July 25/COMEX OPTIONS EXPIRY AND AS ALWAYS GOLD AND SILVER ARE HIT: GOLD FALLS $2.10 BUT SILVER RESPONDS AND RISES 10 CENTS/GLD HAS A LOSS OF 9.17 TONNES/SLV HAS A LOSS OF 3.309 MILLION OZ/TURKEY ON TRACK TO IMPORT A MONSTROUS 400 TONNES OF GOLD/CHINA ON TARGET TO IMPORT 130 MILLION OZ OF SILVER AND YET THEY ARE A HUGE SILVER PRODUCER/VENEZUELA OUT OF CONTROL AS OPPOSITION MAY RESORT TO GUERRILLA WARFARE TO COMBAT MADURO’S NEW CONSTITUTIONAL THREAT/

GOLD: $1252.40  DOWN $2.10

Silver: $16.55  UP 10 cent(s)

Closing access prices:

Gold $1250.00

silver: $16.52

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: $1259.96 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1254.25

PREMIUM FIRST FIX:  $5.71

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SECOND SHANGHAI GOLD FIX: $1262.69

NY GOLD PRICE AT THE EXACT SAME TIME: $1257.25

Premium of Shanghai 2nd fix/NY:$5.44

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LONDON FIRST GOLD FIX:  5:30 am est  $1252.00

NY PRICING AT THE EXACT SAME TIME: $1252.50 

LONDON SECOND GOLD FIX  10 AM: $1254.40

NY PRICING AT THE EXACT SAME TIME. $1254.50  

For comex gold:

JULY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  6 NOTICE(S) FOR 600  OZ.

TOTAL NOTICES SO FAR: 157 FOR 15700 OZ    (.4883 TONNES)

For silver:

JULY

 122 NOTICES FILED TODAY FOR

610,000  OZ/

Total number of notices filed so far this month: 3149 for 15,745,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 WE HAVE NOW ENTERED OPTIONS EXPIRY WEEK:

COMEX OPTIONS EXPIRY: TOMORROW JULY 26.2017

LONDON BASED OPTIONS EXPIRY: JULY 31.2017 AT 11AM OR SO.

(OTC/LBMA CONTRACTS)

end

Let us have a look at the data for today

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In silver, the total open interest FELL BY 480 contract(s) DOWN to 206,068 WITH THE FALL IN PRICE THAT SILVER TOOK WITH YESTERDAY’S TRADING (DOWN 4 CENT(S). YESTERDAY THE COMMERCIALS TRIED IN VAIN TO COVER BUT TO NO AVAIL.  THE SPEC SHORTS ARE HEARING RUMOURS OF TROUBLE WITH DELIVERIES IN LONDON SO THEY  ARE TRYING TO GET OUT OF THEIR SHORTS. THE LONGS CONTINUE TO REMAIN STOIC.

 In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.03 BILLION TO BE EXACT or 147% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 122 NOTICE(S) FOR 610,000  OZ OF SILVER

In gold, the total comex gold FELL BY 4830 CONTRACTS WITH THE FALL IN THE PRICE OF GOLD  ($0.25 with YESTERDAY’S TRADING). The total gold OI stands at 458,968 contracts. We continue to have liquidation in the front month as these guys are given EFP’s which gives them the right to receive a fiat bonus plus a future delivery product and these are generally London based forwards. We will continue to see liquidation up until first day notice on July 31.2017.

we had 6 notice(s) filed upon for 600 oz of gold.

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

GLD:

Today a huge  change in gold inventory/ a massive withdrawal of 9.17 tonnes

Inventory rests tonight: 800.45 tonnes

IN THE LAST 8 DAYS: GLD SHEDS 37.05 TONNES YET GOLD IS HIGHER BY $34.10 . NO FIGURE!! GLD IS A MASSIVE FRAUD

SLV

Today: : WE HAD A HUGE CHANGE IN SILVER INVENTORY TONIGHT DESPITE SILVER BEING UP 10 CENTS/ A MASSIVE WITHDRAWAL OF 3.309 MILLION OZ OF SILVER.

INVENTORY RESTS AT 343.812 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 480 contracts  DOWN TO 206,068 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787), WITH THE FALL IN SILVER PRICE  WITH YESTERDAY’S TRADING  (DOWN 4 CENTS ). NO DOUBT WE WITNESSED MORE SPEC LONGS ENTER THE ARENA WITH THE REMAINDER OF THE  SPEC LONGS BASICALLY REMAINING STOIC. THE SPEC LONGS SEEM TO BE TAKING ON THE BANKERS. THE NEWBIE SPEC SHORTS AND BANKER SHORTS (AS WE WITNESSED IN THE COT REPORT LAST FRIDAY) ARE LOATHE TO SUPPLY NEW PAPER AS THEY ARE TRAPPED IN THEIR OWN JUICES. 

(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 DOWN 6.91 POINTS OR 0.21%   / /Hang Sang CLOSED UP 5.22 POINTS OR 0.02% The Nikkei closed DOWN 20.47 POINTS OR .10%/Australia’s all ordinaires CLOSED UP 0.65%/Chinese yuan (ONSHORE) closed DOWN at 6.7513/Oil UP to 47.04 dollars per barrel for WTI and 49.34 for Brent. Stocks in Europe OPENED IN THE GREEN,, Offshore yuan trades  6.7512 yuan to the dollar vs 6.7513 for onshore yuan. NOW THE OFFSHORE IS WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN  WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS  WEAKER 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/CHINA

China is wasting no time as they plan for an eventual attack by the USA.  Their plan is to protect the nuclear sites and as well as protect the norther border with China.

( zero hedge)

b) REPORT ON JAPAN

c) REPORT ON CHINA

North Korea is not the only border that China is having some conflict.  Today we see China and India having a spat

( zero hedge)

4. EUROPEAN AFFAIRS

 GERMAN BUNDS/ECB

At the current 60 billion euros of QE purchases, the ECB will run out of German bunds to buy by late 2018.  If they reduce purchases down to 40 billion euros, then they will have enough until Jan 2019..

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

IRAN/USA

Good reason for the boys to whack gold and silver today;  USA navy patrol ship fires warning shots at an Iranian Vessel (Revolutionary Guards)

(courtesy zero hedge)

6 .GLOBAL ISSUES

A very important commentary illustrates how food inflation is upon us totally without us noticing:  how:  “shrinkflation”

( zero hedge)

7. OIL ISSUES

i)Last night we detailed Norseman’s Chairman Russell Clark’s strong belief that the shale patch will run into severe troubles this year.

Well today that has already been borne out as large Anadarko has just cut its capital expenditures basically stating that they have already reached peak shale:

( zerohedge)

ii)WTI jumps above 48 dollars after a huge crude draw down

( zero hedge)

8. EMERGING MARKET

The Venezuelan opposition has vowed a violent response to the new constitution and a major power grab by bus driver Maduro. They plan on guerrilla warfare

( zerohedge)

9.   PHYSICAL MARKETS

i)This will not bode well for Acacia Mining as they have just been handed a bill for 4190 billion.  They may have to abandon its flagship mine in Tanzania

( Biesheuvel/GATA)

ii)The London’s Telegraph also covers the story on”shrinkflation” which has hit 2500 consumer products over the past 5 yrs

( Morley/GATA)

iii)This is also not good for mining companies: the Philippines Duterte warns miners that he is going to tax them to death over environmental concerns.  The Philippines is the worlds largest nickel ore producer as well as large gold/copper mining

( DelaCruz/Reuters)

iv)Cryptocurrencies are crashing again

zero hedge)

v)China, a huge producer of silver, decided it was important to import huge amounts as well.  In June:  10.6 million oz.  For the first 6 months:  63.7 million oz.  They are on target for about 130 million oz for the year or 18% of annual global production.

this is a huge story!

(courtesy China’s Scrap Register)

vi)Wow!! Turkey has imported a monstrous 174 tonnes of gold in the first half of the year. If they continue on this pace they will import 400 tonnes in a year. In the years 2013-2015 Turkey bought on behalf of Iran.  The tonnage of gold imports is for their own use either for sovereign or domestic

(courtesy Sharp’s Pixley)

10. USA Stories

i)Former CIA director calls for a coup if Trump fires Mueller: good grief!

( zero hedge)

ii)today’s huge tweetstorm from Trump as he lashes out against Jeff Sessions and Hillary

( zero hedge)

iii)Not sure if this is fake news but CNN reports that Sec of State Tillerson is considering an early exit from the Trump administration due to huge  differences and chaos.

( zerohedge)

iv)A great commentary showing how citizens of Illinois and in particular those in Cook Country which houses Chicago are leaving in droves:

( Mish Shedlock/Mishtalk)

v)Soft data Conference Board’s Consumer Confidence soars to its second highest level since 2000 on the backs of a rise in the stock market

( zero hedge)

vi)The senate passes a critical motion to advance Obamacare repeal by a vote of 51 to 50 with Mike Pence casting the deciding vote

( zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY A 4830 CONTRACTS DOWN to an OI level of 458,968 DESPITE THE TINY FALL IN THE PRICE OF GOLD ($0.25 with YESTERDAY’S trading). The liquidation in the total gold comex continues and we should see a further drop in open interest until first day notice, come July 31.2017. Actually these guys have not really left the gold arena as they have received EFP’s which entitle them to a fiat bonus plus a future delivery contract and this no doubt would be on a London forward. 

We are now in the contract month of JULY and it is one of the POORER delivery months  of the year. .

The non active July contract LOST 3 contract(s) to stand at 19 contracts. We had only 2 notices filed YESTERDAY morning, so we LOST 1 contracts or an additional 100 oz will NOT stand in this non active month of July.  Thus 1 EFP notice(s) were given for July which gives the long holder a fiat bonus plus a futures contract for delivery and most likely these are London based forwards.  The contracts are private so we do not get to see all the particulars. The next big active month is August and here the OI LOST 27,944 contracts DOWN to 31,014, as this month winds down prior to first day notice, Monday July 31.  The next non active contract month is September and here they LOST 94 contract to stand at 806. The next active delivery month is October and here we gained 2715 contracts up to 28,847.  October is the poorest of the active gold delivery months as most players move right to December.

We had 6 notice(s) filed upon today for 600 oz

For those keeping score: in the upcoming front delivery month of August:

On July 25.2017:  open interest for the front month: 118,637 contracts compared to July 25.2016:   180,687.

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And now for the wild silver comex results.  Total silver OI FELL BY A TINY 480 contracts FROM 206,498 UP TO 206, 068 WITH YESTERDAY’S  4 CENT LOSS (AND DESPITE CONSTANT TORMENT THESE PAST FEW WEEKS). 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. THE SHORT SPECULATORS WERE ALSO TRYING TO COVER THEIR SHORTS ALONG WITH THE BANKERS BUT TO NO AVAIL. BASICALLY THE OPEN INTEREST HARDLY BUDGED. HOWEVER IT DID NOT STOP HUNGRY PLAYERS SEEKING REAL PHYSICAL SILVER (SEE BELOW)

We are now in the next big active month will be July and here the OI GAINED 54 contracts RISING TO 188. We had 17 notices served  yesterday so we gained 71 CONTRACTS or an additional  355,000 oz will stand at the comex, and 0 EFP contracts were issued which entitles them to receive a fiat bonus and a future delivery contract (which no doubt is a London based forward).

The month of August, a non active month GAINED 31 contracts to stand at 499.  The next big active delivery month for silver will be September and here the OI LOST ANOTHER 481 contracts DOWN to 149,580.

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 JULY 2016:  12.370 million with the difference being EFP’s taking delivery in London.  Thus we have an increasing amount of silver standing in comparison to what happened a year ago

amt standing tonight: 16.075 million oz.

We had 122 notice(s) filed for 610,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 154,166 contracts which is fair/

Yesterday’s confirmed volume was 290,532 contracts  which is excellent

volumes on gold are STILL HIGHER THAN NORMAL!

Initial standings for JULY

 July 25/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
nil oz
Deposits to the Dealer Inventory in oz NIL  oz
Deposits to the Customer Inventory, in oz 
53,804.330 oz
HSBC
No of oz served (contracts) today
 
6 notice(s)
600 OZ
No of oz to be served (notices)
13 contracts
1300 oz
Total monthly oz gold served (contracts) so far this month
157 notices
15700 oz
.4883 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   137,167.5 oz
Today we HAD  0 kilobar transaction(s)/ 
We had 0 deposit into the dealer:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had no dealer deposits:
total dealer deposits:  nil oz
we had 1  customer deposit(s):
 i) Into HSBC: 53,804.330 oz
total customer deposits; 53,804.330  oz
this is the 2nd day in a row that  a huge amount of gold enters the comex gold from HSBC
We had 0 customer withdrawal(s)
total customer withdrawals; nil oz
 we had 0 adjustment(s)
 
For JULY:

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 6  contract(s)  of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 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 JULY. contract month, we take the total number of notices filed so far for the month (157) x 100 oz or 15,700 oz, to which we add the difference between the open interest for the front month of JUNE (19 contracts) minus the number of notices served upon today (6) x 100 oz per contract equals 17,000  oz, the number of ounces standing in this NON active month of JULY.
 
Thus the INITIAL standings for gold for the JULY contract month:
No of notices served so far (157) x 100 oz  or ounces + {(19)OI for the front month  minus the number of  notices served upon today (6) x 100 oz which equals 17,000 oz standing in this  active delivery month of JULY  (0.5287 tonnes)
We LOST 1 contract or AN ADDITIONAL 100 oz will stand and 0 EFP contract(s) was issued as described as above.
.
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Total dealer inventory 695,420.097 or 21.63 tonnes  (dealer gold continues to disappear)
Total gold inventory (dealer and customer) = 8,572,222.03 or 266.63 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 266.63 tonnes for a  loss of 36  tonnes over that period.  Since August 8/2016 we have lost 87 tonnes leaving the comex. However I am including kilobar transactions and they are very suspect at best.
I have a sneaky feeling that these withdrawals of gold in kilobars are being used in the hypothecating process  and are being used in the raiding of gold!

The gold comex is an absolute fraud.  The use of kilobars and exact weights makes the data totally absurd and fraudulent! To me, the only thing that makes sense is the fact that “kilobars: are entries of hypothecated gold sent to other jurisdictions so that they will not be short with their underwritten derivatives in that jurisdiction.  This would be similar to the rehypothecated gold used by Jon Corzine at MF Global.
 
IN THE LAST 11 MONTHS  89 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE June DELIVERY MONTH
 
JULY INITIAL standings
 July 25 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
237,604.410 oz
 Brinks
Scotia
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
1,208,552.130 oz
JPM
Scotia
No of oz served today (contracts)
122 CONTRACT(S)
(610,000 OZ)
No of oz to be served (notices)
66 contracts
( 330,000 oz)
Total monthly oz silver served (contracts) 3149 contracts (15,745,000 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 1,898,314.9 oz
today, we had  0 deposit(s) into the dealer account:
total dealer deposit: nil   oz
we had 0 dealer withdrawals:
total dealer withdrawals: NIL oz
we had 2 customer withdrawal(s):
i) out of Brinks: 181,214.950 oz
ii) Out of Scotia:  92,389.460 oz
TOTAL CUSTOMER WITHDRAWALS:   237,604.410 oz
We had 2 Customer deposit(s):
i) Into JPM: 629,612.400 oz
ii) Into Scotia: 578,939.730 oz
***deposits into JPMorgan have resumes  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: 1,208,552.130 oz
 
 we had 1 adjustment(s)
i) out of the criminal JPMorgan an adjustment error in accounting of exactly: 1990.000 oz
The total number of notices filed today for the JULY. contract month is represented by 122 contract(s) for 610,000 oz. To calculate the number of silver ounces that will stand for delivery in JULY., we take the total number of notices filed for the month so far at 3149 x 5,000 oz  = 15,745,000 oz to which we add the difference between the open interest for the front month of JULY (188) and the number of notices served upon today (122) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the INITIAL standings for silver for the JULY contract month:  3027 (notices served so far)x 5000 oz  + OI for front month of JULY.(188 ) -number of notices served upon today (122)x 5000 oz  equals  16,075,000 oz  of silver standing for the JULY contract month.
We gained ANOTHER 71 contracts for an additional 355,000 oz  that will stand at the comex and 0 EFP’s were issued. THE DELIVERY CYCLE IN JULY IS BEHAVING EXACTLY LIKE THE PREVIOUS MONTHS OF MAY, AND JUNE AS THE AMOUNT STANDING INCREASES EVERY SINGLE DAY AS IT ALSO SURPASSES WHAT WAS STANDING FOR METAL ON THE FIRST DAY OF THE MONTH (12.115 MILLION OZ)
 
 
 
 
Volumes: for silver comex
Today the estimated volume was 39,562 which is fair
YESTERDAY’s  confirmed volume was 66480 contracts which is EXCELLENT
YESTERDAY’S CONFIRMED VOLUME OF 66480 CONTRACTS EQUATES TO 332 MILLION OZ OF SILVER OR 47% 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:  38.433 million (close to record low inventory  
Total number of dealer and customer silver:   214.829 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 7.6 percent to NAV usa funds and Negative 6.7% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.9%
Percentage of fund in silver:37.0%
cash .+0.1%( July 25/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV RISES TO +0.14% (July 25/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.67% to NAV  (July 25/2017 )
Note: Sprott silver trust back  into NEGATIVE territory at +0.14/Sprott physical gold trust is back into NEGATIVE/ territory at -0.67%/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

July 25/A MASSIVE 9.17 TONNES OF GOLD WITHDRAWN FROM THE GLD/INVENTORY RESTS AT 800.45 TONNES

July 24/A massive 9.62 tonnes withdrawal and yet the price remains constant (down only 25 cents)..inventory drops to 809.62 tonnes

July 21/with gold up $8.75 again, we had no changes in gold inventory at the GLD/inventory rests at 816.13 tonnes

July 20/WITH GOLD UP AGAIN TODAY ($3.50) WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 816.13 TONNES

jULY 19/STRANGE!! AGAIN WITH GOLD UP $0.50 WE HAD ANOTHER HUGE 5.32 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 816.13 TONNES  THIS GOLD IS HEADING TO SHANGHAI

July 18/STRANGE AGAIN/WITH GOLD UP $7.50 WE HAD ANOTHER HUGE 5.62 TONNES WITHDRAWAL FROM THE GLD/INVENTORY RESTS AT 821.45 TONNES

July 17/strange again! with gold up $4.20 we had another huge withdrawal of 1.77 tonnes/inventory rests at 827.07 tonnes

July 14/strange@!!with gold up $12.00 today, we had a huge withdrawal of 3.55 tonnes/inventory rests at 828.84 tonnes

July 13/no change in gold inventory at the GLD/inventory rests at 832.39 tonnes

JULY 12/no change in gold inventory at the GLD/inventory rests at 832.39 tonnes

July 11/strange!@! we had a big withdrawal of 2.96 tonnes despite gold’s advance today/inventory rests tonight at 832.39 tonnes

July 10/no changes in gold inventory at the GLD/inventory rests at 835.35 tonnes

July 7/a massive withdrawal of 5.32 tonnes of paper gold were removed and this was used in the attack today/inventory rests at 835.35 tonnes

July 6/no changes in tonnage at the GLD/Inventory rests at 840.67 tonnes

July 5/A MASSIVE 5.62 TONNES OF GOLD LEFT THE GLD AND NO DOUBT WAS USED IN THE RAID THIS MORNING/INVENTORY REST

July 3/ A MASSIVE 7.37 TONNES OF GOLD LEAVE THE GLD/INVENTORY RESTS AT 846.29 TONNES

June 30/no change in gold inventory at the GLD/Inventory rests at 853.66 tonnes

June 29/no change in inventory at the GLD/inventory rests at 853.66 tonnes

June 28/no change in inventory at the GLD/Inventory rests at 853.66 tonnes

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

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July 25 /2017/ Inventory rests tonight at 800.45 tonnes
*IN LAST 196 TRADING DAYS: 149.79 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 137 TRADING DAYS: A NET  22.36 TONNES HAVE NOW BEEN WITHDRAWN FROM  GLD INVENTORY.
*FROM FEB 1/2017: A NET  9.17 TONNES HAVE BEEN WITHDRAWN.

end

Now the SLV Inventory

July 25/A MASSIVE 3.309 MILLION OZ OF INVENTORY WITHDRAWN FROM THE SLV DESPITE SILVER’S 10 CENT RISE TODAY.

July 24/no change in silver inventory despite its 4 cent drop/inventory remains at 347.121 million oz

July 21/STRANGE! WITH SILVER UP AGAIN TODAY (11 CENTS), NO CHANGE IN SILVER INVENTORY AT THE SLV/inventory 347.121 million oz/

July 20/STRANGE! WITH SILVER UP AGAIN TODAY, THE SLV INVENTORY LOWERS BY 945,000 OZ/INVENTORY RESTS AT 347.121 MILLION OZ/

July 19/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 348.066 MILLION OZ

July 18/a huge 946,000 oz withdrawal from the SLV despite silver’s 16 cent gain!

Inventory rests at 348.066 million oz

July 17/no change in silver inventory at the SLV/Inventory rests at 349.012 million oz

July 14/no change in silver inventory/inventory rests at 349.012 million oz/

July 13/no change in silver inventory/inventory at the SLV rests at 349.012 million oz/

JULY 12/another massive 1.986 million oz of silver added into the SLV/inventory rests at 349.012 million oz/the last 3 days saw 7.281 million oz added into the SV

July 11/ANOTHER MASSIVE INCREASE OF 2.364 MILLION OZ into the SLV inventory/inventory rests at 347.026 million oz

July 10/ A HUGE INCREASE OF 2.931 MILLION OZ OF SILVER DESPITE THE EARLY HIT ON SILVER THIS MORNING/INVENTORY RESTS AT 344.662 MILLION OZ.

July 7/Strange: no change in inventory (compare that with gold) Inventory rests at 341.731 million oz

July 6/ANOTHER MASSIVE DEPOSIT OF 2.126 MILLION OZ INTO THE SLV INVENTORY/INVENTORY RESTS AT 341.731 MILLION OZ.

July 5/STRANGE! NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 339.605 MILLION OZ

July 3/strange! with the huge whacking of silver we got an increase of 379,000 oz into inventory.

June 30/no change in silver inventory at the SLV/Inventory rests at 339.226 million oz

June 29/no change in silver inventory at the SLV/Inventory rests at 339.226 million oz/

June 28/ a small withdrawal of 662,000 oz form the SLV/Inventory rests at 339.226 million oz/

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/

July 21.2017:
 Inventory 343.812  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.27%
  • 12 Month MM GOFO
    + 1.44%
  • 30 day trend

end

Here is a review of the 3 latest comex waterfall (whacks) on gold and silver not including the current one we are undergoing.  I have taken the nadir of the gold price before it started to rise again and compared it to OI in both gold and silver with the OPEN INTEREST.  The OI readings are the following day but we are always one day behind so this compares exactly to the nadir price.
First waterfall ended Oct 6 2016/ Nadir price of gold at that date Oct 6 2016 : $1254.70 / OI for gold Oct 7/2016: 511,340//OI for silver/Oct 7.2016: 194,811
Second waterfall ended Dec 15.2016:Nadir Price of gold Dec 15.2016:      $1128.20              //OI for gold Dec 16/2016 401,798// OI for silver: Dec 16/16 161,570
Third waterfall ended May 10/2017: Nadir Price of gold May 10 2016:   $1220.95              //  OI for gold May 11: 425,252//  OI for silver May 11/17: 199,826
and for comparison while we are undergoing another waterfall these past several weeks
 Today’s price of gold $1255.00                                                                                                    OI for gold today: 458,968//Oi for silver  206,068
The first waterfall corresponds to a silver price of $17.30 on Oct 6
The second waterfall corresponds to a silver price of $15.90 on Dec 15
The third waterfall corresponds to a silver price of $17.37 on May 10
and today:  silver price of $16.49
Since the bottom of the second waterfall the price of gold at its nadir is about the same ($1220 and $1226), but the OI for gold is much higher along with silver OI also much higher. (425,252 and 458,968 OI for gold) accompanying  199,826 and 206,068 for silver)
It seems the data suggests power manipulation to control the price through paper!

END

Major gold/silver trading/commentaries for TUESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Gold Seasonal Sweet Spot – August and September – Coming

– Gold seasonal sweet spot – August and September – is coming
– Gold’s performance by month from 1979 to 2016 – must see table
– August sees average return of 1.4% and September of 2.5%
– September is best month to own gold, followed by January, November & August

 by Palisade Research

Looking back at gold’s performance since 1979, August and September are big months for the yellow metal. What is the cause? No one really knows but there are some theories that have been thrown around.

The adage “sell in May and go away” is common in the mining sector. Investors are back from vacation and ready to deploy their cash in a big way. Concurrently, the largest financial crashes have occurred in September and October, investors are also buying gold to hedge their portfolios.

Indian wedding season is huge for gold, and if you have ever been to a traditional Indian, its easy to see why India is the World’s largest consumer of gold jewelry. Throw Christmas into the mix, and you have the perfect retail storm.

Lastly, the European Central Bank and 20 other European central banks are currently governed by a Central Bank Gold Agreement, which ensures all banks operate with transparency and do not engage in large uncoordinated gold sales. The Agreement dictates the limit in sales, and resets every September, meaning the market may see less selling activity.

In the 38 years we used for the chart, August had only 14 years of negative returns, while September had 13. Regardless if these theories are true or not, its hard to ignore the decades of data that suggest the best months of gold are yet to come.

Gold’s Best Months Are Coming – Read here

GoldCore Comment
The precious metal’s ‘summer doldrums’ period is coming to a close. Traditionally seasonal factors often result in weakness in gold and silver, particularly in May and June. This frequently creates an attractive buying opportunity for those seeking to allocate funds to the precious metals.

The data is compelling as seen in the Palisade table above. However, it is important to realise that the seasonal data is just another indicator and short term speculation should be avoided in favour of long term investment diversification.

It is important to focus on gold’s value rather than simply its price. Gold’s value is as an investment hedge and financial insurance against financial and monetary crises. There is a real of another global financial crisis in the coming months and in 2018 and hence the importance of owning physical gold and silver.

Owning physical coins and or bars in your possession and in allocated and most importantly in segregated accounts will continue to protect and grow wealth in the coming years.

Related Content

Gold Bullion Averages Biggest Seasonal Gains in September Over Past 20 Year –  Read here

Gold’s Sweet Spot – Strongest Months Are August, September, November And January – Read here

News and Commentary

Gold settles lower, ending 6-session streak of gains (MarketWatch.com)

Gold hits one-month high, eyes on Fed and dollar (Reuters.com)

U.S. Stocks Mixed as Dollar Stabilizes, Oil Gains (Bloomberg.com)

Gold settles lower, ending 6-session streak of gains (MarketWatch.com)

‘Shrinkflation’ has hit over 2,500 consumer products over the past five years (Telegraph.co.uk)

Source: US Funds

Putin’s Chess Game Involves Involves Accumulating Gold, Alternative Payments and Ultimate Demise of the Dollar (DailyReckoning.com)

Too calm? Wall Street volatility collapses to lowest since 1993 – CNBC (CNBC.com)

Crash in bond markets, Fed mistake are investors’ biggest fears right now, survey finds (CNBC.com)

Where Chinese Millionaires Want to Live (Statista.com)

Greed is no longer good – bond boom comes to an end – Guardian (TheGuardian.com)

Success isn’t just having lots of money – Success is fulfillment (CNBC.com)

Gold Prices (LBMA AM)

25 Jul: USD 1,252.00, GBP 960.78 & EUR 1,074.59 per ounce
24 Jul: USD 1,255.85, GBP 962.99 & EUR 1,077.64 per ounce
21 Jul: USD 1,247.25, GBP 958.89 & EUR 1,071.39 per ounce
20 Jul: USD 1,236.55, GBP 953.63 & EUR 1,075.06 per ounce
19 Jul: USD 1,239.85, GBP 950.84 & EUR 1,074.83 per ounce
18 Jul: USD 1,237.10, GBP 949.47 & EUR 1,071.82 per ounce
17 Jul: USD 1,229.85, GBP 940.71 & EUR 1,074.03 per ounce

Silver Prices (LBMA)

25 Jul: USD 16.31, GBP 12.52 & EUR 14.00 per ounce
24 Jul: USD 16.50, GBP 12.66 & EUR 14.17 per ounce
21 Jul: USD 16.43, GBP 12.63 & EUR 14.11 per ounce
20 Jul: USD 16.18, GBP 12.50 & EUR 14.07 per ounce
19 Jul: USD 16.23, GBP 12.44 & EUR 14.08 per ounce
18 Jul: USD 16.17, GBP 12.41 & EUR 13.99 per ounce
17 Jul: USD 16.07, GBP 12.30 & EUR 14.02 per ounce


Recent Market Updates

– Commercial Property Market In Dublin Is Inflated and May Burst Again
– Gold Hedges Against Currency Devaluation and Cost Of Fuel, Food, Beer and Housing
– Millennials Can Punt On Bitcoin, Own Gold and Silver For Long Term
– “Time To Position In Gold Is Right Now” says Jim Rickards
– Bloomberg Silver Price Survey – Median 12 Month Forecast Of $20
– “Bigger Systemic Risk” Now Than 2008 – Bank of England
– “Financial Crisis” Coming By End Of 2018 – Prepare Urgently
– Video – “Gold Should Probably Be $5000” – CME Chairman
– India Gold Imports Surge To 5 Year High – 220 Tons In May Alone
– “Silver’s Plunge Is Nearing Completion”
– China, Russia Alliance Deepens Against American Overstretch
– Silver Prices Bounce Higher After Futures Manipulated 7% Lower In Minute
– Precious Metals Are “Best Defence” Against Bail-ins In Economic Crisis

END

This will not bode well for Acacia Mining as they have just been handed a bill for 4190 billion.  They may have to abandon its flagship mine in Tanzania

(courtesy Biesheuvel/GATA)

Tanzania Hands Mining Company $190 Billion Tax Bill

July 24, 2017, 12:41 PM EDT
  • Gold miner tumbles 21 percent in London to 18-month low
  • Company says it declared all its revenues, refutes findings

Tanzania just hit Acacia Mining Plc with a tax bill equal to almost two centuries worth of the gold producer’s revenue.

The government issued the company, which mines all of its gold in the African country, with a $40 billion tax bill and another $150 billion in interest and penalties, Acacia said in a statement Monday. The charge covers alleged under-declared export revenues from the Bulyanhulu and Buzwagi mines over periods between 2000 and 2017.

Acacia reiterated that it has fully declared all revenues. The stock extended a slump after the statement, closing down 21 percent in London to the lowest since January 2016.

The giant tax bill is the latest twist in an increasingly ugly spat between the government and Acacia. In March, Tanzania banned exports of unprocessed gold and copper, a move Acacia said is costing it about $1 million a day in lost revenue. The situation escalated when the government accused the firm of operating illegally in the country and said mine operators had been evading taxes.

“The company is considering all of its options and rights and will provide a further update in due course,” Acacia said in the statement.

At least two senior employees have been detained for questioning by Tanzanian authorities this month, while other employees have been interviewed by the police. On Friday, Acacia said the dispute had depleted its cash balance to $176 million from $318 million a year earlier and that it will have to shutter its flagship Bulyanhulu mine at the end of this quarter if the situation is not resolved.

To put the size of the bill in perspective, Acacia had total revenues of $1.05 billion last year and has reported sales of a total of $7.7 billion since 2009

end

Andrew Maguire to me on silver:

Harvey

From a wholesale  market perspective the silver kilobar market is extremely tight, we are witnessing 3 week delays in filling size orders and all the bars are brand new and still warm. Refiners cannot keep up with this demand. Comex silver is undeliverable, any ‘deliveries’ we see are no more than a  fork lift ride across the warehouse centreline.

SLV is consistently shorted used as a delivery flywheel and rolled over by the same actors .Wouldn’t touch it with a  bargepole.

Best

A

end

The London’s Telegraph also covers the story on”shrinkflation” which has hit 2500 consumer products over the past 5 yrs

(courtesy Morley/GATA)

‘Shrinkflation’ has hit over 2,500 consumer products over the past five years

 Section: 

By Katie Morley
The Telegraph, London
Monday, July 24, 2017

More than 2,500 consumer products have shrunk in size over the past five years despite being sold for the same price, official data shows.

According to the Office for National Statistics, the so-called “shrinkflation” effect has hit items ranging from chocolate bars, toilet rolls, coffee, and fruit juice. But most of the items getting smaller were food products.

Over the same period 614 products had become larger. …

… For the remainder of the report:

http://www.telegraph.co.uk/news/2017/07/24/shrinkflation-has-hit-2500-co

END

This is also not good for mining companies: the Philippines Duterte warns miners that he is going to tax them to death over environmental concerns.  The Philippines is the worlds largest nickel ore producer as well as large gold/copper mining

(courtesy DelaCruz/Reuters)

Philippines’ Duterte warns miners: ‘I will tax you to death’

 Section: 

… For the remainder of the report:
By Enrico Dela Cruz
Reuters
Monday, July 24, 2017

MANILA — Philippine President Rodrigo Duterte said today he wanted to stop exporting mineral resources and might close the mining sector completely and tax miners “to death” if damage to the environment persisted.

“The protection of the environment must be made a priority ahead of mining and all other activities that adversely affect one way or another,” Duterte said in his State of the Nation address, his second since assuming power in June last year. “This policy is non-negotiable.”

The Philippines is the world’s biggest supplier of nickel ore and also among the top producers of copper and gold. …

http://www.reuters.com/article/us-philippines-duterte-mining-idUSKBN1A90…

END

Cryptocurrencies are crashing again

(courtesy zero hedge)

Cryptocurrencies Are Crashing Again

The largest cryptocurrencies are under presure again today – Bitcoin, Ethereum down around 10% – as it seems some anxiety remains ahead of the August 1st scaling decision deadline, chatter about Russian Bitcoin viruses, and a new report from BofA has raised more questions than answers about the future of virtual currencies.

On average major crytos are down around 10%…

With Bitcoin back near $2500…

And Ethereum testing $200 support…

No obvious catalyst but several notes going around include… Concerns over a Bitcoin Virus infecting Russian devices… (via CoinTelegraph)

Russia’s chief presidential advisor on the Internet has stated a Bitcoin mining virus has infected up to 30 percent of Russian computers.

Speaking in interviews with RNS and RBC, Herman Klimenko said that although infection rates varied by region and device, it involved at least 20 percent of machines.

“In regions with lower bandwidth instances are reduced, but we’re looking at 20 to 30 percent of devices being infected – iPhones and Macs are less prone,” he commented.

Elliott-wave guru Prechter is predicting a bear market for Bitcoin.. (via CoinTelegraph)

Market analyst Elliott Prechter has projected that digital currencies, particularly Bitcoin, will experience a sharp decline in the near future. Prechter has correctly forecast the surge of Bitcoin in 2010 when the cryptocurrency’s price was just six cents.

In his July 13, 2017 report, Prechter claimed that the Elliott wave pattern, optimistic psychology, and Blockchain bottlenecks will lead to the collapse of the digital currency market.

“The price activity and manic sentiment that led to present prices have dwarfed even the Tulip mania of nearly 400 years ago. The success of Bitcoin has spawned 800-plus clones (altcoins) and counting, most of which are high-tech, pump-and-dump schemes. Nevertheless, investors have eagerly bid them up.”

Prechter, meanwhile, has correctly predicted Bitcoin’s rise when it was just priced at six cents in September 2010. Elliott Prechter, however, said that the excitement about Bitcoin surpasses the tulip bulb mania in The Netherlands in the early 1600s.

“A mania can be both a mania and a revolution at the same time.”

and a big BofA report suggests to sustain a virtuous cycle of rising liquidity & falling vol bitcoin has to gain acceptance as collateral, an unlikely event

Is bitcoin a currency? A commodity? Neither? A proper store of value like the EUR, T-bills, or gold is measured by 3 factors: safety, liquidity, and return. Diversification is a plus. Bitcoin remains very volatile. But it has experienced a surge in liquidity in the last six months, surpassing $2bn a day. Moreover, bitcoin is uncorrelated to any financial asset, commodity, or currency we study in this note. The flipside of extreme diversification is that there is no way to explain let alone predict returns. Could bitcoin see a virtuous cycle of increased liquidity, lower volatility, attractive returns, and wider acceptance? Possibly, if regulated financial institutions move to allow bitcoin as pledgeable collateral. However, large inherent risks to digital tokens such as fraud, hacking, theft, new protocol adoption, limited acceptance, and that it is not legal tender many places in the world make it an unlikely development.

A wide array of risks obscure the future of cryptocurrencies

When examining the safety of any asset, volatility is not the only source of concern. In the case of bitcoin and other virtual tokens, worries are magnified given that it is not legal tender in many places in the world or regulated by any government bodies. In fact, decentralization is central to bitcoin. As such, risks like fraud, hacking, and outright theft have plagued the cryptocurrency world in recent years. In particular, the surge in initial coin offerings seems hard to justify and creates a risk of fragmentation in the market. Confidence could suffer if many of these offerings turn out to be outright scams to circumvent investor protection regulations. After all, it is hard to “know your client” if a bitcoin transaction happens through an exchange in an obscure jurisdiction. Other issues more specific to the functioning of cryptocurrencies, such as finding an agreement regarding the adoption of certain protocols, are also worth mentioning. For example, should bitcoin split into two digital tokens because miners cannot find common ground, a collapse in confidence and value could follow. Lastly, it is worth noting that cryptocurrency transactions are taxable in many jurisdictions, presenting additional challenges to users that are unfamiliar with the fiscal implications of using bitcoin.

A key step for bitcoin would be to become pledgeable collateral

Still, bitcoin and ethereum have delivered impressive returns so far as fiat currency flowed into these digital tokens. Is it realistic to assume cryptocurrencies will continue to appreciate over time? The dollar price of gold has appreciated over centuries in line with inflation, but some periods have experienced much faster gold price appreciation than others. Moreover, periods of high real interest rates have been particularly damaging for gold returns in the past. In our view, cryptocurrency returns will mostly depend on the faith placed by individuals, corporations, and financial institutions on this emerging technology. As discussed earlier, there are large inherent risks to digital tokens such as fraud, hacking, outright theft, new protocol adoption, limited acceptance, and that it is not legal tender in many places in the world. Moreover, a crucial hurdle remains. Most regulated financial institutions allow their clients to borrow against financial or physical assets, but we are not aware of any major institution that takes cryptocurrency as collateral at the moment. Thus, in our view, a key step for bitcoin would be for it to become pledgeable collateral.

And finally anxiety remains ahead of the fork.

end

China, a huge producer of silver, decided it was important to import huge amounts as well.  In June:  10.6 million oz.  For the first 6 months:  63.7 million oz.  They are on target for about 130 million oz for the year or 18% of annual global production.

this is a huge story!

(courtesy China’s Scrap Register)

China H1 2017 Silver imports climb to highest level in nearly seven years

CHINA July 25 2017 11:22 AM

SHANGHAI (Scrap Register): China’s silver imports have been robust so far this year, pointed out Commerzbank.

Rising demand for silver in two of the world’s largest consumers, China and India, since the beginning of this year is seen raising hopes of a better price performance for the metal.

A precious metal and industrial metal at once, silver generally follows the footsteps of its more sought-after sibling, gold.

The first half of this year has been no different. In the initial months, silver prices rose two per cent on strong investment demand and in line with gold.

Analysts at Commerzbank cited a data from customs authorities showing that China imported around 330 tons of silver in June, which is up 34% from last June.

The figures show that 1,984 tons of silver were imported in the first half year – 37% more than in the same period last year and the highest first-half-year silver imports in seven years, Commerzbank added.

http://www.scrapregister.com/news/42952/china-h1- 2017-silver-imports-climb-to-highest-level-in-nearly-seven- years

end

Wow!! Turkey has imported a monstrous 174 tonnes of gold in the first half of the year. If they continue on this pace they will import 400 tonnes in a year. In the years 2013-2015 Turkey bought on behalf of Iran.  The tonnage of gold imports is for their own use either for sovereign or domestic

(courtesy Sharp’s Pixley)

LAWRIE WILLIAMS: Turkey gold imports still riding very high

By our reckoning, Turkey has imported some 174 tonnes of gold in the first half of the current year. This reflects a degree of political turmoil both before and after the April referendum, which gave President Erdogan sweeping additional powers, but also Erdogan’s advice late last year that citizens should buy gold or Turkish lira rather than dollars in converting foreign currency or as a hedge against future uncertainties. It looks as though his advice has been well heeded as far as gold is concerned.

This year’s imports to date have already exceeded the 106 tonnes imported in full year 2016, which in turn was more than double the amount imported in 2015. Thus this year’s figures represent an enormous increase on prior years’ figures and probably puts Turkey currently in place as the world’s third largest net importer of gold, after China and India. Turkey’s month by month gold imports for the past five years are shown in the chart below from www.goldchartsrus.com .

While Turkey is a significant consumer of gold in its own right it has also acted as a conduit for gold going into nations like Iran where economic sanctions have restricted direct imports in the past. The nation is also currently embroiled in the Qatar crisis which could bring it into direct conflict with another Middle Eastern powerhouse – Saudi Arabia – and it is hugely critical of U.S. support for Kurdish forces helping the latter in the fight against Islamic State. It sees the strengthening of the Kurdish militias as a major threat to the region as the Kurds have an agenda to create a Kurdish state which would incorporate ethnic Kurdish areas of Turkey, Syria and Iraq.

With Chinese gold demand remaining reasonably strong and Indian demand hugely up in the first half of the year ahead of the new GST imposition, gold flows from the West to the Middle East and South and East Asia have been very strong in the first half of the year and have probably accounted for just about all of the world’s new mined gold, which puts physical metal in short supply in the west. Gold continues to be taken out of the world’s largest gold ETF, GLD in the U.S., but it looks as though this has immediately moved eastwards and has so far had little impact on the gold price.

Analysts are awaiting any signals which may come out of this month’s U.S. Fed meeting which takes place over the next 2 days. While this is not expected to recommend a further interest rate increase, the minutes of the deliberations will be pored over for signals of the Fed’s current thinking on rate rises and balance sheet reductions.

25 Jul 2017

https://www.sharpspixley.com/articles/lawr ie-williams-turkey-gold-imports-still-riding-very- high_269990.html

-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  WEAKER 6.7513(DEVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT   6.7512/ Shanghai bourse CLOSED DOWN 6.91 POINTS OR 0.21%  / HANG SANG CLOSED UP 5.22 POINTS OR 0.02% 

2. Nikkei closed DOWN 20.47 POINTS OR .10%    /USA: YEN RISES TO 111.40

3. Europe stocks OPENED IN THE GREEN        ( /USA dollar index FALLS TO  93.95/Euro UP to 1.1657

3b Japan 10 year bond yield: RISES  TO  +.076%/ GOVERNMENT INTERVENTION    !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 114.34/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD FINALLY IN THE POSITIVE/BANK OF JAPAN LOSING CONTROL OF THEIR YIELD CURVE AS THEY PURCHASE ALL BONDS TO GET TO ZERO RATE!!

3c Nikkei now JUST BELOW 17,000

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

3e WTI::  47.04 and Brent: 49.34

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO  +.522%/Italian 10 yr bond yield UP  to 2.059%    

3j Greek 10 year bond yield RISES to  : 5.286???  

3k Gold at $1250.00  silver at:16.31 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble UP 1/100 in  roubles/dollar) 60.01-

3m oil into the 47 dollar handle for WTI and 49 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.40 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  0.9481 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1053 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  +0.522%

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 2.2747% early this morning. Thirty year rate  at 2.8521% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

S&P Futures Bounce As VIX Hammered, Europe “Euphoric”

 

After sliding to 3 month lows on “car cartel” concerns yesterday, European stocks have rebounded after three days of declines, while oil extended gains after Saudi export cuts, with Brent rising above $49 and WTI just shy of $47. Asian stocks fell while S&P futures rose 0.2% to 2,473, putting yesterday’s GOOGL drop on plunging Costs-Per-Click in the rearview mirror.

Helping today’s episode of global, pervasive complacency is the VIX which was hammered early by 3% in early Tuesday trading, down to 9.17. As previewed on Monday, the dollar rebounded after dropping to its lowest since August as investors await Wednesday’s U.S. interest rate decision; the greenback strength sent Gold lower for the first time in four days.

US TSYs sell-off in relatively heavy volume after a large futures block trade in London hours and Bunds decline as strong German IFO data weighs. The dollar rallied from overnight low against G-10 and UST move helps USD/JPY trade through yesterday’s high.

Most European industry sectors rose as the Stoxx Europe 600 Index rose 0.5%, with banks leading the way as German 2s10s curve steepens and ahead of bank earnings later this week, helping the DAX regain some of the recently lost ground, although as the chart below shows it has a way to go before catching up with the MSCI World Stocks index which remains just shy of all time highs.

Emerging-market equities fell after gaining in 10 of the past 11 days, on the back The greenback strengthened with the euro, which flirted once again with its highest level in two years after German business confidence data beat expectations. Saudi Arabia’s promise to further cut crude exports pushed Brent to under $1 of $50. Overnight, the Euro got a boost after ECB’s Mersch stated monetary accommodation is still needed and ongoing expansion in the euro area offers confidence but stated that “risks to the euro area growth may be to the upside” and that headline inflation is dampened by weak energy prices, but added that underlying inflation is to rise gradually.

The Euro got a boost as German business morale hit new high, with firms “euphoric” according to the Munich based Ifo economic institute that compiles the data from 7,000 of them in Europe’s largest economy. “Hardly anything seems to be able to hit the German economy,” Ifo economist Klaus Wohlrabe added, saying German business was experienced in managing the impact of exchange rate moves following the euro’s sharp rise.

The Australian dollar rose less than 0.1 percent after erasing an earlier decline. Attention turns to two key events on Wednesday: June quarterly inflation data and a speech on the labor market and monetary policy from Reserve Bank of Australia Governor Philip Lowe. Japan’s Topix index lost 0.3 percent. Australia’s S&P/ASX 200 Index added 0.7 percent. South Korea’s Kospi index retreated 0.5 percent.  The Hang Seng Index was little changed while the Shanghai Composite Index slipped 0.2 percent. Strong rally in base metals, led by copper with most noting potential demand growth from China; U.K. mining stocks supported through the equity open.

The Fed starts a two-day meeting later in the day to discuss its monetary stance and the timing of its long-awaited balance sheet reduction, a plan most likely to be detailed in September. “Any major policy announcement is more likely when Chair Janet Yellen faces the press following the September meeting,” J&E Davy Holdings Ltd. analyst David McNamara wrote in a note. “For now the Fed remain on track for a couple more rate hikes at least this year, with most members believing the recent softness in inflation to be temporary.”

The political troubles of President Donald Trump’s White House continue to mount, with investigations into his pre-election links to Russia deepening. There is also growing anxiety about the United States hitting another debt ceiling in October with few moves to potentially offset that.

“We may seem some consolidation here from the dollar but fundamentally our bearish view on it remains,” UniCredit Global Head of FX Strategy Vasileios Gkionakis told Reuters. “What the Fed says tomorrow is the million dollar question… but the risk is that they sound a bit more cautious after the fourth consecutive downside surprise in inflation.”

Greek government borrowing costs meanwhile hovered near their lowest level since 2010, as the country sought to sell its first longer-dated bond in three years. Some five years since European Central Bank Mario Draghi pledged to do “whatever it takes” to preserve the euro, the debt sale by the euro zone’s weakest economy is the clearest sign yet of the bloc’s recovery from a crippling debt crisis.

Elsewhere in rates, the yield on 10-year Treasuries increased two basis points to 2.27 percent, the highest in more than a week. Germany’s 10-year yield rose one basis point to 0.52 percent. Britain’s 10-year yield also added one basis point to 1.194 percent. France’s 10-year yield climbed one basis point to 0.763 percent, the first advance in more than a week. The gap between Italian and German 10-year bond yields narrowed to its smallest since December 2016 at 153 basis points.

Companies scheduled to report earnings include AT&T, Amgen and 3M. Economic data include conference board consumer confidence.

Market Snapshot

  • S&P 500 futures up 0.1% to 2,470.50
  • STOXX Europe 600 up 0.5% to 381.00
  • MSCI Asia Pacific down 0.2% to 159.17
  • MSCI Asia Pacific ex-Japan down 0.09% to 526.11
  • Nikkei down 0.1% to 19,955.20
  • Topix down 0.3% to 1,617.07
  • Hang Seng Index up 0.02% to 26,852.05
  • Shanghai Composite down 0.2% to 3,243.69
  • Sensex up 0.03% to 32,257.09
  • Australia S&P/ASX 200 up 0.7% to 5,726.60
  • Kospi down 0.5% to 2,439.90
  • German 10Y yield rose 0.6 bps to 0.514%
  • Euro up 0.09% to 1.1653 per US$
  • Brent Futures up 1% to $49.06/bbl
  • Italian 10Y yield fell 1.7 bps to 1.763%
  • Spanish 10Y yield fell 0.2 bps to 1.483%
  • Brent futures up 1% to $49.06/bbl
  • Gold spot down 0.2% to $1,252.28
  • U.S. dollar Index unchanged at 93.98

Top Overnight News

  • McCain Returns to D.C. for Health Fight; Alphabet Falls on Rising Traffic Costs; Copper Jumps, Leading Industrial Metals
  • Senate Republican leaders and President Donald Trump appear determined to begin a floor debate Tuesday on repealing Obamacare in a highly unorthodox way — without lawmakers knowing what they’ll be voting on or where it might end up
  • The U.S. House is poised to vote on a bill to strengthen sanctions against Russia and prevent President Donald Trump from unilaterally lifting penalties, after the measure was delayed by procedural concerns and objections from energy companies
  • Michael Kors Holdings Ltd. agreed to buy Jimmy Choo Plc for about 896 million pounds ($1.2 billion), as the maker of handbags popular with the commuter set seeks to restore lost luster by adding “Sex and the City” stilettos
  • Greece has fired the starting gun on its first issue of new bonds since 2014, testing whether investors will back its recovery from a debt crisis that forced it to seek multiple international bailouts
  • Carlyle Group LP is seeking $15 billion for its next U.S. fund for what could be the largest pool ever focused on buyouts in the region
  • Hedge funds are still holding large bearish bets against oil and OPEC, yet out in the real world traders and refiners buying and selling actual barrels say it’s starting to look somewhat more bullish
  • German business climate improved for a sixth month, hitting a record high in July
  • House Poised to Add Russia Sanctions With Curbs on Trump’s Power
  • Alphabet Falls on Concern About Rising Google Traffic Costs
  • Michael Kors to Buy Jimmy Choo for About $1.2 Billion
  • German Business Climate Hits Record as Economy Proves Robust
  • Saudi Alliance Says Qatar’s Action Not Enough to End Crisis
  • Elon Musk Says Zuckerberg’s Understanding of AI Is ‘Limited’
  • EU Asks Google, Facebook, Twitter to Make More Changes to Terms
  • Copper Heads for Highest Close Since ‘15 as Rally Picks Up Steam
  • Nasdaq Agrees to Acquire Sybentix to Beef Up Trade Surveillance
  • Wal-Mart and JD Deepen Chinese Logistics, Customer Integration
  • Beximco Pharma Gets FDA Approval for Methocarbamol
  • Quants Unlock Iron Ore’s Secrets as BNP Says Yuan Is the Key
  • Government Shutdown Odds Grow With GOP Border Wall Funding Bill

Asian markets maintained the mixed tone seen on Wall Street where earnings remained in focus and tech outperformed, which pushed the Nasdaq to fresh record highs before a continued drop in Alphabet’s cost-per¬clicks resulted to an after-market pullback in futures. ASX 200 (+0.9%) outperformed as broad-based gains buoyed the index, while Nikkei 225 (-0.1%) traded indecisive and at the mercy of JPY price action. Shanghai Comp. (-0.1%) and Hang Seng (Unch.) were choppy as concerns of tighter regulatory scrutiny persisted, and although the PBoC reduced its liquidity operation by more than half, this was still a respectable CNY 140bln injection. 10yr JGBs were flat amid an inconclusive risk tone in the region, while today’s 40yr auction also failed to spur demand despite the b/c at its highest since February 2015, as this was also accompanied by a decline in lowest accepted prices. BoJ meeting minutes for June 15th – 16th meeting state that members agreed policy needs to be keep easy as price target is still distant. Highlights:

  • Financial conditions were highly accommodative
  • Inflation expectations remain in a weakening phase
  • Overseas economies continue to grow at a moderate pace overall
  • Japan’s economy has been turning towards a moderate expansion
  • One member said BoJ should set asset purchases as target

ECB’s Mersch stated monetary accommodation is still needed and ongoing expansion in the euro area offers confidence. Mersch also stated that risks to the euro area growth may be to the upside and that headline inflation is dampened by weak energy prices, but added that underlying inflation is to rise gradually.

Top Asia News

  • Ishiba Overtakes Abe as Top Choice for Japan Premier in Poll
  • Indonesia Flags Risk of Forest Fires That Triggered 2015 Haze
  • SoftBank Is Said to Mull Buying Stake in Bharti Airtel: CNBC
  • HNA Is Said to Have Parked Shareholdings With Mystery Investor

European bourses trade green across the board, financials out-perform, likely a carry on to a strong Q2 earnings start for the banking stocks. German Ifo was the key piece of data for the morning, where beats were seen across the report. Despite earnings, stock specific news has largely been dictated by takeover talk, with Jimmy Choo confirming an offer from Michael Kors, being followed by reports that Shell and Softbank are among potential suitors considering bidding for renewable energy firm Equis for potentially USD 5bn. Fixed income markets were led by German paper in early trade, as a large sell order was followed by the aforementioned strong German Ifo data. BTP’s have outperformed, after hitting a new high at 137.17, with the Italian yields still managing to hold above 2.00%.

Top European News

  • Ifo July German Business Confidence Index at 116.0, Est. 114.9
  • UPM Falls, Pulling Down Stora Enso; DNB Sees Softness in Paper
  • Kumba Resumes Dividend as Earnings Jump After Iron Ore Recovery
  • Intertrust Shares Slump as Company Cuts Full-Year Margin Target

In currencies, EUR/USD saw a slight bid following the Ifo beat, marginally so, continuing to trade in the day’s range, with similar price action seen in EUR/GBP, with the pair quickly retracing the move. The Kiwi saw some brief, rare selling pressure, amid news that New Zealand Officials stated that a contagious disease has been found in 14 cattle. With New Zealand being one of the top five largest exporters of beef, this weighed on the Kiwi dollar. The volatility in NZD led into early European trade, and despite NZD/USD bouncing ahead of 0.74, a Kiwi recovery was not seen in AUD/NZD, trading though overnight highs in the European session. A 1.07 test in AUD/NZD is possible, as the week’s high is set to act as intra-day resistance. The Japanese risk event overnight was the BoJ meeting minutes for June 15th — 16th meeting; the highlight stating that members agreed policy needs to be keep easy as price target is still distant. Despite a modest uptick following the release, and some buying following, the 11.30/50 area continues to act as intraday resistance, and following the rejection of this level once again, the market has been pushed to look to test 110.60 lows.

In commodities, energy traders will await the API report following the wall street closing bell this evening, with Oil markets trading subdued following the OPEC led volatility yesterday. The precious metals trade marginally lower, as mild money flow into equities has been clear, further weighed upon by strong numbers out of Germany. Gold does trade at the top of a July uptrend however, slowing down around the 1257.50 area (23 June High).

Taking a look now at the day ahead, we will see house price data for May in the form of the FHFA House Price Index (+0.5% mom expected) and the S&P House Price indices. We will also get the July readings for the conference board consumer confidence indicator (116.5 expected; 118.9 previous) and the Richmond Fed Manufacturing Index (7 expected; 7 previous. Away from the data, the US secretary of Commerce will address the economic club of Washington and BOE Haldane speaks. Notable US companies reporting include: AMD, McDonalds, 3M, Texas instruments, Caterpillar, AT&T and GM.

US Event Calendar

  • 9am: FHFA House Price Index MoM, est. 0.5%, prior 0.7%
  • 9am: S&P CoreLogic CS 20-City MoM SA, est. 0.3%, prior 0.28%; CS 20-City YoY NSA, est. 5.75%, prior 5.67%
  • 10am: Conf. Board Consumer Confidence, est. 116.5, prior 118.9; Present Situation, prior 146.3; Expectations, prior 100.6
  • 10am: Richmond Fed Manufact. Index, est. 7, prior 7

DB’s Jim Reid concludes the overnight wrap

There wasn’t much heat in markets yesterday and we saw a day of mixed sentiment across broader European and US equity markets although the VIX did hit an intra day low of 9.26 (closed at 9.43) in late trading which would have been the all time low. The NASDAQ (+0.4%) hit fresh all time highs. If there was a story to keep on your radar it’s that yesterday saw the US T-bill curve invert after a weak 3m auction. There’s chatter that autumnal debt ceiling fears are creating some worries.

Back to equities, in Europe the STOXX dipped by -0.2% on the day which can be traced to some weaker PMI data out yesterday (discussed further below). However the market dynamics were more uneven across regions: the DAX (-0.3%) and FTSE (-1.0%) both posted losses while the CAC (+0.2%) and FTSE MIB (+0.6%) rose on the day. To be fair the lows of the day were early in the European session and the rest of the day was spent slowly recovering. Most sectors posted a loss though with the Automobile sector as the worst performer at -1.2%, while the STOXX Banks index was the top performer as it gained +0.8% on the day ahead of a number reporting this week. Over in the US the S&P 500 (-0.1%) and Dow (-0.3%) were both down. Nearly all S&P 500 sectors were in the red although financials were the best performer and rose by +0.3% on the day, followed by IT (+0.25%).

This morning in Asia, markets have been quiet and slightly on the softer side with the Nikkei (-0.1%), Kospi (-0.1%), Hang Seng (flat) and the 3 Chinese bourses down around 0.2-0.3%. Alphabet shares fell as much as -3.5% after hours last night after a disappointing earnings report.

On the US political links with Russia, during a 2.5 hours Q&A with Senate investigators, White House advisor Kushner denied he “…colluded with Russia, nor do I know of anyone else in the campaign who did so..”. That said, he also confirmed 4 contacts with Russians during the presidential campaign, but the “encounters were unmemorable”.

The ongoing saga to repeal Obamacare also continues. Trump remains defiant, warning Senate Republicans that anyone who votes not to take up debate of the bill today is saying they are “fine with the Obamacare nightmare.” Realistically, Republicans have been struggling to find a replacement plan that can attract >50 votes in the Senate, even though the party has a 52-48 majority. Nonetheless, Senator Cornyn appears to be fighting to the end, noting yesterday that “if for some reason we aren’t able to muster the votes tomorrow…it’s not the end of it….” For now, we wait and watch.

Back to yesterday and over in government bond markets, we saw the German Bund curve unchanged to slightly lower across all maturity points (2Y: -2bps; 10Y: unch). OATs (2Y: -1bp; 10Y: unch) and BTPs (10Y:  -2bps) also saw yields broadly flat to slightly lower across maturities, while Gilts saw yields rise across all points of the curve (2Y: +1bp; 10Y: +1bp). Over in the US Treasury yields were higher across all maturity points (2Y: +2bps; 10Y: +2bp).

Over in FX markets, the US dollar index posted a rare recent gain (+0.2%) following two weeks where it has cumulatively dropped by over -2%. Sterling was also up on the day by +0.2%, while the Euro saw its rally pause for breath as it dropped by -0.2% on the day. Over in commodity markets crude oil was up on the day (WTI +1.4%) although other segments of the energy sector posted some losses. Oil was helped by Saudi Arabia pledging big export cuts and also Halliburton suggesting the shale boom was slowing. The metals sector saw precious metals flat to marginally lower (Gold: +0.0%; Silver -0.1%) while industrial metals were a mixed bag with copper gaining (+0.8%) while aluminium was lower (-0.1%).

We also got a look at the latest CSPP numbers out yesterday. Net CSPP purchases averaged €145mn/day last week, well below the €361mn average since the program started. This was a very slow CSPP week, even  by last summer’s standards (only the Christmas break lull is comparable). With PSPP purchases at €12.1bn, the weekly CSPP/PSPP flow ratio dropped to 6% which is less than half of the historical average. However much of this may be noise due to the summer lull and it remains difficult to conclude much from these dynamics. Staying with credit, Michal Jezek on my team published a note yesterday on his views on credit curves in Europe. The piece notes that while credit curves are expectedly steep given the current macro environment and sound corporate fundamentals, future changes will depend on how good a macro outlook is being priced in already and what the contribution of ECB QE technicals has been. Given our views about the likely combination of macro fundamentals and market technicals going forward, we maintain a flattening bias. We also highlight key curve trade strategies around these views.

Taking a look at yesterday’s calendar, the key numbers in Europe were the manufacturing, services and composite PMIs for France, Germany and the Eurozone. The Euro Area composite PMI disappointed as it pulled back more than expected (55.8 vs. 56.2 expected; 56.3 previous). As the services PMI reading was steady on the month as expected (55.4 vs. 55.4 expected; 55.4 previous), the fall in the composite can be largely attributed to the unexpectedly large drop in the manufacturing PMI (56.8 vs. 57.2 expected; 57.4 previous). France and Germany also saw their composite PMIs disappoint after dropping to 55.7 (vs. 56.4 expected; 56.6 previous) and 55.1 (vs. 56.3 expected; 56.4 previous) respectively. However France actually saw its manufacturing PMI unexpectedly rise to 55.4 (vs. 54.6 expected; 54.8 previous) while the drop in the composite was largely due to the fall in the services PMI (55.9 vs. 56.7 expected; 56.9 previous). Germany on the other hand saw both its manufacturing (58.3 vs. 59.2 expected; 59.6 previous) and services (53.5 vs. 54.3 expected; 54.0 previous) disappoint.

Over in the US we also got the Markit PMI numbers, where the composite ticked up to 54.2 (53.0 previous) primarily off an unexpectedly large gain in the manufacturing PMI to 53.2 (vs. 52.3 expected; 52.0 previous) as services remained steady (as expected) on the month at 54.2. Away from PMIs the US also saw existing home sales data for June that came fell more than expected to 5.52m (vs. 5.57m expected; 5.62m previous).

Taking a look now at the day ahead. In Europe we will open with various July confidence indicators out of France, which will be followed by the July IFO business climate (114.9 expected) and expectations (106.5 expected) readings for Germany. Over in the US we will see house price data for May in the form of the FHFA House Price Index (+0.5% mom expected) and the S&P House Price indices. Thereafter we will also get the July readings for the conference board consumer confidence indicator (116.5 expected; 118.9 previous) and the Richmond Fed Manufacturing Index (7 expected; 7 previous).

Away from the data, the US secretary of Commerce will address the economic club of Washington and BOE Haldane speaks. Notable US companies reporting include: AMD, McDonalds, 3M, Texas instruments, Caterpillar, AT&T and GM.

 END

3. ASIAN AFFAIRS

i)Late MONDAY night/TUESDAY morning: Shanghai closed DOWN 6.91 POINTS OR 0.21%   / /Hang Sang CLOSED UP 5.22 POINTS OR 0.02% The Nikkei closed DOWN 20.47 POINTS OR .10%/Australia’s all ordinaires CLOSED UP 0.65%/Chinese yuan (ONSHORE) closed DOWN at 6.7513/Oil UP to 47.04 dollars per barrel for WTI and 49.34 for Brent. Stocks in Europe OPENED IN THE GREEN,, Offshore yuan trades  6.7512 yuan to the dollar vs 6.7513 for onshore yuan. NOW THE OFFSHORE IS WEAKER  TO THE ONSHORE YUAN/ ONSHORE YUAN  WEAKER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS  WEAKER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/CHINA

China is wasting no time as they plan for an eventual attack by the USA.  Their plan is to protect the nuclear sites and as well as protect the norther border with China.

(courtesy zero hedge)

b) REPORT ON JAPAN

end

c) REPORT ON CHINA

North Korea is not the only border that China is having some conflict.  Today we see China and India having a spat

(courtesy zero hedge)

China Adds Troops To India Border, Will Defend Sovereignty At “Whatever Cost”

With attention focused on geopolitical tensions involving North Korea, the world may have missed that another, potentially more troubling conflict is brewing on the border between India and China, where as we reported over the weekend, China threatened with military action after a “blatant sovereignty infringement.” Since then tensions have grown, and on Monday China warned on Monday that it will step up its troop deployment in a border dispute with India, vowing to defend its sovereignty at “whatever cost”.

The latest standoff started more than a month ago after Chinese troops started building a road on a remote plateau, which is disputed by China and Bhutan.  Indian troops countered by moving to the flashpoint zone to halt the work, with China accusing them of violating its territorial sovereignty and calling for their immediate withdrawal.

The crossing of the mutually recognised national borders on the part of India… is a serious violation of China’s territory and runs against the international law,” Chinese defence ministry spokesman Wu Qian told a press conference quoted by AFP, adding that “the determination and the willingness and the resolve of China to defend its sovereignty is indomitable, and it will safeguard its sovereignty and security interests at whatever cost.”

He also said that “border troops have taken emergency response measures in the area and will further step up deployment and trainings in response to the situation,” without giving any details about the deployment.

Meanwhile, showing no signs that either nation is willing to relent, India and China both said they have foreign support for their positions on the conflict. As AFP adds, India-ally Bhutan has said construction of the road is “a direct violation” of agreements with China. Bhutan and China do not have diplomatic relations.

India, which fought a war with China in 1962 over a separate part of the disputed Himalayan border, supports Bhutan’s claim, although India should “not have any illusions” that its position will prevail, Wu said.

“The history of the PLA (People’s Liberation Army) over the past 90 years has proven that our resolve to safeguard (China’s) sovereignty and territory… are indomitable,” he said.  “It is difficult to shake the PLA, even more difficult than to shake a mountain.”

India and China have vied for strategic influence in South Asia, a key component of China’s “One Belt One Road” initiative, with Beijing ploughing large sums into infrastructure projects in Nepal, Sri Lanka and Bangladesh. Bhutan has remained closely allied to India.

* * *

Finally, courtesy of Bloomberg here is a primer on the ongoing conflict between the world’s 2 most populous nations:

China and India, two nuclear-armed powers with a combined population of 2.7 billion, have been in an “eyeball-to-eyeball” military stand-off over territory in Bhutan, a kingdom in a remote area of the Himalayas, since mid-June. The flare-up, one of the most serious since China won a border war in 1962, comes as the two rising powers jostle for regional influence. The current dispute is near a three-way junction between Bhutan, China’s Tibet and India’s Sikkim.

1. Why is the area important?

All land-based military and commercial traffic between India’s northeastern provinces and the rest of the country travels through the narrow strip of land known as the Siliguri Corridor — also sometimes referred to as the Chicken’s neck. The Doklam Plateau — where troops are currently facing off — overlooks the corridor, which India defense strategists fear could be vulnerable to Chinese attack in case of a conflict.

2. How far back does this dispute go?

An 1890 convention between Britain and China is supposed to determine the location of the border near the Siliguri Corridor. However it contains a contradiction that allows each country to claim support for its position, said Taylor Fravel, who studies border disputes at the Massachusetts Institute of Technology. India contends the border is at Batang La, while China argues it is at Mount Gimpochi, three miles to the south. If China is correct, it would gain access to the Doklam Plateau.

3. What’s the status of ties between the three countries?

Bhutan has had close relations with India since 1949 when it agreed to a Friendship Treaty under which India would “guide” Bhutan’s foreign policy. This was updated in 2007 to remove the guidance provision. Both agreed that neither government would allow its territory to be used for activities harmful to the national security of the other. Bhutan doesn’t have diplomatic ties with China, though the two sides routinely holds talks aimed at resolving seven disputed border areas.

4. What is behind the latest flare-up?

All three sides agree that a People’s Liberation Army road-building team entered the Doklam Plateau and started construction. India said that its troops entered Bhutan’s territory “in coordination” with Bhutanese authorities to stop the Chinese road builders. There are now about 3,000 troops on each side on the plateau, according to the Times of India. It is the first time that Indian troops have confronted China from a third country.

5. Is it all about a road?

Bhutan’s foreign ministry says the road is being constructed on territory subject to a border dispute, and that the two sides in 1988 and 1998 agreed to refrain from changing the status quo of the boundary. China contends that it is operating in its own territory and cites the 1890 convention. The removal of Indian troops from the area is a prerequisite for “meaningful dialogue” to resolve the issue, China’s foreign ministry says. India cites a 2012 agreement that indicates the boundary points are yet to be finalized and says China’s actions could have serious implications for India’s security.

6. Is this stand-off more sensitive than others?

All this is taking place during a period of tense relations between two rivals competing for influence in the broader South Asia region. Bilateral relations were frosty even before the current border dispute began because New Delhi objects to President Xi Jinping’s “Belt and Road” trade-and-infrastructure initiative. Part of it traverses the Pakistan-administered part of disputed Kashmir, which India claims as its sovereign territory. China’s Global Times, raising Kashmir, said “under India’s logic, if the Pakistani government requests, a third country’s army can enter the area disputed by India and Pakistan.”

7. Will it lead to war as we saw in 1962?

Most observers think not. Conflict wouldn’t serve either country’s interest. India, with an election in 2019, would risk losing an economically debilitating conflict with a much more powerful foe. China would risk its efforts to present itself as an international leader, filling the shoes of an isolationist U.S.

8. Without war, what other solution is possible?

With nationalists in both countries stoking tensions, neither side can afford to be seen standing down. Most analysts predict a protracted stand-off before the two countries figure out a diplomatic solution. But it won’t be easy. Neither side wants to be the first to withdraw troops.

end

4. EUROPEAN AFFAIRS

At the current 60 billion euros of QE purchases, the ECB will run out of German bunds to buy by late 2018.  If they reduce purchases down to 40 billion euros, then they will have enough until Jan 2019..

(courtesy zerohedge)

When Will The ECB Run Out Of German Bunds To Buy: Here Is The Math

Speaking earlier on Monday, ECB governing council member Ewald Nowotny said that despite growing market concerns, the ECB “sees no need to set a timetable to end bond buying” adding that “the question is not when but how to continue. That will depend on the economic projections for 2018, which we will have in the fall […] It’s not about an abrupt halt, but about registering that we are no longer confronted by such an acute crisis as we were when we implemented the measures. I consider it wise to step off the gas slowly.”

In other words, just like all other central bank pronouncements, this too was meant to instill confidence in the economy. There is just one problem: the question which Nowotny tried so hard to ignore is precisely the one that matters as we most recently explained in “Both ECB And BOJ Are Just Months Away From Running Out Of Bonds To Buy.” The question is even more relevant considering it has been the ECB’s purchases of corporate (and government) bonds that has led to a record drop in European credit spreads as we showed yesterday.

But back to the math, because apart from the macro economic rationale for tapering the most important, if not only limiting factor which will result in a moderate tapering of the QE programme starting in the coming months is the lack of eligible government bonds, Bunds in particular, for central bank purchases.

As a reminder, the current eligibility criteria (which admittedly can be changed) for government bonds is that they should be euro denominated, have a remaining maturity of 1Y to 31Y and an issue and issuer limit of 33% applies. The issuer limit is different from the issue limit as it takes into account central banks’ holdings of government bonds outside of the asset purchase program as well.

Using ECB data, one can estimate the remaining eligible universe taking into account the reinvestment needs and the impact of gross issuance on the eligible universe. This is what Deutsche Bank has done recently, assuming that 70% of German PSPP purchases are in central govt. bonds with the remaining 30% in regional government bonds and local agencies. The bank then estimates that the remaining eligible universe of bonds is €114bn. Further assuming gross issuance for the remainder of 2017 and 2018 to be € 69bn and € 150bn respectively, I.e. a total of EUR 220bn, the eligible universe increases by 33% of this amount which is €73bn. This takes the total eligible universe by the end of 2018 to approximately €185bn.

At the current pace, Bund purchases until the end of the year should amount to €50bn. Should the ECB continue monetizing debt at the current pace it will not have enough eligible bonds by the end of 2018.

This is where the taper comes in: at an aggregate QE pace of €40bn per month from Jan-18 onward, a €20bn reduction of the current monetization pace, total QE purchases of German govt bonds would amount to €67bn. Additionally, estimating that reinvestment needs until the end of 2018 would amount to €40bn, this takes total QE purchases to €157bn which is comfortably below the available eligible universe of €185bn, however virtually no eligible bonds remain going into 2019.

Summarizing DB’s calculations, if the ECB were to reduce the pace of QE to €40bn per month starting from Jan-18, the ECB should not run out of German government bonds to purchase until early 2019. On the other hand, if it keeps the current pace of QE, it will run out of paper by late 2018, and even with a downward revised €40bn monthly total, the ECB will have almost no German bonds left to buy in early 2019. Furthermore, even tapering to €20Bn in late 2018 or 2019 will only extend total QE by just a few more months at best.

There is a last resort: either by then Germany starts running a huge budget deficit – obviously a very touchy political issue – which the ECB will be delighted to fund, or Greece will finally be eligible for QE and will be delighted to step in to Germany’s shoes, allowing the ECB to monetize Greek bonds, although it will take some very imaginative Goldman financial engineering to allow the ECB to monetize the (defaulted) Greek bonds that it already owns…

end

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

IRAN/USA

Good reason for the boys to whack gold and silver today;  USA navy patrol ship fires warning shots at an Iranian Vessel (Revolutionary Guards)

(courtesy zero hedge)

US Navy Patrol Ship Fires Warning Shots At Iranian Vessel

One day after a US spy plane had to take “evasive action” over the East China Sea after a Chinese fighter jet showed off its Top Gun skills and appeared 90 meters in front of the interloper, a US Navy patrol ship fired warning shots toward an Iranian vessel near the northern Arabian Gulf on Tuesday after the vessel came within 150 yards (137 meters).

 navy ship fires warning shots toward vessel after it comes within 150 yards in northern : US official

Reuters, which confirms the report, quotes an  official who said the USS Thunderbolt fired the warning shots after the Iranian vessel ignored radio calls and the ship’s whistle. The Thunderbolt was being accompanied by several U.S. Coast Guard vessels.

The official also said that the Iranian vessel appeared to be from Iran’s Islamic Revolutionary Guard Corps.

“The IRGCN boat was coming in at a high rate of speed. It did not respond to any signals, they did not respond to any bridge-to-bridge calls, they felt there was no choice except to fire the warning shots,” the defense official told AFP.

The incident comes as tensions in the Arabian Gulf remain elevated throughout the Qatar crisis, with Iran backing up the small kingdom against the Saudi-led Arab bloc. Additionally, Iran lashed out at the US following the latest sanctions and even though Trump’s administration recently declared that Iran was complying with its nuclear agreement with world powers, he warned that Tehran was not following the spirit of the accord and that Washington would look for ways to strengthen it.

Similar incidents have happened periodically, the last in January when a U.S. Navy destroyer fired three warning shots at four Iranian fast-attack vessels near the Strait of Hormuz after they closed in at high speed and disregarded repeated requests to slow down.

 

END

6 .GLOBAL ISSUES

A very important commentary illustrates how food inflation is upon us totally without us noticing:  how:  “shrinkflation”

(courtesy zero hedge)

“Shrinkflation” – How Food Companies Implement Massive Price Hikes Without You Ever Noticing

Do you ever get the sense that your favorite steak at that Quick Service Restaurant of your choice keeps getting thinner and thinner all while your check size at the end of the night continues getting larger and larger.  Well, it is.  How else are publicly traded chains going to continue to deliver margin growth to wall street in the midst of rising labor costs, rising commodity costs and shrinking customer traffic?

As a new study in the U.K. just revealed, shrinking portion sizes among food manufacturers is actually way more common than you might think and you probably never even noticed it.  In fact, according to data from the Office for National Statistics, over 2,500 consumer products in the U.K. shrunk in size over the past five years despite being sold for the same price.

But it’s not just food manufacturers that are shrinking portions while maintaining price as many consumers goods items from chocolate to coffee to toilet paper are all experiencing the same trends.  Known in grocery circles as ‘liar packs’, shrinking portion sizes became an attractive alternative to simply raising prices back during the great recession when consumers became particularly sensitive to price. Of course, the net effect is exactly the same but it’s much more difficult to notice that fine print on the bottom corner of the packaging than it is the price tag at check out.  Per The Telegraph:

Mark Jones, a food and drink solicitor at Gordons law firm, said: “Shrinkflation was borne out of the recession and has gathered staggering pace since 2009. The ONS’s report confirms this. Against the back drop of a weak economy, commodity prices have been rising over the last five years.

“The recession made people very price sensitive and you can see the evidence of that by looking at the impressive growth of discount retailers in the last five years, no retail sector has grown faster.

“Suppliers and retailers do not want to raise the ‘on the shelf’ price, but both have had to adapt to increasing commodity prices.

“Shrinking the size of the products being sold, whether that is toilet paper, chocolate or cleaning products, is just another way of pushing through a price increase, but in a more subtle way. How many of us noticed Andrex reduce the number of sheets on a toilet roll from 240 to 221?”

And here is the breakdown by month over the past 5 years:

But it’s not just British consumers getting duped by “shrinkflation” as all the same games are played in the U.S. markets as well.  For example, who is actually going to notice that 10 sheets of paper are missing from the Bounty rolls on the right versus those on the left?  Yet, assuming that both packages are sold at the same price this small reduction in size equates to a substantial 9% price hike on a per sheet basis.

Meanwhile, these containers are completely identical aside from some tiny print in the bottom right hand corner.

Conclusion: Caveat emptor…there is a whole army of Harvard MBAs working in consumer goods companies all around the world whose sole mission in life is to get you to pay more for less without ever noticing.

7. OIL ISSUES

Last night we detailed Norseman’s Chairman Russell Clark’s strong belief that the shale patch will run into severe troubles this year.

Well today that has already been borne out as large Anadarko has just cut its capital expenditures basically stating that they have already reached peak shale:

(courtesy zerohedge)

Peak Shale: Anadarko Just Became The First US Oil Producer To Slash CapEx

It appears that Horseman Global’s Russell Clark may have been spot on with his bearish take on the US shale sector.

As a reminder, in his latest letter to investors, Clark said that “the rising decline rates of major US shale basins, and the increasing incidents of frac hits (also a cause of rising decline rates) have convinced me that US shale producers are not only losing competitiveness against other oil drillers, but they will find it hard to make money…. at some point debt investors start to worry that they will not get their capital back and cut lending to the industry. Even a small reduction in capital, would likely lead to a steep fall in US oil productionIf new drilling stopped today, daily US oil production would fall by 350 thousand barrels a day over the next month.”

What I also find extraordinary, is that it seems to me shale drilling is a very unprofitable industry, and becoming more so. And yet, many businesses in the US have expended large amounts of capital on the basis that US oil will always be cheap and plentiful. I am thinking of pipelines, refineries, LNG exporters, chemical plants to name the most obvious. Even more amazing is that other oil sources have become more cost competitive but have been starved of resources. If US oil production declines, the rest of the world will struggle to increase output. An oil squeeze looks more likely to me.

While the bearish thesis has yet to play out, moments ago Anadarko poured cold water on US energy investors after it missed earnings badly, reporting a Q2 EPS loss of 77c, more than double the 33 cent loss expected. However, what was far more concerning to shale bulls (and perhaps oil bears), is that the company admitted that it can no longer support its capital spending budgetand it would cut its 2017 capital budget by $300 million, becoming the first major U.S. oil producer to do so, as a result of depressed oil prices. In March, Anadarko had forecast total 2017 capex of $4.5 billion to $4.7 billion, a continuation of the recent CapEx rebound which troughed in Q3 2016.

Ahead of the Tuesday earnings call, APC CEO Al Walker confirmed Wall Street’s growing fears that oil prices are simply too low to sustain ongoing exploration when he said that “the current market conditions require lower capital intensity given the volatility of margins realized in this operating environment. As such, we are reducing our level of investments by $300 million for the full year.”

Ironically it was Walker himself who issued a clear warning to Wall Street in June, when he bought up something we first covered in April of 2015 in “When QE Leads To Deflation: A Look At The “Confounding” Global Supply Glut“, when he said that it was the relentless supply of cheap capital that was masking the underlying lack of profitability and allowing shale companies to pump beyond the point of negative returns: “The biggest problem our industry faces today is you guys,” Al Walker, chief executive of Anadarko Petroleum Corp. told investors at a conference last month, quoted by the WSJ.

Companies have more capital to keep drilling thanks to $57 billion Wall Street has injected into the sector over the last 18 months. Money has come from investors in new stock sales and high-yield debt, as well as from private equity funds, which have helped provide lifelines to stronger operators. Flush with cash, virtually all of them launched campaigns to boost drilling at the start of 2017 in the hope that oil prices would rebound.

The new wave of crude has again glutted the market. The shale companies are edged even further from profitability, and a few voices have begun to question the wisdom of Wall Street financing the industry’s addiction to growth.

Wall Street has become an enabler that pushes companies to grow production at any costwhile punishing those that try to live within their means, Mr. Walker said, adding: “It’s kind of like going to AA. You know, we need a partner. We really need the investment community to show discipline.”

Ultimately, it was up to Walker to demonstrate that discipline when he voluntarily reduced the amount of capital he would reinvest in his business. And since oil exploration is by far the most capital intensive industry, the hit to revenue will be quick and painful, much to the delight of OPEC which may finally be seeing light at the end of a long, dark tunnel. To that point, Anadarko also said it was trimming its 2017 production forecast to 644,000 bpd, a 2% cut.

Incidentally, Horseman is not the first to turn bearish on shale. As Bloomberg reported earlier, Goldman Sachs Asset Management has been shedding oil and gas-related company bonds in the past few months and shorting oil in some portfolios, according to Mike Swell, the firm’s co-head of global fixed-income portfolio management. The investment manager has moved from an overweight position in energy-related corporate bonds a few months ago to neutral today and toward an underweight stance, he said in an interview on Friday.

Some investors seem to agree with Goldman’s asset-management arm, at least enough to have a touch of skepticism about the prospect of these oil and gas explorers. Since the end of January, credit traders have demanded slightly more yield to own junk-rated bonds of oil and gas companies than other high-yield debt.

In an amusing twist, we reported last week that the very same Goldman reported last Friday that energy junk bonds are finally starting to notice the decline in oil prices:

Once the APC news reverberates across the industry, this may just be the straw that breaks the energy junk bond market’s back, as a scramble out of the sector ensues, resulting in the double whammy of also yanking much needed capital from shale companies.  Such an exodus could not come at a worse possible time: as Bloomberg calculated if oil prices were to stay below $47 a barrel, “investors will demand a bigger cushion of extra yield to own junk-rated energy debt. Part of the reasoning is that these firms still require an excessive amount of leverage (and investor faith) to keep operating as junk-rated oil and natural gas producers have more than $25 billion of credit-line commitments expiring in 2019. If oil prices don’t rebound, banks have good reason to reduce those lines substantially, siphoning off a crucial funding source.”

Think a rerun of the late 2015/early 2016 period all over again.

However, while the Anadarko news is clearly negative for its shale peers, most of whom are set to announce similar capex declines, it will likely end up being positive for oil prices as much of the “swing” crude production courtesy of the US shale basin is about to be reduced substantially, in a clear victory for OPEC which has been waiting long for just this day.

Anadarko’s CapEx cut also comes in the same month as the EIA announced that US shale production just hit a new all time high of 5.472mmb/d.

To the disappointment of many energy bulls (and oil bears as a reduction in production means that the shale supply glut is about to get far smaller), it may be all downhill from here.

end

WTI jumps above 48 dollars after a huge crude draw down

(courtesy zero hedge)

WTI Jumps Above $48 After API Inventory Report Shows Huge Crude Draw

The recent trend of inventory draws (in crude and products) has supported higher Brent and WTI prices (the latter testing $48 today) despite surging production. API reported more of the same with a much larger than expected draw (-10.2mm vs -3mm exp), sending WTI above $48. All was not perfect in the report however as gasoline saw an unexpected build.

API

  • Crude -10.2mm (-3mm exp) – biggest draw since Sept 2016
  • Cushing  -2.568mm (-1mm exp)
  • Gasoline  +1.9mm (-1.8mm exp)
  • Distillates -111k

Gasoline surprised with an unexpected build in inventories but the massive crude draw (largest since Sept 2016) and a reduction in stocks at Cushing helped send crude proices higher…

WTI traded around $48 into the API print – having ripped higher the last two days after Saudi ‘whatever it takes’ comments – and blew through $48 on the API print…

“They have chased the bears back into the woods. Sentiment in the market is mildly bullish,” James Williams, an economist at London, Arkansas-based energy-research firm WTRG Economics

8. EMERGING MARKET

The Venezuelan opposition has vowed a violent response to the new constitution and a major power grab by bus driver Maduro. They plan on guerrilla warefare

(courtesy zerohedge)

“We Are Tired Of Being Killed” Venezuelan Opposition Vows Violent Response To Maduro Power Grab

Venezuelan President Nicolas Maduro has made it clear: Nothing short of the invasion threatened by President Donald Trump will stop him from holding a vote on a new constituent assembly that will officially replace the country’s legislature and likely allow the embattled president to rewrite the country’s Constitution, cementing his grip on power.

According to Bloomberg, Maduro has said the vote will be held next week in defiance of threats of US sanctions, and calls by his opponents for a two-day general strike. If approved, the new assembly will replace the country’s previous opposition-controlled assembly, which was annulled by the Maduro-controlled Supreme Court in March.

Once approved, it’s widely believed that Maduro will stock the assembly with political allies who will enable the re-drafting of the country’s constitution, allowing Maduro to consolidate power and officially marginalize anyone who opposes his regime.

President Nicolas Maduro

In the face of mounting violence, opposition lawmakers are urging citizens to demonstrate at polling places in a last-ditch attempt to foil the vote. The death toll from street demonstrations demanding Maduro’s exit that have become a daily occurrence  in Caracas and other Venezuelan cities since they started in April recently topped 100.

“Deputy Simon Calzadilla, speaking for Unidad Democratica, urged Venezuelans to go to their electoral centers Monday at 10 a.m. to place protest banners and signs that say ‘in my voting place there won’t be a constituent assembly.’

Calzadilla, in an email, also asked citizens to rally to Caracas next Friday to “demand massively” that Maduro’s government halt the assembly vote.

If the regime doesn’t cancel this fraud by Friday, the party will inform of the actions it will behold on July 29 and 30, Calzadilla said in the statement. “Center by center, street by street, neighborhood by neighborhood to defeat Maduro’s proposal.”

The US has threatened “strong and swift economic actions” against the regime, which could force Venezuela into a default if the US stops buying hundreds of thousands of barrels of oil a day from the country. The creation of the assembly will enrage millions of Venezuelans who are fighting against the entrenchment of the Maduro regime. Unsurprisingly, Maduro is struggling with abysmally low approval ratings. In a symbolic vote, 7.5 million Venezuelans who participated in an unsanctioned ballot overwhelmingly voted against the assembly.

In the run up to the vote, violence against Venezuela’s political opposition is intensifying. On July 5, Venezuela’s independence day, a mob of pro-government thugs brutalized a group of opposition lawmakers who were protesting Maduro’s plans to hold a vote on the new assembly. The irony of this exercise in repression was probably lost on the Maduro regime, which denied involvement and condemned the attack.

Opposition member Simon Calzadilla

Frustrated by the rising death toll, some protesters are banding together to form militias, abandoning the strategy of peaceful protest espoused by the opposition and diving headlong into violent urban guerilla warfare. One Bloomberg reporter followed a would-be militia group during one of its meetings, where members created Molotov cocktails and practiced assembling their weapons.

The protesters were explicit in expressing their distaste for the president.

“The security forces they’re up against, the riot-helmeted troops shooting tear-gas canisters and water cannon and bullets? “They all deserve to die,” one of the bomb makers said flatly, dripping petrol into a jar.

The call to arms coming from some in the resistance may be the initial stirrings of the kind of urban guerrilla movement the country hasn’t seen in half a century. It’s too early to tell if they’ll follow through on their threats, but the bold talk is a troubling sign for mainstream opposition leaders who have issued instructions – pleas, recently – for peaceful rallies and marches. Those calls increasingly fall on deaf ears. Masked activists hurl their homemade bombs, rocks, jars filled with feces, anything they can get their hands on. They’ve stormed office buildings, shattered store windows and blocked roads.”

“We are tired of being killed,” one demonstrator who refused to show his face or give his name told Bloomberg. “We are willing to go out with guns, to face them as equals,” he said. “The protest must evolve.” The demonstrator claimed to be a teenager from a middle-class neighborhood – fitting the profile of many of the young men who’ve died in the demonstrations.

Collapsing oil prices and years of economic mismanagement led to Venezuela’s economic collapse beginning when the price of crude plunged in 2014. It seems that the vote, which the opposition has already written off as hopelessly rigged, will one way or another lead to the next evolution of Venezeula’s rolling political and fiscal crisis – be it a revolution or bankruptcy. The country is struggling with, dwindling foreign reserves, bond yields as high as 36%, and looming payments on billions of dollars of oil-company bonds that were bought by Russia. Meanwhile, its citizens are struggling with hyperinflationary hell that has rendered dollars 1000x more expensive than they were in 2010.  

As we reported yesterday, Helima Croft, global head of commodity strategy at RBC Capital Markets, believes the country’s next crisis point will arrive by Christmas. But with much of Venezuela resembling the lawless Detroit from the movie RoboCop – public mobs routinely lynch suspected thieves, and gangs of bikers waylay merchants carrying commodities to market – it’s difficult to imagine how the situation could get any more dire for the country’s desperate citizens. The only options left for them, it seems, are to forcefully demand regime change, or pray that the price of oil moves back toward $100 a barrell. 

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

Euro/USA   1.1657 UP .0019/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 GREEN

USA/JAPAN YEN 111.40 DOWN 1.161(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/LABOUR PARTY LOSES IN LOCAL ELECTIONS

GBP/USA 1.3034 UP .0008 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2510 UP .0006 (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 19 basis points, trading now ABOVE the important 1.08 level  RISING to 1.1657; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  DOWN 6.90 POINTS OR 0.21%     / Hang Sang  CLOSED UP 5.22 POINTS OR 0.02% /AUSTRALIA  CLOSED UP 0.65% / EUROPEAN BOURSES OPENED  IN THE GREEN 

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

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

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

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

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

The NIKKEI: this TUESDAY morning CLOSED DOWN 20.47 POINTS OR .10%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 5.22 POINTS OR 0.02%  / SHANGHAI CLOSED DOWN 6.91 POINTS OR 0.21%   /Australia BOURSE CLOSED UP 0.65% /Nikkei (Japan)CLOSED DOWN 20.47  POINTS OR .10%    / INDIA’S SENSEX IN THE RED

Gold very early morning trading: 1250.90

silver:$16.31

Early TUESDAY morning USA 10 year bond yield: 2.2747% !!!  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  2.8521, UP 2  IN BASIS POINTS  from MONDAY night.

USA dollar index early TUESDAY morning: 93.95 DOWN 3  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: 2.904%  DOWN 0 in basis point(s) yield from MONDAY 

JAPANESE BOND YIELD: +.072%  UP 1/2   in   basis point yield from MONDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.4851% UP 3   IN basis point yield from MONDAY 

ITALIAN 10 YR BOND YIELD: 2.055 DOWN 2 POINTS  in basis point yield from MONDAY 

the Italian 10 yr bond yield is trading 57 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.508% DOWN 0 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 1.1635 DOWN .0024 (Euro DOWN 24 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.20 UP  0.092(Yen DOWN 9 basis points/ 

Great Britain/USA 1.3023 UP  0.0033( POUND UP 33

basis points) 

USA/Canada 1.25152 DOWN .0020 (Canadian dollar UP 20 basis points AS OIL ROSE TO $46.32

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This afternoon, the Euro was DOWN  by 24 basis points to trade at 1.1635

The Yen FELL to 111.20 for a LOSS of 9  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND ROSE BY 33  basis points, trading at 1.3023/ 

The Canadian dollar ROSE by 20 basis points to 1.25152,  WITH WTI OIL RISING TO :  $46.32

The USA/Yuan closed at 6.7512/
the 10 yr Japanese bond yield closed at +.072%  UP  1/2  IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield UP 2 IN basis points from MONDAY at 2.2517% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.8299  UP 3 in basis points on the day /

Your closing USA dollar index, 94.02  UP 22 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 75.18 POINTS OR 1.01%
German Dax :CLOSED DOWN 31.11 POINTS OR 0.25%
Paris Cac  CLOSED UP 10.04 POINTS OR 0.20% 
Spain IBEX CLOSED UP 19.90 POINTS OR 0.19%

Italian MIB: CLOSED  UP 124.42 POINTS/OR 0.59%

The Dow closed UP 100.26 OR 0.47%

NASDAQ WAS closed UP 1.36  POINTS OR 0.02%  4.00 PM EST
WTI Oil price;  46.32 at 1:00 pm; 

Brent Oil: 48.51 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.96 UP 60/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 60 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +0.508%  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:$48.65

BRENT: $50.84

USA 10 YR BOND YIELD: 2.335%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.915%

EURO/USA DOLLAR CROSS:  1.1645 UP .0007

USA/JAPANESE YEN:111.92  UP  0.694

USA DOLLAR INDEX: 94.09  UP 11  cent(s) 

The British pound at 5 pm: Great Britain Pound/USA: 1.3026 : UP 5 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2503 up 2 BASIS pts 

German 10 yr bond yield at 5 pm: +0.508%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks Scramble To 4th Longest Stretch Of ‘Dip-less’ Gains In 90 Years

Relax, we got this…

The Dow was the day’s best-performer (thanks to MCD, CAT, GS, and HD – which accounted for 135 of the 122 points gained on the index; MMM and UTX knocked 85 points off the index). Nasdaq lagged thanks to GOOGL but the machines did their best (got almost to unchanged then faded)…

NOTE: stocks took a tumble in the last hour – not on the healthcare vote but on Trump-Sessions’ headlines.

Small Caps remain the week’s biggest gainer with Trannies, S&P, and The Dow fading tick for tick…

Nasdaq was “managed” back to unchanged…

And all another yuge short squeeze…Today was the biggest short squeeze in over 5 months

Since the lows reached immediately after the Brexit vote in July 2016, the S&P 500 has seen over 270 consecutive trading sessions without a 5% peak-to-trough drawdown. This is the 4th longest stretch since 1928

UTEs are biggest underperformers, Tech was unch, as Financials and Energy were best…

GOOGL did not see dip-buyers…

VIX tested down to 9.04 intraday… lifting the S&P after a quiet overnight session…NOTE – as soon as VIX opened for trading, stocks took off…

VIX has not closed above 10 for 9 straight days – starting with Yellen’s dovish Humphrey Hawkins testimony – this is the longest period below 10 in history…

The last time VIX dipped below 9 was 12/27/93, the day of VIX’s record intraday low at 8.89…

FANG Stocks suffered their first loss in 13 days today (thanks to GOOGL)…

Bonds and Stocks recoupled the last few days…

But today saw bonds extend out beyond stocks…

30Y Yield pushed up above 2.91% ahead of tomorrow’s FOMC statement…

The yield curve bear-steepened with 2Y outperforming…

The Dollar Index gained on the day – though chopped around quite significantly…

JPY weakness was the day’s big factor (sending stocks higher)…

WTI Crude extended yesterday’s panic-buying ramp, testing $48 today – the highest since June 7th (when DOE data slumped prices)…ahead of tonight’s API data

Gold was down modestly (below $1250)

Notably markets barely even blinked when The House voted to debate the healthcare bill. Presumably the market knows it’s going nowhere with McCain back, bringing confirmed “no”s to 3.

end

Former CIA director calls for a coup if Trump fires Mueller: good grief!

(courtesy zero hedge)

Former CIA Director Calls For A Coup If Trump Fires Mueller

In the most vocal opposition to president Donald Trump yet, former CIA Director John Brennan said that if the White House tries to fire special counsel Robert Mueller, government officials should refuse to follow the president orders, as they would be – in his view – “inconsistent” with the duties of the executive branch.

“I think it’s the obligation of some executive branch officials to refuse to carry that out. I would just hope that this is not going to be a partisan issue. That Republicans, Democrats are going to see that the future of this government is at stake and something needs to be done for the good of the future,” Brennan told CNN’s Wolf Blitzer at the Aspen Security Forum, effectively calling for a coup against the president should Trump give the order to fire Mueller.

The exchange is 43 minutes into the clip below:

(Full transcript here)

Brennan appeared alongside his former colleague, Director of National Intelligence James Clapper, and both men who served in the Obama administration, told Blitzer they have total confidence in Mueller. “Absolutely. It was an inspired choice- they don’t come any better, ” Brennan said adding that “If Mueller is fired, I hope our elected reps will stand up and say enough is enough.” Some have responded with questions where Brennan’s devotion to the Constitution was in the aftermath of the events in Benghazi.

Falling back on his neocon roots, James Clapper, who has waged a long-running vendetta with Trump, once again warned about Russian interference in US affairs. When asked about the June 2016 meeting between Donald Trump Jr., Jared Kushner and Paul Manafort with a Russian lawyer and others, he responded: “I’m an old school, Cold War warrior and all that – so I have, there’s truth in advertising, great suspicions about the Russians and what they do. A lot of this to me had kind of the standard textbook tradecraft long deployed by Russians. It would have been a really good idea maybe to have vetted whoever they were meeting with.”

Clapper was also asked about Trump’s comparison of the intelligence community to Nazi Germany. Clapper said he called the President-elect nine days before he left the Obama administration saying he “couldn’t let that reference pass” and it was an insult to him, CIA Director John Brennan and the workforce. “That was a terrible, insulting affront, not just to me or John, we get paid the big bucks, but I’m talking about the rank and file, men and women, patriots and intelligence community — that was completely inappropriate and over the top – I had to do something about it.”

And so he did: on the call Clapper said Trump asked him to “to put out a statement rebutting the contents of the dossier which I couldn’t and wouldn’t do. It was kind of transactional” referring to a dossier that alleged ties between President Donald Trump’s campaign and Russia. It was not clear if he wouldn’t and couldn’t do it because the contents were legitimate, in his view, or because the dossier is what started the whole “Russian collusion” narrative in the first place. Curiously, Clapper saw it as a favor to Trump not to issue a statement: Clapper was asked by Blitzer why he didn’t put out a statement replying: “The whole point of the dossier by the way was we felt an obligation to warn him to alert him to the fact it was out there. That was the whole point.”

It was not clear if James Comey, whose subsequent leak to the NYT led to the appointment of Mueller, would have applied the same reasoning when asked by Trump to rebut the dossier’s contents.

END

today’s huge tweetstorm from Trump as he lashes out against Jeff Sessions and Hillary

(courtesy zero hedge)

In Early Tweetstorm, Trump Lashes Out At Sessions For Ignoring “Hillary Crimes”

The feud between Donald Trump and Jeff Sessions started early on Tuesday, when President Trump, in an early tweetstorm lashed out at the attorney general whom he accused of taking a “VERY weak position on Hillary Clinton crimes.”

“Attorney General Jeff Sessions has taken a VERY weak position on Hillary Clinton crimes (where are E-mails & DNC server) & Intel leakers!” Trump tweeted.

Attorney General Jeff Sessions has taken a VERY weak position on Hillary Clinton crimes (where are E-mails & DNC server) & Intel leakers!

Trump also asked the A.G. where is the investigation into “Ukrainian efforts to sabotage Trump campaign… quietly working to boost Clinton.”

Ukrainian efforts to sabotage Trump campaign – “quietly working to boost Clinton.” So where is the investigation A.G. @seanhannity

In a follow up tweet, Trump also slammed the acting director of the FBI, Andrew McCabe, whom he implicitly accused of corruption for getting $700,000 from Hillary for his wife (which incidentally is accurate, as the WSJ described last October, in “Clinton Ally Aided Campaign of FBI Official’s Wife“)

“Problem is that the acting head of the FBI & the person in charge of the Hillary investigation, Andrew McCabe, got $700,000 from H for wife!” he said on Twitter.

Problem is that the acting head of the FBI & the person in charge of the Hillary investigation, Andrew McCabe, got $700,000 from H for wife!

Today’s animosity between Trump and Sessions was first unveiled in an interview with The New York Times last week, when Trump said he would have never hired his attorney general if he knew he would recuse himself from the probe into ties between the Trump campaign and Russia. Trump in a tweet Monday morning also asked why the “beleaguered A.G.” wasn’t investigating ties between Clinton and Russia.

Overnight, the WaPo reported that Trump has floated possible replacements for Sessions including Sen. Ted Cruz and former New York City Mayor Rudy Giuliani, although subsequently Giuliani said on Monday, however, that he’s not being considered for the position.

In addition to slamming Sessions, Trump also focused on today’s big item, the latest Senate vote on the GOP Healthcare vote, which however remains in chaos as nobody knows what will be voted on just hours ahead of the actual vote. After berating Republicans for failing to repeal and replace Obamacare on Monday, Trump tweeted “Big day for HealthCare. After 7 years of talking, we will soon see whether or not Republicans are willing to step up to the plate! ObamaCare is torturing the American People.The Democrats have fooled the people long enough. Repeal or Repeal & Replace! I have pen in hand.”

Big day for HealthCare. After 7 years of talking, we will soon see whether or not Republicans are willing to step up to the plate!

ObamaCare is torturing the American People.The Democrats have fooled the people long enough. Repeal or Repeal & Replace! I have pen in hand.

Today’s Trump tweets followed a late night barrage against the WaPo/Amazon/Jeff Bezos (who is now about $2 billion away from becoming the world’s richest man), in which Trump said “So many stories about me in the @washingtonpost are Fake News. They are as bad as ratings challenged @CNN. Lobbyist for Amazon and taxes?” and “Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?“, prompting many to ask if Trump’s much anticipated crackdown against Bezos has officially begun.

END

The senate passes a critical motion to advance Obamacare repeal by a vote of 51 to 50

with Mike Pence casting the deciding vote

(courtesy zerohedge)

Senate Passes Critical Motion To Advance Obamacare Repeal Efforts

Update 3:  Vice President Mike Pence cast the deciding vote and the motion to begin debate on a repeal of Obamacare has officially passed.

Senate

* * *

Update 2:  With just two Republicans, Susan Collins (R-ME) and Lisa Murkowski (R-AK) voting ‘no’, the Senate has just passed a critical “Motion To Proceed” bill which will allow for debate to officially begin on a repeal of Obamacare.  The official tally included 50 ‘yes’ votes which will allow Vice President Mike Pence to cast the deciding tie breaker vote to put Republicans over the edge.

Senate

* * *

Update 1:  With 50 votes cast so far, two Republicans, Susan Collins (R-ME) and Lisa Murkowski (R-AK) have voted ‘no’, and Senators McCain (R-AZ) and Johnson (R-WI) have yet to vote.  Both Senators will need to vote in ‘yes’ in order for the Motion to Proceed to pass.

Apparently Senator Johnson has still not made up his mind as he’s currently huddling with Mitch McConnell on the sidelines and McCain’s whereabouts is currently unknown.

What’s a mic in this convo worth?

* * *

After months of debate and wasted time on efforts to draft an Obamacare ‘repeal and replace’ bill, moments from now the Senate will vote on a procedural motion that could result in a “skinny repeal” of Obama’s most controversial piece of legislation, without the replacement part, later this week.

While Republicans still don’t know exactly what they’ll be voting on, The Hillnoted that a ‘skinny repeal’ would likely include a repeal of the individual and employer mandates as well as the medical device tax as a way to bridge to a conference committee with the House. 

Senate Republicans are considering passing a dramatically scaled-down version of their ObamaCare repeal bill as a way to pass something and set up negotiations with the House, according to GOP aides.

The measure, known as a “skinny bill,” is intended to be something all Republicans can agree on, so they can pass a bill and move to a conference committee with the House.

Aides say the scaled-down bill would likely just repeal ObamaCare’s individual and employer mandates and the medical device tax.

That would be a far narrower measure than the most recent Senate replacement bill, which also scaled down ObamaCare’s subsidies and cut Medicaid.

Senator Rand Paul, who was a vocal critic of the Senate’s last ‘repeal and replace’ bill (see: New Op-Ed From Senator Rand Paul Blasts GOP Decision To “Keep Obamacare”), has confirmed that he will vote in favor of “whatever version of CLEAN repeal” can be passed with just 50 votes.

Paul tweeted that Senate Majority Leader Mitch McConnell (R-Ky.) told him the upper chamber would take up the 2015 ObamaCare repeal bill previously passed by Congress.

“If this is indeed the plan, I will vote to proceed and I will vote for any all measures that are clean repeal,” Paul said

Paul has pushed for a vote on the 2015 bill, which repeals large parts of ObamaCare’s requirements and regulations, instead of the GOP repeal-and-replace plan that Republicans have been working on this year.

If that measure can’t get the 60 votes it needs, which is unlikely, Paul said he would support “whatever version of CLEAN repeal we can pass.”

And, in a stunning series of last minute reversals, Senator Dean Heller (R-NV) and Senator Shelley Moore Capito (R-WV) have also confirmed they’ll support the motion to proceed.

Meanwhile, adding to the dramatics of today’s critical vote, Senator John McCain has returned from Arizona, after being diagnosed with brain cancer, specifically to participate in the process.

Tune in below for a live feed of the vote:

Not sure if this is fake news but CNN reports that Sec of State Tillerson is considering an early exit from the Trump administration due to huge  differences and chaos.(courtesy zerohedge)

Rexit? Tillerson Reportedly Considering Early Exit Amid Trump Administration Chaos

Perpetual chaos within the Trump administration is apparently starting to take it’s toll on Secretary of State Rex Tillerson, at least according to some anonymous sources, and has prompted rumors that he may depart his post before the end of the year.  According to various media outlets, Tillerson has grown frustrated with his lack of autonomy, constant internal policy contradictions and public disputes between the White House and Attorney General Jeff Sessions, among other things.  Per Reuters:

Secretary of State Rex Tillerson has told friends he will be lucky to last a year in his job, according to a friend, while two officials said national security adviser H.R. McMaster was frustrated by what he sees as disorganization and indiscipline on key policy issues inside the White House.

A source familiar with the situation told Reuters that Tillerson was “very upset at not having autonomy, independence and control over his own department and the ability to do the job the way the job … is traditionally done.”

The source said he had heard nothing about any possible departure, but added: “The situation doesn’t seem to be getting any better, and in some respects appears to be getting worse.”

According to CNN‘s anonymous sources, Tillerson has told friends outside of Washington that he’d like to remain in his post through the end of the year though those same sources question whether another 5 months will be possible.

For weeks, conversations with Tillerson friends outside of Washington have left the impression that he, despite his frustrations, was determined to stay on the job at least through the end of the year. That would allow time to continue efforts to reorganize the State Department and would mean he could claim to have put in a year as America’s top diplomat.

But two sources who spoke to CNN on condition of anonymity over the weekend said they would not be surprised if there was a “Rexit” from Foggy Bottom sooner that that.

Both of these sources are familiar with Tillerson conversations with friends outside Washington. Both said there was a noticeable increase in the secretary’s frustration and his doubts that the tug-of-war with the White House would subside anytime soon. They also acknowledged it could have been venting after a tough week, a suggestion several DC-based sources made when asked if they saw evidence Tillerson was looking for an exit strategy.

Tillerson

Of course, Tillerson recently suffered an embarrassing contradiction from the White House over Qatar.  Following last month’s move by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt to boycott Qatar, which they accuse of financing extremist groups and supporting terrorism, Tillerson publicly asked the nations to ease their blockade, and put the onus on both sides to end the crisis.

Unfortunately, less than 90 minutes later, Trump accused Qatar of being a “high level” sponsor of terrorism in a press conference and suggested he had helped plan the Qatar action with Arab leaders.

Meanwhile, according to Reuters, Tillerson has also grown increasingly frustrated over internal criticisms surrounding the Iran deal.

Tillerson scored a policy win last week when the administration certified, albeit reluctantly, that Iran was complying with the 2015 nuclear deal under which Tehran agreed to restrain its atomic program in exchange for sanctions relief.

He was upset, however, by fierce internal criticism from Trump, as well as his chief strategist, Steve Bannon, and White House aide Sebastian Gorka, over the decision, said another U.S. official who spoke on condition of anonymity.

“The secretary does not feel that White House staff members should be in a position to conduct hostile cross-(examinations) of Cabinet officials,” the official said.

Hammond disputed the account of harsh discord between Trump and Tillerson regarding recertifying the Iran nuclear deal, saying: “I don’t buy this whole thing that there are tensions. Developing public policy is about vetting out ideas,” he said.

Not surprisingly, Tillerson’s spokesman has so far denied that the Secretary of State is considering an early exit…

R.C. Hammond, Tillerson’s spokesman, denied Tillerson was considering leaving or that his frustrations were boiling over, saying he had “plenty of reasons to stay on the job, and all of them are important to America.”

“There’s a desperate need for American leadership in the world and that’s where the secretary’s focusing his attention,” he said.

…so what say you?  Fake news or is Tillerson in a race with Sessions to see who will exit their post first?

end

A great commentary showing how citizens of Illinois and in particular those in Cook Country which houses Chicago are leaving in droves:

(courtesy Mish Shedlock/Mishtalk)

Tracking The Great Escape From Cook County And Illinois

Authored by Mike Shedlock via MishTalk.com,

Cook County Illinois has the largest population loss of any county in the nation. Chicago represents just over half of the population of Cook County.

Here is a graph I put together of the “Great Escape” from Illinois.

Highlights

  • Between 2013 and 2016 the population of Illinois fell by 77,966. The population of Cook County fell by 36,739.
  • Between 2001 and 2016 the population of Illinois rose by 313,084. The population of Cook County fell by 122,759.
  • Starting in 2013, the “great escape” is in roughly equal numbers from Cook County and the rest of the state.

Job Highlights

On July 23 I noted Eight States Including Illinois Have Not Recovered Jobs Lost in Prior Recessions. The states are Alabama, Connecticut, Illinois, Michigan, Mississippi, New Mexico, Ohio, and Wyoming.

Illinois, Ohio, and Michigan are still below employment levels set in 2000. Here is a new chart I created comparing Illinois to Michigan and Ohio.

At least Illinois is not last in every category.

Metro Area Unemployment: Which States Are in Reverse? Spotlight Illinois

  • Illinois has 12 metro areas, none of which have unemployment rates below the national average.
  • Illinois worsened between 1998 and 2007 and then again from 2007 to 2017.
  • Neighboring states are all now better than Illinois

Illinois vs Neighboring States

For more details, please see Metro Area Unemployment: Which States Are in Reverse? Spotlight Illinois.

With each passing decade, the unemployment situation in Illinois has gotten worse.

This is not surprising. The state passed its first budget in three fiscal years, complete with massive tax hikes. The budget is required by Constitution to be balanced, but it isn’t.

An exodus of businesses and private citizens is underway. Reforms are desperately needed but none came with the passage of the budget.

Rauner 0-44

Governor Rauner is 0 for 44 in reforms he set out to accomplish. In fact, the corporate and personal tax hikes put the true score at -2 out of 44.

Cash-strapped cities suffer under prevailing wage laws and untenable pension promises.

Corporations suffer under the worst workers’ compensation laws in the nation.

Citizens suffer from the highest property taxes in the nation.

It is too late to save Illinois from insolvency. Rather than fix the problem, the new tax hikes will make matters worse.

Five Desperately Needed Reforms

  1. Municipal bankruptcy legislation
  2. Pension reform
  3. Right-to-Work legislation
  4. End of prevailing wage laws
  5. Workers’ compensation reform

Number one on my list of Illinois reforms is bankruptcy legislation. It is the only way out for numerous Illinois cities whose hands are tied by union-sponsored prevailing wage laws and pension plans.

Moody’s held off for now downgrading Illinois to junk status, but junk is baked into the cake sooner or later. The budget fixes nothing.

END

Soft data Conference Board’s Consumer Confidence soars to its second highest level since 2000 on the backs of a rise in the stock market

(courtesy zero hedge)

Conference Board Consumer Confidence Soars To 2nd Highest Since 2000

Second only to March’s highs, The Conference Board’s Consumer Confidence printed at its highest level since the year 2000 (ironic given where Nasdaq is trading). Despite a tumble in ‘hard’ data, and a plunge in Bloomberg’s economic expectations, it appears record high stocks are working to pump Americans up.

“Consumer confidence increased in July following a marginal decline in June,” said Lynn Franco, Director of Economic Indicators at The Conference Board. “Consumers’ assessment of current conditions remained at a 16-year high (July 2001, 151.3) and their expectations for the short-term outlook improved somewhat after cooling last month. Overall, consumers foresee the current economic expansion continuing well into the second half of this year.”

 Consumers’ assessment of current conditions improved in July. Those saying business conditions are “good” increased from 30.6 percent to 33.3 percent, while those saying business conditions are “bad” was virtually unchanged at 13.5 percent. Consumers’ appraisal of the labor market was also more favorable. Those stating jobs are “plentiful” rose from 32.0 percent to 34.1 percent, while those claiming jobs are “hard to get” decreased slightly from 18.4 percent to 18.0 percent.

Consumers were also more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions to improve over the next six months increased from 20.1 percent to 22.9 percent, while those expecting business conditions to worsen declined from 10.0 percent to 8.2 percent.

Consumers’ outlook for the labor market improved. The proportion expecting more jobs in the months ahead was unchanged at 19.2 percent, but those anticipating fewer jobs decreased from 14.6 percent to 13.3 percent.

Consumers, however, were not as upbeat about their income prospects as in June. The percentage of consumers expecting an improvement in their income declined moderately from 20.9 percent to 20.0 percent, while the proportion expecting a decline increased from 9.3 percent to 10.0 percent.

end

Harvey.

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