOST 2 CONTRACT(S) OR AN ADDITIONAL  10,000 OZ OF SILVER WILL NOT STAND FOR DELIVERY IN THIS NON ACTIVE DELIVERY MONTH OF JUNE AND 2 EFP CONTRACTS WERE ISSUED.  IT SEEMS WE ARE CONTINUING WHERE WE LEFT OFF LAST MONTH IN SILVER AS INVESTORS ARE WILLING TO FORGO THE FIAT PROFIT JUST TO SECURE PHYSICAL SILVER METAL.

The next big active month will be July and here the OI LOST 8108 contracts DOWN to 40,677 as we start to wind down before first day notice Friday, June 30.  July will be interesting to watch in silver as we witness fewer players pitching for EFP contracts than with gold. We have 3 trading days left before first day notice

The month of August, a non active month picked up 128 contracts to stand at 298.  The next big active delivery month for silver will be September and here the OI already jumped by another 6452 contracts up to 119,819.

I will give you a snapshot as to what happened last year at the exact number of days before first day notice:

  June 27.2016:  44,936 contracts were still outstanding vs 40,677 contracts June 26.2017.WITH THE EXACT SAME NUMBER OF TRADING DAYS BEFORE FIRST DAY NOTICE 

At the conclusion of June, the final standing for physical silver was 3,080,000 oz and we have already surpassed that number this year  (4,915,000 oz).

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.

As for the July contracts:

Initial amount that stood for silver for the July 2016 contract:  14.785 million  oz

Final standing:  12.370 million with the difference being EFP’s taking delivery in London.

We had 2 notice(s) filed for 10,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 212,543 contracts which is GOOD

Yesterday’s confirmed volume was 236,441 contracts  which is GOOD

volumes on gold are STILL HIGHER THAN NORMAL!

INITIAL standings for JUNE
 June 27/2017.
Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
11,670.798
OZ
HSBC
MANFRA
(INCLUDES 15 KILOBARS)
Deposits to the Dealer Inventory in oz NIL  oz
Deposits to the Customer Inventory, in oz 
nil oz
No of oz served (contracts) today
 
77 notice(s)
7700 OZ
No of oz to be served (notices)
142 contracts
14,200 oz
Total monthly oz gold served (contracts) so far this month
2850 notices
285,000 oz
8.8646 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   338,438.8 oz
Today we HAD  1 kilobar transaction(s)/ 
We had 0 deposit into the dealer:
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 2 customer withdrawal(s)
i) Out of HSBC: 11,188.548 oz
ii) Out of Manfra: 482.25 oz (15 kilobars)
total customer withdrawal: 11,670.798  oz
 we had 0 adjustment(s):
 
For JUNE:

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 77  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 64 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the initial total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (2850) x 100 oz or 285,000 oz, to which we add the difference between the open interest for the front month of JUNE (219 contracts) minus the number of notices served upon today (77) x 100 oz per contract equals 299,200  oz, the number of ounces standing in this active month of JUNE.
 
Thus the INITIAL standings for gold for the JUNE contract month:
No of notices served so far (2850) x 100 oz  or ounces + {(219)OI for the front month  minus the number of  notices served upon today (77) x 100 oz which equals 299,200 oz standing in this  active delivery month of JUNE  (9.3063 tonnes)
.
WE LOST 76 CONTRACTS OR AN ADDITIONAL 7600 OZ WILL NOT STAND AT THE COMEX AND 76 CONTRACT WAS GIVEN AN EFP CONTRACTS WHICH ENTITLES THEM TO A FIAT BONUS PLUS A FUTURES GOLD CONTRACT OR A LONG CALL ON A GOLD CONTRACT OR MOST LIKELY A LONDON BASED GOLD FORWARD CONTRACT. YOU CAN NOW SEE WHY THE COT REPORTS ARE DISTORTED DUE TO THE ISSUANCE OF THESE EFP CONTRACTS 
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Total dealer inventory 850,783.09 or 26.460 tonnes DEALER RAPIDLY LOSING GOLD
Total gold inventory (dealer and customer) = 8,615,851.751 or 267.98 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 267.98 tonnes for a  loss of 35  tonnes over that period.  Since August 8/2016 we have lost 86 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 10 MONTHS  85 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE June DELIVERY MONTH
 
June INITIAL standings
 June 27 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
 nil  oz
Deposits to the Dealer Inventory
560,595.640  oz
Deposits to the Customer Inventory 
600,062.787 oz
CNT
No of oz served today (contracts)
 2 CONTRACT(S)
(10,000 OZ)
No of oz to be served (notices)
0 contracts
( NIL oz)
Total monthly oz silver served (contracts) 983 contracts (4,915,000 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 6,332,238.3 oz
today, we had  1 deposit(s) into the dealer account:
 i) into Brinks:  560,595.640 oz
total dealer deposit: 560,595.640  oz
we had Nil dealer withdrawals:
total dealer withdrawals: nil oz
we had 0 customer withdrawal(s):
TOTAL CUSTOMER WITHDRAWALS: 337,867.892 oz
We had 1 Customer deposit(s):
i)Into CNT: 600,062.787 oz
***deposits into JPMorgan have now stopped again
In the month of March and February, JPMorgan stopped (received) almost all of the comex silver contracts.
why is JPMorgan bringing in so much silver??? why is this not criminal in that they are also the massive short in silver
total customer deposits: 600,062.787 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the JUNE. contract month is represented by 2 contract(s) for NIL oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 983 x 5,000 oz  = 4,915,000 oz to which we add the difference between the open interest for the front month of JUNE (2) and the number of notices served upon today (2) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the initial standings for silver for the JUNE contract month:  983 (notices served so far)x 5000 oz  + OI for front month of JUNE.(2 ) -number of notices served upon today (2)x 5000 oz  equals  4,915,000 oz  of silver standing for the JUNE contract month.
 
We LOST 2 contract(s) or an additional 10,,000 oz will stand for delivery. WE ALSO HAD 2 EFP CONTRACTS THAT WERE ISSUED AS THE LONGS FINALLY SUCCUMBED TO A FIAT BONUS:  . THIS ENDED THE STREAK AT 18TH CONSECUTIVE TRADING DAY THAT WE EITHER GAINED NOR DID WE LOSE ANY SILVER CONTRACTS THROUGH THE EFP ROUTE.
 
 
Volumes: for silver comex
Today the estimated volume was 118,995 which is GIGANTIC
Yesterday’s  confirmed volume was 111,291 contracts which is GIGANTIC
YESTERDAY’S CONFIRMED VOLUME OF 111,291 CONTRACTS EQUATES TO 556 MILLION OZ OF SILVER OR 80% 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:  35.473 million (close to record low inventory  
Total number of dealer and customer silver:   207.535 million oz
The record level of silver open interest is 234,787 contracts set on April 21./2017  with the price at that day at  $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end

NPV for Sprott and Central Fund of Canada

1. Central Fund of Canada: traded at Negative 7.0 percent to NAV usa funds and Negative 7.2% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.3%
Percentage of fund in silver:37.6%
cash .+0.1%( June 27/2017) 
 
2. Sprott silver fund (PSLV): STOCK   NAV  falls TO +.32% (june 27/2017) 
3. Sprott gold fund (PHYS): premium to NAV rises TO -0.33% to NAV  (June 27/2017 )
Note: Sprott silver trust back  into POSITIVE territory at +0.32 /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

June 27.2017/a deposit of 2.64 tonnes into the GLD/inventory rests at 853.66 tonnes

June 26/a withdrawal of 2.66 tonnes from the GLD and this gold no doubt was part of the raid/Inventory rests at 851.02

June 23/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 22/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 21/no change in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 20/no  change in gold inventory at the GLD//Inventory rests at 853.68 tonnes

June 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 853.68 TONNES

June 16/no changes in gold inventory at the GLD/Inventory rests at 853.68 tonnes

June 15/ a monstrous “paper” withdrawal of 13.32 tonnes/Inventory rests at 853.68 tonnes

June 14./NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 13. No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 12/No change in gold inventory at the GLD/Inventory rests at 867.00 tonnes

June 9/no change in inventory at the GLD/Inventory rests at 867.00 tonnes

June 8/AN ADDITION OF 3.07 TONNES OF GOLD ADDED TO THE GLD/INVENTORY RESTS AT 867.00 TONNES

June 7 a huge change in inventory/a deposit of 13.93 tonnes/inventory rests at 864.93 tonnes

June 6/ no changes in inventory at the GLD/Inventory remains at 851.00 tonnes

June 5.2017/no changes at the GLD/Inventory remain at 851.00 tonnes

June 2/2017/a huge deposit of 3.55 tonnes of gold into the GLD/Inventory rests at 851.00 tonnes

June 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 847.45 TONNES

May 31./ no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 30/no change in gold inventory at the GLD/Inventory rests at 847.45 tonnes

May 26./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 25./no change in inventory at the GLD/Inventory rests at 847.45 tonnes

May 24/no change in inventory at the GLD/inventory rests at 847.45 tonnes

May 23/a paper withdrawal of 5.03 tonnes of gold from the GLD/Inventory rests at 847.45 tonnes

May 22/A DEPOSIT OF 1.77 TONNES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.48 TONNES

May 19/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 850.71 TONNES

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

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June 27 /2017/ Inventory rests tonight at 853.66 tonnes
*IN LAST 181 TRADING DAYS: 93.47 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 122 TRADING DAYS: A NET  33.96 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
*FROM FEB 1/2017: A NET  47.30 TONNES HAVE BEEN ADDED.

end

Now the SLV Inventory

June 27/no change in the silver inventory at the SLV/Inventory rests at 339.888 million oz/

June 26/no change in the silver inventory at the SLV/Inventory rests at 339.888 million oz/

June 23/no change in silver inventory at the SLV/Inventory rests at 339.888 million oz

June 22/ a big change; a huge deposit of 2.175 million oz into the SLV/Inventory rests at 339.888 million oz

June 21/no change in silver inventory at the SLV/inventory rests at 337.713 million oz

June 20/a deposit of 1.513 million oz/inventory rests at 337.713 million oz/.

June 19/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 336.200 MILLION OZ

June 16/no changes in inventory at the SLV/inventory rests at 336.200 million oz

June 15/ a massive “paper withdrawal” of 3.405 million oz of silver/Inventory rests at 336.200 million oz/

June 14/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 13/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz

June 12/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 9/no change in silver inventory at the SLV/Inventory rests at 339.605 million oz/

June 8/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ/

June 7/no change in inventory at the SLV/inventory rests at 339.605 million oz/

June 6/no change in inventory at the SLV/Inventory rests at 339.605 million oz.

June 5/a huge change at the SLV/a withdrawal of 1.371 million oz /inventory rests at 339.605 million oz/

June 2/no change in silver inventory at the SLV/Inventory rests at 340.976 million oz/

June 1/NO CHANGE IN INVENTORY AT THE SLV/INVENTORY RESTS AT 340.976 MILLION OZ

May 31./ no change in silver inventory at the SLV/inventory rests at 340.976 million oz/

May 30/no change in silver inventory at the SLV/inventory rests at 340.976 million oz

May 26/another paper withdrawal of 946,000 oz of silver from the SLV with silver rising/inventory rests at 340.976 million oz

May 25/no change in silver inventory at the SLV/Inventory rests at 341.922 million oz

May 24./a “paper” withdrawal of 1.893 million oz from the SLV/inventory rests tonight at 341.922 million oz

May 23/no change in silver inventory at the SLV/inventory rests at 343.815 million oz

May 19/no change in silver inventory at the SLV/Inventory rests at 343.815 million oz.

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/

June 27.2017:
 Inventory 339.888  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.21%
  • 12 Month MM GOFO
    + 1.43%
  • 30 day trend

end

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Goldman, Citi Turn Positive On Gold – Despite “Mysterious” Flash Crash

Goldman and Citigroup Turn Positive On Gold – Despite “Mysterious” Flash Crash

– Gold bounces higher after “mysterious” one minute “flash crash” mistake

– $2 billion, 50 tons or 1.8 million ounces “fat finger” trade blamed

Gold in USD – 1 Week

– Massive selling at 0400 EST when U.S. markets closed and  thin trading amid holidays in Muslim countries including Turkey, Singapore and Malaysia.

– Mystery is that “fat fingers” in gold market are always sell trades that push prices lower

– Traders or market ‘muppets’ frequently push gold market lower … not other markets

– Only small 0.9% loss on the day and bounce back shows deep liquidity and robust nature of gold market

– Similar massive selling of bitcoin or other crypto currencies would likely lead to massive price fall

Asset Performance – 2017 YTD (Finviz)

– Citigroup say gold’s “downtrend” is “running out of steam” (see News and Commentary)

– 3 reasons why Goldman now bullish on gold including “peak gold” (see News and Commentary)

– Gold still 8.75% higher year to date 2017; S&P at 8.7% gain ytd


News and Commentary

Gold Plunges After 1.8 Million Ounces Were Traded in One Minute (Bloomberg)

Huge sell order ‘mistake’ sends gold to six-week low (CNBC)

Huge sell order pushes gold to six-week low (Reuters)

Gold remains under pressure after ‘mysterious’ drop (FT.com)

U.S. threatens Syria, says Assad is planning chemical weapons attack (Reuters)

Bloomberg Image

Gold Flash Crashes As “Someone” Dumps $2 Billion, “Fat Finger” Blamed (Zerohedge)

Gold’s Downtrend Is “Running Out Of Steam” – Citi (Zerohedge)

3 Reasons Why Goldman Just Turned Bullish On Gold (Zerohedge)

Central Bank Intervention Slams Paper Gold (IRD)

India Said to Plan Gold Policy Revamp for $19 Billion Sector (Bloomberg)

Gold Prices (LBMA AM)

27 Jun: USD 1,250.40, GBP 980.31 & EUR 1,111.36 per ounce
26 Jun: USD 1,240.85, GBP 975.56 & EUR 1,109.32 per ounce
23 Jun: USD 1,256.30, GBP 987.70 & EUR 1,125.27 per ounce
22 Jun: USD 1,251.40, GBP 988.36 & EUR 1,120.13 per ounce
21 Jun: USD 1,247.05, GBP 989.04 & EUR 1,118.98 per ounce
20 Jun: USD 1,246.50, GBP 981.99 & EUR 1,117.24 per ounce
19 Jun: USD 1,251.10, GBP 976.86 & EUR 1,117.73 per ounce

Silver Prices (LBMA)

27 Jun: USD 16.66, GBP 13.07 & EUR 14.79 per ounce
26 Jun: USD 16.53, GBP 12.98 & EUR 14.79 per ounce
23 Jun: USD 16.71, GBP 13.12 & EUR 14.97 per ounce
22 Jun: USD 16.58, GBP 13.09 & EUR 14.85 per ounce
21 Jun: USD 16.51, GBP 13.03 & EUR 14.81 per ounce
20 Jun: USD 16.59, GBP 13.10 & EUR 14.88 per ounce
19 Jun: USD 16.67, GBP 13.02 & EUR 14.87 per ounce


Recent Market Updates

– Worst Crash In Our Lifetime Coming – Jim Rogers
– Go for Gold – Win a beautiful Gold Sovereign coin
– Only Gold Lasts Forever
– Your Future Wealth Depends on what You Decide to Keep and Invest in Now
– Inflation is no longer in stealth mode
– James Rickards: Gold Will Start Heading Higher On “Dwindling” Supply
– Billionaires Invest In Gold
– Brexit and UK election impact UK housing
– In Gold we Trust: Must See Gold Charts and Research
– Pension Funds, Sovereign Wealth Funds, Central Banks “Stock Up” on Gold “Amid Uncertainty”
– 4 Charts Show Gold May Be Heading Much Higher
– Gold in Pounds Surges 1.5% To £1,001/oz – UK Political Turmoil Likely
– Gold Prices Steady On UK Election Risk; ECB Meeting and Geopolitical Risk

END

Wow!! Mainstream media picking up that something is seriously wrong with how gold is trading.  It is “ not a “mistake” but longstanding policy”

(courtesy Bloomberg news)

end

The huge flash crash in gold yesterday

(courtesy Shabalala/Reuters)

END

My goodness the all realize something that we have noticed 10 years ago: that central banks have been intervening in ALL markets

a must read..

(courtesy Haggith/GATA)

Mysterious my foot!!

(courtesy GATA/London’s Financial times)

Financial Times calls gold’s flash crash ‘mysterious’

Section:

But the newspaper will be damned before it puts to central banks any questions about their gold trading.

* * *

Gold Remains Under Pressure After Mysterious Drop

By Adam Samson
Financial Times, Lodon
Monday, June 26, 2017

Gold, one of this year’s best-performing commodities, is still pinned around the day’s lows after a mysterious tumble earlier today.

Spot gold was recently down $12.69, or 1 percent, at $1,243.9 a troy ounce. That represented a modest recovery from the day’s lows of $1,236.43, which was the weakest level on an intraday basis since May, according to Bloomberg data.

Traders struggled to pin the fall on a particular event, with some analysts suggesting that an accidental “fat finger” trade may have triggered the initial fall, although moves like that typically immediately unwind.

“One question market participants are asking is: What happened to gold?,” Citigroup strategists pondered. …

… For the remainder of the report:

https://www.ft.com/content/31b7f81e-d803-31bb-8835-95205b7c1c03

END

the anatomy of the huge gold raid foisted upon us yesterday: why 4 am was chosen

(courtesy Dave Kranzler/IRD)

Dave Kranzler: Central banks try to scare the crap out of the gold market

Section:

12:51p ET Monday, June 26, 2017

Dear Friend of GATA and Gold:

Dave Kranzler of Investment Research Dynamics today quotes an explanation for today’s central bank flash crash in gold, provided by gold market analyst John Brimelow of John Brimelow’s Gold Jottings report:

“The day was well chosen as the Muslim world including Turkey was closed for the end of Ramadan, as was India, which has the amiable habit of observing the holidays of religious minorities.”

Kranzler adds: “Four a.m. Eastern time is one of the slowest, lowest-volume trading periods during any 24-hour period. Why would a seller of a large number of contracts sell at that time of day when the largest buyers of what is being sold are not in the market at the time of the sale?”

He answers his own question: “to scare the crap out of the market.”

Kranzler’s commentary is headlined “Central Bank Intervention Slams Paper Gold” and it’s posted at the IRD internet site here:

http://investmentresearchdynamics.com/central-bank-intervention-slams-pa…

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

END

Julian Philips on gold/silver raids in general:

his thoughts…..

Julian Phillips…

PRICE DRIVERS

Yesterday, we thought the sale at the open in London must have been a physical sale, but it wasn’t, it was a ‘paper’ sale, where one theory was that someone made a huge mistake selling ‘lots’ in the futures market instead of ounces. The deal was 56 tonnes of gold a massive amount that has not been seen since the gold price was crushed in 2013. Whatever it was, we learned a great deal about the behavior of markets then right up until now and likely tomorrow.

Lesson 1: Shanghai, a physical gold market, is not influenced by London and New York in such speculative lurches.

Lesson 2: To impact the gold price solidly, physical sales are needed in gold’s global markets.

Lesson 3: The influence of ‘paper’ gold markets [Futures and Options] is declining rapidly as physical sales or purchases directly affect gold prices. Paper sales do not involve physical gold sales in such cases. The speed of the price recovery in the face of such massive sales confirms what we are saying.

Lesson 4: When such speculative sales take place dealers in London and New York take up defensive positions in case of stop losses or further sales, but return to higher prices when buyers came in, which they are doing in both the ‘paper’ and physical gold markets. The charts may show a rapid take up of such ‘paper’ contract sales, as one saw in the F & O markets, probably by ‘limit’ purchase orders below the market prices. Nevertheless, the SPDR gold ETF saw buyers come in at these levels to buy physical gold. The markets both physical and ‘paper’ now know the strong underlying strength below $1,250. The ‘Golden Cross’ remains intact!

We see the gold price recovering to levels seen before the sale, at least, as physical dealers move prices higher for fear of more physical gold buying, likely from Shanghai through arbitrageurs. If the sale of 56 tonnes was an attempted ‘bear’ raid we do not expect to see more in the future, unless they involve large amounts of physical gold. When they do come in, expect Shanghai to pick up the physical stock sold  (Harvey: there is no physical gold left)

end

This is huge:  China imported 407 tonnes  (13.1 million oz) last month. If they continue at this pace:  156 million oz or 22% of annual production is heading their way!!

(courtesy Scrap Register/Shanghai)

SHANGHAI (Scrap Register): Chinese trade data has showed that the most monthly silver imports in May since 2010, while platinum imports were the strongest in more than a year, according to Commerzbank.

Analysts at Commerzbank cited data from customs authorities showing that China imported 407 tons of silver in May. This was nearly twice as much as in last May, as well as the largest quantity since December 2010.

Silver imports in the first five months of the year were thus a third higher than in the same period last year.

Platinum imports hit a 16-month high of 9.5 tons. By contrast, palladium imports were subdued at 1.3 tons, Commerzbank added.

“We are therefore finding palladium’s significant outperformance of platinum increasingly difficult to understand,” Commerzbank noted.

end

Two important points here:

  1. India has imported 236 tonnes over a 5 month period from Switzerland. Switzerland represents I believe around 50% of their official imports. So ti looks like they are on tap to import on a yearly basis: 1132 tonnes.  This does not include smuggled gold from other areas.
  2. Switzerland exported 170 tonnes total to China and others. If we extrapolate that number;  2040 tonnes or 100% of annual gold production ex China ex Russia

(courtesy ScrapRegister/Shanghai)

India’s Gold buying from Swizerland shoots up 40% m/m in May

INDIA June 27 2017 5:36 PM

MUMBAI (Scrap Register): India’s gold imports from Switzerland has shot up by 40% month-on-month to 68 metric tons during the month of May this year and up from 18.5 metric tons in May 2016, according to the Swiss Federal Customs data.

Indian gold buying is believed to have climbed in anticipation of widespread tax reforms to India’s economy, which includes a new 3% goods and service tax on gold, to be levied from July 1.

India was the biggest destination for Switzerland’s gold for the fifth straight month, with 68 metric tons and is the largest export volume to the country for 18 months.

India has imported 236 metric tons of gold during January to May this year, an increase of 105 percent from the same period a year earlier and the highest for at least three years.

Switzerland total gold export has reached 170 metric tons during the month of May, a sharp increase of 39 percent from 122 metric tons a month early and down 2% from 174 metric tons in May 2016.

end


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

 
 

1 Chinese yuan vs USA dollar/yuan  STRONGER 6.8145(REVALUATION NORTHBOUND   /OFFSHORE YUAN MOVES  A LITTLE WEAKER TO ONSHORE AT   6.8176/ Shanghai bourse CLOSED UP 5.75 POINTS OR 0.18%  / HANG SANG CLOSED UP 31.90 POINTS OR 0.12% 

2. Nikkei closed UP 71.74 POINTS OR 0.36%   /USA: YEN FALLS TO 111.74

3. Europe stocks OPENED ALL IN THE RED       ( /USA dollar index FALLS TO  96.97/Euro UP to 1.1249

3b Japan 10 year bond yield: FALLS TO   +.047%/     !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 110.06/ 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::  43.79 and Brent: 46.33

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.295%/Italian 10 yr bond yield UP  to 1.954%    

3j Greek 10 year bond yield RISES to  : 5.48???  

3k Gold at $1251.50  silver at:16.67 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 14/100 in  roubles/dollar) 58.96-

3m oil into the 43 dollar handle for WTI and 46 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.74 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  0.9688 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0877 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 RISING to  +0.294%

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 2.156% early this morning. Thirty year rate  at 2.712% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

“Hawkish Shock” From Draghi, PBOC Intervention Fail To Move Futures As Attention Turns To Yellen

S&P futures were fractionally in the red, pressured by a drop in European shares following what several desks called a “hawkish shock” speech by Mario Draghi at the annual ECB forum in Portugal, even as oil rose for a fourth day, boosted by favoriable remarks from China’s premier Li, while the Yuan surged 0.4% amid speculation of more PBOC interference in the yuan.

The overnight session was divided in two parts: the early European focus on a spike higher in Chinese yuan, with some speculating on PBOC intervention, others cite tightening in yuan forward curve. Metals and crude both rallied broadly in response, USD pushed weaker against G-10.

The initial PBOC-inspired euphoria was later doused by another central bank, this time the ECB, when a hawkish Draghi speech drove markets, sending the EUR/USD back to YTD highs, and leading to a sharp steepening in German 2s10s and Euribor curves.

With the help of the sliding dollar, the Euro is now on pace for its best quarter in six years.

European equity markets open lower led by sector-specific news. As noted earlier, the German auto sector was hit after supplier Schaeffler issued a surprisingly ugly profit warning, Deutsche Telekom weighed on Telecoms sector though basic resources shares were among those bucking the trend as commodities advanced. U.K. banks briefly sold off after BOE raises countercyclical capital buffer to 0.5% (and 1.0% as of November), while Google was down -2.6% in premarket trading after the EU competition commissioner announced a record €2.4BN fine for antitrust issues and skewing search results.

Gold rebounded after an apparently erroneous order triggered a plunge in the price on Monday. The Chinese yuan surged both onshore and overseas amid speculation of central bank intervention. Treasuries slipped before an appearance by Federal Reserve Chair Janet Yellen.

With Draghi’s hawkish outlook shocking markets, it is now up to Yellen. As Bloomberg notes, “traders will be looking to Yellen for clues on the outlook for interest rates and the American economy, especially after weakness in data yesterday added to concerns about the strength of growth. Some investors worry the Fed is taking too rosy a view as it sets the path for increasing borrowing costs. European Central Bank President Draghi struck a cautiously optimistic tone for the euro area, noting a “strengthening and broadening recovery” but stressing the need for prudence in adjusting policy.”

Elsewhere, as reported overnight, Brazilian President Michel Temer was charged with corruption in a highly anticipated development that may put the embattled leader of Latin America’s largest economy on trial. Temer, who has denied the charges, could lose his job if indicted and found guilty.

India and Singapore reopened after holidays but many markets, including in Malaysia, Indonesia and most of the Middle East remain closed.

Futures on the S&P 500 Index fell 0.1 percent. The underlying gauge rose less than one point on Monday. The Nasdaq 100 fell 0.4 percent.

In currencies, the euro surged 0.6 percent to $1.1251. The Bloomberg Dollar Spot Index fell 0.3 percent after gaining 0.1 percent in the previous session. The British pound added 0.1 percent to $1.2737.

In commodities,  WTI rose 0.8% to $43.73 a barrel, adding to a three-day rally following oil’s drop into a bear market. Gold increased 0.5 percent to $1,250.71 an ounce. The precious metal sank almost 1 percent on Monday.

In rates, the yield on 10-year Treasuries rose two basis points to 2.16%, after dropping less than one basis point on Monday. European government bonds dropped across the board, with the yield on benchmark French bonds climbing six basis points and that of Germany four basis points.

Bulletin Headline Summary from RanSquawk:

  • European equity markets trade lower amid hawkish comments from ECB’s Draghi
  • Bank of England Financial Stability Report; Countercyclical buffer for UK banks raised from 0.00% to 0.50%
  • Highlights include Fed’s Yellen, Harker and Kashkari

Market Snapshot

  • S&P 500 futures down 0.1% to 2,432.80
  • STOXX Europe 600 down 0.5% to 387.31
  • MXAP up 0.1% to 155.78
  • MXAPJ unchanged at 507.63
  • Nikkei up 0.4% to 20,225.09
  • Topix up 0.4% to 1,619.02
  • Hang Seng Index down 0.1% to 25,839.99
  • Shanghai Composite up 0.2% to 3,191.20
  • Sensex down 0.9% to 30,864.71
  • Australia S&P/ASX 200 down 0.1% to 5,714.19
  • Kospi up 0.1% to 2,391.95
  • Brent futures up 0.8% to $46.19/bbl
  • Gold spot up 0.6% to $1,252.19
  • U.S. Dollar Index down 0.4% to 97.01
  • STOXX Europe 600 down 0.9% to 385.62
  • German 10Y yield rose 3.4 bps to 0.279%
  • Euro up 0.6% to 1.1243 per US$
  • Italian 10Y yield fell 1.8 bps to 1.609%
  • Spanish 10Y yield rose 0.5 bp to 1.382%

Top Overnight News

  • ECB’s Draghi: factors dampening inflation are on the whole temporary; the central bank can accompany the recovery by adjusting the parameters of its policy instruments, not in order to tighten the policy stance, but to keep it broadly unchanged
  • U.S. GSEs: senators Corker and Warner working on a plan to break up Fannie and Freddie
  • BOE: raises countercyclical capital buffer to 0.5% from 0.0%, plans further raise to 1.0% in November
  • Canada: U.S. to impose additional tariffs on Canadian lumber imports
  • China Premier Li: economy keeps steady growth with improvement in 2Q; continues stable positive trend in 2017
  • Brazil: President Temer charged with corruption by top prosecutor
  • Hong Kong small-cap stock plunge wipes out $6.1 billion in value
  • Dimon Says JPMorgan Headcount to Keep Rising Despite Automation
  • Sprint Jumps on Report Deutsche Telekom Favors T-Mobile Merger; Sprint Said in Talks With Charter, Comcast on Wireless Deal
  • Stada Plunges as $5.9 Billion Bid Fails to Lure Investors
  • Li Says China to Meet Growth Goals, Vows Free Trade Support
  • Draghi Defends ECB Stimulus Saying Jobs Matter Most for Equality
  • Deutsche Telekom Won’t Sell BT Group Stake, CEO Hoettges Says
  • Deutsche Bank Wasn’t Only ‘Mirror’ Trader: Russian Central Bank
  • Germany Asks Opel to Update Zafira 1.6l Diesel Engine Software
  • Volkswagen, Nvidia to Cooperate on Mobility Services
  • Volvo Cars, Autoliv Add Nvidia as Partner on Self- Driving Autos
  • Spanish Lender Bankia Agrees to Buy BMN in All- Stock Deal
  • Chemicals M&A Still Hot Topic in Europe, U.S., Citi Says
  • Hollywood Said to Be Auditing China’s Box-Office for First Time
  • Jorge Mas Plans to Bid $1b-$1.1b for Miami Marlins: Fox Business
  • Morgan Stanley Raises Alcoa Price Target, Cuts Cliffs
  • Apple Acquires Eye-Tracking Company SensoMotoric For AR Tech

Asia equities traded mostly in the green following a similar close on wall St., where financials outperformed as Fed comments backed the FOMC to continue hiking rates gradually, while the tech sector lagged after the US Supreme Court reinstated much of Trump’s travel ban. ASX 200 (-0.2%) saw broad-based weakness with gold miners also suffering from yesterday’s selling in the precious metal, while Nikkei 225 (+0.3%) was buoyed by a weaker JPY. Shanghai Comp. (+0.2%) and Hang Seng (-0.1%) were indecisive with stronger Industrial Profit growth counterbalanced by the PBoC refraining from liquidity injections for a 3rd consecutive day. 10yr JGBs were relatively flat with some mild upside seen despite the positive risk tone in Japan. Furthermore, the curve steepened with outperformance in the short-end following a 2yr bond auction which saw increased demand from prior as the b/c surged to 6.79 vs. Prey. 5.06. Chinese Premier Li stated that China is able to meet major economic targets this year and that China will ease market entry restrictions, as well as deepen reforms. Furthermore, Premier Li also stated that will maintain stable macro-policies and will not resort to massive stimulus. (Newswires)

Top Asian News

  • Hong Kong Small Cap Stock Plunge Wipes Out $6.1 Billion in Value
  • Cotton Crop in Top Grower Seen at 3-Year High on Local Price
  • China Stocks Reverse Drop in Afternoon as Consumer Shares Gain
  • Russia Has Plan for North Korea to Give Up Nuclear Program: RIA
  • China Said to Discuss VAT Exemption for Asset Management Firms
  • Noble Group Slides as Fitch Sees Real Possibility of Default
  • Exporters Lead Advance in Japanese Stocks as Yen Maintained Loss

EU bourses saw some bearish pressure on the back of Draghi’s comments, as all European majors trade in the red. Telecoms lag amid morning reports stating that Sprint said to be in exclusive talks with Charter, subsequently putting talks with T-Mobile US (TMUS) on hold (DTE GY holds a stake in TMUS). Fixed Income markets saw a subdued morning; however, a somewhat hawkish Draghi has weighed on European paper. The 10y Bund has been the main driver in the move, trading at session lows, down now over 20 ticks on the session. Bond trading is likely to focus on central bank speech today, with Yellen set to speak later in the session.

Top European News

  • Bankia, Banco Mare Nostrum Boards Sign Merger Agreement
  • Nomura to Set Up German Unit in Preparation for Brexit
  • Euro Jumps; Draghi Sees Temporary Factors Weighing on Inflation
  • U.K. Grocers Back in Growth as Brits Pay More for Their Shopping
  • Italian Business Confidence Unexpectedly Rises On Better Outlook
  • European Miners Advance as Iron Ore Jumps Most in Four Months
  • North Korea Sanctions Violations Trigger Fines at Latvian Banks
  • Petrofac Not Getting Paid for Oil Sales From Greater Stella Area

In currencies, it has been a lively morning for the EUR as the speech from president Draghi at the ECB forum on central banking was met positively. Traders took their cue from the comments highlighting the strengthening and broadening Euro area recovery and that deflationary forces have been replaced by reflationary ones. He also stated — again — that monetary accommodation is still required and that adjustment to policy will need to be gradual. Nevertheless, the market is still positioning for an eventual reining in of stimulus, and will continue to buy dips in EUR/USD and EUR/GBP, with EUR/JPY back at the session highs after a brief dip this morning. EUR/USD still faces as wall of selling interest into 1.1300, but for EUR/GBP, uncertain future in the UK makes for a comfortable buy in the near term, with the market having bid this cross rate well off the pre 0.8700 support highlighted in the past week or so. Still no major direction to discern in Cable, and we remain right in the middle of the broader 1.2400-1.3000 limits we see playing out until we get some fresh colour/news on Brexit. The rate policy ahead is being discounted to a larger degree despite the anticipated shift on the vote split. Pre 1.2800 still very well offered, but demand ahead of 1.2700 to note also.

In commodities, gold has recovered some of the heavy drop suffered in early Monday trade, in what is believed to have been a stop chase or errant volumes entered. We are back above USD1250.00 this morning, but we see the USD based weakness tempered by the steady risk tone. Silver is also steady in the upper USD16’s for now. Base metals show modest gains on the day, having seen decent gains over the last few days, and with reports of steel mill closures in China, iron ore has recovered a little more today. Copper is still holding circa USD2.64-5 this morning, so net little changed over the last 24 hours, with Zinc and Lead outperforming on the morning so far. Oil prices have also stabilised in the near term, but with little change to the overall backdrop of rising US production, traders will be wary of riding this latest move higher. WTI has held off USD44 so far.

Looking at the day ahead, we will receive the June consumer confidence reading (expected to edge down to 116.0 from 117.9) along with the Richmond Fed’s manufacturing index print for June and S&P/Case-Shiller house price index reading for April. Also of note today will be comments from Fed Chair Yellen at 6pm BST when she is due to speak in London on “Global Economic Issues”. Q&A is also expected to follow. The Fed’s Harker is also due to speak in London at 4pm while Williams speaks this morning at 9am BST and Kashkari also speaks at 10.30pm BST.

US Event and Central Bank Calendar

  • 9am: S&P CoreLogic CS 20-City MoM SA, est. 0.5%, prior 0.87%;  YoY NSA, est. 5.9%, prior 5.89%
  • 10am: Conf. Board Consumer Confidence, est. 116, prior 117.9; Present Situation, prior 140.7; Expectations, prior 102.6
  • 10am: Richmond Fed Manufact. Index, est. 5, prior 1
  • 11am: Fed’s Harker Speaks on Economy in London
  • 1pm: Fed’s Yellen Speaks on Global Economic Issues in London
  • 5:30pm: Fed’s Kashkari Speaks at Townhall Event in Houghton, Michigan

DB’s Jim Reid concludes the overnight wrap

While there wasn’t too much song and dance in markets yesterday, US politics was more of a talking point. Early in the day we learnt firstly that President Trump’s travel ban had been mostly cleared by the US Supreme Court which in turn allows it to take effect this week. Press reports were calling it a ‘partial victory’ for Trump insofar as the ban will take effect on people from the 6 nations concerned who lack a “bona fide relationship” in the US. After the close the focus then swiftly turned over to the healthcare debate with the findings from the CBO on the proposed bill. The headlines were largely dominated by the finding that an additional 22 million Americans would be left without insurance in a decade under the proposal, compared to 23 million in the House plan that passed in May. The CBO also found that the bill would lower the deficit by $321bn over the same period which compares to a $119bn reduction under the House bill. Significantly, following the CBO findings 3 Republican senators announced that they would block the bill from advancing. As a reminder, Majority Leader Mitch McConnell can only afford a maximum of two dissenters. McConnell is still aiming for a vote on the measures before the July 4th recess so it’ll be worth keeping an eye on how things progress.

Closer to home in the UK we finally learned that PM May’s Conservatives party had agreed to a pact with Northern Ireland’s DUP. The BBC reported that the pact included an extra £1bn in funding for Northern Ireland over the next 2 years. Staying with the UK, yesterday May’s government published the citizen’s rights plans in a 20 page report following talks last week. The EU’s Chief Negotiator Michal Barnier did however respond to the plan by saying that “more ambition, clarity and guarantees needed than in today’s UK position”. The EU’s Tusk also called it “below expectations” while Germany’s Merkel said it was a “good start” but “not a breakthrough”. So those talks will likely drag on.

Over in markets yesterday, the Italy bank rescue over the weekend coupled with some decent data in Germany (more on that later) combined to help European equities start the week on the front foot. The Stoxx 600 firmed +0.37% while Italy’s FTSE MIB rallied +0.81% (with Italian Banks up +2.43%). BTPs also rallied 3bps at the 10y which compared to a much more mixed session for the rest of the periphery. US equities got off to an equally positive start however faded as the session drew to a close. The S&P 500 ended +0.03% with the VIX also closing below 10 (at 9.90) for the seventh time this year, while in bond land Treasuries were a basis point or two lower across the curve not helped by some soft durable and capital goods orders data (again more on that later). The Fed’s Dudley also spoke although largely focused his remarks about effective communication so far around balance sheet strategy and the lack of any market response.

Coming back to Italy, in credit yesterday we saw a notable rally in Banca Popolare di Vicenza and Veneto Banca senior bonds after the weekend rescue package. After trading around 86c on Friday the news over the  week helped Vicenza’s 2.75% 2020 senior bonds rally all the way back above par yesterday and in fact close just above 102c. Veneto’s 4% 2019 senior bonds also rallied 19pts yesterday to close at 104c. The latter traded as low as 74c just a couple of weeks ago. The move to protect senior bondholders was also reflected in a 2bp rally for the iTraxx Senior Fins index to 51.7bps while Sub Fins underperformed (+0.5bps to 129.5bps) with Vicenza and Vento sub debt largely getting wiped out. This news hopefully continues to help support our financials over non-financials trade. We still think the former offer value. As a reminder our other big trade at the moment is Euro IG over HY. As discussed yesterday we wonder whether the recent US energy sector sell-off will help this trade too by creating a little contagion into other HY sectors and currencies.

Staying with credit. The latest weekly ECB CSPP holdings data was out yesterday. They are not being very predictable at the moment and it was another week of below par purchases averaging €300mn/day vs. the long-term average of €365mn/day. However although the CSPP/PSPP ratio was down to 12.1% (from the previous week’s 12.7%), the average since April has been 13.2% which still compares favourably with 11.6% before then. After a strong May for CSPP, perhaps corresponding with high supply, June has seen below average purchases. So the more recent data suggests that the ECB are tapering corporate purchases but perhaps not as much as government equivalents.

Refreshing our screens this morning, there’s not a huge amount of direction for bourses in Asia as we type. While the Nikkei (+0.30%), Hang Seng (+0.14%) and Kospi (+0.17%) are posting modest gains, bourses in China are flat and the ASX is -0.33%. Data in China this morning, without moving the dial, was supportive with industrial profits rising to +16.7% yoy in May (from +14.0% in April). Elsewhere Oil (+0.37%) has continued to build on the recent bounce-back from last week’s lows (currently at $43.53/bbl after touching $42.05/bbl on Wednesday). There is also some news to report out of Brazil with the announcement early  this morning that President Michel Temer has been indicted for corruption.

Jumping back to that macro data we mentioned earlier, yesterday in the US we learned that headline durable goods fell -1.1% mom in May and a bit more than expected (-0.6% expected). A big decline in aircraft orders played a part although the ex-transportation reading also disappointed after revealing that orders rose just +0.1% mom (vs. +0.4% expected). The closely watched core capex orders print was also soft (-0.2% mom vs. +0.4% expected). Away from that, the Dallas Fed’s manufacturing index fell 2.2pts in June to +15.0 (vs. +16.0 expected) with the new orders index in particular declining a fairly steep 8.5pts. As alluded to earlier, there was however some better news in Germany. The headline IFO business climate reading for June climbed 0.5pts to 115.1 (vs. 114.5 expected) and in doing so hit a new post reunification high. Components for expectations and current assessment were also firmer. Our economists in Germany noted that the data points to a solid rise in Q2 GDP and have now lifted their forecast to +0.6% qoq from +0.4%. That has also had the effect of lifting their 2017 forecast to +1.6% yoy from +1.3%.

In terms of the day ahead, this morning in Europe the only data of note due out is from the UK where the CBI’s distributive trades survey for June is released. Also of note is the BoE’s Financial Stability Report due at 10.30am BST with Governor Carney then scheduled to speak shortly after. In the US this afternoon we will receive the June consumer confidence reading (expected to edge down to 116.0 from 117.9) along with the Richmond Fed’s manufacturing index print for June and S&P/Case-Shiller house price index reading for April. Also of note today will be comments from Fed Chair Yellen at 6pm BST when she is due to speak in London on “Global Economic Issues”. Q&A is also expected to follow. The Fed’s Harker is also due to speak in London at 4pm while Williams speaks this morning at 9am BST and Kashkari also speaks at 10.30pm BST. The ECB’s Draghi will make an introductory speech at the ECB forum in Sintra too.

 END

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed UP 5.75 POINTS OR 0.18%   / /Hang Sang CLOSED DOWN 31.90 POINTS OR 0.12% The Nikkei closed UP 71,74 POINTS OR 0.36%/Australia’s all ordinaires CLOSED DOWN 0.10%/Chinese yuan (ONSHORE) closed UP at 6.8145/Oil UP to 43.79 dollars per barrel for WTI and 46.33 for Brent. Stocks in Europe OPENED ALL IN THE RED,,   Offshore yuan trades  6.8176 yuan to the dollar vs 6.8176 for onshore yuan. NOW THE OFFSHORE IS MUCH WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS A LOT STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA

This is big news:  Trump is getting increasingly frustrated with China as they deal with North Korea. They may increase steel tariffs or even initiate sanctions against China

(courtesy zero hedge)

Trump “Increasingly Frustrated With China” Over North Korea, Trade: Reuters

Two weeks after Trump’s ominous “China “tried and failed” to contain North Korea tweet, the US president appears to be getting closer to that default condition in US-China relations which many had anticipated from day one: a not particularly cooperative one. Here’s Reuters:

  • TRUMP IS INCREASINGLY FRUSTRATED WITH CHINA OVER NORTH KOREA, TRADE DIFFERENCES-SENIOR ADMINISTRATION OFFICIALS
  • TRUMP DROPPED BY MEETING LAST WEEK BETWEEN SENIOR CHINESE OFFICIAL AND WHITE HOUSE ADVISERS KUSHNER, MCMASTER – SENIOR ADMINISTRATION OFFICIAL
  • TRUMP IS CONSIDERING TOUGHER STANCE ON TRADE WITH CHINA; STEEL TARIFFS ARE AMONG OPTIONS-SENIOR ADMINISTRATION OFFICIALS

The report follows last night’s news that the United States plans to place China on its global list of worst offenders in human trafficking and forced labor, a step that according to Reuters could aggravate tension with Beijing that has eased under President Donald Trump.

The reprimand of China, Washington’s main rival in the Asia-Pacific region, would come despite Trump’s budding relationship with Chinese counterpart Xi Jinping and the U.S. president’s efforts to coax Beijing into helping to rein in North Korea’s nuclear and missile programs.

Secretary of State Rex Tillerson has decided to drop China to “Tier 3,” the lowest grade, putting it alongside Iran, North Korea and Syria among others, said the sources, who have knowledge of the internal deliberations and spoke on condition of anonymity.

The rating is expected to be announced on Tuesday in an annual report published by the State Department’s Office to Monitor and Combat Trafficking in Persons. A State Department official declined to comment on the report’s contents and said the department “does not discuss details of internal deliberations.”

Tier 3 rating can trigger sanctions limiting access to U.S. and international aid, but U.S. presidents frequently waive such action.

While it was unclear what led Tillerson to downgrade China, last year’s report criticized the communist government for not doing enough to curb “state-sponsored forced labor” and concluded it did not meet “minimum standards” for fighting trafficking – though it still said Beijing was making significant efforts.

China has yet to respond to what may be a growing escalation in US-Chinese relations which started off on the right foot with Xi’s visit to Mar a Lago but have since deteriorated, slowly at first…

end

b) REPORT ON JAPAN

c) REPORT ON CHINA

Last night some of the small caps crashed in price amidst a huge margin call due to lack of good collateral

(courtesy zero hedge)

Hong Kong Small Caps Crash Amid Marketwide Margin Call: “It’s A Domino Effect”

A few weeks ago, we reported that in a bizarre development – and the latest in a long series of red flags involving Chinese and HK stocks – various Chinese small and micro cap companies had asked employees to buy their stock while promising to cover losses” amid rising margin call pressures as the underlying stocks had been drifting lower. As we also noted, China has a broader issue with collateral that could endanger the health of its financial system, such as fraudulent or “ghost” collateral, where pledged products either don’t exist or are already sold or pledged to multiple lenders.

This in turn led BofA strategist David Cui warned that a potential “vicious selling circle” could lead to a replay of China’s mid-2015 market crash. “As the 2015 experience shows, with high leverage, a vicious selling circle can quickly develop,” he said, noting a “moderate” risk of broad-based financial instability. To which we concluded that “at that point either Beijing will have to step in with another bailout, or scenes such as this one which emerged during the 2015 market rout, will become the norm once again.”

Less than three weeks later we got a vivid example of just how dire the impact of a coordinated margin calls on Chinese markets could be, when overnight dozens of Hong Kong microcap stocks plunged amid what started as a rumor that the local exchange will force all “zombie companies”to delist (since denied)…

Dozens of HKEx penny stocks plunged 40%~90% today amid rumor HKEx will force all “zombie stocks” to delist.
HKEx denies the rumor!

… but not before triggering banks to promptly demand their margin, which in turn led to a sudden plunge in over a dozen names on Tuesday as ‘traders pointing to links between some of the companies and a brokerage that’s under regulatory investigation” according to Bloomberg.

In total, seventeen firms tumbled by more than 40% at the close, losing a combined $6.1 billion in market value. Among the names plunging were China Jicheng Holdings, an umbrella maker, and GreaterChina Professional Services which sank more 90% .

Quoted by Bloomberg, Francis Lun, the CEO of HK’s Geo Securities said “we’re seeing a domino effect; all the companies in the same network got cut. These shares are owned by the same group of people so they must be experiencing a liquidity crunch and they don’t have the money to support the share prices,” he said.

In other words, a market-wide margin call, which led to a self-reinforcing avalanche of selling, and as

There were other red flags which investors conveiently ignored as long as everything was going up. Here’s Bloomberg

The stocks that saw large price drops on Tuesday tended to have characteristics that can be conducive to extreme volatility and to market misconduct: multiple relationships between different companies and listed brokerage firms, high shareholding concentrations, thin turnover and small public floats, Ernest Kong, a spokesman at the Securities & Futures Commission, said in an emailed statement. The regulator won’t comment on whether it has been or will be pursuing investigations into specific individuals or related companies, he said.

The selloff, which sent Hong Kong’s Growth Enterprise Market, or S&P/HKEX GEM Index crashing by 10%, the most since 2015, has reinforced concerns about risks in the world’s fourth-largest equity market after a series of spectacular plunges. While Hong Kong’s benchmark index is among the best performers this year, declines in companies such as China Huishan Dairy Holdings Co., which in March plunged 85%  after a Muddy Waters research report, have blown up more than one investor.

Meanwhile, despite the crash in HK’s small capps, the broader market remained resilient to the declines on Tuesday, with the Hang Seng Index losing only 0.1% and the Hang Seng Composite Small Cap Index sliding 0.4%.

To be sure, anyone seeking an explanation for what happened would be disappointed: Hong Kong Exchanges & Clearing Ltd. said it wasn’t in a position to explain the share price declines.

However, as noted above, the explanation was simple: a market-wide margin call which promptly made all the recent buyers into aggressive lilquidators:

“Obviously there’s been some margin calls and forced liquidation of shares among these companies,” said Hao Hong, Hong Kong based strategist with Bocom International.

Obviously.

4. EUROPEAN AFFAIRS

Early this morning, the Euro surged as Draghi for the first time sounded hawkish in that stimulus for the markets may be tapered.  He states that the deflation scare is over and that lack of inflation is only temporary

(courtesy zero hedge)

Euro Surges, Bunds Tumble On Unexpectedly Hawkish Draghi Comments

The euro surged to its highest in two weeks after Mario Draghi, speaking at the ECB forum in Sintra, Portugal, surprised markets who expected yet another dovish speech from the central banker, who instead signaled that stimulus tapering may be closer than the market anticipated and said factors weighing on inflation in the euro zone were “mainly temporary” and the central bank could look through them.

Speaking at the ECB’s annual policy forum, Draghi highlighted a recovering euro zone economy that the threat of deflation is gone and reflationary forces are at play and that that the effects that keep inflation subdued are temporary and won’t let inflation deviate from its trend over the medium term. but added that stimulus in the form of the ECB’s monetary support was still needed.

The market broadly interpreted his unexpected comments as opening the way for the start of tapering even as core inflation readings fail to reach fresh highs. As Reuters adds, Draghi’s comments “sounded to investors like he was ready to give more ground on German demands that the ECB get on with starting to reduce the volume of extra euros it is feeding monthly into the economy.”

The euro surged as Draghi spoke, rising as much as half a percent on the day to $1.1255, its highest level since Jun. 14. It had earlier traded around the $1.1187 mark.

In a comparable kneejerk reaction, confirming the market is preparing for an end to the ECB’s ultraeasy policy, 10Y Bund yields jumped by 4bps to 0.28%.

Bund futures tumbled with wave of selling seen across 5-10y sector from fast money after Draghi’s speech. Schatz auction met with strong demand. Treasuries slid with bunds.

The Euro strength pulled the dollar index to an eight-day low of 96.973, dropping sharply (-0.5%), as the yuan surged earlier, spurring speculation of central bank intervention.

“Draghi’s comments I would say were quite optimistic on the growth outlook, talking about a broadening recovery and even saying growth was above trend,” said Niels Christensen, currency strategist with Nordea bank in Copenhagen. “While talking about inflation he said mainly temporary factors were slowing inflation at the moment, so he’s not too concerned about the fallback in at least headline inflation.”

Draghi’s comments contrasted with a dovish tone he took on Monday, saying that super low interest rates create jobs, foster growth and benefit borrowers, while rejecting calls to exit super easy monetary policy quickly.

Separately, traders await speeches by Fed officials for signs on whether the central bank will stick to its guns and raise rates this year; key among these will be Janet Yellen, who addresses the British Academy in London at 1700 GMT (1pm EDT), less than two hours after an address by Philadelphia Fed President Patrick Harker in the same city at 1515 GMT. Fed officials have signaled they will look through a slowdown in inflation and continue on their current trajectory of interest rate hikes – though investors are skeptical and market pricing shows only a 40 percent chance of a rise at the Fed’s December meeting

As Dudley noted yesterday, the Fed appears to be intent to keep hiking regardless of the data, in order to burst asset bubbles. As Reuters adds, a positive view from Yellen despite a recent batch of weak U.S. economic data would support the Fed’s forecast for another rise in policy rates this year.

“A notion increasingly shared in the market … is that the Fed is continuing to normalise monetary policy regardless of more muted inflation developments – this is the message which has been provided during the last week by several Fed speakers,” said Manuel Oliveri, currency strategist with Credit Agricole in London.

“This suggests that the market-based rate expectations have additional room of adjusting to the upside should this notion become even a bigger one.”

Should the BOJ’s Kuroda also echo Draghi’s hawkish remarks when he also speaks in Sintra, suddenly risk assets may find themselves above a trapdoor as suddenly the global central bank balance sheet expansion that has been the reason for the YTD rally grinds to a halt, and may even goes into reverse.

end

later in the morning:  The euro and bund yields spike  right after Draghi’s hawkish speech shocked the markets

(courtesy zero hedge)

Euro, Bund Yields Extend Spike After Hawkish Draghi Shocks Markets

Draghi’s overly-optimistic expectations for growth were taken as hawkish by the markets and earlier weakness in Bunds (yields spiking) and strength in EUR (surging to 2-week highs) have continued…

As we noted earlier, speaking at the ECB’s annual policy forum, Draghi highlighted a recovering euro zone economy that “the threat of deflation is gone and reflationary forces are at play” and that that the effects that keep inflation subdued are temporary and won’t let inflation deviate from its trend over the medium term. but added that stimulus in the form of the ECB’s monetary support was still needed.

The market broadly interpreted his unexpected comments as opening the way for the start of tapering even as core inflation readings fail to reach fresh highs. As Reuters adds, Draghi’s comments “sounded to investors like he was ready to give more ground on German demands that the ECB get on with starting to reduce the volume of extra euros it is feeding monthly into the economy.”

A 7bps spike in Bund yields has taken out the Fed spike highs…

And EURUSD is testing Fed-spike highs…

Draghi’s comments contrasted with a dovish tone he took on Monday, saying that super low interest rates create jobs, foster growth and benefit borrowers, while rejecting calls to exit super easy monetary policy quickly.

We wonder how long before today’s comments are also appended with “you misunderstood” jawboning.

end

Italy

A terrific commentary from Simon Black on the true cost of the bailout of the two small Italian banks.  At 17 billion euros it is 1% of GDP and that equates to its annual defense budget.

Two important facts to consider:

  1. Italy’s non performing loans are 360 billion euros or 18% of GDP
  2. Italy’s debt to GDP is around 135%

now what happens when the next Italian banks fail?

(courtesy Simon Black/SovereignMan.com)

These guys are in serious trouble: they have violated the Volcker rule again using customer money on risky trades despite assurances that they would not

It sure looks like the officers and the company itself are habitual criminals and  they do not have a straight bone in the body

(courtesy zero hedge)

Deutsche Faces $60MM Derivative Loss For Inflation Bet Gone Bad

Just two months after Deutsche Bank was fined $165 million for not only still rigging FX when its currency traders were found to still be participating in banned chat boards, but for violating the Volcker rule, the chronic German recidivist bank, whose endless criminal activity cost the jobs of the entire previous management team… has violated the Volcker rule one again. And this time the bank faces a double whammy of not only breaching the terms of its latest settlement with the Fed, but is also facing a $60 million derivative loss for a TIPS-linked trade gone bad, which also happened to frontrun its clients!

As Bloomberg reports, citing “people familiar”, DB made a bet on U.S. inflation that puts the firm on course to lose as much as $60 million, While the specifics of the trade are not available, it appears to have been a TIPS-linked bet on inflation rising. As everyone, and certainly the Fed knows, precisely the opposite has happened, and it is now another humiliating mark on the face of new CEO John Cryan, as he has to explain not only why the bank broke the terms of its consent order with the Federal Reserve, which stated, and we quote…

The consent order requires Deutsche Bank to improve its senior management oversight and controls relating to the firm’s compliance with Volcker rule requirements.

… but because the loss also appears to be in major breach of that particular unit’s VaR limits, suggesting not only a Volcker Rule violation but also a general lack of risk oversight.  Bloomberg confirms as much, reporting that the bank has “been examining whether Deutsche Bank traders breached risk limits on the deal” and adds that “a risk limit violation could indicate a weakness in the bank’s oversight of its traders in a business that earned about $270 million in the first quarter. “

Such a loss would be a setback for Chief Executive Officer John Cryan,
who has been trying to improve the lender’s risk and operational
controls that have drawn scorn from regulators around the world.

In what appears to be a laughable explanation why the prop trade was not a prop trade, Deutsche Bank reportedly “made the trade in anticipation of how clients were going to transact and isn’t expecting the bet to reverse.” So not only was it a prohibited prop bet, i.e., not a hedging trade which to our knowledge is the only Volcker loophole allowed, but Deutsche bank also was actively frontrunning its clients.

That’s not all.

According to Bloomberg, in a separate case, the bank last year began a review into whether it misstated the value of derivatives used to bet on inflation, known as zero-coupon inflation swaps.” We assume that will be another several hundred million hit (oddly, never a benefit) to the books when it has to be unwound.

In the first quarter, DB’s fixed-income pretax profit was the result of €2.3 billion in revenue, an 11% increase on the year earlier, and as the German bank said, revenue from products tied to interest rates was “significantly higher.”  The question now – as happens virtually every quarter for Deutsche Bank – is how much of its was also illegal.

end

(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

GERMANY/TURKEY

This is shaping up to being a very interesting G20 summit.  Germany who is hosting the event in Hamburg has now told Turkish President Erdogan not to bring his bodyguards as they are not welcome.

(courtesy zero hedge)

Germany Tells Erdogan His Bodyguards “Not Welcome” At Next Week’s G-20 Summit

Ahead of the G-20 summit to be held in Hamburg next week where Turkey will be present, Germany has warned Turkey that members of President Recep Tayyip Erdogan’s security detail who were involved in a bloody melee in Washington last month “are not welcome in Germany.” The reason for the snub – which won’t go over too well with Erdogan – is that last month numerous Turkish security officials, including several of Erdogan’s personal guards, brawled with protesters outside the Turkish ambassador’s residence in Washington, landing 9 protesters in the hospital.

Quoted by CNN, Martin Schafer, a spokesperson for the German Foreign Ministry, said Monday: “Some foreign security services of the Turkish delegation did not abide by the law and therefore those people are not welcome in Germany for the foreseeable future.

Die Welt adds that the German Foreign Ministry received a list of 50 people who were to accompany Erdogan to the G20 summit, some of whom were involved in the incident in Washington, and responded that the Ministry told Turkey not to bring those bodyguards to the summit. While Schafer refused to confirm or deny the report, he made it clear that everyone attending the summit must respect German law. “The Turkish side just like all other guests who travel to Germany must abide by German law,” he said. “This is what our Turkish partners also know.”

As a reminder, the bloody brawl took place on May 16 after the first official meeting between Erdogan and President Trump at the White House. Nine people ended up in hospital when Turkish security officials, including Erdogan’s personal bodyguards, got into a fight with demonstrators outside the Turkish ambassador’s residence in Washington. Video showed Erdogan looking on as Turkish guards beat up protesters, before heading into the ambassador’s home.

Quoted by CNN, a senior State Department official said at the time that the Turkish officials involved in the fight appeared to be a mix of Turkish embassy staff and Erdogan’s personal guards. The official also confirmed that two members of Erdogan’s detail “were briefly detained during the altercations and subsequently released” and returned to Turkey with Erdogan.

One month later, Washington police issued warrants for 12 of Erdogan’s security officers in mid-June however Erdogan denied his security detail had done anything wrong and questioned the legality of the warrant.

“They didn’t do anything (to the protesters). In addition to that, yesterday, they detained two of our brothers who intervened … they issued arrest warrants for 12 of my security officials. What kind of law is this? What kind of legal system is this?” Erdogan said, who in turn blame US authorities: in a statement issued by the Turkish Foreign Ministry, Erdogan said the decision to issue warrants was “wrong, biased and lacks legal basis” and said the brawl was “caused by the failure of local security authorities to take necessary measures,” and that “Turkish citizens cannot be held responsible.”

The presence, or absence, of Erdogan’s bodyguards will only be a sideshow in next week’s G-20 summit, where as many 100,000 protestors are expected. Some will be protesting the presence of President Trump and Russian President Vladimir Putin, but Kurdish groups are also expected to turn up to protest Erdogan’s policies.

In other words, stocks will make new all time highs.

end

6 .GLOBAL ISSUES

7. OIL ISSUES

More bad news for WTI and gasoline after an unexpected inventory gain

(courtesy zerohedge)

WTI/RBOB Tumble After Unexpected Inventory Builds

“There is still hope that inventories will draw and crude runs will remain high,” noted one research director ahead of the API data as WTI rose for a 4th day (back above $44), the longest rally in over a month. With tropical storm Cindy likely impacting the data, API showed a surprise crude build (exp -2.25mm) and notable gasoline build which sent WTI/RBOB prices reeling.

API

  • Crude +851k (-2.25mm exp)
  • Cushing -678k
  • Gasoline +1.351mm (unch exp)
  • Distillates +678k (+350k exp)

Figures will be tricky to interpret because of impact from tropical storm Cindy, but taken as reported the biggest headline was the surprise build in crude and gasoline is most worrisome for the bulls…

Following last week’s API/DOE data – which showed modest draws – the initial reaction was a kneejerk higher before tumbling. WTI was limping lower into tonight’s print…

Of course, with Hedge funds near record bearish bets, it won’t take much to send prices skyrocketing.

Fund managers now hold just two long positions for every one short position, which ranks among the most bearish positions since oil prices started to tumble in the middle of 2014

8. EMERGING MARKET

Last evening, President Temer of Brazil has officially been charged with corruption and he is deeply involved in providing “hush money” to silence individuals in the car wash scandal/ and receiving bribes.

(courtesy zero hedge)

Brazilian President Temer Officially Charged With Corruption

Just over a month after O Globo newspaper first brought the world’s attention to the fact that Brazil’s President Michel Temer was ‘allegedly’ involved in “hush money” payments, then vehemently denied by him; and just a week after the police confirmed it had evidence that Temer received bribes, O Globo, reports citing court documents, that President Michel Temer was formally charged with corruption by Prosecutor-General Rodrigo Janot.

As we noted last week, almost exactly one month after Brazil’s stock market crashed, and the Real plunged after the country’s never-ending political drama made a triumphal return following accusations that president Michel Temer had encouraged a “hush money” bribe to former House Speaker Eduardo Cunha in return for not getting dragged into the Carwash scandal, Brazil’s federal police force said it has found evidence that the embattled president received bribes to help businesses, Brazil’s O Globo reported.

Then earlier today, Brazil’s federal police confirmed it had found evidence that President Michel Temer allegedly committed three crimes, according to local media reports. As Bloomberg reports,

Federal police sent full report to the Supreme Court regarding allegations gathered through plea bargains from executives at meat-packer JBS.

In the report, police found evidence of corruption, obstruction of justice and failure to report a crime.

Police also said there was no evidence of tampering with the audio of the meeting of Temer and the then-head of JBS, Joesley Batista, secretly recorded by the latter.

While Temer has repeatedly denied the accusation, Bloomberg reports that the accusations are based on JBS’s Joesley Batista’s plea bargain.

Brazil’s Temer was officially charged with corruption by the chief prosecutor on Monday evening, in a highly-anticipated development that may put the embattled president of Latin America’s largest economy on trial.

Rodrigo Janot charged Temer in a case in which the president was accused of corruption and obstruction of justice, according to documents filed at the Supreme Court. The charges need to be approved by two-thirds of Brazil’s chamber of deputies to proceed. It is not yet clear how long that process will take. The president has repeatedly denied wrongdoing.

As a reminder, trying a President in Brazil is not an easy feat:

Step One – Supreme Court

The prosecutor’s case is delivered to the Supreme Court which notifies the speaker of the lower house of Congress, Rodrigo Maia.

Step Two – House Speaker
Maia must formally notify Temer of the charges against him. From that moment on, the president’s lawyers have ten lower house sessions to present their defense. At the same time, Maia sends the paperwork to the Chamber’s Constitution and Justice Committee, which must then appoint a sponsor for the case.

Step Three – Constitution and Justice Committee, or CCJ
After Temer presents his defense, the committee has five sessions to discuss the charges. The sponsor then presents a final report with his recommendation on the case that the whole 66-member committee must vote on.

Step Four – Plenary
Regardless of the outcome of the committee hearing, the report goes to a vote in a plenary session of the lower house. The report can be read the very next day after the hearing or on a date of the speaker’s choosing.
At least two-thirds of lawmakers, or 342 legislators, need to agree for a trial to go ahead at the Supreme Court.
Each lawmaker must cast his or her vote aloud via microphone.

Step Five – Supreme Court
If approved by the lower house, a trial will take place at the Supreme Court. Temer would be obliged to stand down as president for 180 days while the court case goes ahead. If the trial lasts for longer than that, Temer would return to office while the case continues.
If convicted, Temer would be stripped of office and his political rights. He may also be imprisoned.
The house speaker would become president for 30 days before Congress votes for a new head of state via an indirect election.

Contacted by Bloomberg, Presidential Palace wasn’t immediately available to comment.

For now, no markets are open to see if this is affecting anything for now, we will be monitoring the IBOVESPA funds in Japan once they open for any reaction.

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

Euro/USA   1.1249 UP .0067/REACTING TO  + huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/ /USA FALLING INTEREST RATES AGAIN/EUROPE BOURSES ALL IN THE RED 

USA/JAPAN YEN 111.74 DOWN 0.134(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 1.2747 UP .0024 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.3227 DOWN .0030 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS TUESDAY morning in Europe, the Euro ROSE by 67 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1249; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 5.75 POINTS OR 0.18%     / Hang Sang  CLOSED DOWN 31.90 POINTS OR 0.12% /AUSTRALIA  CLOSED DOWN 0.10% / EUROPEAN BOURSES OPENED ALL  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 TUESDAY morning CLOSED UP 71.74 POINTS OR 0.36%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 31.90 POINTS OR 0.12%  / SHANGHAI CLOSED UP 5.75 POINTS OR 0.18%   /Australia BOURSE CLOSED DOWN 0.10% /Nikkei (Japan)CLOSED UP 71.74 POINTS OR 0.36%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1251.40

silver:$16.69

Early TUESDAY morning USA 10 year bond yield: 2.156% !!! UP 2 IN POINTS from MONDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.712, UP 2  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 96.97 DOWN 49  CENT(S) from MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS

Portuguese 10 year bond yield: 3.07%  UP 14 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.047%  DOWN 7/10  in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.495%  UP 12 IN basis point yield from MONDAY 

ITALIAN 10 YR BOND YIELD: 2.060 UP 16   POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 56 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.370% UP 12 IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1325 UP .0144 (Euro UP 144 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 112.23 UP  0.396 (Yen DOWN 40 basis points/ 

Great Britain/USA 1.2789 UP 0.0066( POUND UP 66 basis points) 

USA/Canada 1.3192 DOWN .0066 (Canadian dollar UP 66 basis points AS OIL ROSE TO $44.26

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This afternoon, the Euro was UP  by 144 basis points to trade at 1.1325

The Yen FELL to 112.23 for a LOSS of 40  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 66  basis points, trading at 1.2789/ 

The Canadian dollar ROSE by 66 basis points to 1.3192,  WITH WTI OIL RISING TO :  $44.26

The USA/Yuan closed at 6.8126/
the 10 yr Japanese bond yield closed at +.047% DOWN 7/10 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 8 IN basis points from MONDAY at 2.208% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.7590  UP 7 in basis points on the day /

Your closing USA dollar index, 96.55  DOWN 88 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 12.64 POINTS OR 0.17%
German Dax :CLOSED DOWN 99.81 POINTS OR 0.78%
Paris Cac  CLOSED DOWN 37.17 POINTS OR 0.70% 
Spain IBEX CLOSED DOWN 48.70 POINTS OR 0.46%

Italian MIB: CLOSED  UP 211.09 POINTS/OR 1.01%

The Dow closed DOWN 98.89 OR 0.46%

NASDAQ WAS closed DOWN 100.53 POINTS OR 1.61%  4.00 PM EST
WTI Oil price;  44.26 at 1:00 pm; 

Brent Oil: 46.62 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.31 UP 49/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 49 BASIS PTS)

TODAY THE GERMAN YIELD RISES TO  +0.370%  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:$43.72

BRENT: $46.14

USA 10 YR BOND YIELD: 2.205%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.7518%

EURO/USA DOLLAR CROSS:  1.1334 up .0152

USA/JAPANESE YEN:112.31  UP 0.442

USA DOLLAR INDEX: 96.49  down 94  cent(s) 

The British pound at 5 pm: Great Britain Pound/USA: 1.2810 : UP 87 POINTS FROM last NIGHT  

Canadian dollar: 1.3194 UP 63  BASIS pts 

German 10 yr bond yield at 5 pm: +0.370%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Fed Alert & TrumpCare Turmoil Slams Tech Stocks, Bonds, & Dollar

 

Fed to market…

If you believe in the maxim, don’t fight the fed, then today was a problem for you…

Yellen – “We have been in an economy with low interest rates for some time, and that influences asset prices… Asset valuations are somewhat rich by traditional valuations like price-earnings ratios… Some asset valuations look high. There is no certainty about that.”

Williams – “I am somewhat concerned about the complacency in the market. If you look at these measures of uncertainty, like the VIX measure, or other indicators, there seems to be a priced-to-perfection attitude out there… The stock market still seems to be running very much on fumes…”

Fischer – Calls for “close monitoring” of rising risk appetites…”Equity P/E ratios are near top of historical levels… it would be foolish to think all risks eliminated… Sees notable uptick in risk appetites in asset markets… Corporate sector notably leveraged…”

Add to that Draghi, The BIS, Carney, and Dudley all noting financial stability concerns.

Nasdaq tumbled to the lows of the tech wreck day, as VIX topped 11…

With a second big daily loss…

Pushing NASDAQ into the red for June…

FANG Stocks were monkey-hammered (down over 4% from yesterday’s highs)…

With NFLX leading the drop…

Financials ended green (higher yields) but everything faded as The Fed’s trumivirate spoke and McConnell let them down…

As Investors rotated from high-beta Tech to the ‘safe-haven’ of Virtual Currencies…

Oddly, while VIX heads for a monthly drop (even with today’s jump), S&P Sectors are mostly seeing notable rises in volatility…

Bonds were a bloodbath, with Treasury Futures biggest drop in over 3 months, erasing all of June’s gains in one day

Yellen’s comments halted the rout in Treasuries, which began with a drop in EGBs after ECB President Draghi signals earlier in the day the central bank’s willingness to look through temporary factors weighing on inflation. For those who thought the US Treasury market was a bloodbath – Bunds imploded… The biggest spike in yields since Dec 2015 as EURUSD soared to Oct 2016 highs…


The Dollar Index tumbled for the 4th day in the last 5 to its lowest close since Oct 4th 2016.

Cable mysteriously flash-smashed shortly after 3pmET – no headline catalyst…but desk chatter was series of stops around 55DMA

Gold was higher on the day as the dollar sank…(retracing most of yesterday’s flash-crash)

But most notably was the big reversal in bonds relative to crude futures…

end

Trading today:

Stocks Sink As Fed Vice-Chair Fischer Just Rang The Market’s Bell

While the old saying is “they don’t ring a bell at the top,” we suspect Fed vice-chair Stanley Fischer just came as close as one can without screaming “sell.”

  • *FISCHER: ‘NOTABLE UPTICK IN RISK APPETITES’ IN ASSET MARKETS
  • *FISCHER: EQUITY P/E RATIOS ARE NEAR TOP OF HISTORICAL LEVELS

  • *FISCHER: HIGH ASSET PRICES MAY LEAD TO FUTURE STABILITY RISKS
  • *FED’S FISCHER SAYS CORPORATE SECTOR ‘NOTABLY LEVERAGED’

Don’t fight The Fed…

  • *FISCHER SAYS IT WOULD BE FOOLISH TO THINK ALL RISKS ELIMINATED
  • *FISCHER CALLS FOR ‘CLOSE MONITORING’ OF RISING RISK APPETITES

The question is – will Janet Yellen play dovish good cop to Fischer’s fear-mongery? Or is The Fed’s new policy designed to crack markets?

end

Well respected Seymour Hersh has now written that the USA lied to the American people concerning the Syrian Chemical Attack and the resultant bombing of Syria

(courtesy Seymour Hersh/zero hedge)

Seymour Hersh: US Lied About Syrian Chemical Attack Then Bombed Them Anyway

Liberty Blitzkrieg’s Mike Krieger notes that part of Trump’s appeal to many of his voters was, at least ostensibly, the idea that he would employ a less hawkish/neocon foreign policy than his opponent Hillary “We Came, We Saw, He Died” Clinton.

While it’s still too early to decisively say that Trump will usher in yet another foreign policy disaster for these United States and the world, it’s certainly not looking good.

The lobbing of tomahawk missiles into Syrian based on the fairytale that Assad launched a chemical weapons attack was the first sign that Trump is easily manipulated and impulsive. In fact, the episode bothered me so much I wrote a post detailing the dire ramifications titled, Prepare for Impact – This is the Beginning of the End for U.S. Empire.  I suggest taking a read if you missed it the first time, it’s my most popular post of the year.

While that was bad enough, Trump’s cozying up to the barbaric, terrorist-supporitng leaders of Saudi Arabia has been by far the most concerning aspect of his foreign policy (if you can call it that) so far. This policy has become even more dangerous now that the 30-year old princeling who is leading the Saudis’ increasingly aggressive stance in the region has been named crown prince. It appears Trump is willing to let the Saudis do whatever they want in the region, which is guaranteed to have disastrous implications for America and the Middle East.

But a new Seymour Hersh article is out showing that the US knew there was no Assad chemical attack in April, but President Trump decided to bomb anyway.

And the details are shocking… as TheAntiMedia.org’s Darius Shahtahmasebi details, never one to accept the U.S. government’s official explanation of events without question, Pulitzer Prize-winning journalist Seymour Hersh has investigated Donald Trump’s decision to strike the al-Shayat Airbase in Syria in April of this year, which the president launched amid widespread allegations that the Syrian government committed a chemical weapons attack.

In a report entitled “Trump’s Red Line,” published Sunday in the daily German newspaper Die Welt, Hersh asserts that President Donald Trump ignored important intelligence reports when he made the decision to attack Syria after pictures emerged of dying children in the war-torn country.

For those of us without goldfish memories, Hersh’s recent investigation is reminiscent of his previous examination of the alleged chemical weapons attacks in 2013, detailed in an article entitled “Whose Sarin?” That article was published in the London Review of Books.

The official White House explanation for the events in April of this year was that Donald Trump was moved by the suffering of “beautiful” Syrian babies – the same Syrian babies he doesn’t want to set foot in the United States – and decided to punish the Syrian government for the attack two days after it allegedly occurred. This punishment came in the form of an airstrike despite the lack of a thorough investigation regarding what took place that fateful day in April and who was ultimately culpable (though the Trump administration insisted they were certain that Syrian President Bashar al-Assad was to blame).

In that context, it should come as no surprise that Trump acted rashly without consideration of the facts on the ground. However, what is most disturbing about Hersh’s account is the fact that, according to his source, Trump was well aware that the U.S. had no solid intelligence linking the Syrian government to a chemical weapons attack — and that’s because, according to Hersh’s article, it’s doubtful a chemical weapons attack occurred at all.

Hersh reports:

“The available intelligence made clear that the Syrians had targeted a jihadist meeting site on April 4 using a Russian-supplied guided bomb equipped with conventional explosives. Details of the attack,  including information on its so-called high-value targets, had been provided by the Russians days in advance to American and allied military officials in Doha, whose mission is to coordinate all U.S., allied, Syrian and Russian Air Force operations in the region.”

“None of this makes any sense,” one officer reportedly told colleagues upon learning of the decision to bomb Syria, according to Hersh. We KNOW that there was no chemical attack … the Russians are furious. Claiming we have the real intel and know the truth … I guess it didn’t matter whether we elected Clinton or Trump.”

According to Hersh, Trump “could not be swayed” by 48 hours worth of intense briefings and decision-making following the initial reports of the alleged chemical weapons attack. Hersh, who reportedly reviewed transcripts of real-time communications, explains that there is a “total disconnect” between the president and his military advisers and intelligence officials.

As is the case with Syrian military operations, Russia gave the U.S. details of the carefully planned attack on a meeting in Khan Sheikhoun, according to Hersh’s  admittedly anonymous sources. The Russians had employed a drone to the area days before the attack to develop the intelligence necessary to coordinate it.

According to Hersh’s sources, the United States and its Russian counterpart routinely share information regarding planned attacks in order to avoid collisions. However, they also permit “coordination,”  a practice that involves giving the other side a “hot tip about a command and control facility,” which then helps the other side carry out their attack.

Therefore, there was no surprise chemical weapons attack, as the Trump administration alleged. In fact, Russia had actually warned its American counterpart on the off-chance that there were any CIA assets on the ground who should have been forewarned of an impending attack.

“They [the Russians] were playing the game right,” a senior adviser told Hersh.

Hersh continues:

“Russian and Syrian intelligence officials, who coordinate operations closely with the American command posts, made it clear that the planned strike on Khan Sheikhoun was special because of the high-value target. ‘It was a red-hot change. The mission was out of the ordinary – scrub the sked,’ the senior adviser told me. ‘Every operations officer in the region’ – in the Army, Marine Corps, Air Force, CIA and NSA – ‘had to know there was something going on. The Russians gave the Syrian Air Force a guided bomb and that was a rarity. They’re skimpy with their guided bombs and rarely share them with the Syrian Air Force. And the Syrians assigned their best pilot to the mission, with the best wingman.’ The advance intelligence on the target, as supplied by the Russians, was given the highest possible score inside the American community.

Hersh confirms Russia’s account of the incident, in which Russian authorities alleged that the Syrian Air Force bombed a “terrorist warehouse,” and that secondary bombings dispersed dangerous chemicals into the atmosphere.

Strangely, if Hersh’s reporting is accurate, it is not clear why Russia didn’t give the detailed account at the time — and why the Russians didn’t emphasize that they had shared information with the U.S. military well in advance of the attack, as this would have cast further doubt on the official U.S. narrative. In that context, Russia could have provided proof of any prior communications that took place within the so-called deconfliction channel. It also doesn’t explain why Russia’s president, Vladimir Putin, appeared to endorse two competing theories behind the events at Khan Sheikhoun.

However, Hersh continues:

“A team from Médecins Sans Frontières, treating victims from Khan Sheikhoun at a clinic 60 miles to the north, reported that ‘eight patients showed symptoms – including constricted pupils, muscle spasms and involuntary defecation – which are consistent with exposure to a neurotoxic agent such as sarin gas or similar compounds.’ MSF also visited other hospitals that had received victims and found that patients there ‘smelled of bleach, suggesting that they had been exposed to chlorine.’ In other words, evidence suggested that there was more than one chemical responsible for the symptoms observed, which would not have been the case if the Syrian Air Force – as opposition activists insisted – had dropped a sarin bomb, which has no percussive or ignition power to trigger secondary explosions. The range of symptoms is, however, consistent with the release of a mixture of chemicals, including chlorine and the organophosphates used in many fertilizers, which can cause neurotoxic effects similar to those of sarin.

Hersh is not the first high-profile investigator to cast major doubts on the Trump administration’s official narrative regarding the events at Khan Sheikhoun. MIT professor emeritus Theodore Postol, who previously worked as a former scientific advisor to the U.S. military’s Chief of Naval Operations, poked major holes in the claims that the Syrian government had launched a chemical weapons attack at Khan Sheikhoun, noting the “politicization” of intelligence findings (you can access all of his reports here). Postol argued that there was no possible way U.S. government officials could have been sure Assad was behind the attack before they launched their strike, even though they claimed to be certain. Postol took the conversation even further, asserting that the available evidence pointed to an attack that was executed by individuals on the ground, not from an aircraft. Former weapons inspector Scott Ritter had similar concerns regarding the White House’s conclusions, as did former U.K. ambassador to Syria Peter Ford. The mainstream media paid almost zero attention to these reports, a slight that exposes the media’s complicity in allowing these acts of war to go ahead unquestioned.

“This was not a chemical weapons strike,” the adviser said. “That’s a fairy tale. If so, everyone involved in transferring, loading and arming the weapon – you’ve got to make it appear like a regular 500-pound conventional bomb – would be wearing Hazmat protective clothing in case of a leak. There would be very little chance of survival without such gear. Military grade sarin includes additives designed to increase toxicity and lethality. Every batch that comes out is maximized for death. That is why it is made. It is odorless and invisible and death can come within a minute. No cloud. Why produce a weapon that people can run away from?”

According to Hersh’s source, within hours of viewing the footage of the ‘attack’ and its aftermath, Trump ordered his national defense apparatus to plan for retaliation against the Syrian government. Hersh explains that despite the CIA and the DIA (Defense Intelligence Agency) having no evidence that Syria even had sarin, let alone that they used it on the battlefield, Trump was not easily persuaded once he had made up his mind.

“Everyone close to him knows his proclivity for acting precipitously when he does not know the facts,” the adviser told Hersh. He doesn’t read anything and has no real historical knowledge. He wants verbal briefings and photographs. He’s a risk-taker. He can accept the consequences of a bad decision in the business world; he will just lose money. But in our world, lives will be lost and there will be long-term damage to our national security if he guesses wrong. He was told we did not have evidence of Syrian involvement and yet Trump says: ‘Do it.”’ [emphasis added]

At a meeting on April 6, 2017, at his Mar-a-Lago resort in Florida, Trump spoke with his national security officials regarding the best way to move forward. The meeting was not to decide what to do, Hersh explains, but how best to do it (and how to keep Trump as happy as possible).

Trump was given four options. The first one was dismissed at the outset because it involved doing nothing. The second one was the one that was decided upon: a minimal show of force (with advance warning to Russia). The third option was the strike package that Obama was unable to implement in 2013 in the face of mounting public opposition and Russia’s threats of intervention. This plan was Hillary Clinton’s ultimate fantasy considering she was encouraging it moments before Trump’s lone strike actually took place. However, this would have involved extensive air strikes on Assad’s airfields and would have drawn in the Russian military to a point of no return. The fourth option involved the direct assassination of the Syrian president by bombing his palaces, as well as his underground bunkers. This was not considered, either.

As we all witnessed in April, the second option was adopted, and the airbase Trump struck was up and running again in less than 24 hours, making it a very symbolic and empty show of force.

Hersh’s insight into the way Trump is conducting his foreign policy does not bode well for the future of the Syrian conflict (or anywhere else in the world, for that matter). Trump was not interested in the intelligence or the facts on the ground — if he had been, he would have waited until an investigation had determined culpability before ordering a strike.

Missing from Hersh’s account, however, is the fact that it was newly appointed national security advisor General H.R. McMaster who laid out the military strike proposals to the president at his resort on April 6. McMaster replaced former national security advisor Michael Flynn after the latter was forced to resign due to leaks from within the intelligence community. Due to Flynn’s alleged ties to Russia, it seems unlikely he would have proposed such a strike on Russia’s close ally to begin with.

It is unclear whether McMaster proposed the strikes in order to appease Trump or because McMaster ultimately wants Trump to adopt a tougher stance against Syria and Russia; McMaster has a history of pro-interventionism and anti-Russian sentiment.

Those commentators who can review these startling revelations but still condone Trump’s actions with a lazy ‘Assad is still a bad guy and must be overthrown’ mindset argument are being intellectually dishonest, with themselves and others. As was the case in 2013, there is still very little evidence that Assad has ever used chemical weapons — particularly in the attacks that the U.S. has tried to pin on him — yet this is the standard by which the corporate media and our respective governments have instructed us to judge Assad. Even without this conclusive evidence, shortly after the April events, U.S. ambassador to the U.N. Nikki Haley stated Assad will fall from power.

Hersh’s investigation bolsters many claims that the U.S. acted rashly without first conducting or ordering an impartial inquiry regarding what happened in April of this year. Hersh’s report also serves as a reminder to the world of the warpath we are continuing down, spearheaded by an impulsive and reckless megalomaniac who has no interest in ascertaining fact from fiction.

*  *  *

Liberty Blitzkrieg’s Mike Krieger also notes that just as interesting as the information above, is the fact that Hersh had to turn to a German newspaper to publish it. This makes perfect sense, because the one area where U.S. corporate press maintains unassailable consistency is when it comes to cheerleading for an interventionist, imperial foreign policy based on unverified claims and outright lies. Trump’s little fireworks display checked all those boxes, which is why the corporate media drooled all over the bombing, celebrating Trump for the first time of his Presidency. As Hersh notes:

After the meeting, with the Tomahawks on their way, Trump spoke to the nation from Mar-a-Lago, and accused Assad of using nerve gas to choke out “the lives of helpless men, women and children. It was a slow and brutal death for so many … No child of God should ever suffer such horror.”

The next few days were his most successful as president. America rallied around its commander in chief, as it always does in times of war.

Trump, who had campaigned as someone who advocated making peace with Assad, was bombing Syria 11 weeks after taking office, and was hailed for doing so by Republicans, Democrats and the media alike. One prominent TV anchorman, Brian Williams of MSNBC, used the word “beautiful” to describe the images of the Tomahawks being launched at sea. Speaking on CNN, Fareed Zakaria said: “I think Donald Trump became president of the United States.” 

A review of the top 100 American newspapers showed that 39 of them published editorials supporting the bombing in its aftermath, including the New York Times, Washington Post and Wall Street Journal.

Which once again goes to show just how worthless, irresponsible and downright dangerous U.S. corporate media really is.

Finally, as Ron Paul rages below, Republicans cannot let go of “regime change” for Syria and new Cold War with Russia — even as the Democrats are starting to back away. Will the mainstream media stick with the narrative as well? Or is it all about to come crashing down?

CNN  caught red handed in an undercover sting..the producer admits the Russian fake news stories were done for ratings

(courtesy zerohedge/Project Veritas)

“CNN Caught Cold” In Undercover Sting – Producer Admits Russia Fake News Story Pushed For Ratings

Update: President Trump has noted the series of CNN ‘Fake News’ stories once again…

Fake News CNN is looking at big management changes now that they got caught falsely pushing their phony Russian stories. Ratings way down!

So they caught Fake News CNN cold, but what about NBC, CBS & ABC? What about the failing @nytimes & @washingtonpost? They are all Fake News!

*  *  *

Content originally published at iBankCoin.com

The investigative journalists at Project Veritas have done it again! Known for their undercover sting operations, such as the one which exposed the DNC’s highly organized network of professional agitators sent to disrupt Trump rallies, voter fraud, or the undercover operation which led to the arrests of Antifa thugs planning to disrupt an the inauguration “deploraball” event.

This time, the organization led by James O’Keefe has infiltrated CNN

A PV journalist covertly filmed a candid discussion with CNN [health] producer John Bonifield, where the “Very Fake News” network employee admitted that the whole Russia story against President Trump is nothing more than a ratings grab by CNN’s CEO Jeff Zucker – based on the fact that most of CNN’s liberal audience wants to see the President go down in flames.

Bonifield also admitted that he hasn’t seen any evidence of President Trump committing a crime.

John Bonifield: Even if Russia was trying to swing an election, we try to swing their elections, our CIA is doing shit all the time, we’re out there trying to manipulate governments.

I haven’t seen any good enough evidence to show that the President committed a crime.

I know a lot of people don’t like him and they’d like to see him get kicked out of office…. but that’s a lot different than he actually did something that can get him kicked out of office.

Russia is for ratings!

PV Journalist: Why is CNN constantly like “Russia this, Russia that?”

Bonifield: Because it’s ratings. Our ratings are incredible right now.

My boss, I shouldn’t say this, my boss yesterday we were having a discussion about this dental shoot and he was like I just want you to know what we’re up against here. Just to give you some context, President Trump pulled out of the climate accords. For a day and a half we covered the climate accords. And the CEO of CNN [Jeff Zucker] said in our internal meeting, he said good job everybody covering the climate accords, but we’re done with it. Let’s get back to Russia.

But all the nice cutesy little ethics that used to get talked about in journalism school, you’re just like, that’s adorable. That’s adorable. This is a business.

True feelings about Russia…

John Bonifield was asked directly what he thinks about Russia… and responded with what many on the right have been saying for months; If it was something really good, it would have already leaked:

PV Journalist: But honestly, you think the whole Russia shit is just bullshit?

Bonifield: Could be bullshit. I mean, it’s mostly bullshit right now. Like, we don’t have any giant proof. Then they say, “well there’s still an investigation going on.” I don’t know, if they were finding something we would know about it. They way these leaks happen, they would leak it. They’d leak. If it was something really good, it’d leak.

I just feel like they don’t really have it but they want to keep digging. And so I think the President is probably right to say, like “look, you are witch hunting me. You have no smoking gun, you have no real proof.”

Watch:

UPDATE: Full video here:

What timing!  The White House now accuses Syria of planning another chemical attack and Trump warns that they will pay a heavy price

(courtesy zero hedge)

White House Accuses Syria Of Planning Another Chemical Attack, Warns “Will Pay Heavy Price”

Less than three months after the US launched 49 cruise missiles at a Syrian airbase in early April, allegedly in retaliation for a chemical attack conducted by Assad forces, in an ominous statement issued with no supporting evidence or further explanation, on Monday night the White House warned that the U.S. has “identified potential preparations for another chemical weapons attack by the Assad regime” in Syria and warned that Assad would “pay a heavy price” if one took place.

Such an attack “would likely result in the mass murder of civilians, including innocent children,” White House (outgoing) spokesman Sean Spicer added, noting the activity is “similar to preparations the regime made before its April 4, 2017 chemical weapons attack.”

“As we have previously stated, the United States is in Syria to eliminate the Islamic State of Iraq and Syria.  If, however, Mr. Assad conducts another mass murder attack using chemical weapons, he and his military will pay a heavy price,” the White House added on Monday night.

According to AP, a non-governmental source with close ties to the White House said the administration had received intelligence that the Syrians were mixing precursor chemicals for a possible sarin gas attack in either the east of south of the country, where government troops and their proxies have faced recent setbacks.

Further quoted by AP, several State Department officials typically involved in coordinating such announcements said they were caught completely off guard by the warning, which didn’t appear to be discussed in advance with other national security agencies, perhaps an indication of just how powerful the Deep State has become under Trump. Typically, the State Department, the Pentagon and U.S. intelligence agencies would all be consulted before the White House issued a declaration sure to ricochet across foreign capitals.

As a reminder, the justification for Trump’s strike on the Shayrat airfield in Syria in April was to retaliate for what the White House said was a poison gas attack by Assad’s government that killed at least 70 people in rebel-held territory. Syria denied it carried out the attack. Overnight, however, a new article by Pulitzer winning investigative journalist Seymour Hersh (in a German newspaper of all places) has again accused the US of lying about Syria’s chemical weapons, and claims that the US bombed Syria in what was the latest attempt to “rally around the flag” and distract from Trump’s ongoing domestic scandals.

Predictably, the White House has provided no immediate evidence to back up its claims, however in a media world that is desperate for clicks, we doubt many will demand proof this time, unlike the April strike, when Russia requested a broad UN inquiry into whether Assad indeed used chemical weapons, in which the US has declined to participate for obvious reasons.

April’s strike put Washington in confrontation with Russia, which has advisers in Syria aiding its close ally Assad. US officials at the time called the intervention a “one-off” intended to deter future chemical weapons attacks and not an expansion of the U.S. role in the Syrian war. The United States has taken a series of actions over the past three months demonstrating its willingness to carry out strikes, mostly in self-defense, against Syrian government forces and their backers, including Iran.

And, as if expressly intending to further deteriorate already abysmal relations with Russia, shortly after the White House statement, the US ambassador to the United Nations Nikki Haley said on Twitter: “Any further attacks done to the people of Syria will be blamed on Assad, but also on Russia and Iran who support him killing his own people.

Any further attacks done to the people of Syria will be blamed on Assad, but also on Russia & Iran who support him killing his own people.

Since the April military strike, Washington has repeatedly struck Iranian-backed militia and even shot down a drone threatening U.S.-led coalition forces. The U.S. military also shot down a Syrian jet earlier this month. Trump has also ordered stepped-up military operations against the Islamic State militant group and delegated more authority to his generals.

So far Russia has refused to respond in deed to repeated US provocations over Syria.

end

Syria denies that it has plans for a new chemical attack.  Russia slams the uSA warning claiming that this action is totally unacceptable

(courtesy zero hedge)

Syria Denies Plans For A Chemical Attack As Russia Slams US Warning As “Unacceptable”

The Syrian government dismissed the White House’s unsubstantiated, and bizarrely ominous late Monday night allegations that it was preparing a new chemical weapons attack. According to AP, Ali Haidar, the Syrian minister for national reconciliation, dismissed the White House’s warning and said it foreshadowed a diplomatic campaign against Syria at the U.N., according to the AP. Or maybe military campaign.

The Kremlin also dismissed the White House statement, which had warned that Assad and his military would “pay a heavy price” if it goes ahead with the attack. Russian  President Vladimir Putin’s spokesman Dmitry Peskov said that “such threats to Syria’s legitimate leaders are unacceptable.

Peskov also criticized the Trump administration for using the phrase “another chemical weapons attack,” arguing that an independent investigation into the April attack was never conducted despite Russia’s calls for one. The US has so far not explained why it is against an impartial third party determining all the facts.

A senior Russian lawmaker dismissed the U.S. warning as “provocation.” Frants Klintsevich, first deputy chairman of the defense and security committee in the upper chamber of the Russian parliament, accused the United States of “preparing a new attack on the positions of Syrian forces.” The U.S. strike in April was the first direct American assault on the Syrian government and Trump’s most dramatic military order since becoming president. Trump said at the time that the chemical attack crossed “many, many lines,” and called on “all civilized nations” to join the U.S. in seeking an end to the carnage in Syria.

Syria denied using chemical weapons. Russia’s Defense Ministry said the toxic agents were released when a Syrian airstrike hit a rebel chemical weapons arsenal and munitions factory.

* * *

As reported earlier, the statement by White House spokesman Sean Spicer said the U.S. had “identified potential preparations for another chemical weapons attack by the Assad regime that would likely result in the mass murder of civilians, including innocent children.” He said the activities were similar to preparations taken before the attack in April, but provided no evidence or further explanation.

Several State Department officials typically involved in coordinating such announcements said they were caught completely off guard by the warning, which didn’t appear to have been discussed in advance with other national security agencies. Typically, the State Department, the Pentagon and U.S. intelligence agencies would all be consulted before the White House issued a declaration sure to ricochet across foreign capitals. The officials weren’t authorized to discuss national security planning publicly and requested anonymity.

The bizarre sequence of events when it comes to foreign policy and potential military action has prompted some to speculate whether and if Trump is even in control of US foreign policy or if all control has been relinquished to the deep state.

* * *

As AP adds, also on Monday, Trump had dinner with Mattis, Secretary of State Rex Tillerson, National Security Adviser H.R. McMaster and other top officials as he hosted Indian Prime Minister Narendra Modi at the White House. Tillerson and Russian Foreign Minister Sergey Lavrov talked earlier Monday about the need to secure a cease-fire in Syria, fight extremist groups and prevent the use of chemical weapons, the Russian Foreign Ministry said. It looks as if those talks were not particularly fruitful.

end

What a riot!  The democratic aligned firm that did that wonderful false dossier on Trump somehow refuses to cooperate with Senate investigators…I wonder why?

(courtesy zero hedge)

Democratic-Party-Aligned Firm Behind Debunked “Russia Dossier” Stonewalls Senate Investigators

A Democratic Party-aligned opposition research firm is stonewalling Congressional investigators who are trying to ascertain exactly who financed the now-debunked “Russia dossier” – remember? The one that claimed germaphobe Trump enjoyed getting urinated on by Russian hookers?

The New York Post’s Paul Sperry is out with another report about Fusion GPS, a “research and strategic intelligence firm” founded by “three former Wall Street Journal investigative reporters.” But congressional sources say it’s actually an opposition-research group for Democrats, and the founders, who are more political activists than journalists, have a pro-Hillary, anti-Trump agenda.”

Fusion has refused to answer Senate investigators’ questions or provide records of communications that might help the panel identify who financed the error-ridden dossier. Now, because of the firm’s intransigence, it looks like the investigators might soon make good on their threats.

“These weren’t mercenaries or hired guns,” a congressional source familiar with the dossier probe said.

“These guys had a vested personal and ideological interest in smearing Trump and boosting Hillary’s chances of winning the White House.”

The firm was founded by Glenn Simpson, Thomas Catan and Peter Fritsch. Two of whom, Fritsch and Catan, have ties to Mexico — with Fritsch, a former Journal bureau chief in Mexico City, married to a Mexican woman who worked for Grupo Dina — a beneficiary of NAFTA. Catan, formerly from Britain, once edited a Mexican business magazine.

Simpson, pictured below, is reported to have shared dark views of both Russian President Vladimir Putin and Trump. Before joining Fusion GPS, Simpson did opposition research for a former Clinton White House operative.

Clearly, the research in the dossier – which was used to help justify the launch of Congressional and DOJ probes into the Trump campaign’s ties to Russian entities – has had tremendous consequences for the new administration, forcing Trump to beat back baseless claims and insinuations fed to the media by the DOJ and intelligence agencies. Still, after months of this treatment, no evidence of collusion has emerged.

But the question remains: Who, exactly, provided the funding for the organization’s controversial and research? Money that allowed the firm to hire former MI6 agent Christopher Steele, allegedly the source of the dossier’s controversial claims.

The Post has an idea of the profile, if not exactly the identity, of the individual or individuals responsible.

“Fusion GPS was on the payroll of an unidentified Democratic ally of Clinton when it hired a long-retired British spy to dig up dirt on Trump. In 2012, Democrats hired Fusion GPS to uncover dirt on GOP presidential nominee Mitt Romney. And in 2015, Democrat ally Planned Parenthood retained Fusion GPS to investigate pro-life activists protesting the abortion group.”

The FBI is also resisting Senate investigators who are zeroing in on the alleged misconduct by former deputy director Andrew McCabe, who’s failure to recuse himself from the investigation into the Trump campaign despite financial and political connections to Clinton through his Democrat activist wife has attracted suspicion.

And unsurprisingly, former Attorney General Loretta Lynch – now the subject of another probe organized by the Senate Judiciary Committee – is somehow involved.

“Senate investigators are demanding to see records of communications between Fusion GPS and the FBI and the Justice Department, including any contacts with former Attorney General Loretta Lynch, now under congressional investigation for possibly obstructing the Hillary Clinton email probe, and deputy FBI director Andrew McCabe, who is under investigation by the Senate and the Justice inspector general for failing to recuse himself despite financial and political connections to the Clinton campaign through his Democrat activist wife.:

The bureau’s attempts to verify the content in the dossier should alarm anybody in a report that should who’s been following along these past few months, after receiving a copy of the dossier in August, the bureau offered to pay its controversial source to corroborate the information.

“The FBI received a copy of the Democrat-funded dossier in August, during the heat of the campaign, and is said to have contracted in October to pay Steele $50,000 to help corroborate the dirt on Trump — a relationship that “raises substantial questions about the independence” of the bureau in investigating Trump, warned Senate Judiciary Chairman Chuck Grassley, R-Iowa.”

As the Post reminds us, Steele has been cited as the source for nearly the entire collusion narrative, from the pro-Trump hackers were working at the direction of Russian President Vladimir Putin, the theory that the Russian government might have compromising information about Trump, and the idea that a Trump confidant held a clandestine meeting in Moscow.

All of these allegations, as the Post notes, are 100% bullshit. Steele hasn’t traveled to Moscow since the 1990s, and it appears his main source for most of his material was Google. 

“Steele’s most sensational allegations remain unconfirmed. For instance, his claim that Trump lawyer Michael Cohen held a “clandestine meeting” on the alleged hacking scheme in Prague with “Kremlin officials” in August 2016 unraveled when Cohen denied ever visiting Prague, his passport showed no stamps showing he left or entered the US at the time, witnesses accounted for his presence here, and Czech authorities found no evidence Cohen went to Prague.

Steele hadn’t worked in Moscow since the 1990s and didn’t actually travel there to gather intelligence on Trump firsthand. He relied on third-hand “friend of friend” sourcing. In fact, most of his claimed Russian sources spoke not directly to him but “in confidence to a trusted compatriot” who, in turn, spoke to Steele — and always anonymously.

But his main source may have been Google. Most of the information branded as “intelligence” was merely rehashed from news headlines or cut and pasted — replete with errors — from Wikipedia.”

But that didn’t stop both Democrats and, before them, anti-Trump Republicans, from accepting Steele’s allegations without scrutiny – and paying him handsomely for his efforts.

“Steele contracted with Fusion GPS to investigate Trump’s ties to Russia starting in June 2016, whereupon he outlandishly claimed that Hillary campaign hackers were “paid by both Trump’s team and the Kremlin” and that the operation was run out of Putin’s office. He also fed Fusion GPS and its Hillary-allied clients incredulous gossip about Trump hating the Obamas so much that he hired hookers to urinate on a bed they slept in at the Moscow Ritz-Carlton, and that Russian intelligence recorded the pee party in case they needed to blackmail Trump.

Never mind that none of the rumors were backed by evidence or even credible sourcing (don’t bother trying to confirm his bed-wetting yarn, Steele advised, as “all direct witnesses have been silenced”). Steele reinforced his paying customers’ worst fears about Trump, and they rewarded him for it with a whopping $250,000 in payments.”

Steele, pictured below, also played a role in maligning former National Security Adviser Michael Flynn by suggesting there was something “untoward” about Flynn’s attending of a dinner to celebrate the 10th anniversary of Russia Today – an event that was also attended by former Green Party candidate Jill Stein.

“In the same August report, for example, Steele connected a Moscow trip taken by then-Trump campaign adviser Michael Flynn to “the Russian operation” to hack the election. But there was nothing secret about the trip, which had taken place months earlier and had been widely reported.

And there was nothing untoward about it. It was a dinner celebrating the 10th birthday of Russian TV network RT, and Flynn sat at the same table with Putin as US Green Party presidential candidate Jill Stein.”

Meanwhile, it appears the founders of Fusion GPS have profited handsomely from their misinformation campaign:

“Property records show that in June 2016, as Clinton allies bankrolled Fusion GPS, Fritsch bought a six-bedroom, five-bathroom home in Bethesda, Md., for $2.3 million.”

Could this be the thread that finally unravels the Trump investigation? We think so. Stay tuned for more information once the inevitable subpoena is served…

end

Now it is the IMF’s turn to slash USA GDP growth from 2.3% to 2.1% in 2017

(courtesy zero hedge/IMF)

 

IMF Slashes US GDP Forecast, Says Trump’s Growth Target Is “Unrealistic”

The IMF has cut its US GDP forecast to 2.1% in 2017 from 2.3% projected in April and to 2.1% for 2018 from 2.5% previously, it said in a statement following its U.S. Article IV Consultation, and saying it could no longer assume the Trump administration will be able to deliver pledged tax cuts and higher infrastructure spending. Specifically, in giving up on the Trump agenda, the fund said “we have removed the assumed fiscal stimulus from our forecast.”

Worse, the revised US forecast is now expected to peak in 2017, remains flat in 2018, and then continues to decline to 1.7% by 2022, which once upon a time was considered stall speed.

In its annual review of the American economy, the IMF questioned the White House’s plan to accelerate output and said it was skeptical the administration would be able rev up the world’s largest growth engine to a sustained 3% annual rate. Instead, the fund forecasts the growth rate will steadily fall over the next five years to around 1.7%, assuming no major policy changes.

IMF GDP Forecast:

Amusingly, it was only in April that the IMF said President Trump’s tax-overhaul plans and spending stimulus could goose the growth rate to 2.5% next year, up from 2.3% this year. But after talks with administration officials amid still-evolving policy plans, the fund says it can no longer factor such fiscal stimulus into its forecasts. The IMF now says the economy will expand by 2.1% this year and next.

And, as the WSJ notes, Initial optimism about the administration’s ability to get a tax revamp and infrastructure spending has faded in the face of mounting political hurdles. “Meanwhile, buoyant stock prices, one of the longest expansions in U.S. history and a precrisis jobless rate belie an economy facing considerable challenges ahead, the fund warned.”

“All in all, in our judgment, the U.S. economic model is not working as well as it could in generating broadly shared income growth,” said Alejandro Werner, head of the IMF’s Western Hemisphere department.

The IMF also disagreed with the Trump’s administration’s optimistic economic forecasts, questioning whether the package as proposed will deliver the administration’s long-term growth targets, balance the budget and cut public debt.

“Even with an ideal constellation of progrowth policies, the potential growth dividend is likely to be less than that projected in the budget and will take longer to materialize,” the IMF said. International experience and U.S. history suggest a sustained acceleration in annual growth of more than one percentage point is unlikely, the IMF said.

Of note: the IMF said that given the weaknesses in the economy, the Fed should aim to temporarily overshoot its 2% inflation target by gradually easing into its planned interest rate increases. And some of us are old enough to remember when cutting rates was supposed to boost inflation…

* * *

Some of the highlights from the IMF statement:

  • “The outlook is clouded by important medium-term imbalances. The U.S. economic model is not working as well as it could in generating broadly shared income growth”
  • “Real GDP is now 12 percent higher than its pre-recession peak, job growth has been persistently strong, and the economy appears to be back at full employment”
  • Fed should continue to gradually raise interest rates “in a data dependent way” and it must accept modest, temporary overshoot of its inflation goal
  • Fed must well-telegraph balance sheet reduction plans
  • U.S. needs lower tax rate, simpler system, fewer exemptions
  • “Tax reform should focus on increasing revenues- GDP over the medium term including through a broad-based federal level consumption tax, a carbon tax, and a higher federal gas tax”
  • U.S. can improve trade deals like Nafta also to the benefit of its trading partners
  • “The U.S. would benefit by remaining open as it pursues new or amended trade agreements”
  • Skilled-based immigration to U.S. can boost labor participation and productivity
  • Current financial regulation approach should remain intact
  • “There is scope to fine-tune some aspects of the system, notably to reduce the compliance burden for smaller banks. However, the current approach to regulation, supervision, and resolution should be preserved.”
Soft data conference board consumer confidence falters to a 5 month low
(courtesy zerohedge)

Conference Board Consumer ‘Hope’ Stumbles To 5-Month Lows

Following the drop in UMich confidence preliminary print for June (as Republican hope fell), The Conference Board’s measure of confidence ticked up, handily beating expectations. The present situation index rose sharply but economic expectations tumbled to its lowest since January.

As Bloomberg notes, while consumers are growing weary about the political environment and their chances of obtaining some form of stimulus, conditions in the real economy like low gas prices, rising stock market valuations and a strong labor market remain major confidence boosters.

But economic expectations slumped to Jan lows…

But Gallup notes that, among its respondents, Americans’ confidence in the economy remains barely positive.

From 2008 — when Gallup began tracking economic confidence on a daily basis — through most of 2016, Americans’ assessments of the economy were routinely negative, although they became less negative over time. However, last year’s presidential election proved to be an inflection point for economic confidence.

Last week marked the 32nd straight week the index has been above zero, meaning that many Americans — Republicans above all — continue to feel fundamentally different about the economy now than they did before the election. Still, economic confidence has ebbed and flowed throughout the first half of 2017, with the measure registering an eight-year high of +14 the week after Donald Trump was inaugurated as president and surpassing this in early March with a +16 reading.

But in subsequent months, confidence has declined — largely due to worsening attitudes among Democrats. Since May, however, attitudes have largely stabilized, with weekly averages of the index remaining slightly positive.

Worse still, Gallup notes that while the current conditions are holding positive, expectations for the future are notably negative

We will see you WEDNESDAY night

Have a great evening

Harvey.

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