July 27/GOLD UP $ 10.45 WITH SILVER UP 13 CENTS/GOLD/SILVER EQUITY SHARES FLOUNDER AT THE END OF THE DAY SIGNALLING A POSSIBLE RAID TOMORROW//EU IS FORCING 3 COUNTRIES TO ACCEPT MIGRANTS AGAINST THEIR WISHES/SWITZERLAND FOR ITS 2ND CONSECUTIVE MONTH EXPORTS MORE GOLD THAN IT IMPORTS: IT HAS 0 MINING OPERATIONS IN ALL OF SWITZERLAND//

GOLD: $1260.30  UP $10.45

Silver: $16.59  UP 13 cent(s)

Closing access prices:

Gold $1259.50

silver: $16.58

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

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

SHANGHAI FIRST GOLD FIX: $1269.54 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME:  $1263.20

PREMIUM FIRST FIX:  $6.34

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SECOND SHANGHAI GOLD FIX: $1267.86

NY GOLD PRICE AT THE EXACT SAME TIME: $1262.60

Premium of Shanghai 2nd fix/NY:$5.26

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LONDON FIRST GOLD FIX:  5:30 am est  $1262.05

NY PRICING AT THE EXACT SAME TIME: $1263.00 

LONDON SECOND GOLD FIX  10 AM: $1261.10

NY PRICING AT THE EXACT SAME TIME. $1261.20 

For comex gold:

JULY/

NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH:  4 NOTICE(S) FOR 400  OZ.

TOTAL NOTICES SO FAR: 175 FOR 17500 OZ    (.5443 TONNES)

For silver:

JULY

 112 NOTICES FILED TODAY FOR

560,000  OZ/

Total number of notices filed so far this month: 3282 for 16,410,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 WE HAVE NOW ENTERED OPTIONS EXPIRY WEEK:

 

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

(OTC/LBMA CONTRACTS)

 Judging from the way the gold/silver shares traded today, it sure looks like the boys are going to orchestrate another humdinger of a raid against us tomorrow. 

 

end

Let us have a look at the data for today

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In silver, the total open interest surprisingly ROSE BY 1352 contracts from 206,347 UP to 207,699 DESPITE THE FALL IN PRICE THAT SILVER TOOK WITH YESTERDAY’S TRADING (DOWN 9 CENT(S). YESTERDAY AGAIN THE COMMERCIALS TRIED IN VAIN TO COVER BUT TO NO AVAIL. EVEN WITH THE HELP OF OPTIONS EXPIRY THEY COULD NOT GET THE SILVER LONGS TO LEAVE THE SILVER TREE. THE SPECS SHORTS ALSO DESPERATELY TRIED TO COVER THEIR SHORTFALL. RELUCTANTLY THE BANKERS CONTINUED TO SUPPLY THE SHORT PAPER.  

 In ounces, the OI is still represented by just OVER 1 BILLION oz i.e.  1.04 BILLION TO BE EXACT or 148% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED: 112 NOTICE(S) FOR 560,000  OZ OF SILVER

In gold, the total comex gold AFTER A ONE DAY HIATUS FELL BY A WHOPPING 13,506 CONTRACTS WITH THE FALL IN THE PRICE OF GOLD  ($2.25 with YESTERDAY’S TRADING). The total gold OI stands at 450,321 contracts. The liquidation in the front month has now resumed where we left off on Tuesday as spec longs liquidated their comex contracts FOR EFP CONTRACTS which gives them a fiat bonus plus a future delivery product which most likely is a London based forward. (It was extremely strange yesterday to witness WEDNESDAY’s huge OI gain..maybe an error from the CME.) 

we had 4 notice(s) filed upon for 400 oz of gold.

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

GLD:

Late last night, a huge changes in gold inventory/another withdrawal of 5.03 tonnes of gold with gold up $10.45

Inventory rests tonight: 795.42 tonnes

IN THE LAST 10 DAYS: GLD SHEDS 42.08 TONNES YET GOLD IS HIGHER BY $42.00 . GO FIGURE!! GLD IS A MASSIVE FRAUD

SLV

Today: : WE HAD NO CHANGES IN SILVER INVENTORY TONIGHT DESPITE SILVER BEING DOWN 9 CENTS.

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 ROSE BY 1352 contracts from 206,347   UP TO 207,699 (AND now A LITTLE CLOSER TO THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787). THE RISE IN OPEN INTEREST WAS ACCOMPANIED BY  THE FALL IN SILVER PRICE  WITH  YESTERDAY’S TRADING  (DOWN 9 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 SPEC SHORTS ARE DESPERATE TO COVER THEIR SHORTFALL BUT THEY ARE COMING IN CONTACT WITH NEW HUGE NEW SPEC LONGS AND THAT DROVE THE OI HIGHER. THE BANKERS HAD NO CHOICE BUT TO SUPPLY MASSIVE AMOUNT OF SHORT PAPER WHICH QUELLED SILVER’S RISE BUT CONTRIBUTED TO THE HIGHER OI.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

 

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY:  Bloomberg

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 2.10 POINTS OR 0.06%   / /Hang Sang CLOSED UP 190.15 POINTS OR 0.71% The Nikkei closed UP 29.48 POINTS OR .15%/Australia’s all ordinaires CLOSED UP 0.15%/Chinese yuan (ONSHORE) closed DOWN at 6.7392/Oil UP to 48.88 dollars per barrel for WTI and 50.65 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT GERMAN DAX,, Offshore yuan trades  6.7384 yuan to the dollar vs 6.7533 for onshore yuan. NOW THE OFFSHORE IS STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY  

3a)THAILAND/SOUTH KOREA/NORTH KOREA

i)NORTH KOREA

 After Mike Pompeo indicated that it would be good for a regime change in North Korea, Kim responds by threatening the USA with a “Nuclear Hammer”(THE ANTIMEDIA.ORG)

 

b) REPORT ON JAPAN

c) REPORT ON CHINA

4. EUROPEAN AFFAIRS

i)ECB

An interesting commentary from Jeffrey Snider as he analyzes the huge 2 trillion euro QE orchestrated by Draghi. He explains why he did not keep his promise and for that Europe will be in trouble but not for target 2 imbalances or differences between the North and Club Med countries:

( Jeffrey Snider/Alhambra Investment Partners)

 

ii)GERMANY/DEUTSCHE BANK
Deutsche bank although reporting higher earnings, tumbled a huge 4% as in its earnings, it had a very abysmal trading results.  The street is very concerned because this bank is the world’s largest derivative player

( zero hedge)

iii)EU
This is rather dangerous for Europe and the Schengen agreement.  The EU is forcing by court 3 countries to accept refugees which they state they will defy.
( zero hedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

6 .GLOBAL ISSUES

Sweden

The government is in trouble as by mistake it released information of just about all of its citizens. The PM will not resign and that caused the Krona to sink in value:

 

( zero hedge)

7. OIL ISSUES

8. EMERGING MARKET

9.   PHYSICAL MARKETS

i)Amazing:  Bankers are ditching their fat salaries to chase cryptocurrencies

 

( Chen/Russo/Bloomberg/GATA)

ii)Very important:  Bullion star’s Ronan Manly highlights how China is accumulating massive amounts of gold on the international market probably equating to around 500 tonnes per year. Gold purchased on the international market is secret to China as they will not divulge those purchases. This gold is different to the 2000 tonnes of gold imported into the SGE  which is for citizens only.

 

This differs a little from Alasdair Macleod who believes that China has already amassed over 20,000 tonnes of gold from 1984 onward. Both Alasdair and Manly agree that no sovereign gold is purchased through the SGE. Manly believes that China has around 3800 tonnes-4900 tonnes.

 

( Ronan Manly/Bullionstar/GATA)

 

iii)Libor is not a very good indicator as to risks among banks and loans to each other.  Libor will be phased out in 2021 and it will be replaced with another reliable indicator.

 

( Ring/Bloomberg/GATA)

iv)Be careful when you view the recent rise in copper prices.  It may be just speculative and not fundamental increase in use of this metal.

( zero hedge)

v)I have a better explanation as to the huge bleed of gold at the GLD that I have been reporting to you.  Banks are borrowing shares. They cash the shares for gold and silver and then the metals are shipped to China.

( Lawrie Williams/Sharp’s Pixley)

vi)The following is a very important commentary from Lawrie Williams.  We now have Switzerland’s gold imports and exports.  Switzerland mines zero gold.

 

What is fascinating is that for two consecutive months, Switzerland’s gold exports have exceeded gold imports.  In May the differential was 39 tonnes.  In June 37 tonnes of gold. Switzerland’s refiners are going full tilt taking London good delivery bars and making them into kilobars. The big question is why the huge deficit in each month?. No wonder we are hearing delivery delays coming from the LBMA

(courtesy Lawrie Williams/Sharp’s Pixley)

10. USA Stories

i)The Senate as promised is set to introduce the “skinny” Obamacare repeal and that has a much better chance of passing.  However it just starts the proceedings all over again as they must get the House and Senate to agree on a comprehensive health bill.  With huge differences between Republican factions..that seems unlikely

 

( zero hedge)

( Breitbart/Mathew Boyle)

iii) No wonder Illinois is broke:  they have 63,000 public employees with salaries $100,000 or greater.  This is costing the state just for those people over 10 billion dollars

( Forbes/Andrezejewski)

iv)They were hoping for a better core durable goods.  However aircraft orders surge over 131%

( zero hedge)

Let us head over to the comex:

The total gold comex open interest FELL BY 13,506 CONTRACTS DOWN to an OI level of 450,321 WITH THE  FALL IN THE PRICE OF GOLD ($2.25 with YESTERDAY’S trading). The liquidation in the total gold comex has now resumed. The comex gold longs relinquished their comex contracts for 13,506 EFP’s which entitles the holder to a fiat bonus plus a future deliverable product but on an other exchange, most likely London’s gold forward market  (LBMA)

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 14 contract(s) to stand at 5 contracts. We had only 14 notices filed YESTERDAY morning, so we GAINED 0 contracts or an additional 0 oz will stand in this non active month of July.  Thus 0 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 33,423 contracts DOWN to 75,246, as this month winds down prior to first day notice, Monday July 31.  The next non active contract month is September and here they GAINED 127 contract to stand at 1057. The next active delivery month is October and here we gained 77933 contracts up to 38,052.  October is the poorest of the active gold delivery months as most players move right to December.

We had 4 notice(s) filed upon today for 400 oz

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

On July 27.2017:  open interest for the front month: 75,246 contracts compared to July 27.2016:   88,176.

THERE ARE 2 MORE READING DAYS BEFORE FIRST DAY NOTICE, MONDAY JULY 310.2017

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And now for the wild silver comex results.  Total silver OI ROSE BY 1352 contracts FROM 206,347 up to 207,699 WITH YESTERDAY’S  9 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. THE BANKERS HAD NO CHOICE BUT TO SUPPLY THE NECESSARY PAPER AS THEY WERE ORCHESTRATING THEIR NORMAL RAID ON COMEX OPTIONS EXPIRY. THIS IS WHY THE OPEN INTEREST ROSE DESPITE THE DROP IN SILVER PRICE. 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 39 contracts RISING TO 112. We had 21 notices served  yesterday so we gained 60 CONTRACTS or an additional  300,000 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 LOST 35 contracts to stand at 452.  The next big active delivery month for silver will be September and here the OI LOST ANOTHER 298 contracts DOWN to 146,459.

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: 16.410 million oz.

We had 112 notice(s) filed for 560,000 oz for the June 2017 contract

VOLUMES: for the gold comex

Today the estimated volume was 200,552 contracts which is fair/

Yesterday’s confirmed volume was 376,061 contracts  which is HUGE

volumes on gold are STILL HIGHER THAN NORMAL!

Initial standings for JULY

 July 27/2017.

Gold Ounces
Withdrawals from Dealers Inventory in oz   nil
Withdrawals from Customer Inventory in oz  
12,800.000 oz
400  KILOBARS
Deposits to the Dealer Inventory in oz NIL  oz
Deposits to the Customer Inventory, in oz 
64,322.587 oz
 hsbc
No of oz served (contracts) today
 
4 notice(s)
400 OZ
No of oz to be served (notices)
1 contracts
100 oz
Total monthly oz gold served (contracts) so far this month
175 notices
17500 oz
.5443 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   150,027.5 oz
Today we HAD  1 kilobar transaction(s)/ 
We had 0 deposit into the dealer:
total dealer deposits: nil oz
We had nil dealer withdrawals:
total dealer withdrawals:  0 oz
we had no dealer deposits:
total dealer deposits:  nil oz
we had 1  customer deposit(s):
 i) Into HSBC: 64,311.587  oz
total customer deposits; 64,311.587  oz
this is the 4th day in a row that  a huge amount of gold enters the comex gold
We had 1 customer withdrawal(s)
i) Out of Scotia:  12,860.000 oz
total customer withdrawals; 12,860.000 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 4  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 (175) x 100 oz or 17,500 oz, to which we add the difference between the open interest for the front month of JUNE (5 contracts) minus the number of notices served upon today (4) x 100 oz per contract equals 17,600  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 (175) x 100 oz  or ounces + {(5)OI for the front month  minus the number of  notices served upon today (4) x 100 oz which equals 17,600 oz standing in this  active delivery month of JULY  (0.5474 tonnes)
We GAINED 0 contracts or AN ADDITIONAL 0 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) = 8,691.779.684 or 270.35 tonnes 
 
Over a year ago the comex had 303 tonnes of total gold. Today the total inventory rests at 270.35 tonnes for a  loss of 33  tonnes over that period.  Since August 8/2016 we have lost 84 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  84 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE June DELIVERY MONTH
 
JULY INITIAL standings
 July 27 2017
Silver Ounces
Withdrawals from Dealers Inventory  nil
Withdrawals from Customer Inventory
1,142,069.980 oz
 JPMorgan
Scotia
Deposits to the Dealer Inventory
nil  oz
Deposits to the Customer Inventory 
629,404.600 oz
JPM
No of oz served today (contracts)
112 CONTRACT(S)
(560,000 OZ)
No of oz to be served (notices)
0 contracts
( NIL oz)
Total monthly oz silver served (contracts) 3282 contracts (16,410,000 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 3,710,901.0 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 JPM: 300,039.380 oz
ii) Out of Scotia:  811,679.110 oz
TOTAL CUSTOMER WITHDRAWALS:   1,142,069.98 oz
We had 2 Customer deposit(s):
i) Into JPM: 629,404.600 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: 629,404.600 oz
 
 we had 0 adjustment(s)
The total number of notices filed today for the JULY. contract month is represented by 112 contract(s) for 560,000 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 3282 x 5,000 oz  = 16,410,000 oz to which we add the difference between the open interest for the front month of JULY (112) and the number of notices served upon today (112) x 5000 oz equals the number of ounces standing
 

 

.
 
Thus the INITIAL standings for silver for the JULY contract month:  3282 (notices served so far)x 5000 oz  + OI for front month of JULY.(112 ) -number of notices served upon today (112)x 5000 oz  equals  16,410,000 oz  of silver standing for the JULY contract month.
We gained ANOTHER 60 contracts for an additional 300,000 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 33,804 which is GOOD
YESTERDAY’s  confirmed volume was 71,721 contracts which is EXCELLENT
YESTERDAY’S CONFIRMED VOLUME OF 71,721 CONTRACTS EQUATES TO 358 MILLION OZ OF SILVER OR 52% 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:   214.202 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 7.4 percent to NAV usa funds and Negative 7.1% to NAV for Cdn funds!!!! 
Percentage of fund in gold 62.4%
Percentage of fund in silver:37.5%
cash .+0.1%( July 27/2017) 
2. Sprott silver fund (PSLV): STOCK   NAV FALLS TO +0.39% (July 27/2017) 
3. Sprott gold fund (PHYS): premium to NAV RISES TO -0.61% to NAV  (July 27/2017 )
Note: Sprott silver trust back  into POSITIVE territory at +0.39/Sprott physical gold trust is back into NEGATIVE/ territory at -0.61%/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 27/LATE LAST NIGHT, A HUGE WITHDRAWAL OF 5.03 TONNES WITH GOLD UP $10.45 ON THE DAY/

July 26/NO CHANGE IN GLD INVENTORY WITH GOLD DOWN $2.55/INVENTORY RESTS AT 800.45 TONNES

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
July 27 /2017/ Inventory rests tonight at 795.42 tonnes
*IN LAST 198 TRADING DAYS: 154.82 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 139 TRADING DAYS: A NET  27.39 TONNES HAVE NOW BEEN WITHDRAWN FROM  GLD INVENTORY.
*FROM FEB 1/2017: A NET  14.20 TONNES HAVE BEEN WITHDRAWN.

end

Now the SLV Inventory

July 27/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ WITH SILVER UP 13 CENTS TODAY.

July 26/NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 343.812 MILLION OZ

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 27.2017:
 Inventory 343.812  million oz
end
  • 6 Month MM GOFO

    Indicative gold forward offer rate for a 6 month duration

    + 1.22%
  • 12 Month MM GOFO
    + 1.42%
  • 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 $1258.25                                                                                                    OI for gold today: 450,321//Oi for silver  207,699
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 $16.70
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 450,321 OI for gold) accompanying  199,826 and 207,699 for silver)
It seems the data suggests power manipulation to control the price through paper!

END

Major gold/silver trading/commentaries for THURSDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Gold A Good Store Of Value – Protect From $217 Trillion Global Debt Bubble

– ‘Mother of all debt bubbles’ keeps gold in focus
– Global debt alert: At all time high of astronomical $217 T
– India imports “phenomenal” 525 tons in first half of 2017
– Record investment demand – ETPs record $245B in H1, 17
– Investors, savers should diversify into “safe haven” gold
– Gold good ‘store of value’ in coming economic contraction

by Frank Holmes, U.S. Global Investors

Gold’s medium- to long-term investment case, I believe, looks even brighter. Many unsettling risks loom on the horizon—not least of which is a record amount of global debt—that could potentially spell trouble for the investor who hasn’t adequately prepared with some allocation in a “safe haven.”

According to the highly-respected Institute of International Finance (IIF), global debt levels reached an astronomical $217 trillion in the first quarter of 2017—that’s 327 percent of world gross domestic product (GDP). Notice that before the financial crisis, global debt was “only” around $150 trillion, meaning we’ve added close to $120 trillion in as little as a decade. Much of the leveraging occurred in emerging markets, specifically China, which is spending big on international infrastructure projects.

It goes without saying that this is a huge risk. Some are calling this mountain of debt “the mother of all bubbles,” and we all remember how the last two bubbles ended, in 2000 (the tech or dotcom bubble) and 2007 (the housing bubble).

Paying down this debt will not be easy. As Scotiabank mentioned in a note last week: “Higher interest rates are going to make the burden of refinancing the debt considerably heavier, and as more money goes into servicing the debt, it means less money is available to spend on other things, which could lead to less infrastructure spending and increased austerity.”

Add to this the fact that global pension levels are also sharply on the rise, with people living longer and population growth—and therefore workforce growth—slowing in many advanced economies. In May, the World Economic Forum (WEF) estimated that by 2050, the size of the retirement savings gap—unfunded pensions, in other words—could be as much as $400 trillion, an unimaginably large number.

The U.S. alone adds about $3 trillion every year to the pension deficit. I shared with you earlier in the month that the State of Illinois’s unfunded pensions could be as high as $250 billion, putting each Illinoisan on the hook for $56,000.

Central banks’ efforts to promote economic growth through monetary easing haven’t exactly been a raging success, nor can they continue forever. Plus, near-zero interest rates are precisely what encouraged such inflated levels of borrowing in the first place.

Conclusion
You can probably tell where I’m headed with all of this. Another crisis could be in the works. Savvy investors and savers might very well see this as a sign to allocate a part of their portfolios in “safe haven” assets that have historically held their value in times of economic contraction.

Gold is one such asset that’s been a good store of value in such times, and gold stocks have tended to outperform the yellow metal as production costs have fallen, according to Seabridge Gold. I always recommend a 10 percent weighting in gold—5 percent in bars and coins; 5 percent in gold stocks, mutual funds or ETFs.

This is an excerpt. Read the original article on U.S. Global Investors.

News and Commentary

Gold rises to 6-week high following Fed statement (FT.com)

Spot Gold Advances as Fed Holds Rates Steady, Assesses Inflation (Bloomberg.com)

Fed holds rates steady, expects to cut balance sheet ‘relatively soon’ (Reuters.com)

Gold steady as global stocks rise and dollar firms (Reuters.com)

Greece arrests Russian suspected of running $4 billion bitcoin laundering ring (Reuters.com)

TGold volatility at lowest level since 2005 and price surge from 2006 to 2012. Source Bloomberg

Gold volatility at lowest level since 2005 and price surge from 2006 to 2012 (Bloomberg.com)

The “Chuck Prince Market” Redux — Only More Dangerous (DailyReckoning.com)

Bankers Ditch Fat Salaries to Chase Digital Currency Riches (Bloomberg.com)

Reconciling the US Dollar Outlook with the Super Bullish Gold and Silver COTs (StreetWiseReports.com)

Global Monetary Policy Still “Insanely” Easy (DollarCollapse.com)

Gold Prices (LBMA AM)

27 Jul: USD 1,262.05, GBP 960.29 & EUR 1,076.53 per ounce
26 Jul: USD 1,245.40, GBP 956.72 & EUR 1,071.29 per ounce
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

Silver Prices (LBMA)

27 Jul: USD 16.79, GBP 12.77 & EUR 14.34 per ounce
26 Jul: USD 16.37, GBP 12.54 & EUR 14.06 per ounce
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

Recent Market Updates

– Why Surging UK Household Debt Will Cause The Next Crisis
– Gold Seasonal Sweet Spot – August and September – Coming
– 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

end

Amazing:  Bankers are ditching their fat salaries to chase cryptocurrencies

 

(courtesy Chen/Russo/Bloomberg/GATA)

Bankers ditch fat salaries to chase digital currency riches

 Section: 

By Lulu Yilun Chen and Camila Russo
Bloomberg News
Tuesday, July 25, 2017

Richard Liu gave up a seven-figure salary this month to get into one of the hottest financial instruments around right now: initial coin offerings. The former China Renaissance deal maker has since backed a clutch of cryptocoin sales that have raised millions — sometimes in seconds — often without a single product.

From Hong Kong and Beijing to London, accomplished financiers are abandoning lucrative careers to plunge into the murky world of ICOs, a way to amass quick money by selling digital tokens to investors sans banks or regulators. Cut out of the action, a growing cohort of banking professionals are instead applying their talents toward buying or hawking cryptocurrency.

They are going in with eyes wide open. For Liu, who put together some of China’s biggest tech deals in his old job, the chance to shape the nascent arena outweighs the dangers of a market crash or crackdown. Loosely akin to IPOs, ICOs have raised millions from investors hoping to get in early on the next bitcoin or ether, and their unchecked growth over the past year is such that they have drawn comparisons to the first ill-fated dot-com boom. Yet with stratospheric bonuses largely a thing of the past, the allure of an incandescent new arena far from financial red-tape has proven irresistible to some. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-07-25/bankers-ditch-fat-sal…

 

 

END

 

 

Very important:  Bullion star’s Ronan Manly highlights how China is accumulating massive amounts of gold on the international market probably equating to around 500 tonnes per year. Gold purchased on the international market is secret to China as they will not divulge those purchases. This gold is different to the 2000 tonnes of gold imported into the SGE  which is for citizens only.

 

This differs a little from Alasdair Macleod who believes that China has already amassed over 20,000 tonnes of gold from 1984 onward. Both Alasdair and Manly agree that no sovereign gold is purchased through the SGE. Manly believes that China has around 3800 tonnes-4900 tonnes.

 

(courtesy Ronan Manly/Bullionstar/GATA)

Bullion Star: China’s secretive accumulation of gold on the international market

 Section: 

9:40p ET Wednesday, July 26, 2017

Dear Friend of GATA and Gold:

Bullion Star today reviews the evidence that China has been accumulating much more gold as semi-official reserves than the country has been reporting. Bullion Star’s analysis is headlined “People’s Bank of China Gold Purchases: Secretive Accumulation on the International Market” and it’s posted at Bullion Star here:

https://www.bullionstar.com/gold-university/chinese-central-bank-gold-bu…

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

END

 

Libor is not a very good indicator as to risks among banks and loans to each other.  Libor will be phased out in 2021 and it will be replaced with another reliable indicator.

 

(courtesy Ring/Bloomberg/GATA)

LIBOR to end in 2021 as regulator says bank benchmark is untenable

 Section: 

By Suzi Ring
Bloomberg News
Thursday, July 27, 2017

Libor, the benchmark underpinning more than $350 trillion of financial products, will be phased out by the end of 2021 as U.K. regulators and banks look to replace the scandal-tarred indicator with a more reliable system.

Andrew Bailey, the head of the Financial Conduct Authority, said today that the rate isn’t sustainable because of a lack of transactions providing data. Libor became a byword for corruption after traders were caught manipulating the benchmark, leading to about $9 billion in fines and the conviction of several bankers.

“We do not think we will complete the journey to transaction-based benchmarks if markets continue to rely on Libor in its current form,” Bailey said in a speech at Bloomberg’s London headquarters. “Panel bank support for current Libor until end-2021 will enable a transition that can be planned and can be executed smoothly.” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2017-07-27/libor-to-end-in-2021-…

 

 

END

 

Be careful when you view the recent rise in copper prices.  It may be just speculative and not fundamental increase in use of this metal.

(courtesy zero hedge)

 

Dr.Copper’s False Hope – “We’ve Seen All This Before, Too Many Times”

Copper prices surged to the highest levels since May 2015 in the last few days, prompting the ubiquitous “must mean the economy is doing well”narrative from every hope-fuelled reflationist. There’s just one problem, we’ve seen all this before too many times.

The most recent spike in copper prices has been explained by the news that China may ban imports of some scrap metal, including copper, from the end of 2018, according to an industry association notice, which may lead to higher refined copper imports into the world’s largest consumer of the metal. As Reuters reports, the review of copper scrap imports is part of a broader crackdown by China authorities on imports of foreign waste as it looks to cut pollution from heavy industries to clear its skies.

The recycling branch of the China NonFerrous Metals Industry Association said on Tuesday that it had received a notice that at the end of 2018 imports of scrap metal including wire, motors and bulk scrap metal will be prohibited, according to a copy of an informal Association message sent to members of its WeChat group reviewed by Reuters.

 

“The market is reacting to the news about China banning scrap cables, scrap motor and other scrap metals from the end of next year, which could block a lot of copper supply into China,” said analyst Li Chunlan at consultancy CRU in Beijing.

However, that narrative does not hold water…

Antaike, a metals research institute under the Association, said that the ban would likely affect less than 1 million tonnes of imports that market participants are speculating could be impacted.

 

That is because the type of scrap affected by the ban only accounted for about 300,000 tonnes of China’s total 3.35 million tonnes of scrap copper imports in 2016, it said in a report.

So Reuters resorts to Dr.Copper’s Economics PhD…

Metals were also supported by a better demand outlook from China after second-quarter growth beat expectations and the International Monetary Fund raised the country’s 2017 growth forecast.

But, just like it did in November of last year after President Trump’s election, Volume in Chinese copper contracts is massively outpacing Open Interest, suggesting this latest surge is as much speculation-driven as fundamental hope.

Perhaps there is another driver of copper’s rise?

The rise and fall in China’s credit impulse that has been so highly correlated (on a lagged basis) with copper for the last eight years…

 

Alhambra’s Jeffrey Snider has some excellent in-depth insight for the fallacies of Dr.Copper’s economic inisghts…

Copper prices are up very sharply today, igniting across markets a reborn “reflation.” Treasuries along with eurodollar futures have been stuck in anti-“reflation” for quite some time. Copper, on the other hand, is not just now breaking from the pack. Going back to May 9, this important economic indication has been so far steadily bucking the trend.

When we talk about Dr. Copper it is important to settle on terms. When the price surged way out of historical proportions back in 2005, it was assumed that was in relation to the US housing mania. But 2005 was the top of that bubble, not the start. Instead, copper was reacting to the other part of the eurodollar-driven global imbalance – EM construction, especially China.

The first of China’s so-called ghost cities was begun around that time, with Communist authorities shifting state investment toward urbanization at the fastest possible rate. From the perspective of 2005, continued rapid growth was expected indefinitely. The export/industrial engine of China’s economy required workers, meaning the migration of hundreds of millions of subsistence farmers out of the rural fields and into modern cities already awaiting them.

Thus, copper’s peak in early 2011 coincides with perceptions (including those relating to global money) about how many new “ghost cities” China might still have yet to build. If the global recovery after the Great “Recession” was to be delayed, the Chinese might not need in the foreseeable future much more by way of new construction. The price of copper is therefore in large part a proxy for China’s view of that paradigm (especially given copper’s role in construction finance as collateral).

That perspective had only dimmed through the “rising dollar” period as it was realized there was the nontrivial economic risk the world economy might not recover at allCopper sank all the way back under $2 during the worst of the 2015-16 downturn the metal was no longer pricing as a recession.

“Reflation” in copper terms, therefore, is and so far has been about just what that might mean. In other words, how will the Chinese react to a truly changed economic paradigm?

One possibility is that authorities will be provoked to try to bubble their way out. Another is that the internal Chinese economy can replace as its center the once all-important manufacturing business (rebalancing). In both those possibilities there is required RMB. Any possible change in PBOC policy, public or not, can be a catalyst toward shifting baselines, low as they might be at this point.

Publicly the central bank is still neutral; in reality, CNY suggests something else; at least for RMB. The currency exchange rate has risen against the dollar more resolutely since Moody’s dared downgrade China’s debt back in May. But the start of CNY’s appreciation was May 9.

There really isn’t any other basis for copper’s behavior this far in 2017. Many if not most economic projections are still more favorable, but that really doesn’t mean all that much. The OECD, for example, raised its global trade outlook for 2017 and 2018 at its last update last month.

In November, their economic models projected $23.5 trillion in total world trade (volume) in 2017, and $24.3 trillion in 2018. As of June, those estimates were upgraded to $24.0 trillion and $25.0 trillion, respectively. A $700 billion upgrade for next year sounds terrific and surely substantial, but in context it is revealed as both a rounding error as well as a repeat of these intermittent bursts of upgraded optimism that always fail (“reflation”).

Even with minor improvement this year, the OECD does not expect it to last or more importantly to be lasting. Instead, they are projecting variations of all-around insufficient growth; some years, like this year, could be less painful than others, but stuck always way behind.

They project for China an even greater uptick in trade than the world in general. It is still not much more than a barely noticeable change, and is not expected to last much beyond 2017.

There aren’t a whole lot of new ghost cities required of the old Chinese economy in these figures (which are very likely the best case, given the history of the last decade where time and again the real economy consistently underperforms them).

It could be that copper investors, like those in global stocks, see only what they want in extrapolating a lot out of a very little improvement; turning a molehill of variable deficiency into dreams of a mountain of true recovery.

In that respect, central bankers and the media especially in the West have done little to deter such thinking (see: Mario Draghi, June 27).

That might be overthinking it too much. Copper prices really aren’t that far off the recent lows, like oil closer to that position than past highs. If last year the global economy seemed to warrant only a couple new Chinese ghost cities, then this year it might appear as if two or three more rather than the initially planned twenty could eventually be built. A positive RMB environment would seem to be the initial stage for it.

As usual, however, that all depends on even minimal growth levels from here being finally uninterrupted by (monetary) circumstances. We’ve seen all this before too many times, including as advised by Dr. Copper only a few years ago. From a low of just a bit over $3 in October 2011, copper at first surged ahead and then settled back into a volatile uptrend all the way until February 2013 – and the primordial conditions of what would be the “rising dollar.”

Copper, as many markets, is trying to investigate the possible upside scenario to what is global stagnation, malaise, or depression. We already know the downside, for China and all the rest.

*  *  *

And finally, bringing the narrative back to American shores, DoubleLine’s Jeff Gundlach tweeted about the “Copper/Gold ratio soaring to the high of the year!”…

Adding

“Not good news for the “1.50% 10 year” crowd. Neither is 10 year Bund holding above 50 bp.”

 

If China’s legged credit impulse is about to have its peak effect on Copper (as we showed above) then perhaps, just perhaps, the real pain trade (given the surging shorts in T-Bonds), is a 1.50% 10Y yield after all…

I have a better explanation as to the huge bleed of gold at the GLD that I have been reporting to you.  Banks are borrowing shares. They cash the shares for gold and silver and then the metals are shipped to China.
(courtesy Lawrie Williams/Sharp’s Pixley)

LAWRIE WILLIAMS: GLD bleeds 71.58 tonnes of gold in just over a monthThe SPDR Gold Shares ETF (GLD) – the world’s largest gold ETF – saw another 5.03 tonne withdrawal yesterday bringing the total of gold held to only 795.42 tonnes – its lowest level since mid-March 2016 and fully 71.58 tonnes below its recent interim peak of 867 tonnes seen as recently as mid-June – and 58.26 tonnes in the past month. This is a huge fall in such a short period and last time the GLD holding was as low was back in mid-March last year.

The big anomaly here is that similar big withdrawals from GLD are normally accompanied by a fall in the gold price, but in the event gold surged yesterday to over $1,260 an ounce – its highest level since mid-June. Indeed gold has effectively been on the rise for the past three weeks – a period over which GLD has bled close on 40 tonnes.

There have been various attempts to understand this unusual pattern. Ed Steer in his daily newsletter, quoting Ted Butlerwho follows movements in the silver and gold markets very closely, picks up the following quote from Ted “The most plausible and, in fact, only explanation I can come up with is that some large entity is converting shares into physical metal for the purpose of preventing share ownership from rising to or above reporting levels. When a big shareholder converts shares of SLV or GLD into metal, the shares no longer exist and, therefore, don’t need to be reported to any regulator. Likewise, direct physical ownership of silver or gold needn’t be reported to anyone no matter how large the position may grow. (This is another major factor behind why JPMorgan decided to buy physical silver). Again, a large entity amassing a large physical position in silver or gold on the sly is not bearish for price.”

Whatever the explanation the movement of gold out of GLD at a time of a rising gold prices, if it continues, has to be very worrying for gold bulls. My colleague Julian Phillips writing on my site –www.lawrieongold.com – is, however, confident that the GLD gold withdrawals will shortly turn around and we will additions back into the world’s largest gold ETF. It is noticeable that it is appears only to be GLD which has been so affected. The other big U.S. Gold ETF – the iShares Gold Trust (IAU) does not appear to be seeing similar movements and, by all accounts, the European gold ETFs, if anything, have been seeing inflows rather than outflows.

https://www.sharpspixley.com/articles/lawrie-williams- gld-bleeds-7158-tonnes-of-gold-in-just-over-a- month_270074.html

end

 

The following is a very important commentary from Lawrie Williams.  We now have Switzerland’s gold imports and exports.  Switzerland mines zero gold.

 

What is fascinating is that for two consecutive months, Switzerland’s gold exports have exceeded gold imports.  In May the differential was 39 tonnes.  In June 37 tonnes of gold. Switzerland’s refiners are going full tilt taking London good delivery bars and making them into kilobars. The big question is why the huge deficit in each month?. No wonder we are hearing delivery delays coming from the LBMA

(courtesy Lawrie Williams/Sharp’s Pixley)

27 Jul 2017

LAWRIE WILLIAMS: June Swiss gold exports: 90% moving east

The latest figures for gold exports from Switzerland just further emphasise that physical gold is continuing to move eastwards in a big way. The country’s gold refineries sent 74% of their gold exports to Greater China (the Chinese mainland and Hong Kong) and India alone, while if we add in other south and east Asian nations – Malaysia, Singapore, Taiwan, Thailand and South Korea – and the Middle East – Turkey, the UAE, Lebanon and Jordan – fully 90% of Swiss gold exports that month moved to this region.

Why is this so significant? Switzerland produces no gold of its own, but its gold refineries between them are the world’s largest gold exporters taking gold bullion and scrap from mines and other sources, including good delivery 400 ounce bars, and re-refining these into the smaller sizes in demand in Asia and the Middle East and re-exporting the bullion mostly to these eastern nations.

The latest Swiss figures also support the anecdotal evidence of extremely tight supply, with the Swiss refineries struggling to source enough gold to meet the eastern demand. In June, Switzerland exported in total 162.1 tonnes of gold while only importing 124.9 tonnes – a shortfall of 37.2 tonnes. This is the second month in a row where Swiss gold exports were substantially larger than imports – the figure for May was around 39 tonnes.

Looking in more depth at the Swiss figures, June was the first month this year in which India was not the biggest importer of Swiss gold – being replaced by both Hong Kong and China as the top export destinations. It has been widely reported that now the level of the new Indian Goods and Services Tax (GST) to be applied to gold has been set at 3%, additional imports in anticipation of perhaps an even larger imposition, have been falling away. Nonetheless total Indian gold imports in the first half of the current year at over 500 tonnes are hugely above those for 2015, when first half imports were particularly depressed due to a prolonged protest strike by the country’s huge jewellery fabrication sector. We are now entering anyway something of a hiatus period for Indian gold imports with the agricultural sector (a big gold demand source) bringing in the post monsoon harvest and July through October seen as an inauspicious time for Indian weddings where gold often plays an important part. We would thus expect Swiss gold exports to India to remain relatively low until October ahead of the big Diwali festival, which happens at the end of that month, and the resumption of the wedding season.

But as Indian gold imports fall those into China seem to be taking up the slack – see the graphic below from Nick Laird’s excellent www.goldchartsrus.com service:

One can assume that gold exports to Hong Kong will eventually mostly find their way to the Chinese mainland, but interestingly around 44% of the Swiss gold going into Hong Kong and China in June went directly to the Chinese mainland. For the half year the percentage going directly into the Chinese mainland is actually somewhat higher which further confirms the point, often ignored by the mainstream media, that Hong Kong gold exports into the Chinese mainland, can no longer be considered a proxy for China’s total gold imports. Yes, they do constitute an important part of the total figure, but nowadays may only account for 50% – or perhaps even less – of the total amount of gold flowing into the Chinese mainland.

The similar chart from www.goldchartsrus.com of Swiss gold imports (see below) may also be an excellent indicator of the Swiss refiners’ struggles to source enough gold to meet their export demands:

While much of the Swiss imported gold is indeed coming from global gold mining nations, significant amounts are also flowing in from non traditional sources like Hong Kong, the UAE and Thailand, which historically are gold importers and fabricators of gold jewellery and artefacts. This suggests that the Swiss refiners are aggressively having to seek scrap supplies for remelting and re-refining from these sources. The gold coin element in the imports may also be significant in this respect.

All in all the latest Swiss figures do emphasise what seems to be an ever continuing flow of gold from Western vaults into firmer hands in the East, and also the potential supply shortages for physical gold which appear to be building up. Ultimately these shortages will find their way into physical gold pricing. External factors like the U.S. Fed interest rate deliberations are just a diversion.

27 Jul 2017

https://www.sharpspixley.com/articles/lawri e-williams-june-swiss-gold-exports-90-moving- east_270067.html

 


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

 
 

1 Chinese yuan vs USA dollar/yuan  STRONGER 6.7392(REVALUATION SOUTHBOUND   /OFFSHORE YUAN MOVES STRONGER TO ONSHORE AT   6.7384/ Shanghai bourse CLOSED UP 2.10 POINTS OR 0.06%  / HANG SANG CLOSED UP 190.15 POINTS OR 0.71% 

2. Nikkei closed UP 29.48 POINTS OR .15%    /USA: YEN RISES TO 111.32

3. Europe stocks OPENED IN THE GREEN  EXCEPT DAX      ( /USA dollar index FALLS TO  93.60/Euro DOWN to 1.1710

3b Japan 10 year bond yield: FALLS  TO  +.073%/ 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::  48.88 and Brent: 50.65

3f Gold UP/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 FALLS TO  +.525%/Italian 10 yr bond yield UP  to 2.118%    

3j Greek 10 year bond yield RISES to  : 5.325???  

3k Gold at $1262.90  silver at:16.77 (8:15 am est)   SILVER BELOW  RESISTANCE AT $18.50 

3l USA vs Russian rouble; (Russian rouble DOWN 11/100 in  roubles/dollar) 59.53-

3m oil into the 48 dollar handle for WTI and 50 handle for Brent/

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

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 111.32 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  0.9593 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1233 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  +0.5250%

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 2.289% early this morning. Thirty year rate  at 2.8953% /POLICY ERROR)GETTING DANGEROUSLY HIGH

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

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

Global Stocks Hit New All Time High As Dollar Rebounds; Europe Volatile On Earnings Deluge

The levitation continues with S&P futures pointing to – what else – another higher open while European stocks swung between gains and losses on the busiest earnings days of the year (85 of the Stoxx 600 report) which has seen European pharma giant AstraZeneca plunge 15%, the most on record, after its flagship lung cancer trial Mystic failed to show benefits, e.while Deutsche Bank slumped 4% on a 12% plunge in FICC revenue Asian shares rose spurred by results and alongside a surge in China’s small-cap ChiNext index which surged 3.6%, its biggest one day gain since last August, after earnings reports revealed that the Chinese “National Team” aka PPT had bought 2 ChiNext shares.

Europe’s Stoxx Europe 600 Index fluctuated before edging lower amid the wave of company reports, with the likes of Nokia and BASF beating estimates but Deutsche Bank and Airbus disappointing. The Stoxx Europe 600 Index declined 0.1 percent. The U.K.’s FTSE 100 Index decreased less than 0.1 percent. Germany’s DAX Index fell 0.5 percent. The MSCI Emerging Market Index rose 0.9 percent to the highest in about three years.

In Asia, solid earnings from giants Samsung and Nintendo helped the MSCI Asia Pacific Index to the highest since December 2007. Japan’s Topix index rose 0.4 percent, while Australia’s S&P/ASX 200 Index added 0.2 percent. South Korea’s Kospi index climbed 0.4 percent. In Hong Kong, the Hang Seng Index added 0.7 percent, while the Shanghai Composite Index added 0.1 percent. 

Meanwhile, the MSCI’s 47-country All World share index cheered its latest record high.

The big story remains the relentless drop in the greenback which however may have paused for the time being, with the Bloomberg Dollar Spot Index paring an earlier drop, but still trading near the lowest in more than a year after the Fed once again surprised on the dovish side by altering its wording around inflation, suggesting recent inflationary weakness may be more persistent than expected.

“The dollar’s biggest problem is it can’t expect help from the Fed for a long time,” said Alan Ruskin, global head of forex at Deutsche Bank.  “In the short term we are still in a risk-favorable loop, whereby subdued goods and services inflation supports a well-behaved bond market and asset inflation. It’s just another day in paradise.”

Elsewhere in currencies, the yen traded at 111.35 per dollar, while the Aussie extended gains above 80 US cents, rising 0.4 percent after jumping 0.9 percent Wednesday. The Bloomberg Dollar Spot Index dipped less than 0.05 percent to the lowest in about 15 months as of 9:40 a.m. in London. The euro declined 0.1 percent to $1.1727. The British pound rose 0.1 percent to $1.3138, the strongest in more than 10 months. The Swiss franc decreased 0.3 percent to $0.9542, the weakest in more than a week.

Oil prices paused near eight-week highs after a surprisingly sharp drop in U.S. inventories encouraged speculation a global crude glut would recede. A bout of profit-taking saw Brent crude futures ease 7 cents to $50.90 a barrel, while U.S. crude dipped 5 cents to $48.70.

In rates, Germany’s 10-year yield decreased five basis points to 0.52 percent. France’s 10-year yield fell four basis points to 0.772 percent. Britain’s 10-year yield declined four basis points to 1.191 percent.

Economic data include jobless claims, durable goods orders. Scheduled earnings include Amazon, Procter & Gamble, Comcast, Verizon, Intel. U.S.

Bulletin Headline Summary

  • Swedish PM, Lofven is said to not call a snap election and is to re-arrange cabinet
  • Yields have continued to soften across Europe
  • Looking ahead, highlights include US Durables, Wholesale Inventories and Weekly Jobs

Market Snapshot

  • S&P 500 futures up 0.2% to 2,477.75
  • MXAP up 1% to 160.81
  • MXAPJ up 0.9% to 532.31
  • Nikkei up 0.2% to 20,079.64
  • Topix up 0.4% to 1,626.84
  • Hang Seng Index up 0.7% to 27,131.17
  • Shanghai Composite up 0.06% to 3,249.78
  • Sensex up 0.4% to 32,524.37
  • Australia S&P/ASX 200 up 0.2% to 5,785.01
  • Kospi up 0.4% to 2,443.24
  • STOXX Europe 600 down 0.08% to 382.44
  • German 10Y yield fell 4.7 bps to 0.514%
  • Euro down 0.08% to 1.1725 per US$
  • Italian 10Y yield fell 1.7 bps to 1.836%
  • Spanish 10Y yield fell 3.2 bps to 1.515%
  • Brent Futures down 0.3% to $50.84/bbl
  • Gold spot up 0.1% to $1,261.95
  • U.S. Dollar Index down 0.2% to 93.52

Top Overnight News

  • Deutsche Bank’s Trading Outlook Dims; AstraZeneca Plummets After Failed Trial; Big Oil Earnings Beat Across the Board
  • Libor will be phased out by the end of 2021, as U.K. regulators and banks look to replace the scandal- tarred indicator with a more reliable system
  • Senate Republicans who have promised to demolish Obamacare are swerving toward a bare-bones approach that might eliminate just a few pieces of the landmark health-care law
  • Hedge funds which had built up an unprecedented bet against two-year
    U.S. notes in the futures market, left battered by the dovish Fed
  • With House members planning to leave Washington Friday for a five-week recess, the lack of a budget is raising doubts that a tax rewrite — one of President Donald Trump’s top priorities — can get done this year, or even before the 2018 elections
  • Schneider Electric SE agreed to buy U.S. power-systems maker ASCO Power Technologies for $1.25 billion as the French company expands in North America and seeks to offset falling sales at its infrastructure division
  • Energy Capital Partners, the private equity firm that owns the largest stake in U.S. power generator Dynegy Inc., is now in advanced talks to buy its rival Calpine Corp.
  • Apollo Global Management LLC amassed $24.6 billion for the largest fund ever raised by a leveraged-buyout firm, crowning a string of record-setting war chests as investors hunt for better returns
  • Just four months into his latest turnaround plan, Deutsche Bank CEO John Cryan is already dialing back ambitions
  • Viacom has dropped out of the bidding to buy Scripps; Discovery remains in talks for deal, WSJ reports
  • Ex-PBOC adviser sees capital outflow as biggest potential threat: Caixin
  • Moody’s changes China banking system outlook to stable from negative
  • Japan doesn’t need fiscal stimulus, economic adviser Takahashi says
  • Brazil cuts benchmark lending rate by 100bps to 9.25%

Asia equity markets were mostly higher following the US gains, where stocks marginally extended on advances amid earnings and following a somewhat dovish-perceived FOMC. As such, mild upside was observed in ASX 200 and Nikkei 225, with the former led by strength across the commodities complex. Elsewhere, Shanghai Comp. and Hang Seng. traded mixed with underperformance in the mainland bourse after the PBoC reduced its liquidity operations, while participants also digested mixed Industrial Profits data. 10yr JGBs were higher despite the mostly positive tone in the region, as yields tracked the declines in their US counterparts following the aforementioned FOMC, while today’s 2yr auction results failed to impact prices as the results were mixed. China Industrial Profits in June rose Y/Y 19.1%, above May’s 16.7%.  The PBoC injected CNY 60bln 7-day reverse repos, while the PBoC set CNY mid-point at 6.7307 (Prey. 6.7529)

Top Asia News

  • Noble Group Shares Collapse After Warning of $1.8 Billion Loss
  • Glencore Is Said In Talks to Share Assets Yancoal Won From Rio
  • India Said to Mull Allowing Funds to Lend Bonds in Repo Market
  • Queensland Sees Adani Tapping Equipment Firms to Fund Giant Mine
  • Japan’s Main Opposition Leader Resigns Amid Turmoil in Her Party

European equities are pretty choppy this morning with today being without a doubt the busiest session so far in Europe on the earnings front, as the majority of Europe’s largest reported before the open. All eyes on AstraZeneca (-15%) as they look set for their worst day on record after initial reports in their lung cancer trial failed to meet primary objectives. Consequently, the healthcare sector underperforms noticeably with the sector slipping 1.5%. On a brighter note, AB InBev and Diageo are enjoying sizeable gains after firm financial results. EGBs higher this morning with the German curve slightly flatter this morning, notable activity has been seen going through in futures with reports of one black trade of 5k at 162.29 with some believing this to be a buyer of Bunds. The EU has warned that the next phase of Brexit negotiations will be delayed for two months because of the UK’s refusal to engage with Brussels on the so-called ‘Brexit divorce bill’, according to the Telegraph. UK Home Secretary Rudd said the government would seek a transitional Brexit arrangement, which would likely to include free movement to avoid a “cliff edge” for employers or EU nationals in the country.

Top European News

  • London Walkie Talkie Skyscraper Sells for a Record $1.7 Billion
  • Macron Unleashes a Decade of Italian Anger Since Zidane Headbutt
  • Price Shock Too Big to Ignore Seen Halting Russian Rate Cuts
  • Norway Gas Outage Keeps EU Traders Busy Before Summer Lull
  • U.K. Commissions Study Into Impact of EU Workers on Economy

In currencies, USD selling continued last night post the FOMC meeting in which the central bank was slightly more downbeat on inflation. Subsequently, this prompt the USD sell-off to benefit major FX pairs, with the greenback at 2Y lows against the EUR. Notable size in the options market with 1.3bln worth of vanilla options situated at 1.17. Sweden are currently gripped by a political crisis after opposition parties called for a no confidence vote in PM Lofven’s minority government (potentially for August) following handling of an IT out-sourcing deal. With suggestions that the option on the table were possibly for the PM to call a snap election EURSEK broke the early morning range of 9.5680-9.5870 to breach 9.6000. However, the weakness in SEK had been pared after the PM announced that he would reshuffle cabinet.

Looking at the day today, we will see June data on durable (+3.7% mom expected) and capital goods orders (+0.3% mom expected) as well as wholesale inventories (+0.3% mom expected). We will also see jobless claims numbers and the Kansas City Fed’s manufacturing index (11 expected) due. Notable US companies reporting include: Intel, Western Digital, Dow Chemical, Mastercard, Procter & Gamble, Conocophillips and Amazon.

US Event Calendar

  • 8:30am: Initial Jobless Claims, est. 240,000, prior 233,000; Continuing Claims, est. 1.96m, prior 1.98m
  • 8:30am: Durable Goods Orders, est. 3.7%, prior -0.8%; Durables Ex Transportation, est. 0.4%, prior 0.3%
  • 8:30am: Cap Goods Orders Nondef Ex Air, est. 0.3%, prior 0.2%; Cap Goods Ship Nondef Ex Air, est. 0.25%, prior 0.1%
  • 8:30am: Advance Goods Trade Balance, est. $65.5b deficit, prior $65.9b deficit, revised $66.3b deficit
  • 8:30am: Wholesale Inventories MoM, est. 0.25%, prior 0.4%; Retail Inventories MoM, prior 0.6%
  • 8:30am: Chicago Fed Nat Activity Index, est. 0.4, prior -0.3
  • 9:45am: Bloomberg Consumer Comfort, prior 47.6
  • 11am: Kansas City Fed Manf. Activity, est. 11, prior 11

DB’s Jim Reid concludes the overnight wrap

Before we review a broadly in-line FOMC, albeit one that led to a sharpish fall in yields and the dollar its worth reminiscing that it was 5 years ago yesterday that Draghi gave his infamous “Whatever it takes…” speech. So what did it take and what did it achieve? Well the depo rate was cut 4 times to -0.4% and ECB balance sheet has expanded to €4.24tn from just over €3tn 5 years ago. However in September 2014 this had dropped to c.€2tn. So in just under 3 years the ECB has acquired around €2.25tn of securities which interestingly is roughly the size of the entire annual output of France (population 67mn) and only a bit more than that of India (population 1.32bn). Over that 5 year period of 39 major global assets we track on a regular basis the IBEX (+109%), S&P 500 (+106%), FTSE-MIB (+93%) and the DAX (+84%) are the best performers in USD terms.

As one would expect Spanish (+52%) and Italian (+44%) government bonds have dramatically outperformed Bunds (+6%), Treasuries (+5%) and Gilts (+2%). The Euro is actually ‘only’ -4% lower against the USD over the period. Actually it’s interesting that in this world of extreme QE and the perception that bonds are  in a semi-permanent low yield environment with inflation at rock bottom levels, that the core bond market returns above are actually pretty uninspiring and would have given investors a negative real return over 5 years. Probably our strongest held medium-term view continues to be that core bond markets have very  little chance of giving investors a positive real return over any medium-long term horizon. Anyway Draghi clearly did what it took to avert a European financial disaster but only history will tell us whether the huge asset purchases, negative rates and yields were a price worth paying for such a dramatic turnaround in the peripheral asset class complex.

It will also be interesting to see what history makes of the Fed’s huge balance sheet expansion in recent years and also their decision to start the reduction process. It will be a journey into the unknown from a historical perspective. On that topic last night’s FOMC outcome was broadly inline with expectations but the market must have thought it more dovish than expected as 10 year US yields fell around 4.5bps after the statement and by the same amount on the day. The Dollar index fell by -0.5% immediately after too.

Our US economists saw two minor surprises in the statement. One was the more explicit firming in the Committee’s guidance about the timing to start its balance sheet unwind, which they now expect to begin “relatively soon.” Secondly, it was how the Committee described the inflation outlook. They now acknowledged the further decline in (PCE) inflation since the June meeting, and now view inflation as running “below” rather than “somewhat below” their inflation target (2% in the medium term). Elsewhere, the committee upgraded their view on job gains post solid June employment stats.

On the back of this, DB’s rate expectations remain unchanged, where we expect the Fed to announce it will begin a gradual tapering of its balance sheet reinvestment purchases in October and see the next rate hike coming in December. Looking at market pricing from Bloomberg, traders appear to have taken a very slightly dovish outlook, with the chance of a rate hike in Dec 17 slightly lowered to 43% vs. 45% pre the FOMC.

Global equity markets continued to post small gains yesterday. Over in the US, the FOMC didn’t seem to have much impact and generally strong earnings pushed the S&P 500 (+0.03%), Dow (+0.45%) and the NASDAQ (+0.17%) to slightly higher brand new highs. In Europe the STOXX 600 index posted strong gains of +0.5%, with nearly every single sector ending the day in positive territory. Regional markets were also broadly positive, as the DAX (+0.33%), FTSE (+0.24%), CAC (+0.56%) and FTSE MIB (+0.56%) were all up on the day as well. This morning in Asia, markets are broadly up, with the Nikkei (+0.1%), Kospi (+0.2%) and Hang Seng (+0.5%) higher, but two of the three main Chinese bourses have fallen -0.6% with the Shenzhen bucking the trend (+0.6%).

Back to bonds yesterday, in Europe we saw German Bund yields (2Y -1bp; 10Y -1bp) lower. Elsewhere Gilt yields fell across all maturities (2Y -3bps; 10Y -3bps) following a fairly lacklustre (if expected) Q2 GDP growth number of +0.3% (+0.2% last quarter) or +1.7% YoY (+2.0% previous).

In other FX markets the Euro/USD climbed by 0.7% – all after the FOMC – and to a fresh 30-month high. Sterling/USD also climbed a similar amount at the same point (+0.6%) to 10-month highs. Both are also a couple of tenths of a percent higher again in Asian trading. In commodity markets the energy sector saw broad based gains as oil continued to rally (WTI +1.8% – although most of this was holding onto levels from the after hours performance the night before), with gains of +6.2% on the week so far. Precious metals were mostly flat on the day while industrial metals gained (Copper +3.3%; Aluminium +0.9%). Agricultural commodities also posted broad based gains.

Away from markets, the voting drama to repeal Obamacare continues. Overnight, the Senate rejected a simple repeal of the plan on votes of 45-55. Senator Cornyn is now exploring a scaled back repeal plan that may be easier to pass, but the House Freedom Caucus Chairman Meadows said there was “zero” chance the house would go for a skinny repeal of Obamacare even if the Senate pass it first. Forward plans are still unclear and it is possible that this could lead to an all-night voting event at some point soon, featuring dozens of amendment votes.

Elsewhere, Treasury secretary Mnuchin reiterated the government can finance tself through September but warned that there is a cost to delaying an increase to the government debt limit.

Staying with US fiscal policy, the Washington Post ran a story that White House officials may be looking to pass a sharp short-term tax cut if President Trump’s broader tax reform plans falter. These contingency plans could be pursued as soon as September and highlight the challenges faced by a broader tax overhaul. According to the story, the top advocates for the targeted tax cut are Larry Kudlow and Steve Moore, both top economic advisers during Trump’s campaign who remain in contact with White House officials. Their pitch is a plan called “Three Easy Pieces” which would (i) cut the corporate tax rate from 35% to 15% for 10 years, (ii) double the standardized deduction that Americans claim in their taxes and (iii) allow companies to bring money back from overseas without a significant tax penalty. While Moore expects the changes to cost between U$2-3tn over 10 years, they could ramp up economic growth and give Congress more time to plan out a broader overhaul of the tax code. This is however a departure from the tax plan crafted by Mnuchin and Cohn over several months, and neither has reportedly entertained the idea much so far. This should become an important story to follow contingent on how tax reform discussions proceed.

Taking a look now at some of the other data out yesterday. Europe saw the July consumer confidence reading out of France disappoint (104 vs. 108 expected; 108 previous). Over in the US the only data ahead of the FOMC rate decision was new home sales data which held steady at 610k against expectations of an increase (615k expected; 610 previous).

For Thursday, the morning session looks quiet with only the German GfK Consumer Confidence indicator for August (10.6 expected; 10.6 previous) and the Euro area M3 money supply number due. Across the pond it’s a busier day over in the US as we will see June data on durable (+3.7% mom expected) and capital goods orders (+0.3% mom expected) as well as wholesale inventories (+0.3% mom expected). We will also see jobless claims numbers and the Kansas City Fed’s manufacturing index (11 expected) due. Notable US companies reporting include: Intel, Western Digital, Dow Chemical, Mastercard, Procter & Gamble, Conocophillips and Amazon. Notable European companies reporting include: Nestle, Shell, Fiat, Volkswagen and Bayer AG. Indeed this is set to be the busiest day for European earnings with 85 of the Stoxx 600 reporting.

 END

3. ASIAN AFFAIRS

i)Late TUESDAY night/WEDNESDAY morning: Shanghai closed UP 2.10 POINTS OR 0.06%   / /Hang Sang CLOSED UP 190.15 POINTS OR 0.71% The Nikkei closed UP 29.48 POINTS OR .15%/Australia’s all ordinaires CLOSED UP 0.15%/Chinese yuan (ONSHORE) closed DOWN at 6.7392/Oil UP to 48.88 dollars per barrel for WTI and 50.65 for Brent. Stocks in Europe OPENED IN THE GREEN EXCEPT GERMAN DAX,, Offshore yuan trades  6.7384 yuan to the dollar vs 6.7533 for onshore yuan. NOW THE OFFSHORE IS STRONGER  TO THE ONSHORE YUAN/ ONSHORE YUAN  STRONGER (TO THE DOLLAR)  AND THE OFFSHORE YUAN IS MUCH STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE WEAKER DOLLAR. CHINA IS VERY HAPPY TODAY 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

NORTH KOREA/

After Mike Pompeo indicated that it would be good for a regime change in North Korea, Kim responds by threatening the USA with a “Nuclear Hammer”

(COURTESY THE ANTIMEDIA.ORG)

b) REPORT ON JAPAN

end

c) REPORT ON CHINA

end

4. EUROPEAN AFFAIRS

ECB

An interesting commentary from Jeffrey Snider as he analyzes the huge 2 trillion euro QE orchestrated by Draghi. He explains why he did not keep his promise and for that Europe will be in trouble but not for target 2 imbalances or differences between the North and Club Med countries:

(courtesy Jeffrey Snider/Alhambra Investment Partners)

Draghi Did Not Keep His Promise

Authored by Jeffrey Snider via Alhambra Investment Partners,

It is like a great many things forgotten now, but five years ago today the head of the ECB compared Europe to a bumblebee. That’s not quite right, however, as Mario Draghi really said the euro was like a bumblebee, but you’d be forgiven for mixing the two up. The purpose of his folksy analogy was so that Europe and its currency might forever be interwoven, the two inseparable in fact as well as theory.

We are reviewing, of course, Draghi’s promise on occasion of its half-decade mark. Being in charge of Europe’s central bank at that moment in time was no easy job. The Continent was beset by enormous problems seemingly on all sides. Not even a year before, the European banking system nearly fell into its own Lehman moment (what was it that actually happened on December 8, 2011?), leaving the ECB to scramble up nearly €1 trillion in “liquidity” (LTRO’s).

And still it didn’t seem to be working. The banking crisis faded, as they always do, but the effects of it did not. By summer 2012, the euro seemed to be coming apart. The immediate problem was the euro’s apparently fatal tie between very different economic systems; this North/South divide, or PIIGS versus largely Germany. Peripheral European bond spreads had blown out, suggesting that there were deeper problems than simply short run liquidity.

On July 26, 2012, Draghi put himself in front of the cameras and declared to the world the euro would survive no matter what.

The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.

Was it? As human beings, we like to use the opportunity round numbers afford to take stock of things. And why not? Of big things there needs to be such accounting, and, if need be, reckoning.

On the basis of just peripheral bond spreads, at first glance the promise was a triumph. A more determined view would only give it qualified success. Peripheral spreads have collapsed when compared to the worst of 2011-12, but they have never normalized to pre-crisis conditions. There remains five years later a distinct premium (that rose again, importantly, in the global downturn of 2015-16).

A hundred and fifty basis points is not 600, to be sure, but it’s also not zero and that matters. Whatever it is that drives the differences from among these places remains in effect, if subdued. Because of this, and because of Draghi’s promise, further investigation is required on that narrow basis alone.

In the 21st century we often forget that there is a purpose to money. In many ways that’s understandable given the manner in which these kinds of things are presented for our understanding (especially in the orthodox sense). Money, as finance, has become a thing almost unto itself; a system of inputs dedicated to its own output. It is in that sense where peripheral bond spreads are often measured.

The euro isn’t supposed to be solely a currency for the standard conduct of financial purposes across Europe. Bond spreads do matter but in what they tell us about the primary conditions more necessary to fruitful social circumstances. Money is a derivative tool for economy and therefore overall social stability.

The ECB’s policy framework from July 26, 2012, forward was relatively simple in that respect. It would supply all required liquidity such that the business of money could go back to being the business of business. Remove those concerns about money, it was believed, and everything would go back to normal, or at least close enough to it that any further and necessary reforms or changes could be conducted under benign conditions. Regular economic growth solves almost all problems, or allows them to be solved with reasonable and limited disruption.

In economic terms, Draghi’s promise also comes in for qualified success. As European officials have this year become very fond of saying, real GDP for the EU has grown for 16 successive quarters. It has become for the Europeans nearly like the Japanese, where achievement is measured in the littlest amounts, the mere absence of negatives.

Given that the Continent in mid-2012 was gripped by “unexpected” re-recession, four years without renewal of it does seem to be something. But as we all have found out all around the world over the last ten years, cyclicality no longer applies. For an operating theory that counts on the clearing of monetary obstacles for the natural cyclical forces to be able to do their unfettered good, absence of cyclicality is not minor trivia.

In other words, monetary policy is almost always focused on the downside, preventing recession or the current one getting worse. Monetary theory has over the decades simply lost touch with the upside. It wasn’t necessary, economists believed, because the upside was the upside; a fact of nature. If you let go of a balloon filled with helium, or cut its string, you expect it to rise without any further exertion. That was Draghi’s promise.

If the balloon instead hangs at the same altitude, or even falls toward the ground, what do you do? That has been monetary policy in Europe ever since the promise; trying to make sense of what doesn’t make orthodox sense.

What we find instead is that the biggest threat to the euro was not the North/South divide, but that the entire European economy was malfunctioning. In that way the focus on the PIIGS in the early aftermath of the Great “Recession” was actually misleading. The peripheral bond spreads weren’t suggesting that the PIIGS were at risk that Germany and the Netherlands weren’t. They were the leading indication of where this problem would be exposed first (the weakest links).

Once that became clear(er), the ECB in 2014 went insane. Not in a Weimar Germany sort of way that many people think about for QE and LSAP’s (large-scale asset purchases), but they leapt beyond all sense of prior propriety. As of the latest figures, under the three big current programs since that time, the ECB has purchased €1,961,374,000,000 in assets (€1.64 trillion under PSPP, or QE; €224 billion CBPP3, the covered bonds; €100 billion corporate bonds). It certainly seems as if we should be worried about hyperinflation, but even Mario Draghi can’t find where all that effort ended up.

At the ECB’s latest policy meeting, he admitted what should have been obvious last year, and the year before. The media, by and large, allowed itself to be fooled by oil prices into thinking the nearly €2 trillion in so-called stimulus was just delayed.

There really isn’t any convincing sign of a pickup in inflation.

How can that be? After €2 trillion there should be something easily visible in consumer prices. The relationship between money and prices is immutable. But it’s not just inflation where this “money” has gone missing, however. A broad survey of Europe’s economic and functional money situation displays a shocking incongruity. The ECB has done a lot but only for the sake of the ECB doing a lot. The European balloon just hangs there in suspended animation.

European policymakers believe that they have cut the balloon’s tether, but whether of inflation, lending, or money markets it is clear one remains firmly fixed anyway. In that respect, Mario Draghi should have recalled his now five-year old bumblebee analogy.

The euro is like a bumblebee. This is a mystery of nature because it shouldn’t fly but instead it does. So the euro was a bumblebee that flew very well for several years. And now — and I think people ask “how come?”– probably there was something in the atmosphere, in the air, that made the bumblebee fly. Now something must have changed in the air, and we know what after the financial crisis.

Or maybe they don’t know what after the financial crisis (and its ongoing aftershocks). The threat to the euro is today greater than it was in 2012, and for that Draghi has completely failed. It comes not in Target II imbalances and Greek default penalties, but in political upheaval tied directly to what it is that Mario Draghi can’t seem to figure out. He can promise all he wants, but Europe’s fate will not be determined by his euro.

Deutsche Bank Tumbles After Abysmal Trading Results

Deutsche Bank shares tumbled 4% on Thursday after reporting better than expected earnings, driven by provisions and dramatic cost-cutting, more than offset however by a sharp drop in overall company revenue which slumped to the lowest in three and a half years, as Investment Banking revenue slumped 16%, while FICC tumbled a whopping 12% Y/Y and 30% Q/Q, with CEO John Cryan taking a page out of the Goldman playbook and blaming “muted client activity.”

The biggest German bank said Thursday net income was stronger than expected €466 million ($548 million), compared with €20 million for the same period a year earlier, while Q2 pretax profit was €822 million, beating estimates of €717 million. However, DB companywide revenue of €6.616BN  declined 10% from last year’s €7.146BN, missing consensus estimates. Its noninterest expenses last year were down 15% from a year ago.

Profit was modestly boosted by lower provisions for credit losses, which fell 70 percent from a year earlier, as well as a 6 percent decline in adjusted costs. That’s better than analysts had expected, according to Morgan Stanley, which called the results “mixed” in a note to clients.

The report dragged DB shares lower as much as 4.7%, the biggest drop since March 6, and were trading just shy of €16 last. Investors were most concerned by the poor business performance as Deutsche’s biggest division, investment banking, suffered worse-than-expected revenue declines in most key areas, from securities trading to trade financing.

Chief Executive John Cryan said “muted client activity in many of the capital markets” hurt the lender. That’s one way of putting it; another was bloodbath as net revenues were down as follows:

  • 16% in investment banking, which includes deal-advising, securities issuance and trading.
  • 7% in private and retail-banking
  • 4% in asset management

Having hobbled its trading group in recent years with mass terminations and lack of trader bonuses, the results, or lack thereof, finally emerged today as Europe’s largest bank posted dismal results in what was once its strongest division. Overall trading revenue across debt, interest rate products, currencies and equities was down 18% last quarter. The fixed-income piece of that business, the most important for Deutsche Bank, performed roughly in line with big U.S. rivals during what was broadly a rough quarter for debt trading. Deutsche Bank’s fixed-income trading revenue was down 12%. However, unlike U.S. banks, Deutsche Bank failed to get a boost from clients’ stock-trading the WSJ reported, and as a result the German bank’s equities-trading revenue fell 28% from a year earlier.

The CEO scaled back the debt trading business since taking over in 2015, and made efforts to improve controls and compliance after losses and misconduct fines. But problems with the bank’s risk management practices resurfaced last month when its traders were on course to lose as much as $60 million in a wrong-way derivatives bet on inflation.

“In equities we’ve lost a bit of market share and we’re down quite a bit,” Cryan said in the interview. “We need to invest in technology. We’ve let it slip a little bit.”

Adding insult to injury, the bank said that litigation expenses will probably rise in the second half of the year, the bank said. Several other cases are still pending for the German lender, most importantly a U.S. probe into its role in helping clients move about $10 billion out of Russia in so-called mirror trades. The bank is also facing pressure in the U.S. to disclose details about more than $300 million in loans it made to President Donald Trump for real estate projects.

According to the bank, not enough hedge funds and other clients have come back to the bank after a rocky 2016 to generate the volume of business it had a year ago. And the clients who have returned aren’t paying enough fees to make up for the exodus.

”It’s taking Deutsche Bank longer than expected to regain market share,” said Markus Riesselmann, an analyst with Independent Research who has a buy recommendation on the stock. ”But lower credit loss provisions and progress on cost cuts helped the bank achieve a better-than-expected profit.”

There was some hope: Deutsche said clients continued to return last quarter, bringing €9 billion in net inflows across the retail and private bank, wealth management and asset management, a welcome improvement from this time last year, when clients were pulling money and business over concerns about big legal charges and its capital cushion.

The dreadful performance comes at a sensitive time for CEO John Cryan: DB is going through its second major restructuring in less than two years, recombining its investment bank and trading divisions and folding in a German retail-banking business, Postbank, that it had intended to sell. It is now integrating Postbank and has closed hundreds of bank branches as part of broader cost-cutting moves. The big miss also comes just weeks after Deutsche Bank brought on a new chief financial officer, former Citigroup Inc. Treasurer James von Moltke. Ex-banker-turned-CFO Marcus Schenck is now overseeing the recombined investment bank along with trading-unit chief Garth Ritchie.

Cryan is in the process of cutting about 9,000 jobs and has a target of reducing costs by some 3 billion euros by 2021. Headcount declined by 1,525 during the quarter, and is down 4,656 from a year earlier, to 96,652 at the end of June. The bank has recently started to fill some staffing holes, particularly in its corporate finance franchise and its wealth management unit.

While it is unclear if today’s poor earnings have assured that yet another CEO replacement is in DB’s immediate future, one thing that is certain is that Deutsche Bank’s peer banks took a certain satisfaction in slamming it this morning, as the following comment summaries courtesy of Bloomberg demonstrate:

UBS (neutral)

  • 2Q is repeat of 1Q with lower-than-expected revenues, lower- than-expected costs
  • Reported revenue fell 10% y/y to EU6.6b and was 7% below consensus
  • Underlying revenue fell 7% y/y and missed consensus by 3%
  • Adj. costs fell 6%, were 3% below consensus
  • Reported pretax profit doubled, is 69% above consensus
  • Underlying pretax profit is 13% beat vs consensus
  • Beat mostly due to lower-than-expected provisions for loan losses
  • Any fundamental re-rating of stock hinges on better revenue
  • Market is too cautious about outlook for costs
  • 2Q won’t materially change market view for full year

NATIXIS (reduce)

  • Stock down this morning on low quality performance of CIB business this quarter
  • Corporate & Investment Banking performance shows Deutsche Bank losing market share in its core business
  • Pretax EU822m is 69% beat vs consensus
  • Adj. for one-offs pretax is EU1.08b and 3.1% above consensus
  • Revenue down 10% y/y to EU6.6b is 7.4% miss vs consensus
  • CIB revenue fell 16% y/y and missed by 13%
  • Global Markets revenue fell 18% y/y, missed by 14%; with FICC trading down 12% y/y and Equities down 28%
  • IB revenue down 7%, missed by 6%
  • GTB revenue down 12%, missed by 10%
  • PCB revenue ex-items down 4.4% and 0.4% above consensus
  • DAM revenue up 7%, beat by 6%
  • Costs of EU517m are down 15% y/y, but adj. for one-offs costs down 5%

HAMMER PARTNERS (neutral)

  • 2Q earnings are weaker than expected, Hammer cuts 2017/2018 EPS estimates by 5%
  • 2Q profit EU466m missed Hammer est. EU586m, consensus EU648m
  • Notes one-time gain from sale of Visa boosted year-earlier result
  • Core bank is still “massively loss-making” if adjusted for strong trading gains and EU5.1b release of litigation reserve in 1Q/2Q
  • Litigation remains hard to forecast, 2H litigation costs expected to be higher
  • 2H credit loss provisions likely to rise after “unusually low 1H”

CITIGROUP (sell/high risk)

  • Reported pretax profit of EU0.8b beat consensus for EU0.4b on lower costs and provisions
  • Underlying pretax profit beat consensus by 16%, mostly on Consolidation & Adjustments, followed by Private & Commercial Banking and Asset Management
  • Corporate & Investment Banking missed
  • 2Q will only result in small adjustments to market estimates for the full year
  • Stock may be damped by the weaker leverage ratio, cautious outlook comments
  • Pro-forma for capital increase CET1 ratio gained 225bps to 14.1%, a 30bps beat vs consensus
  • Leverage ratio gains just 40bps q/q to 3.8%, misses consensus by 20bps
  • Says leverage ratio is Deutsche Bank’s “binding constraint,” sees 2018 leverage ratio at 4.2% or ~EU4b short of 4.5% target
  • Guidance for revenue from the operating businesses is now for “lower than last year” vs previously “moderate growth”

MORGAN STANLEY (equal weight)

  • 2Q underlying pretax profit is a 4% beat vs estimates, driven by provisions and better costs while revenue was weak
  • Adj. revenue is a 4% miss with FICC weak, down 30% q/q and 15% y/y
  • Deutsche Bank said client activity was muted, volatility low
  •     Net interest income drops 15% y/y, is up 1% q/q
  • Watch for any comments in conference call on outlook for NII
  • Costs were better y/y with adj. costs beating consensus by 35%
  • 1.5% drop in headcount shows progress on revamp
  • No litigation charge, instead a EU26m litigation write back
  • On divisional level, CIB miss, AM and PCB are strong
  • Corporate & Investment Banking underlying pretax is 18% miss
  • Asset Management underlying pretax rises 15% y/y, is beat
  • Private & Commercial Bank underlying pretax 1.9% q/q gain may signal NII has bottomed

CREDIT SUISSE (underperform)

  • Says investors will be disappointed by revenue weakness
  • Revenue miss is offset by lower charges
  • Revenue missed in FICC and Equity trading and IBD
  • FICC revenue fell 34% q/q and 12% y/y to EU1.13b vs consensus EU1.25b
  • Equity revenue fell 22% q/q and 28% y/y yo EU537m vs consensus EU684m
  • IBD revenue fell 14% q/q and 7% y/y to EU563m vs consensus EU599m
END
EU
This is rather dangerous for Europe and the Schengen agreement.  The EU is forcing by court 3 countries to accept refugees which they state they will defy.
(courtesy zero hedge)

EU To Force Poland, Hungary And Czech Republic To Accept Refugees

One month after the EU’s executive Commission launched legal cases against Poland, Hungary and the Czech Republic for “defaulting on their legal obligations” by refusing to comply with the EU’s refugee quotas (i.e., accept migrants), on Wednesday the three Central European nations suffered another blow after Brussels mounted a legal fightback to force them to comply with EU refugee quotas. The top European Union court’s adviser dismissed a challenge brought by Slovakia and Hungary against the obligatory relocation of refugees across the bloc, as it prepared to sign-off legal suits against the holdout countries.

The two states, backed by Poland, wanted the court to annul a 2015 EU scheme to have each member state host a number of refugees to help ease pressure on Greece and Italy, struggling with mass arrivals across the Mediterranean. Supported by Germany, Italy and Brussels, the EU’s “relocation” law has become one of the bloc’s most divisive recent policy initiatives, forced through over the objections of states from eastern and central Europe.

The euroskeptic governments in Warsaw and Budapest have refused to take in a single asylum-seeker under the plan (which may explain the lack of terrorist events on their home soil). Slovakia and the Czech Republic have also stalled, citing security concerns after a raft of Islamist attacks in the EU in recent years. Quoted by the FT, the EU’s migration commissioner Dimitris Avramopoulos said he regretted the decision of the three member states “not to show solidarity and to ignore our repeated calls to participate in this common effort” adding that none of the responses from Budapest, Warsaw or Prague to the commission “justified that they do not implement the relocation decision”.

Avramopoulos welcomed the advocate general’s opinion but added the “door was still open” for the central-eastern countries to change their stance on the refugee quotas. “If these member states decide to change position we are ready to work with them to address their concerns”, he said. “We are at the last stage but there is still time. Let’s hope reason will prevail.”

The decision to move forward with “infringement proceedings” against Hungary, Poland and the Czech Republic is a highly charged political step that will test whether the EU member states ultimately comply with rules they have called illegal and unjust. The commission’s stance on refugees was bolstered on Wednesday by the European Court of Justice.

 

Hungary and Slovakia had mounted a legal challenge against the relocation decision, claiming it violated procedure, was improperly drafted in law and was neither a suitable or necessary policy response.

 

But in an opinion released on Wednesday an advocate general to the court rejected the claims as unfounded and recommended that judges dismiss the case. While the opinion is not binding, the views of the advocate general are followed in a majority of final rulings.

A final ECJ ruling is expected after the summer break. The court does not have to but generally does follow the advisory opinion of the Advocate General Yves Bot, whoe  rejected the procedural arguments presented by Bratislava and Budapest that obligatory quotas were unlawful.

“The contested decision automatically helps to relieve the considerable pressure on the asylum systems of Italy and Greece following the migration crisis in the summer of 2015 and … is thus appropriate for attaining the objective which it pursues,” he said. The reluctance of Poland and Hungary to help the two southern frontline states, as well as wealthier EU countries such as Germany, which has taken in hundreds of thousands of migrants, have precipitated bitter disputes in the bloc and weakened its unity.

According to Reuters,
the European Commission said on Wednesday that some 24,700 people had been moved from Greece and Italy under the plan that had been due to cover 160,000. The EU had earmarked €377.5 million – some €10,000 per person – for 2018 for a twin scheme to legally bring to Europe asylum seekers from places such as Turkey, Libya or Niger, rather than have people risk their lives in perilous Mediterranean crossings operated by smugglers.

The inflow of refugees was drastically cut after a 2016 deal with Ankara, making Italy the main gateway to Europe now, with some 94,400 arrivals so far this year across the sea. Brussels offered Italy extra money and help, and urged EU states to step up relocations from that country. It also said Rome had to improve registration of those arriving, especially some 25,000 Eritreans, to qualify them for the move.

* * *

With tensions running high over Europe’s controversial refugee-acceptance policy, mostly among central European nations, the resulting split has shaped domestic politics in recent years.

Wednesday’s decisions marked a rebuff to Hungarian prime minister Viktor Orban, who has made the rejection of EU refugee policies his central political message for more than two years. In a referendum in October last year 98.2 per cent of voters backed the government’s opposition to the EU’s refugee sharing programme, although the result was deemed invalid because of low turnout. Orban has since spent tens of millions of public funds on advertising campaigns, accusing the EU of endangering Hungarian security through its asylum policies.

And yet, despite the ruling, none of the affected nations were eager to change their mind: Slovakia’s Prime Minister Robert Fico said in a statement his government was sticking to its decision to refuse mandatory quotas and called the Advocate General’s opinion “non binding”. Hungary similarly dismissed the ruling as politically motivated.

“The main elements of the statement are political, which are practically used to disguise the fact that there are no legal arguments in it,” Pal Volner, state secretary of the Justice Ministry, was cited as saying by the state news agency MTI.

Should the ECJ eventually rule with the commission and uphold the law, it will confront Budapest and Warsaw with a political decision that could have far-reaching ramifications for the EU, according to the FT.

Outright refusal to comply once the legal challenges have run their course will have consequences in other areas, including Germany’s approach to the EU long-term budget, which must be negotiated by 2020. Some have speculated that it could result in the breakup of the Shengen customs zone which forms the backbone of the European Union.

5. RUSSIA AND MIDDLE EASTERN AFFAIRS

END

6 .GLOBAL ISSUES

Sweden

The government is in trouble as by mistake it released information of just about all of its citizens. The PM will not resign and that caused the Krona to sink in value:

 

(courtesy zero hedge)

Krona Sinks After Swedish PM Refuses To Resign, Reshuffles Cabinet Over “Disastrous Leak”

A brief (ECB/Fed-driven) sigh of relief yesterday in the Krona has ended as Sweden’s embattled PM has refused to resign over the government’s “disastrous leak” of the nation’s citizens’ information. Lofven has instead chosen to reshuffle his cabinet, ading “I don’t want political chaos in Sweden, that’s not what we need right now, I will take responsibility and ensure we don’t get a political crisis.”

However, as Bloomberg reportsopposition members were already signaling they weren’t satisfied with the steps taken, and Lofven’s government remains far from secure.

The prime minister said Home Affairs Minister Anders Ygeman and Infrastructure Minister Anna Johansson will leave the Cabinet, as parties representing a majority in parliament prepared no-confidence motions against them.

 

Defense Minister Peter Hultqvist will stay, Lofven told reporters in Stockholm on Thursday, arguing the specific motion against him was “not serious.”

 

The announcement follows speculation the prime minister would himself be forced to resign, or call an early election, in response to the deepening scandal. With the reshuffle, Lofven is buying himself time to negotiate with parliament.

 

Anna Kinberg Batra, head of the Moderate Party that leads the opposition, on Wednesday blamed Lofven for throwing Sweden into “a serious security crisis.”

 

“Confidence in the defense minister is exhausted,” she said. “The prime minister hasn’t taken responsibility — so we will demand responsibility in parliament.”

 

The anti-immigration Sweden Democrats also said they remained committed to a no-confidence vote.

Citi notes that political noise has erupted in Sweden, after the government botched its response to a security breach of classified information, and while the political situation doesn’t look like it will deteriorate for the time being, we think SEK upside is likely to remain limited for now.

 

While Swedish Prime Minister Stefan Lofven avoided the option to resign by choosing to reshuffle his government and “is now playing the ball back to opposition,” the opposition parties are likely to proceed with a no-confidence vote against Defense Minister Peter Hultqvist, SEB says in note.

Initial comments from Christian Democrats indicate that opposition aims to continue to push for a vote of no confidenceagainst Hultqvist; SEB says it will be very difficult for opposition to withdraw from that position.

“Most likely the call for the parliament to return from summer vacation in about 10 days still stands and most likely also Hultqvist will be forced out of office”

That means threat of government crisis will remain in near term.

“The opposition will continue to put pressure on the government to show political strength, while the government will try to fend off attacks by indicating it could step down or even call a snap election, something the opposition most likely would like to avoid”

Swedish politics over the next 10 days “will be a chicken race”

7. OIL ISSUES

8. EMERGING MARKET

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

Euro/USA   1.1710 DOWN .0021/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 EXCEPT GERMAN DAX

USA/JAPAN YEN 111.32 UP 0.156(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 1.31543 UP .0030 (Brexit  March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS

USA/CAN 1.2451 DOWN .0009 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS THURSDAY morning in Europe, the Euro FELL by 21 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1710; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED  UP 2.10 POINTS OR 0.06%     / Hang Sang  CLOSED UP 190.15 POINTS OR 0.71% /AUSTRALIA  CLOSED UP 0.15% / EUROPEAN BOURSES OPENED  IN THE GREEN EXCEPT GERMAN DAX 

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

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

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

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

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

The NIKKEI: this THURSDAY morning CLOSED UP 29.48 POINTS OR .15%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 190.15 POINTS OR 0.71%  / SHANGHAI CLOSED UP 2.10 POINTS OR 0.06%   /Australia BOURSE CLOSED UP 0.15% /Nikkei (Japan)CLOSED UP 29.48  POINTS OR .15%    / INDIA’S SENSEX IN THE GREEN

Gold very early morning trading: 1263.10

silver:$16.76

Early THURSDAY morning USA 10 year bond yield: 2.289% !!!  DOWN 0 IN POINTS from WEDNESDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.

 The 30 yr bond yield  2.8953, DOWN 0  IN BASIS POINTS  from WEDNESDAY night.

USA dollar index early THURSDAY morning: 93.60 DOWN 7  CENT(S) from WEDNESDAY’s close.

This ends early morning numbers  THURSDAY MORNING

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And now your closing THURSDAY NUMBERS

Portuguese 10 year bond yield: 2.955% DOWN 1 in basis point(s) yield from WEDNESDAY 

JAPANESE BOND YIELD: +.073%  DOWN  3/5   in   basis point yield from WEDNESDAY/JAPAN losing control of its yield curve

SPANISH 10 YR BOND YIELD: 1.507% DOWN 4   IN basis point yield from WEDNESDAY 

ITALIAN 10 YR BOND YIELD: 2.095 DOWN 3 POINTS  in basis point yield from WEDNESDAY 

the Italian 10 yr bond yield is trading 59 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.536% DOWN 3  IN  BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.1655 DOWN .0077 (Euro DOWN 77 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 111.64 UP  0.485(Yen DOWN 49 basis points/ 

Great Britain/USA 1.3060 DOWN  0.0054( POUND DOWN 54

basis points) 

USA/Canada 1.2533 UP .0082 (Canadian dollar DOWN 82 basis points AS OIL ROSE TO $48.98

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This afternoon, the Euro was DOWN  by 77 basis points to trade at 1.1655

The Yen FELL to 111.64 for a LOSS of 49  Basis points as NIRP is STILL a big failure for the Japanese central bank/HELICOPTER MONEY IS NOW DELAYED/BANK OF JAPAN NOW WORRIED AS AS THEY ARE RUNNING OUT OF BONDS TO BUY AS BOND YIELDS RISE  /OPERATION REVERSE TWIST ANNOUNCED SEPT 21.2016

The POUND FELL BY 54  basis points, trading at 1.3060/ 

The Canadian dollar FELL by 82 basis points to 1.2510,  WITH WTI OIL RISING TO :  $48.98

The USA/Yuan closed at 6.7430/
the 10 yr Japanese bond yield closed at +.073%  DOWN  3/5 IN  BASIS POINTS / yield/ 

Your closing 10 yr USA bond yield DOWN  1 IN basis points from WEDNESDAY at 2.325% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic  USA 30 yr bond yield: 2.942  UP 1 in basis points on the day /

Your closing USA dollar index, 94.02  UP 35 CENT(S)  ON THE DAY/1.00 PM 

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

London:  CLOSED DOWN 9.31 POINTS OR 0.12%
German Dax :CLOSED DOWN 93.07 POINTS OR 0.76%
Paris Cac  CLOSED DOWN 3.22 POINTS OR 0.06% 
Spain IBEX CLOSED UP 28.00 POINTS OR 0.26%

Italian MIB: CLOSED  UP 57.16 POINTS/OR 0.26%

The Dow closed UP 85.54 OR 0.39%

NASDAQ WAS closed DOWN 40.56  POINTS OR 0.63%  4.00 PM EST
WTI Oil price;  48.98 at 1:00 pm; 

Brent Oil: 51.44 1:00 EST

USA /RUSSIAN ROUBLE CROSS:  59.67 UP 5/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 5 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO  +0.536%  FOR THE 10 YR BOND  4.PM EST EST

END

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

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

WTI CRUDE OIL PRICE 5:00 PM:$49.15

BRENT: $51.58

USA 10 YR BOND YIELD: 2.310%  (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)

USA 30 YR BOND YIELD: 2.919%

EURO/USA DOLLAR CROSS:  1.1676 DOWN .0054

USA/JAPANESE YEN:111.21  UP  0.049

USA DOLLAR INDEX: 93.91  UP 24  cent(s) 

The British pound at 5 pm: Great Britain Pound/USA: 1.3060 : DOWN 48 POINTS FROM LAST NIGHT  

Canadian dollar: 1.2554 DOWN 103 BASIS pts 

German 10 yr bond yield at 5 pm: +0.536%

END

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

TRADING IN GRAPH FORM FOR THE DAY

Gold Surges To 6-Week Highs As Stocks Get De-FANGed, Trannies Worst Day Since Brexit

No fundamental catalyst for today’s tech wreck (just as there wasn’t last time), but many people noted the coincdental timing of JPM’s Kolanovic note on Vol fragilities coincided with the start of the pain…

 

Liquidity collapsed leaving many to think…

 

Since The Fed statement, gold is the biggest winner…

 

US equity markets suffered their worst day since June (with Trannies worst day since Brexit)… The Dow was the only index green on the day despite the ramp…

 

VIX spiked above 11…

 

Nasdaq VIX spiked back above 17 intraday and back above Russell 2000 vol..

Jeffrey Gundlach’s DoubleLine Capital purchased some five-month put options on the S&P 500 Index a couple days ago as the CBOE Volatility Index fell to its lowest since December 1993.  “We lost money the first day we put on the trade, but now we are doing great. This is like free money,” Gundlach, who is known on Wall Street as the Bond King, said in a telephone interview on Thursday. “We are in a seasonally weak period for stocks but more importantly, we think the VIX was really, really low. So the S&P puts are going long volatility.”

Tech and Financials were worst, Retailers best…

 

FANG Stocks puked…

 

GOOGL and NFLX worst, FB best on the week…

 

For a few brief moments today, Jeff Bezos became the richest man in the world…

 

The death of BAT sparked a bid for retailers but sent AMZN back to the lows of the day…

 

Despite the plunge in stocks, bonds did not rally. Lots of chatter as VIX spiked that Risk-Parity funds were deleveraging and the big ATT bond isuance likely weighed on Treasuries…

 

The dollar v-shape-recovered from yesterday’s Fed statement tumble…

 

USDJPY tumbled to a 110 handle but was quickly supported there… twice…

 

Gold had its best day in almost 2 months, closing at 6-week highs (back at Fed rate hike levels)…

 

WTI Crude closed above $49 (Sept contract) for the first time since the start of June…

 

So will tomorrow’s GDP data send stocks back down to bond yields or vice versa…

end

The Senate as promised is set to introduce the “skinny” Obamacare repeal and that has a much better chance of passing.  However it just starts the proceedings all over again as they must get the House and Senate to agree on a comprehensive health bill.  With huge differences between Republican factions..that seems unlikely

 

(courtesy zero hedge)

 

Senate GOP Leader Says “Skinny” Obamacare Repeal Has “Best Chance At Getting Us To Conference”

Right on schedule, President Donald Trump is out with his latest tweet urging Republicans to pass health-care reform: “Come on Republican Senators, you can do it on Healthcare. After 7 years, this is your chance to shine! Don’t let the American people down!”

Come on Republican Senators, you can do it on Healthcare. After 7 years, this is your chance to shine! Don’t let the American people down!

* * *

Like they say, third time’s the charm.

President Donald Trump may have spoken too soon when he praised Senate Republicans as “patriots” who would swiftly put an end to the “tyranny” of Obamacare earlier this week after the chamber passed a crucial motion to proceed with a plan to repeal the controversial health-care law.

But that plan, as well as the Senate’s repeal-and-replace alternative, have now been rejected. So, with few options remaining, the Senate Republican leadershinow believes its best chance of passing health-care reform by the end of the week lies with a so-called “skinny repeal” bill that was drafted last week.

Pundits seem to agree. Goldman’s Alec Phillips believes there’s a “somewhat greater probability” of skinny repeal passing, though he still thinks the most likely scenario would be a Republican surrender: “We believe the status quo is more likely to be maintained,” he said in a research note.

The skinny repeal bill would eliminate three of Obamacare’s most controversial features: The individual and employee mandates, and the tax on medical devices. But its biggest advantage over the other two Republican options was unwittingly revealed by Democrats, who asked the CBO to score the bill.

Turns out, a “skinny” Obamacare repeal would result in only 16 million people losing their insurance, compared with 22 million for the second draft of the Senate plan, and 32 million for full repeal, according to the Hill.

Majority whip John Cornyn, the No. 2 Republican in Senate leadership, told the Hill that skinny repeal could be Republicans’ best, and last, hope to unravel Obamacare.  

 

“ Cornyn…told reporters Wednesday that a scaled-down bill might be the best way to move forward on the issue, possibly by holding a conference committee with the House, which approved a broader repeal-and-replace bill.”

 

It “seems to have a lot of benefits, getting us to conference,” Cornyn said.

According to Reuters, a draft of the skinny bill will be released at some point on Thursday, before the Senate “embarks on a marathon voting session” that could continue into Friday morning.

The irony of this whole process is that, once Republicans muster the votes to pass a health-care bill, its contents, whether it’s repeal and replace, or some variation of a repeal bill, won’t matter all that much. Once the legislation clears the upper chamber, the Senate will form a conference committee with the House to draft an entirely new “compromise” bill. Then lawmakers will need to repeat the whole process, passing the final version of the legislation in the House, and then again in the Senate, before it lands on President Donald Trump’s desk.

To be sure, the skinny bill might not be Republicans’ only alternative. According to Reuters, Democrats are accusing Majority Leader Mitch McConnell are drafting a fourth health-care reform plan in secret. Facing united opposition from Democrats, Republicans have failed to secure the minimum 50 votes needed to pass a bill (a 50-50 split would presumably lead to a tie-breaking vote by Vice President Mike Pence). With only a slim majority of 52-48, the leadership has struggled to placate both moderates, who oppose cuts to Medicaid, and conservatives, who criticized a senate plan they believed to be “Obamacare-lite.”

(courtesy Breitbart/Mathew Boyle)

House Judiciary Committee Officially Approves Effort to Launch Investigation of Comey, Lynch

The House Judiciary Committee has officially approved an effort to launch an investigation into former FBI director James Comey’s leaking activities and apparent mishandling of a federal investigation by former Attorney General Loretta Lynch.

The new investigative effort, authorized by the passage of the amendment in the Judiciary Committee, 16-13 along partisan lines, digs deep requesting documents and information related to Comey’s leaks of conversations he had with President Donald Trump before Trump fired him. According to the Washington Post, Democrats on the committee were infuriated Republicans pressed forward with the probe.

“This is the most astonishing moment I’ve ever experienced in the Judiciary Committee,” one Democrat, Rep. Steve Cohen (D-TN), said. “To take a question about the firing of James B. Comey and turn it into a question about Hillary Clinton? The chairman has left the room. Justice has left this room. Common sense has left this room. A lot of stuff has left this room, and maybe never entered it.”

The amendment was offered by Reps. Matt Gaetz (R-FL), Jim Jordan (R-OH), Andy Biggs (R-AZ), and Mike Johnson (R-LA). It passed Wednesday evening, authorizing the opening of the Judiciary Committee probe. It remains to be seen if subjects of the investigation will cooperate, and if they do not cooperate it remains to be seen if the Committee will use its broad subpoena power to compel document production and testimony.

It also remains to be seen if House Speaker Paul Ryan will support the probe, or intervene and use his power to block it. Ryan’s spokesman has not responded to Breitbart News’s requests for comment on this matter.

“There is little question that members of Obama’s administration repeatedly broke protocol throughout their investigations into Hillary Clinton,” Johnson told Breitbart News in an emailed statement. “What is unclear, however, is why we have received few answers over the past twelve months to our questions about their actions, especially concerning the former attorney general and FBI director. The House Judiciary Committee has continued to seek answers on various issues of interest stemming from their hearings and oversight responsibilities. This is simply an effort to finally get some of those important questions answered.”

The effort was first reported by Breitbart News on Tuesday, when a draft copy of the amendment was circulated demonstrating these conservatives’ efforts to probe deep into the left’s network of leaks and corruption.

The probe is wide-ranging and includes a mandate for the House Judiciary Committee to dig deep into Lynch’s order to Comey that he should refer to the criminal investigation into former Secretary of State Hillary Clinton’s illicit email server as a “matter,” not an “investigation.” Clinton was the failed 2016 Democratic presidential nominee.

The probe also will press for document production regarding Comey’s communication with Columbia University Law Professor Daniel Richman, Comey’s friend, of conversations Comey had with President Trump. Richman was the vessel through which Comey leaked to the media details of those conversations with the president after his firing, with an apparent intent of using the media pressure from said leaks to spark the launching of the special counsel investigation of the Russia scandal. That special counsel investigation is being led by Comey’s longtime friend Robert Mueller, another former FBI director.

The investigation will also, per the amendment passed by the House Judiciary Committee, dig into Comey’s decision to “usurp the authority” of Lynch by making his “unusual announcement” that Hillary Clinton would not face criminal charges over the email scandal. It will inspect Comey’s knowledge of the firm Fusion GPS, the firm that made the fake news anti-Trump dossier that Comey brought to Trump’s attention when he was president-elect, and look at any “collusion” between Comey and Mueller—the special counsel leading the Russia probe now—especially regarding Comey’s leak through Richman to the media.

The probe, too, will look into Comey’s potential knowledge of “unmasking” of intelligence and surveillance collected on Donald Trump’s campaign or transition teams—and specifically any role that former National Security Adviser Susan Rice played in that.

But that’s not all: The probe will dig into potential immunity deals given to “co-conspirators” in Hillary Clinton’s email server scandal, including specifically Cheryl Mills, Heather Samuelson, and John Bentel.

It will also look into matters related to the Clinton Foundation’s influence from foreign governments and specifically the Uranium One deal exposed by Clinton Cash—whereby Russians obtained ownership in U.S. uranium assets. And it will investigate the infamous tarmac meeting between Bill Clinton and Loretta Lynch in Phoenix at Sky Harbor International Airport.

Biggs, one of the sponsors of the now approved amendment to officially launch the committee probe, told Breitbart News in an interview before the measure was introduced that the American people want answers to these questions.

“My constituents ask the same questions that so many people want to know the answer to, and that is why have all these investigations stopped?” Biggs said. “There was a whole lot of fire there and they just seemed to end when the new administration came in and I think there’s two or three reasons,” Biggs said in a brief phone interview on Tuesday afternoon. “Number one, I think you want justice and that leads to number two—if you don’t have justice and you’re not following the rule of law then government and lawmakers and those who enforce the law are held in derision by the public. They lose faith and confidence in those they elect and so I think this is really important to get back to those basics and find out what happened and so that’s why I think it’s important.”

Gaetz, another original sponsor, said in an emailed statement that this is a step in the right direction. “It’s time for Republicans in Congress to start playing offense,” Gaetz said.

And Jordan, the fourth original sponsor, added that Democrats have for years “obstructed justice,” but they will no longer succeed.

“For the past several years, Democrats have obstructed justice and blocked every Congressional investigation imaginable,” Jordan said in an emailed statement to Breitbart News. “Now they want to investigate? Ok, let’s investigate! Both parties have criticized James Comey over the past year for his performance as FBI director. Even Sen. Feinstein says there should be an investigation into Loretta Lynch and James Comey’s handling of the Clinton investigation. Let’s have a special counsel for that and see how serious Congressional Democrats are about getting to the truth.”

 

end

No wonder Illinois is broke:  they have 63,000 public employees with salaries $100,000 or greater.  This is costing the state just for those people over 10 billion dollars

 

(courtesy Forbes/Andrezejewski)

Why Illinois Is In Trouble – 63,000 Public Employees With $100,000+ Salaries Cost Taxpayers $10 Billion

Authored by Adam Andrzejewski via Forbes.com,

The ‘Big Dogs’ of local government in Illinois.

Illinois is broke and continues to flirt with junk bond status. But the state’s financial woes aren’t stopping 63,000 government employees from bringing home six-figure salaries and higher.

Whenever we open the books, Illinois is consistently one of the worst offenders. Recently, we found auto pound supervisors in Chicago making $144,453; nurses at state corrections earning up to $254,781; junior college presidents making $465,420; university doctors earning $1.6 million; and 84 small-town “managers” out-earning every U.S. governor.

Using our interactive mapping tool, quickly review (by ZIP code) the 63,000 Illinois public employees who earn more than $100,000 and cost taxpayers $10 billion. Just click a pin and scroll down to see the results rendered in the chart beneath the map.

http://www.openthebooks.com/map-widget/?Map=1802&MapType=Pin

Here are a few examples of what you’ll uncover:

  • 20,295 teachers and school administrators – including superintendents Joyce Carmine ($398,229) at Park Forest School District 63, Troy Paraday ($384,138) at Calumet City School District 155, and Jon Nebor ($377,409) at Indian Springs School District 109. Four of the top five salaries are in the south suburbs – not the affluent north shore.
  • 10,676 rank-and-file workers and managers in Chicago – including $216,200 for embattled Mayor Rahm Emanuel (D) and $400,000 for Ginger Evans, Commissioner of Aviation – including a $100,000 bonus. Timothy Walter, a deputy police chief, made $240,917 – that’s $146,860 in overtime on top of his $94,056 base salary. Ramona Perkins, a police communications operator, pulled down $121,318 in overtime while making $196,726!
  • 9,567 college and university employees – including the southern Illinois junior college power couple Dale Chapman ($465,420) and Linda Terrill Chapman ($217,290). The pair combined for a $682,000 income at Lewis and Clark Community College. Fady Toufic Charbel ($1.58 million) and Konstantin Slavin ($1.04 million) are million-dollar doctors at the University of Illinois at Chicago.
  • 8,640 State of Illinois employees – including $258,070 for Marian Frances Cook, a “contractual worker” at the newly created Dept. of Innovation and Technology. Further, there are the “barber” and “teacher of barbering” positions in the state prisons making $100,000+. Loreatha Coleman made $254,781 as a nurse at the Dept. of Corrections.
  • 8,817 small town city and village employees – including 84 municipal managers out-earning every U.S. governor at $180,000. These managers include Lawrence Hileman (Glenview – $297,988); Michael Ellis (Grayslake – $264,486); Robert Kiely (Lake Forest – $255,247); Kevin Bowens (Libertyville – $254,428); and Richard Nahrstadt (Northbrook – $250,248).

In total, there is roughly $12 billion in cash compensation flowing to six-figure government workers when counting the 9,031 federal employees based in Illinois.

So, who are the biggest culprits in conferring six-figure salaries? We ranked the top 15 largest public pay and pension systems in Illinois:

Illinois’ largest pay and pension systems conferring $100,000+ cash compensation

Corruption in Chicago

Rahm Emanuel’s Chicago now pays out more six-figure incomes than the state government. We found city truck drivers, tree trimmers, and street light repair workers earned six-figures. But, really, the problem is the overtime. Last year, the city paid out $283 million in overtime to 1,000 employees who pocketed more than $40,000 apiece.

Chicago paid out $283 million in overtime (2016) – here are the top 10 city departments.

Taxpayer-Expensive Educators

Some of Illinois’ K-12 schools are spiking salaries and padding pensions. Data reveals nearly 30,000 teachers and administrators earned $100,000+ incomes. However, just 20,295 of those educators are currently employed; the other 9,305 are retired, resting on six-figure pensions.

Here’s how it breaks down in two of 900 school districts. Just 1,236 of the 2,147 educators with $100,000+ incomes are currently working.

  • In Township High School District 214, there were 500 retirees receiving six-figure annual pensions in addition to 640 working educators.
  • In Palatine Township High School 211, while 596 educators earned a six-figure salary, 491 retirees received six-figure lifetime pensions.

Private associations, nonprofits, and retired lawmakers

All kinds of entities are jumping on the gravy train. Private associations, nonprofit organizations and former lawmakers have gamed the system for personal gain. All of this is legal, although it shouldn’t be:

  • Former state representative Roger Eddy (R) currently makes $334,433 – that’s $303,953 as Executive Director of Illinois Association of School Boards (IASB) and $30,500 from his lawmaker’s pension. Eddy is double dipping for a second government pension, and his employer (IASB) – a private nonprofit – is further burdening an underfunded Teacher’s Retirement System.
  • Two of the highest earners within the municipal pension system work for private associations – not government. Brett Davis, Executive Director of Park District Risk Management Agency, makes $319,404, while Peter Murphy, Executive Director of Illinois Park District Association, brings in $309,972. These private nonprofits muscled their way into the government system and their huge salaries will mean lavish taxpayer-guaranteed pensions.
  • Former Gov. Jim Edgar (R) took $2.38 million in compensation from the University of Illinois (2000-2013) and has received at least $2 million in pension payments earned from his 20-year career as legislator, secretary of state and governor. Today, Edgar receives $241,272 ($20,106 per month) per year from two pension systems: the General Assembly Retirement System ($161,016) and the State University Retirement System ($80,256).

Highly Compensated Locals

County bosses are getting in on the action. In three of the 102 counties – DuPage (201), Lake (237) and Will (190) – 628 employees earned $100,000+. Lake won top honors with 237 six-figure employees. In DuPage, Tom Cuculich, the “Chief of Staff” to DuPage Board Chair Dan Cronin (R), made $201,750.

Even “water district” employees are tapping into the taxpayer largess with 1,432 employees making $100,000+. Across Illinois, 348 highly compensated “park district” employees make over $100,000.

Illinois, like many states, is in serious trouble. Policymakers are exploring desperate measures. Two weeks ago, ten Republicans voted with Democrats to override Governor Bruce Rauner’s veto of a permanent 32-percent income tax hike. Without reforms the tax hike will only feed a culture of waste and abuse.

Rauner was right to veto the income tax hike but he hasn’t shown serious resolve to curtail spending. In fact, he created a personal assistant position for his wife – who has no official state duties – for $100,000 a year at taxpayer expense.

But, hey folks, it’s Illinois!

end

 

They were hoping for a better core durable goods.  However aircraft orders surge over 131%

(courtesy zero hedge)

 

Core Durable Goods Orders Disappoint But Aircraft Orders Surge 131%

A huge upside surprise for durable goods orders (+6.5% MoM vs +3.9% MoM)… This was the biggest surge in DurGoods since July 2014’s record Boeing order also screwed with the data…

Dominated by a 19% spike in transportation (with non-defense aircraft orders up 131.2% MoM)

 

Up from $11bn to $25.3bn…

New orders for manufactured durable goods in June increased $14.9 billion or 6.5 percent to $245.6 billion, the U.S. Census Bureau announced today. This increase, up following two consecutive monthly decreases, followed a 0.1 percent May decrease.

Excluding transportation, new orders increased 0.2 percent. Excluding defense, new orders increased 6.7 percent. Transportation equipment, also up following two consecutive monthly decreases, led the increase, $14.6 billion or 19.0 percent to $91.6 billion.

However, away from this unsustainable surge in orders, Core Durable Goods Orders disappointed (+0.2% vs +0.4% exp) and Capital Goods New Orders Nondefense Ex Aircraft & Parts fell 0.1% – the biggest drop since Dec 2016.

Let’s just hope Boeing can sell a few more planes in July or this picture won’t look so rosy. One glimpse at the top chart above tells you what happens next month… we’re gonna need another airshow!

end

the Republicans kill the Border Adjustment Tax.  Actually I will be surprised if they pass any laws in the next two years:

(courtesy zero hedge)

BAT Is Dead: Republicans Kill Border Adjustment Tax

The Trump fiscal agenda – which these days really means tax reform – may be dead, but that does not mean it can’t reemerge as a zombie every now and then. That’s precisely what happened moments ago when Paul Ryan just announced that after months of speculation whether border adjustment tax will or won’t be implemented to help offset Trump’s proposed tax cuts, it is now officially dead.

  • RYAN IS SAID TO BE TELLING REPUBLICANS BORDER TAX IS DEAD: BBG

As Reuters adds:

  • “BIG SIX” REPUBLICANS IN CONGRESS, TRUMP ADMINISTRATION ANNOUNCE BORDER TAX PROVISION HAS BEEN SET ASIDE IN ORDER TO ADVANCE TAX OVERHAUL

A statement Thursday from the so-called Big Six – Ryan, Brady, White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch – said due to the unknowns associated with the border-adjusted tax, the group “had decided to set this policy aside in order to advance tax reform.”

“While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform,”

“And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base,” according to the statement.

House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady had been telling Republicans prior to the statement’s release that the controversial border-adjusted tax on imports would no longer be part of tax-legislation negotiations, according to four people familiar with the ongoing discussions.

 

The border-adjusted tax, which would replace the current 35 percent corporate rate with a 20 percent levy on companies’ domestic sales and imported goods, had been a centerpiece of the House GOP tax plan endorsed by Brady and Ryan. It was estimated to generate more than $1 trillion over a decade, which would help pay for tax cuts promised by Republicans.

As we discussed extensively at the start of the year, when people still gave some credibility to Trump’s fiscal agenda, the BAT was under furious attack by retailers and other industries that rely on imported goods, who mounted a campaign saying it would raise prices for working Americans on everyday goods. The end of the BAT, while alreadly largely assumed, should be favorable for retail stocks, as the XRT reveals.

The only problem: with or without BAT, retailers are still doomed as long as AMZN is around.

As for BAT being gone, it means that any Trump tax cuts – a generous assumption these days – will be that much smaller as the border adjustment tax was expected to raise roughly $1.2 trillion in government revenue over the next decade, offsetting over half of the corporate tax cut over a ten year period. In other words, so much for corporate tax cuts.

* * *

The full Republican statement is below:

Joint Statement on Tax Reform

Today, House Speaker Paul Ryan (R-WI), Senate Majority Leader Mitch McConnell (R-KY), Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, Senate Finance Committee Chairman Orrin Hatch (R-UT), and House Ways and Means Committee Chairman Kevin Brady (R-TX) issued the following joint statement on tax reform:

“For the first time in many years, the American people have elected a President and Congress that are fully committed to ensuring that ordinary Americans keep more of their hard-earned money and that our tax policies encourage employers to invest, hire, and grow. And under the leadership of President Trump, the White House and Treasury have met with over 200 members of the House and Senate and hundreds of grassroots and business groups to talk and listen to ideas about tax reform.

“We are all united in the belief that the single most important action we can take to grow our economy and help the middle class get ahead is to fix our broken tax code for families, small business, and American job creators competing at home and around the globe. Our shared commitment to fixing America’s broken tax code represents a once-in-a-generation opportunity, and so for three months we have been meeting regularly to develop a shared template for tax reform.

“Over many years, the members of the House Ways and Means Committee and the Senate Finance Committee have examined various options for tax reform.  During our meetings, the Chairmen of those committees have brought to the table the views and priorities of their committee members. Building on this work, as well as on the efforts of the Administration and input from other stakeholders, we are confident that a shared vision for tax reform exists, and are prepared for the two committees to take the lead and begin producing legislation for the President to sign.

“Above all, the mission of the committees is to protect American jobs and make taxes simpler, fairer, and lower for hard-working American families. We have always been in agreement that tax relief for American families should be at the heart of our plan. We also believe there should be a lower tax rate for small businesses so they can compete with larger ones, and lower rates for all American businesses so they can compete with foreign ones. The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing, places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas. And we are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base.  While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform.

“Given our shared sense of purpose, the time has arrived for the two tax-writing committees to develop and draft legislation that will result in the first comprehensive tax reform in a generation.  It will be the responsibility of the members of those committees to produce legislation that achieves the goals shared broadly within Congress, the Administration, and by citizens who have been burdened for too long by an outdated tax system. Our expectation is for this legislation to move through the committees this fall, under regular order, followed by consideration on the House and Senate floors. As the committees work toward this end, our hope is that our friends on the other side of the aisle will participate in this effort. The President fully supports these principles and is committed to this approach. American families are counting on us to deliver historic tax reform. And we will.”

end

 

Harvey.

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