GOLD: $1258.70 DOWN $10.50
Silver: $16.30 DOWN 34 cent(s)
Closing access prices:
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: $1275.00 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1269.40
PREMIUM FIRST FIX: $5.60
SECOND SHANGHAI GOLD FIX: $1275,00
NY GOLD PRICE AT THE EXACT SAME TIME: $1269.40
Premium of Shanghai 2nd fix/NY:$5.60
LONDON FIRST GOLD FIX: 5:30 am est $1261.80
NY PRICING AT THE EXACT SAME TIME: $1262.25
LONDON SECOND GOLD FIX 10 AM: $1269.30
NY PRICING AT THE EXACT SAME TIME. $1257.20
For comex gold:
NOTICES FILINGS TODAY FOR APRIL CONTRACT MONTH: 34 NOTICE(S) FOR 3400 OZ.
TOTAL NOTICES SO FAR: 3246 FOR 324,600 OZ (10.096 TONNES)
130 NOTICES FILED TODAY FOR
Total number of notices filed so far this month: 543 for 2,715,000 oz
You can see for yourself the total falsification of data in the jobs report. Actually the real number was a huge loss. However the attack on Friday was pre-ordained as the gold OI was getting frothy and the silver OI stubbornly remained at extreme lofty levels.
As a little bonus, because I am writing this on Saturday, we get to see the preliminary numbers released close to midnight last night for the Monday trading day.
The open interest for the gold complex fell by 7911 contracts down to 449,868. With the $10.50 drop in gold this was to be expected. When the final numbers come in on Monday it will drop even further.
To highlight the frustration by the bankers with respect to silver, you only have to look at the OI for silver. With the huge 34 cent drop one would have expected the OI to drop considerably. Nope!! it rose by 300 contracts despite the shellacking silver took.
Let us have a look at the data for today
In silver, the total open interest FELL BY 1605 contracts from 206,233 DOWN to 204,833 WITH THE FALL IN THE PRICE THAT SILVER TOOK WITH RESPECT TO YESTERDAY’S TRADING (DOWN 10 CENT(S). WHEN YOU COMPARE THE HUGE GAIN IN OI FOR GOLD THEN YOU MUST ADMIT THAT WE MUST HAVE HAD SOME BANKER SHORT COVERING WITH THE MAJORITY OF OUR LONGS BASICALLY REMAIN STOIC AND LOSING SOME OF THEIR SILVER LEAVES FROM OUR SILVER TREE.
In ounces, the OI is still represented by just OVER 1 BILLION oz i.e. 1.024 BILLION TO BE EXACT or 146% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MAY MONTH/ THEY FILED: 130 NOTICE(S) FOR 650,000 OZ OF SILVER
In gold, the open interest ROSE by A CONSIDERABLE 2,174 despite the FALL in price of gold ($3.65 yesterday.) The new OI for the gold complex rests at 457,779. On Thursday we had the bankers supplying a major amount of short paper to newbie longs who entered the arena again like gangbusters. The bankers had no choice but to supply that paper on the short side and lower prices but could not cover any of their shortfall. Thus the rise in OI despite the fall in price. The bankers needed a massive raid because it seems that they were losing control over the precious metal markets
we had: 34 notice(s) filed upon for 3400 oz of gold.
With respect to our two criminal funds, the GLD and the SLV:
Today, another huge changes in gold inventory: a withdrawal of 4.48 tonnes from the GLD
Inventory rests tonight: 787.14 tonnes
IN THE LAST 16 DAYS: GLD SHEDS 50.1 TONNES YET GOLD IS HIGHER BY $45.20 . GO FIGURE!!
Today: : WE ANOTHER HUGE CHANGES IN SILVER INVENTORY TONIGHT: A WITHDRAWAL OF 945,000 OZ FROM THE SLV
INVENTORY RESTS AT 339.606 MILLION OZ
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in silver FALL BY 1605 contracts from 206,233 down to 204,833 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787). THE FALL IN OPEN INTEREST WAS ACCOMPANIED BY A SMALL LOSS IN PRICE FOR SILVER WITH RESPECT TO YESTERDAY’S TRADING (DOWN 10 CENTS ). WHEN WE SEE THE GOOD SIZED RISE IN GOLD OPEN INTEREST YESTERDAY, WE NO DOUBT WITNESSED SOME BANK SHORT COVERING AS THEY THOUGHT THE TEMPERATURE WAS A LITTLE TOO HOT FOR THEM. WE NO DOUBT HAD SOME NEW SPEC LONGS ENTER THE ARENA. THE MAJORITY OF THE LONGS REMAIN STOIC AND NOTHING IN THE WORLD WILL FORCE THEM OFF THE SILVER TREE.
2.a) The Shanghai and London gold fix report
2 b) Gold/silver trading overnight Europe, Goldcore
and in NY: Bloomberg
3. ASIAN AFFAIRS
i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 10.85 POINTS OR 0.33% / /Hang Sang CLOSED UP 31.67 POINTS OR 0.12% The Nikkei closed DOWN 76.93 POINTS OR .38%/Australia’s all ordinaires CLOSED DOWN 0.23%/Chinese yuan (ONSHORE) closed UP at 6.7204/Oil DOWN to 48.83 dollars per barrel for WTI and 51.80 for Brent. Stocks in Europe OPENED IN THE GREEN , Offshore yuan trades 6.7222 yuan to the dollar vs 6.7204 for onshore yuan. NOW THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR) AND THE OFFSHORE YUAN IS STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA IS HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
b) REPORT ON JAPAN
c) REPORT ON CHINA
4. EUROPEAN AFFAIRS
i)Insanity: Draghi’s push into corporates has caused the junk bond market to yield only 2.49%
( zero hedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)The Kremlin responds to the sanctions and agrees with Trump that this is very dangerous
( zero hedge)
6 .GLOBAL ISSUES
Mish Shedlock comments on the missing piece on global inflation. Actually we are experiencing inflation but not what the bozos want: wage inflation.
( Mish Shedlock/Mishtalk)
7. OIL ISSUES
8. EMERGING MARKET
9. PHYSICAL MARKETS
10. USA Stories
i)the official jobs numbers: a beat by 209,000 jobs. All of the gains were of the “seasonable adjustment” category. Adjusted saw a 1.3 million decline. Shear nonsense!
( zero hedge)
ii)What a phony jobs report: the big gains again in waiters and bartenders, the lowest on the wage scale totem pole:
393,000 part time jobs were added, offset by a drop of 54,000 full-time workers
and the algos reacted to the gain not realizing that a huge 54,000 full time workers lost their jobs
v)The last word on the phony jobs report courtesy of Dave Kranzler.
One of the key numbers of the fake phony numbers is the Birth Death plug. For our newcomers, the BLS records the losses of jobs when businesses die (Death), then they pick out of thin air, their guess as to new businesses created. The net difference is the B/D and even though there has been a huge decline in new businesses over the past 40 years, these bozos always give a huge increase and this is a total falsehood. To give you the absurdity of the numbers; this week, the construction industry report showed a huge 10% drop in June. The bozos in the B/D added 10,000 construction jobs in June. The real answer then for the jobs report is huge decline in meaningful jobs.
vi)Paul Craig Roberts:
Roberts explains the hoax created by the Democrats in their witch hunt to remove Trump from the Presidency
( Paul Craig Roberts)
vii)Sessions declares war on the leakers and will charge them with criminal activity:
( zero hedge)
Let us head over to the comex:
The total gold comex open interest ROSE BY A GOOD SIZED 2174 CONTRACTS UP to an OI level of 457,779 DESPITE THE FALL IN THE PRICE OF GOLD ($3.65 with THURSDAY’S trading). We again had a good sized number of newbie longs enter the gold area to which our crooked bankers were more than happy to comply with an ever increasing supply of short paper. The specs shorts covered as fast as their feet could carry them.The result a higher open interest despite the lower price.
We are now in the contract month of August and it is the 3rd best of the delivery months after December and June.
The active August contract LOST 24 contract(s) to stand at 2728 contracts. We had 73 notices filed upon yesterday so we gained 49 contracts or an additional 4900 oz will stand at the comex and 0 EFP’s were issued which entitles the long holder to a fiat bonus plus a futures contract and most probably that would be a London based forward.
The non active September contract month saw it’s OI gain by 93 contracts up to 2013.
The next active contract month is Oct and here we saw a gain of 301 contracts up to 48,534.
The very big active December contract month saw it’s OI rise by 1535 contracts up to 352,825.
We had 34 notice(s) filed upon today for 3,400 oz
For those keeping score: in the upcoming front delivery month of August:
LAST YEAR WE HAD A MONSTROUS 44.7 TONNES OF GOLD INITIALLY. BY THE CONCLUSION OF THE AUGUST CONTRACT MONTH 44.358 TONNES STOOD FOR DELIVERY.
We are now in the next big non active silver contract month of August and here the OI FELL BY 2 contracts DOWN TO 209. We had 2 notices filed yesterday. Thus we gained 0 contracts or an additional NIL oz will stand for delivery in this non active month of August.
The next active contract month is September (and the last active month until December) saw it’s OI fall by 3582 contacts down to 133,913. The next non active contract month for silver after September is October and here the OI gained 3 contacts up TO 31. After October, the big active contract month is December and here the OI gained by 2035 contracts up to 61,226 contracts.
We had 130 notice(s) filed for 650,000 oz for the AUGUST 2017 contract
VOLUMES: for the gold comex
Today the estimated volume was 283,637 contracts which is EXCELLENT/
Yesterday’s confirmed volume was 218,416 contracts which is GOOD
volumes on gold are STILL HIGHER THAN NORMAL!
|Withdrawals from Dealers Inventory in oz||nil|
|Withdrawals from Customer Inventory in oz||
|Deposits to the Dealer Inventory in oz||oz|
|Deposits to the Customer Inventory, in oz||
|No of oz served (contracts) today||
|No of oz to be served (notices)||
|Total monthly oz gold served (contracts) so far this month||
|Total accumulative withdrawals of gold from the Dealers inventory this month||NIL oz|
|Total accumulative withdrawal of gold from the Customer inventory this month||17,682.500 oz|
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 34 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
|Withdrawals from Dealers Inventory||nil|
|Withdrawals from Customer Inventory||
|Deposits to the Dealer Inventory||
|Deposits to the Customer Inventory||
|No of oz served today (contracts)||
|No of oz to be served (notices)||
( 395,000 oz)
|Total monthly oz silver served (contracts)||543 contracts (2,715,000 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||309,501.2 oz|
NPV for Sprott and Central Fund of Canada
Sprott’s hostile 3.1 billion bid to take over Central Fund of Canada
Sprott makes hostile $3.1 billion bid for Central Fund of Canada
Submitted by cpowell on Thu, 2017-03-09 01:19. Section: Daily Dispatches
From the Canadian Press
via Canadian Broadcasting Corp. News, Toronto
Wednesday, March 8, 2017
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.
And now the Gold inventory at the GLD
AUGUST 4/ANOTHER LOSS OF 4.48 TONNES OF GOLD FROM GLD INVENTORY/INVENTORY RESTS AT 787.14 TONNES.THIS IS A HUGE CRIME SCENE!!
August 3/no change in gold inventory at the GLD/Inventory rests at 791.88 tonnes
August 2/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
Aug 1/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
July 31/NO CHANGES AT THE GLD/INVENTORY RESTS AT 791.88 TONNES
July 28/ANOTHER MASSIVE WITHDRAWAL OF 3.54 TONNES OF GOLD WITH GOLD UP $9.15/INVENTORY RESTS AT 791.88 TONNES
July 27/LATE LAST NIGHT, A HUGE WITHDRAWAL OF 5.03 TONNES WITH GOLD UP $10.45 ON THE DAY/INVENTORY RESTS AT 795.42 TONNES
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
Now the SLV Inventory
AUGUST 4/A WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 339.606 MILLION OZ
August 3/A WITHDRAWAL OF 1,181,000 OZ FROM THE SLV/INVENTOR RESTS AT 340.551 MILLION OZ/
August 2/NO CHANGES IN SILVER INVENTORY AT THE SLV
INVENTORY RESTS AT 341.732 MILLION OZ/
August 1/A HUGE WITHDRAWAL OF 945,000 OZ/INVENTORY RESTS AT 341.732 MILLION OZ/
July 31/no change in silver inventory at the SLV/inventory rests at 342.677 million oz
July 28/ A HUGE WITHDRAWAL OF 1.15 MILLION OZ OF SILVER LEAVES THE SLV DESPITE SILVER BEING UP 11 CENTS TODAY/INVENTORY RESTS AT 342.677 MILLION OZ
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.
Indicative gold forward offer rate for a 6 month duration+ 1.26%
At 3:30 pm we receive the COT report. This report is as of Tuesday August 1.
|Gold COT Report – Futures|
|Change from Prior Reporting Period|
|non reportable positions||Change from the previous reporting period|
|COT Gold Report – Positions as of||Tuesday, August 1, 201|
Our large speculators:
Those large specs that have been long in gold piled back into the comex gold casino for a gain of a whopping 19,467 contacts
those large specs that have been short in gold covered a huge 19,374 contracts from their short side
specs go net long by 38,900 contracts
those commercials who were net long in gold pitched a monstrous 22,035 contracts from their long side
those commercials who have been short in gold added a monstrous 18,007 contracts to their short side
commercials go net short 40,000 contracts and this set up Friday’s raid. It was all pre ordained.
Our small specs:
those small specs that have been long gold covered 1332 contracts from their short side
those small specs that have been short in gold covered 2533 contracts
Conclusions: reason for the raid on gold yesterday.it will all pre ordained.
and now silver COT
|Silver COT Report – Futures|
|non reportable positions||Change from the previous reporting period|
|COT Silver Report – Positions as of||Tuesday, August 1, 2017|
Our large speculators:
those large specs that have been long in silver added a tiny 1394 contracts to their long side
those large specs that have been short in silver covered a huge 9948 contracts from their short side.
those commercials that have been long in silver pitched 3182 contracts from their long side
those commercials that have been short in silver added 6953 contracts.
commercials go net short by only 10,000 contracts..still have considerable trouble trying to cover their huge shortfall in silver.
Our small specs:
those small specs that have been long in silver pitched 1394 contracts from their long side
those small specs that have been short in silver covered 187 contracts from their short side.
Conclusions; reason for the whack in silver yesterday; the extremely high oI and the lack of shedding by the longs.
Major gold/silver trading/commentaries for FRIDAY
Gold Consolidates On 2.5% Gain In July After Dollar Has 5th Monthly Decline
– Gold consolidates on 2.5% gain in July as the dollar has fifth monthly decline
– Trump administration and vicious “civil war” politics casting shadow over America and impacting dollar
– All eyes on non farm payrolls today for further signs of weakness in U.S. economy
– Gold recovers from 1.7% decline in June as dollar falls
– Gold outperforms stocks and benchmark S&P 500 YTD
– Gold gains 10.8% versus 10.6% gain for S&P – led by frothy tech sector (see performance table)
– Gold outperforms stocks globally – Euro Stoxx 50 up 5.7% ytd, FTSE up 4.8% and Nikkei up 4.5%
– Gold’s technicals increasingly positive; now trading above its 50-day & 200-day moving averages & looks set to target $1,300 again
Gold held steady today in Asian and European trading and was flat for the week, consolidating near the $1,270 per ounce level and the 2.5% gain seen in July.
It remains close to a seven-week high hit this week, as the dollar remains weak and vulnerable near multi-month lows after five consecutive months of declines.
The dollar index, which tracks the greenback against a basket of six major peers, is languishing near 15-month lows hit earlier this week.
“All eyes” are again on the monthly U.S. nonfarm payrolls data due today amid continuing very high levels of U.S. and global political uncertainty.
Traders awaiting July’s employment repor for clues about the health of the U.S. economy after recent data highlighted risks to the downside. This is underlining how difficult it will be for the U.S. Federal Reserve to raise interest rates – even from these historically low levels in the current range between 1% and 1.25%.
The complete mess that is the Trump administration and U.S. politics was underlined again this week.
Robert Mueller, the U.S. Special Counsel, has convened a grand jury investigation in Washington to examine allegations of Russian interference in last year’s contentious election and has started issuing subpoenas, according to sources familiar with the situation said on yesterday.
The dollar looks very vulnerable to further falls. Trump and the Republicans have seen repeated failures. These include overhauling healthcare. Now there is multiple congressional and federal investigations into President Donald Trump’s campaign.
This is casting a shadow over his first six months in office and the vicious “civil war” politics that the U.S. finds itself in is casting a shadow over U.S. politics and America’s place in the world.
Gold is performing very well this year and yet sentiment remains poor with little media coverage of gold’s robust performance year to date.
Gold has outperformed stocks and the benchmark S&P 500 YTD with gains of 10.8% versus a 10.6% gain in the S&P 500. Much of the gains are due to surge in prices in the increasingly frothy tech sector.
Indeed, gold is outperforming stocks globally – the Euro Stoxx 50 is up 5.7% ytd, the FTSE up 4.8% and the Nikkei up 4.5%.
Silver gained 1% in July and is 5% higher so far this year.
Gold’s technicals look very good and it now trading above its 50-day and 200-day moving averages and looks set to target $1,300 again this month.
A daily or weekly close above $1,300 per ounce should see gold make quick gains and challenge the intermediate high of $1,361/oz seen 13 months ago. Next levels of resistance are $1,380 and $1,416.
A failure to breach $1,300 in the coming days and weeks could see gold fall back to test very strong support at $1,200 per ounce.
Updates This Week
News and Commentary
Gold Prices (LBMA AM)
04 Aug: USD 1,269.30, GBP 964.92 & EUR 1,068.37 per ounce
03 Aug: USD 1,261.80, GBP 952.41 & EUR 1,064.96 per ounce
02 Aug: USD 1,266.65, GBP 956.83 & EUR 1,069.56 per ounce
01 Aug: USD 1,267.05, GBP 957.76 & EUR 1,072.30 per ounce
31 Jul: USD 1,266.35, GBP 965.59 & EUR 1,079.06 per ounce
28 Jul: USD 1,259.60, GBP 961.96 & EUR 1,075.45 per ounce
27 Jul: USD 1,262.05, GBP 960.29 & EUR 1,076.53 per ounce
Silver Prices (LBMA)
04 Aug: USD 16.70, GBP 12.71 & EUR 14.07 per ounce
03 Aug: USD 16.47, GBP 12.50 & EUR 13.91 per ounce
02 Aug: USD 16.67, GBP 12.60 & EUR 14.09 per ounce
01 Aug: USD 16.74, GBP 12.67 & EUR 14.17 per ounce
31 Jul: USD 16.76, GBP 12.77 & EUR 14.29 per ounce
28 Jul: USD 16.56, GBP 12.66 & EUR 14.15 per ounce
27 Jul: USD 16.79, GBP 12.77 & EUR 14.34 per ounce
Recent Market Updates
– Gold Coins and Bars See Demand Rise of 11% in H2, 2017
– Greenspan Warns Stagflation Like 1970s “Not Good For Asset Prices”
– What Investors Can Learn From the Japanese Art of Kintsukuroi
– Bitcoin, ICO Risk Versus Immutable Gold and Silver
– This Is Why Shrinkflation Is Making You Poor
– Gold A Good Store Of Value – Protect From $217 Trillion Global Debt Bubble
– 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
Dave Kranzler: Western central bank fear of gold is in the air
Submitted by cpowell on Thu, 2017-08-03 23:56. Section: Daily Dispatches
By Dave Kranzler
Investment Research Dynamics, Denver
Thursday, August 3, 2017
Ballooning open interest, heavy fix selling, aggressive post-settlement selling, flash crashes – this all seems a lot of bother. Perhaps the Other Side is afraid of something. – John Brimelow from his Gold Jottings report
Wednesday evening at 7:06 EST, at one of the least liquid trading periods of the 23 hour trading day for Comex paper gold, a “motivated” seller unloaded 10,777 August gold contracts into the CME’s Globex trading system, knocking the price of gold down $9 in 25 minutes. There were no obvious news or events reported that would have triggered any investor to dump over 1 million ozs of gold with complete disregard to price execution.
Rather, the selling was the act of an entity looking to push the price of gold a lot lower in “shock and awe” fashion. The 10.7k contracts sold were just the August contracts. There was also related selling in several other contract months. To be sure, the total number of contracts unloaded included hedge fund selling from stop-losses triggered in the black boxes of momentum-chasing hedge funds.
In addition to the appearance of frequent, strategically-timed “fat finger” flash crashes, the open interest in paper gold on the Comex has soared by 23,000 contracts since last Friday. This added 2.3 million paper gold ounces to the Comex open interest, which represents nearly 27% of the total amount of alleged physical gold ounces sitting Comex vaults. In fact, the total paper gold open interest on the Comex is 455,605 contracts, or 45.5 million ounces of gold. This is 530% more paper gold than the total amount of gold reported to be sitting in Comex vaults.
The dramatic rise in open interest accompanied gold’s move in price above the 50 dma. It’s typical for the bullion banks on the Comex to start flooding the market with additional paper contracts in order to suppress strong rallies in the price of gold. Imagine what would happen to the price of gold if the regulatory authorities forbid the open interest in Comex gold contracts to never exceed 120% of the total amount of gold in the Comex vaults. This is unwritten “120% rule” is de rigeur with every other commodity contract except, of course, silver.
The “flash crash” and “open interest inflation” are two of the obvious signals that the western Central Banks/bullion banks are worried about the rising price of gold. The recent degree of blatant manipulation reflects outright fear. I suspect the fear is derived from two sources. First is a growing shortage of physical gold that is available to deliver into the eastern hemisphere’s voracious import appetite. Exports from Swiss refineries have been soaring. India’s appetite for gold has not been even slightly derailed by the 3% additional sales tax imposed on gold.
Speaking of India, the World Council has put forth a Herculean effort to down-play to amount of gold India has been and will be buying. After India’s 351 tonnes imported in Q1, the WGC tried to shove a 90 tonne per quarter forecast down our throats for the rest of the year. India’s official tally for Q2 is 167.4 tonnes. Swing and a miss for the WGC. Now the WGC is forecasting at total of 650-750 tonnes for all of 2017.
The WGC forecast is idiotic given that India officially imported 518.6 tonnes in 1H and 2H is traditionally the best seasonal buying period of the year AND a copious monsoon season means that farmers will be flush with cash – or rupees, rather – which will be quickly converted into gold. Two more swings and misses for Q3 and Q4 and the WGC is out of excuses for why India likely will have imported around 1,000 tonnes, not including smuggled gold, in 2017. This aggressive misrepresentation of India’s gold demand reeks of propaganda. But for what purpose?
Back to the second reason for the banks to fear a rising price of gold: the inevitable collapse of the largest financial bubble in history inflated by Central Bank money printing and credit creation. The trading action in the gold and silver markets resembles the trading activity in 2008 leading up to the collapse of Lehman and the de facto collapse of Goldman Sachs.
One significant difference is the relative effort exerted to keep a lid on the price of silver. In early 2008, with the price of silver trading between $17 and $19, the open interest in Comex silver peaked at 189k contracts (Feb 29th COT report). Currently the open interest is 206k contracts and it’s been over 240k. In late 2008, the Comex was reporting over 80 million ozs of “registered” silver in its vaults. “Registered” means “available for delivery.” There were thus roughly 3 ozs of paper gold for every reported ounce of physical gold available for delivery. Currently the Comex is reporting 38.5 million ozs of registered silver. That’s 5.3 ozs of paper silver for every ounce of registered silver.
As you can see, the relative effort to suppress the price of gold and silver is more intense now than in 2008. Given what occurred in 2008, I have to believe that fear emanating from the western banks currently is derived from events unfolding “behind the curtain” that are worse than what hit the system in 2008.
Gold demand is up 3.5% this year from China. This is for only its citizens and not sovereign demand which is separate
(courtesy Lawrie Williams/Sharp Pixley)
LAWRIE WILLIAMS:Chinese gold demand up 3.5% on 2016 ytd but way down on 2015
The latest gold withdrawal figures from the Shanghai Gold Exchange(SGE) suggest that demand is up on last year’s figures by 3.5% in the seven months to July, but even further down on the record 2015 figure which was almost 23% higher at this time of year. We would expect this gap on 2015 to widen further through the current quarter as month by month SGE gold withdrawal figures were particularly strong at this time two years ago.
While SGE withdrawal figures are contentious as far as Chinese gold demand estimates go, they do equate to demand as delineated in the Chinese Gold Yearbook and the annual total is far closer to the sum of known Chinese gold imports (from official data from gold exporting entities) plus China’s own gold production, plus a small estimate for recycled gold, than estimates of Chinese demand by the major precious metals consultancies which seem to be restricted to certain demand parameters. In other words, the SGE gold withdrawal figures are far closer to known gold flows into the Chinese mainland.
Table: SGE Monthly Gold Withdrawals (Tonnes)
|Month||2017||2016||2015||% change 2016-2017||% change 2015-2017|
|Year to date||1128.98||1090.39||1463.90||+3.5%||– 22.9%|
Source: Shanghai Gold Exchange, Lawrieongold.com
Overall, given the second half of the year tends to be stronger in terms of demand than the first, it looks as though Chinese full year demand this year will be in the order of 2,000 tonnes, based both on SGE withdrawal levels and known gold flows plus domestic supply. With India perhaps heading also for inwards flows of 1,000 tonnes plus (if one includes smuggled gold, which is thought to be significant), we will again be in the situation where China and India alone will account for virtually all new mined gold production, which looks like coming in this year at perhaps 2% below last year’s estimated annual total of around 3,250 tonnes (See: Top 20 Gold Producing Nations See Small Gain in Output in 2016). This all means that the remainder of global demand needs to be satisfied by recycled gold or from above ground stocks including gold ETFs, central bank holdings and hoarded gold, although the latter tends to be in strong hands and needs a very substantial price increase for any of it to be released.
In the context of supplies from ETFs, the recent sales of gold out of GLD, the world’s biggest gold ETF without leading to lower gold prices, may be significant suggesting perhaps a shortfall of physical gold needed to meet Eastern demand. (See: GLD bleeds 71.58 tonnes of gold in just over a month).
Thus overall, the latest figures coming out of the SGE, suggest that Chinese demand, which is hugely significant in the global gold demand and pricing scenario, is holding up well in relation to a year ago – indeed may even be a little stronger, although well short of the 2015 calendar year when the full year total for SGE withdrawals totalled nearly 2,600 tonnes – or around 80% of global new mined supply that year. Gold flows into China have been the most significant factor in global supply/demand fundamentals over the past several years. If they continue at current, or higher, levels, as looks likely, they are bound to lead to a significant supply squeeze which will eventually overwhelm the forces which seem to be trying to restrict the yellow metal’s price rises. We suspect that this means gold prices will overall move onwards and upwards, but not without the occasional stutter as has been the case in recent years.
Your early FRIDAY 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 6.7204(REVALUATION NORTHBOUND /OFFSHORE YUAN MOVES WEAKER TO ONSHORE AT 6.7222/ Shanghai bourse CLOSED DOWN 10.85 POINTS OR 0.33% / HANG SANG CLOSED UP 31.67 POINTS OR 0.12%
2. Nikkei closed DOWN 76.93 POINTS OR .38% /USA: YEN RISES TO 110.07
3. Europe stocks OPENED IN THE GREEN ( /USA dollar index FALLS TO 92.80/Euro DOWN to 1.1866
3b Japan 10 year bond yield: FALLS TO +.065%/ 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:: 48.83 and Brent: 51.80
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 DOWN for WTI and DOWN for Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.455%/Italian 10 yr bond yield DOWN to 2.002%
3j Greek 10 year bond yield FALLS to : 5.48???
3k Gold at $1268.50 silver at:16.72 (8:15 am est) SILVER BELOW RESISTANCE AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 1/100 in roubles/dollar) 60.33-
3m oil into the 48 dollar handle for WTI and 51 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation (already upon us). This can spell financial disaster for the rest of the world/China forced to do QE!! as it lowers its yuan value to the dollar/GOT A 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 110.07 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 0.9679 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1487 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 FALLING to +0.455%
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 2.2317% early this morning. Thirty year rate at 2.810% /POLICY ERROR)GETTING DANGEROUSLY HIGH
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Futures Flat As Payrolls Loom, Dollar Slide Continues
It took stocks only a few minute to “price in” the latest political shock out of Washington, and as of this morning Emini futures no longer care that Mueller has a grand jury, trading 0.08% in the green with European stocks and Asian shares all little changed as investors await the looming July jobs report, which is expected to show a slowdown in hiring from 222K to 180K but will have little impact on either the Fed’s thinking or the market.
Stocks, gold and most metals headed for a fourth week of gains on Friday, as fresh political woes for U.S. President Donald Trump and the prospect of a trade war with China kept the dollar depressed ahead of payrolls. The Bloomberg Dollar spot index inched lower for a third day, hovering near the weakest in 15 months, while cable rose to $1.3154, the euro hit a fresh two-and-a-half year high against the dollar and oil retreated.
Global stocks were just barely in the green this morning with the MSCI All-Country World Index rising less than 0.05%. In key overnight macro moves, the Aussie dollar gained against the greenback despite RBA warnings about currency’s strength, while the USD/JPY fell as much as 0.2% to 109.85, the weakest since June 15, before paring decline to 110.03.
In Asia, Japan’s Topix index slid 0.2% and Australia’s S&P/ASX 200 Index lost 0.3%. South Korea’s Kospi was up 0.5 percent after sliding 1.7 percent on Thursday. Japan’s Nikkei ended the week little changed, dropping 0.4 percent on Friday as a stronger yen weighed. Wall Street was expected to start marginally higher, having seen the Dow index break through 22,000 points this week. Hong Kong’s Hang Seng Index was little changed, while the Shanghai Composite Index swung between gains and losses.
European markets got off to an underwhelming start, with Britain’s FTSE 100, Germany’s DAX and France’s CAC 40 all lower. The FTSE was on course for its best week in two months, boosted by the latest tumble in the pound. The Stoxx 600 traded sideways as Swiss Re AG’s profit drop weighed on insurers. The rising Euro, which ING now expects to rise as high as 1.20 in the next 4 weeks, has capped Stoxx gains in recent months, on concerns it will pressure exporter earnings. The U.K.’s FTSE 100 Index gained less than 0.05 percent to the highest in more than a week. Germany’s DAX Index jumped 0.1 percent.
The dollar index, which has just recorded its worst run of monthly losses since early 2011, was 0.1 percent lower at 92.766 on the day and about 0.6 percent during a week in which it fell to a 15-month low of 92.548. “We think things are overdone in terms of negative sentiment around the dollar,” said PineBridge Investments fund manager Hani Redha, quoted by Reuters. “Overall we think global growth is going to be quite solid but we think the leadership is going to change back towards the U.S.,” he added, saying Trump was also likely to get at least some fiscal stimulus measures through in the coming months.
As SocGen’s Kit Juckes writes this morning, the US Treasury market is heading towards today’s non-farm payroll data with 10s at 2.23%, in the bottom half of their 2.12-2.42 range. The RBA sees lower inflation thanks to the AUD’s rise to date and a threat to growth from further appreciation, Japanese wages fell and even smoothed show the same lack of wage growth as we see everywhere, despite a tightening labour market.
Just taking those three bits of information I get a now-familiar snapshot of the world. Anchored US rates and yields will make sure that capital goes on flowing out of dollars and into anything that’s perceived as more interesting. Other central banks will grumble (at the very least) about the weaker dollar trend and in Japan, the need to reboot inflation expectations remains as clear as ever, the difficulty of doing so likewise, and the danger that anchored US yields drag USD/JPY down and is pretty clear too.
Previewing today’s payrolls report, the SocGen strategist writes that with consensus forecasts of +180k in NFP an 2.4% in average hourly earnings, “the BOJ, RBA and the ECB for that matter, will be hoping for an upside surprise. An NFP surprise would provide some relief, a huge upside surprise in wage growth would really help them a lot. That doesn’t make it likely, sadly.”
WTI fell below $49, extending its weekly loss with the Baker Hughes rig count due later. “It was very natural on the technical side that we should see consolidation around the 200 day moving average,” Torbjorn Kjus, chief oil economist at DNB Bank, told Bloomberg. Brent is trading below 200-day MA Friday after moving above that level last week and settling above the marker for past 2 sessions; WTI also below Friday
In rates, Europe’s 10-year benchmark government bond yield and U.S. equivalents were pinned near one-month lows of 0.45 and 2.23% respectively amid the U.S. political uncertainty. U.S. yields have been falling for most of 2017 as the President’s travails have cooled expectations for growth and inflation. 10-year gilt yield +1bps to 1.16% after Bank of England kept rates on hold Thursday.
In commodities, West Texas Intermediate crude dipped 0.8 percent to $48.66 a barrel, the lowest in a week. Gold was steady at $1,269 an ounce and set to score and modestly weekly rise, which will be its fourth in a row. Copper advanced 0.2 percent to $2.88 a pound.
- S&P 500 futures up 0.05% to 2,473
- STOXX Europe 600 down 0.05% to 378.75
- MSCI Asia up 0.01% to 160.92
- MSCI Asia ex Japan up 0.2% to 529.07
- Nikkei down 0.4% to 19,952.33
- Topix down 0.2% to 1,631.45
- Hang Seng Index up 0.1% to 27,562.68
- Shanghai Composite down 0.3% to 3,262.08
- Sensex down 0.04% to 32,225.85
- Australia S&P/ASX 200 down 0.3% to 5,720.58
- Kospi up 0.4% to 2,395.45
- EUR/USD: +0.1% to 1.1880
- USD/JPY: steady at 110.09
- GBP/USD: +0.1% at 1.3154
- German 10Y yield rose 0.3 bps to 0.456%
- US 10-year yield +1bp to 2.23%
- Italian 10Y yield fell 2.6 bps to 1.697%
- Spanish 10Y yield rose 1.6 bps to 1.468%
- Brent Futures down 0.8% to $51.62/bbl
- Gold spot up 0.06% to $1,269.40
- U.S. Dollar Index down 0.1% to 92.75
Top Overnight News
- Payrolls May Show Stable Economy; Grand Jury Issues Russia Subpoenas; HNA Says It’s Not Raising Funds in N.Y.
- Toyota and Mazda to sell stakes to each other, worth about 50b yen each
- Special counsel Robert Mueller is using a federal grand jury in Washington to help collect information as he probes Russia’s meddling in the 2016 election and possible collusion by Trump campaign associates
- Pearson Plc made good on a pledge to cut costs, slashing 3,000 jobs and cutting its interim dividend to preserve cash as it works on a turnaround of its struggling education business
- Allianz SE and Canada Pension Plan Investment Board have agreed to buy a 20 percent stake in Spain’s Gas Natural SDG SA’s gas distribution business for 1.5 billion euros ($1.8 billion)
- The world’s biggest pension fund posted its fourth-straight quarterly gain, as global stocks rose and a decline in the yen against both the dollar and the euro helped boost the value of its overseas investments
- Teva Pharmaceutical Industries Ltd.’s warning to investors that it may breach debt covenants if cash flow weakens triggered its biggest bond selloff on record
- “Passive investing is in danger of devouring capitalism,” billionaire Paul Singer wrote in his firm’s second-quarter letter dated July 27
- BOE Is Said to Find Error Behind Spike in U.K. Mortgage Arrears
- Rosneft Aids Venezuela’s State Oil Producer With Prepayment
- Icahn-Backed Change in Biofuel Rule Is Said to Near EPA Rebuff
- McDonald’s Japan July Sales Helped by Desserts, Hawaiian Burgers
- Teva Debt Sells Off After Warning May Breach Covenants
Asian equity markets traded mixed, with the region indecisive ahead of key risk NFP data and after a lacklustre close in US where energy underperformed and the Russian probe seemed to have stepped up a notch. This saw early losses in ASX 200 (-0.2%) and Nikkei 225 (-0.3%), with financials the underperformer in Australia after big 4 bank CBA was accused of breaches to anti-money laundering and counter¬terrorism regulations. Shanghai Comp (+0.2%) and Hang Seng (+0.1%) were slightly positive after the PBoC upped its daily liquidity operations, although upside was capped as this still amounted to a net weekly liquidity drain. RBA Statement on Monetary Policy states recent AUD rise had modest effect on GDP and inflation forecast. Says:
- Holding policy steady consistent with growth and inflation target.
- Recent increase in AUD has modest dampening effect on economy.
- Further strength in AUD would reduce economic growth and inflation.
- RBA maintains inflation forecast for 2017 and 2018 at between 1.5%-2.5% for both, 2019 forecast kept at 2.0%-3.0%.
- Lowers GDP forecast for 2017 to 2.0%-3.0% from 2.5%-3.5%, 2018 forecast maintained at 2.75%-3.75%, while 2019 forecast was increased to 3.0%-4.0%.
Top Asian News
- China Hedge Fund Says Most ‘Violent’ Deleveraging Phase Over
- China Millionaires in Jeans Spur Wealth Manager Push Abroad
- Abe’s New Cabinet Shows Continuity in Japanese Economic Policy
- Summit Announces $1 Billion LNG-to-Power Project in Bangladesh
- Indonesia Sees Room to Ease If Inflation, Forex Rate Manageable
- JT to Buy Karyadibya Mahardhika for $1b Enterprise Value
- China Bulls’ Resolve Tested as Stocks Struggle to Pass Key Level
- Indonesia Says Google Agrees to Monitor Negative YouTube Content
- Hong Kong Stock Rally Buoyed by Bullish Profit Projections
The majority of EU bourses have come off worst levels, and now trade in marginal green territory. The biggest movers throughout the European morning have been UK Home Building names, with an overnight article from “PropertyWeek” circulating, which states that the Government is reviewing its ‘Help to Buy’ Scheme. Taylor Wimpey (TW LN) and Perisimmon (PSN LN) shares were both down over 5% for the session, as the former generated 45% of its sales from the Scheme. Later reports from a UK government spokesperson stated that it is incorrect to infer that the government are set to cancel the help to buy scheme, did see many of the loses retraced. NFP Friday trade has been evident in fixed income. markets today, with the 1 Oy bund holding its slim range. Underperformance has been seen in peripherals, with delays relaying slight profit taking in BTPs and Bonos. Corporate issuance once again came into fruition today, with Verizon printing AUD 2.2bn “kangaroo” bond, with BAT mandating banks for a multi-currency and multi-tranch bond deal.
Top European News
- BOE Says Companies Need Clarity as Brexit Crimps Investment
- German Factory Orders Jump in Sign of Robust Economic Growth
- Allianz Buys LV= Unit in Deal Valued at as Much as $1.3 Billion
- RBS’s Investment Bank Drives Second-Quarter Profit Beat
- Constellium Is Said to Weigh Options After Takeover Interest
- Swiss Re Drops as Earnings Succumb to Market-Pricing Pressure
- U.K. Housebuilders Fall After Reports of ’Help to Buy’ Review
- BOE Is Said to Find Error Behind Spike in U.K. Mortgage Arrears
- Rosneft Aids Venezuela’s State Oil Producer With Prepayment
In currencies, GBP has seen the majority of volatility this morning as EUR/GBP and GBP/USD both briefly broke out of the post EU trading range. Elsewhere, overnight volatility was seen in AUD, following the release of the RBA’s statement of Monetary Policy, with no fears of an overvalued currency, AUD/USD begun to gain some bullish pressure, we have continued to see buying following the bounce of August’s low, with bulls now looking to retest 0.80. USD & CAD will both await their jobs reports due at 13.30BST. However, it is worth noting the greenback did once again see concerning news as political tensions continue with US Special Counsel Mueller empanelling a Washington Grand Jury in Russia probe.
In commodities, Asian oil demand has been seen to shift back to the Middle East and Russia in Q4 following the recent rise in Brent. Elsewhere, OPEC has delivered a record high adherence to its oil cut in 2017, struggles do remain with Iraq and the UAE yet to show how they can meet their targets. Trade yesterday saw the USD 50.00/bbl level hold once again and the rejection has leaked into trade today, with WTI now trading around USD 48.80. Precious metals all trade in marginal positive territory, likely abiding to the risk tone following the recent acceleration in the US Russian probe.
Looking at the day ahead, Friday is relatively quiet day for data in both Asia and Europe with only German factory orders data for June due and Italy’s retail sales for June. The US will be in greater focus as the July nonfarm payrolls number is due (180k expected) along with other labor market data. Alongside that, we will also get the trade balance reading for June. Onto other events, the Baker Hughes US rig count will also be out. Notable US companies reporting include: Cigna, Berkshire Hathaway and CBOE. Notable European companies reporting include: Allianz, Swiss Re and Erste Group.
US Event Calendar
- 8:30am: Change in Nonfarm Payrolls, est. 180,000, prior 222,000;
- Change in Private Payrolls, est. 180,000, prior 187,000
- Change in Manufact. Payrolls, est. 5,000, prior 1,000
- Unemployment Rate, est. 4.3%, prior 4.4%
- Average Hourly Earnings MoM, est. 0.3%, prior 0.2%; Average Hourly Earnings YoY, est. 2.4%, prior 2.5%
- Labor Force Participation Rate, prior 62.8%
- Underemployment Rate, prior 8.6%
- 8:30am: Trade Balance, est. $44.5b deficit, prior $46.5b deficit
DB’s Jim Reid concludes the overnight wrap
Hello Payrolls Friday. On a day we pore over how many people have been employed and how much they’ve been paid in the US, I’m still trying to come to terms with the €222 million buy out clause activated for the transfer of Brazilian Neymar from Barcelona to PSG. This is broadly equivalent to the annual GDP of the equatorial Marshall Islands (population over 53k) which is around the 190th biggest nation in the world. If you include his wages over a 5 year contract you can nearly double this and you get close to the annual GDP of Tonga – home to over 100k people. The Marshall Islands aren’t a hot bed of economic activity although I did note that their income tax rates are 8% and 12% and corporation tax is at 3%. Anyone coming with me to set up a company? Although make sure you can afford your current buy-out first though.
Back to US jobs and consensus expectations are for a 180k gain (222k previous) today. Our US economists project a more optimistic figure of 200k for headline and private payrolls, which they expect to be sufficient to lower the unemployment rate a tenth to 4.3%. However, they note that the July ADP survey and the employment subcomponents of the manufacturing and non-manufacturing ISMs add some downside risks to their forecast as their payrolls model (which uses the first reported values of ADP and the ISM composite employment reading) projects private payroll gains of around 165k. Counterbalancing this risk however is the fact that private payrolls have recently fallen short of the levels implied by ADP and the ISMs, and payrolls (including revisions) have accelerated in the past following similar misses. On other detail aspects of the report, they expect that hours worked should remain steady at 34.5 along with a 0.3% gain in average hourly earnings (AHEs), which would lower the YoY growth rate of the series to 2.4% (with a risk of rounding up and remaining at 2.5%). However, as long as there is no material surprise in either direction, they do not expect this month’s AHEs to meaningfully impact policymakers’ intermediate-term inflation expectations. Finally, the team notes that even if July payrolls fall below their forecast, Amazon’s hiring spree this month could result in an upside surprise in next month’s (August) data, which will likely factor more prominently into the Fed’s decision process going into the September 20 meeting.
So another report where the market will look for any life in inflation and a reason for bonds to sell-off. This report comes on the back of a sizeable bond rally yesterday which seemed to be kickstarted by a relatively downbeat outlook from Mr Carney on a day the BoE cut their growth and wages forecast. Before we review this it’s worth highlighting that the Wall Street Journal reported 30 minutes before the US close that Special Counsel Robert Mueller was said to have impaneled a grand jury in the ongoing Russia probe. It led to a small spike lower in risk (see below) into the close and it’s another cloud for the Trump presidency to contend with.
Back to the BoE. As widely expected, the Bank left rates steady at 0.25% with the number of dissent votes declining from three to two, due to Kristin Forbes’ departure. The Bank reiterated future policy may need to be tightened slightly more than the current market yield curve implies (the first hike is priced in 2H18), but DB’s Mark Wall notes that Governor Carney made no attempt during the press conference to re-price dovish market expectations for this year. In Carney’s opinion, the UK was still experiencing exceptional circumstances ‘and would do so for some time’, with Brexit-related risks to the forefront. The bank has also cut its economic growth projections to 1.7% in 2017 (vs. 1.9% previous) and 1.6% in 2018 (vs. 1.7% previous). Looking ahead, with two new members on the MPC as of the September meeting, our team think it will be difficult for the hawks to gain a majority on the MPC without the support of the Governor. So our team continues to expect the BoE to NOT tighten monetary policy until Brexit related uncertainty has been sufficiently reduced.
Post the BOE release, Gilt yields dropped ~5bps in 10 mins of trading and continued to fall to close 9bps lower for the day. The more dovish rates outlook and cautious comments from Carney had a similar impact across most government bond markets with Gilts (2Y: -6bp; 10Y: -9bps), USTs (2Y: -2bps; 10Y: -5bps) and German bunds (2Y: +1bp; 10Y: -3bps) yields mostly notably lower. Elsewhere changes were a bit more modest with Italian BTPs (2Y: unch; 10Y: -2bps) and OATs (2Y: +1; 10Y: -3bp).
Turning to currencies there was a fair bit of intraday activity for Sterling after the meeting. It traded as high as 1.1202 in the morning session against the Euro, but then fell to as low as 1.1052 in the hours after the BoE announcement, before closing at 1.1069 for the day (-0.7% for the day). Sterling/USD also had similar intraday trends, before closing down -0.6% for the day. For other currencies, the USD dollar index dipped 0.2%, partly due to the softer ISM non-manufacturing data and the Euro/USD edged 0.1% higher. In commodities, WTI oil fell 1.3% as investors weighed up reports of rising US production against a decline in crude stockpiles. Elsewhere, precious metals were slightly up (Gold +0.1%, Silver +0.2%), copper was flat, but aluminium fell 0.8%.
Onto equities, the S&P also had its share of intraday action. The index was trading in a tight range for most of the day, but then fell ~0.3% post the Mueller news and closed -0.2% down for the day. The VIX also responded, rising ~+5.5% around that time to 10.5 but closed a bit lower at 10.44. Elsewhere, the Dow edged up ~+0.1%, breaking another fresh all-time high for the 7th consecutive day. Within the S&P, modest gains in the industrials and utilities sectors were more than offset by losses in energy (-1.3%) and materials (-0.7%). European markets broadly strengthened, the Stoxx 600 edged up 0.1%, the FTSE 100 up 0.9% (helped by the fx move) and the CAC (+0.5%), but the DAX fell 0.2%, impacted by Siemens (-3%).
Away from the markets, as noted earlier, the WSJ has reported that Special Counsel Mueller has impaneled a grand jury as part of his probe into Russia’s interference in the US election and possible ties with President Trump’s campaign. A grand jury suggests that the probe has gone beyond investigating what might have happened, to potentially charging people with crimes. Mueller’s office has declined to comment. However, a special counsel to the president (Ty Cobb) added later that he wasn’t aware that Mueller was using a grand jury, but also acknowledged that “…grand jury matters are typically secret…”.
Elsewhere, US senators have introduced two bipartisan bills aimed at protecting Mueller on concerns that Mr Trump may look to dismiss him. We shall no doubt see more news flow on this in the coming weeks.
This morning in Asia, markets are mixed but little changed. The Nikkei is -0.4%, the Kospi recovering slightly (+0.2%) after yesterday’s -1.7% fall, with the Hang Seng flat and China slightly higher on balance.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, data was in line to slightly soft. The ISM nonmanufacturing composite for July was below expectations at 53.9 (vs. 56.9 expected; 57.4 previous), which is the lowest level since a similar downward spike in August last year. Digging into the details, new orders index fell 5.4pt to 55.1 and the employment index fell 2.2pt to 53.6. However, even after factoring in the employment indices from the twin ISM reports together, DB’s economist believes the employment indicators are still consistent with decent payrolls growth (~200k per month). Elsewhere, factory orders for June was in line at 3%, initial jobless claims for July was slightly lower than expectations at 240k (vs. 243k) and continuing claims was at 1,968k (vs. 1,958k expected). The final durable goods order stat for June was reported higher at 6.4% (vs. 0% expected).
Onto Europe and the June Eurozone retail sales were higher than expectations at 0.5% mom (vs. 0% expected) and 3.1% yoy (vs. 2.5% expected), while UK’s Markit services and composite PMI were also a tad higher than expectations at 53.8 (vs. 53.6) and 54.1 (vs. 53.8) respectively. Elsewhere, the final July services and composite PMI for the Eurozone (-0.1pt vs flash composite), France (-0.1pt) and Germany (-0.4pt) were also released and was slightly lower than the flash PMIs.
Looking at the day ahead, Friday is relatively quiet day for data in both Asia and Europe with only German factory orders data for June due (0.5% mom, 4.4% yoy expected) and Italy’s retail sales for June (0.1% mom expected). The US will be in greater focus as the July nonfarm payrolls number is due (180k expected, DB 200k) along with other labour market data. Alongside that, we will also get the trade balance reading for June. Onto other events, the Baker Hughes US rig count will also be out. Notable US companies reporting include: Cigna, Berkshire Hathaway and CBOE. Notable European companies reporting include: Allianz, Swiss Re and Erste Group.
3. ASIAN AFFAIRS
i)Late THURSDAY night/FRIDAY morning: Shanghai closed DOWN 10.85 POINTS OR 0.33% / /Hang Sang CLOSED UP 31.67 POINTS OR 0.12% The Nikkei closed DOWN 76.93 POINTS OR .38%/Australia’s all ordinaires CLOSED DOWN 0.23%/Chinese yuan (ONSHORE) closed UP at 6.7204/Oil DOWN to 48.83 dollars per barrel for WTI and 51.80 for Brent. Stocks in Europe OPENED IN THE GEEN , Offshore yuan trades 6.7222 yuan to the dollar vs 6.7204 for onshore yuan. NOW THE OFFSHORE IS WEAKER TO THE ONSHORE YUAN/ ONSHORE YUAN STRONGER (TO THE DOLLAR) AND THE OFFSHORE YUAN IS STRONGER TO THE DOLLAR AND THIS IS COUPLED WITH THE SLIGHTLY WEAKER DOLLAR. CHINA IS HAPPY TODAY
3a)THAILAND/SOUTH KOREA/NORTH KOREA
b) REPORT ON JAPAN
c) REPORT ON CHINA
4. EUROPEAN AFFAIRS
Insanity: Draghi’s push into corporates has caused the junk bond market to yield only 2.49%
WTF Chart Of The Day: Draghi’s ‘Markets’ Have “Totally Gone Nuts”
Two weeks ago we summarized the stunning impact that ECB Predit Mario Draghi’s ‘whatever it takes’ efforts have had on European capital markets in one simple chart…
The European Central Bank now owns 14.8% of all eligible European corporate bonds.
However, as WolfStreet.com’s Wolf Richter points out the ECB’s efforts to buy corporate bonds as part of its stupendous asset buying binge has not only pushed a number of government bond yields below zero, where investors are guaranteed a loss if they hold the bond to maturity, but it has also done a number – perhaps even a bigger one – on the euro junk-bond market.
It has totally gone nuts. Or rather the humans and algorithms that make the buying decisions have gone nuts. The average junk bond yield has dropped to an all-time record low of 2.42%.
Let that sink in for a moment. This average is based on a basket of below investment-grade corporate bonds denominated in euros. Often enough, the issuers are junk-rated American companies with European subsidiaries – in which case these bonds are called “reverse Yankees.”
These bonds include the riskiest bonds out there. Plenty of them will default, and losses will be painful, and investors – these humans and algos – know this too. This is not a secret. That’s why these bonds are rated below investment grade. But these buyers don’t mind. They’re institutional investors managing other people’s money, and they don’t need to mind.
It’s perfectly good to invest in risky instruments as long as you’re being paid to take those risks or have a chance to make serious money. If you buy gold and silver bullion, you know you could make or lose a lot of money. But at a yield of 2.42%, these junk bonds will never make any money if you hold them to maturity, except for covering mild inflation. The risk of losses – including from default – are large. And investors are not getting paid to take those risks. It’s one of the most obviously lopsided deals out there.
The average yield of these junk bonds never dropped below 5% until October 2013. In the summer of 2012, during the dog days of the debt crisis when Draghi pronounced the magic words that he’d do “whatever it takes,” these bonds yielded about 9%, which might have been about right.
Since then, yields have plunged (data by BofA Merrill Lynch Euro High Yield Index Effective Yield via St. Louis Fed). The “on the Way to Zero” in the chart’s title is only partially tongue-in-cheek:
The chart below gives a little more perspective on this miracle of central-bank market manipulation, going back to 2006. It shows the spike in yield to 25% during the US-engineered Financial Crisis and the comparatively mild uptick in yield during the Eurozone-engineered debt crisis:
How does this fit into the overall scheme of things? For example, compared to the US Treasury yield? US Treasury securities are considered the most liquid and the most conservative investments.They’re considered as close to a risk-free financial instrument as you’re going to get on this earth. Turns out, from November 2016 until now, the 10-year US Treasury yield has ranged from 2.14% to 2.62%, comfortably straddling the current average euro junk bond yield of 2.42%
This chart shows the BofA Merrill Lynch Euro High Yield Index (red line) and the 10-year Treasury yield (black line). Note how they used to be worlds apart, and how the spread between them blows out when investors suddenly see risks again, with junk bond prices plunging and yield surging, while Treasuries barely quiver:
If you want to earn a yield of about 2.4%, which instrument would you rather have in your portfolio, given that both produce about the same yield, and given that one has a significant chance of defaulting and getting you stuck with a big loss, while the other is considered the safest most boring financial investment out there?
The answer would normally be totally obvious, but not in the Draghi’s nutty bailiwick. That this sort of relentless and blind chase for yield – however fun it may be today – will lead to hair-raising losses later is a given. And we already know who will take those losses: The clients of these institutional investors, the beneficiaries of pension funds and life insurance retirement programs, the hapless owners of bond funds, and the like.
In terms of the broader economy: When no one can price risk anymore, when there’s in fact no apparent difference anymore between euro junk bonds and US Treasuries, then all kinds of bad economic decisions are going to be made and capital is going to get misallocated, and it’s going to be Draghi’s royal mess.
In the US, “covenant-lite” loans – risky instruments issued by junk-rated borrowers, with few protections for creditors – set an all-time record at the end of the second quarter. Read… Risk has been Abolished, According to Institutional Investors
EU Imposes More Sanctions Against Russia, Blacklists Deputy Minister
The European Commission has decided to broaden sanctions against Moscow on Friday. As RT notes, more Russian individuals and firms accused of delivering Siemens gas turbines to the Crimea have been blacklisted.
The updated blacklist includes Russian Deputy Energy Minister Andrey Cherezov, the head of the department of operational control and management in Russia’s electric power industry Evgeniy Grabchak and state firm Technopromexport CEO Sergey Topor-Gilka.
* * *
As we detailed earlier, this was expected.
The European Union is expected Friday to expand sanctions against Russian individuals and companies that were allegedly involved in the transportation of at least four Siemens turbines to Russian-controlled Crimea in violation of an international ban, according to Reuters.
“EU states have until later on Friday to submit any complaints to the proposal to extend the Russia blacklist. Two diplomatic sources said it looked like there will be no obstacles and the decision will be taken.
Germany proposed last month to put four more Russian nationals – including from the energy ministry – on the blacklist, as well as three Russian firms, including the one that delivered the turbines to the peninsula.
EU states need unanimity to introduce sanctions and one source said, however, one of the names has been removed from the original proposal after Italian objections.”
The expansion puts the EU – and Germany in particular – in an awkward position: Representatives of the trade bloc have recently expressed outrage at the US over a sanctions bill signed by President Donald Trump that they say could unfairly infringe on the EU-Russia bilateral trade relationship.
European Commission Chairman Jean-Claude Juncker earlier this week criticized the US for not consulting the EU before moving ahead with the sanctions bill, threatening reprisals should they damage bilateral trading relations. Trump reluctantly signed the sanctions into law earlier this week after expressing his displeasure with the bill in a signing statement that criticized Congress for further escalating tensions between the two countries.
According to Reuters, the US sanctions will make it more difficult for Russia to build two gas export pipelines to Europe. However, Reuters reports that the two projects are still expected to move forward. Last month, Russian oil giant Gazprom warned investors last month that the sanctions “may result in delays, or otherwise impair or prevent the completion of the projects by the group.”
“The Kremlin, dependent on oil and gas revenues, sees the pipelines to Germany and Turkey – Nord Stream 2 and TurkStream – as crucial to increasing its market share in Europe.
It also fears that Western partners – needed to develop the deepwater, shale and Arctic gas deposits that will fill the pipelines – will be scared off by sanctions.
Gazprom warned investors last month that the sanctions ‘may result in delays, or otherwise impair or prevent the completion of the projects by the group.’”
With this in mind, the Russian gas giant is taking steps to reduce the impact of sanctions, even as the heightened risks are expected to drive up costs and make it more difficult for Gazprom, the Russian oil giant that’s building the German Nordstream 2 pipeline.
“The price of any project automatically increases,” said Tatiana Mitrova, director of the Skolkovo Energy Center.
“Gazprom’s relationships with partners, subcontractors, and equipment and service providers are severely complicated,” she said. “They will all ask for a risk premium.”
Siemens, which insists that it was unaware that the turbines had been moved, has said in statements to the media that it was used as an “unwitting pawn” to help fulfill a promise made by Russian President Vladimir Putin to the people of Crimea. The company is calling for criminal charges to be filed against any Russians who helped orchestrate the move. Siemens originally sold the turbines to a Russian firm called Technopromexport.
5. RUSSIA AND MIDDLE EASTERN AFFAIRS
The Kremlin responds to the sanctions and agrees with Trump that this is very dangerous
Kremlin Responds To President Trump’s “Very Dangerous” Tweet
On the heels of Russian PM Medvedev’s aggresive comments that…
“any hopes of improving Russian relations with the new US administration are dead, that the Trump administration demonstrated complete impotence by transferring executive power to Congress ‘in the most humiliating manner’, and most notably, that the US just declared a full-scale trade war on Russia”
…following signing of Congress’ Russian sanctions bill, President Trump tweeted that US-Russian relations are at “very dangerous low” level…
The Kremlin has now responded… and agrees with Trump.
“We fully agree with this opinion,” Dmitry Peskov told reporters on Friday.
“The danger may come from the lack of cooperation and interaction on issues crucial for our peoples and nations.”
Peskov also remarked on the ongoing investigation in the US of alleged collusion between the Trump campaign and the Kremlin.
He said the issue is not for the Kremlin to comment on and reiterated that Moscow considered the accusations that it interfered with the 2016 election in America “absurd and groundless.”
Still, as we are sure everyone on the Left believes, that’s exactly what they would say if they were trying to distract from the obvious facts that they meddled in the US election.
The Russian lawyer in the Donald Trump Jr scandal slams the congressional inquiry as they do not want the truth
(courtesy zero hedge)
Russian Lawyer In Donald Trump Jr. Scandal Slams Congress: “They Don’t Want The Truth”
Congressional investigators have dragged Jared Kushner, Donald Trump Jr. and Paul Manafort to grill them about a now-infamous June 2016 meeting at Trump Tower that is at the center of the Democrats’ dubious narrative that the Trump campaign somehow colluded with the Russian government to tilt the election in Trump’s favor.
But for whatever reasons, they have no interest in speaking with anyone from the Russian side, including Natalia Veselnitskaya, the Russian lawyer at the center of the meeting. Veselnitskaya revealed as much during a 10-minute interview with the Russian news program Vesti, saying she sought the meeting as part of her efforts to help Russian businessman Denis Katsyv, a client of hers who was targeted with sanctions through the Magnitsky Act. Neither Hillary Clinton, nor the Trump campaign were discussed during the meeting, she said.
“It was a private meeting,” Ms. Veselnitskaya told the interviewer, according to an account Friday in the Moscow Times.
“I asked for help – help to get out a story I had come across in my professional capacity.”
The meeting “had nothing to do with [then-candidate Donald Trump’s] rivals or the presidential election,” she added. “That never happened. That’s not true.”
She expressed frustration that US investigators have not asked for her side of the story, telling her audience that the US Congress isn’t interested in the truth.
Mr. Veselnitskaya also complained that she had not been invited to testify at any of the hearings of the multiple House and Senate committees looking into the Trump-Russia collusion charges.
“They don’t want the truth there at the moment.They need an enemy,” she said. “Some because they are looking to undermine Trump, some because they want to fuel the conflict with Russia.”
She also criticized Russian investment manager William Browder, an opponent of President Vladimir Putin. Browder. Browder led the lobbying effort to pass the Magnitsky Act, which pressed sanctions against several high-ranking Russian officials who US officials say had a hand in the death of Sergei Magnitsky. Magnitsky, who once worked closely with Browder at his firm, Moscow-based Hermitage Capital, died in custody after purportedly uncovering wide-ranging theft from the state committed by government officials.In response to the passage of the Magnitsky Act, Putin banned US adoptions of Russian children.
Veselnitskaya complained that Browder was invited to testify before the Senate Judiciary Committee last week. During the hearing, Browder provided details about collusion involving the Russian government. But the co-conspirator wasn’t Trump, but rather the Clinton campaign. In a segment of the testimony that was largely ignored by the mainstream press, Browder said that the opposition-research firm Fusion GPS had received funding from the Russians to compile a bogus dossier that suggested the Russians had embarrassing dirt on Trump. It was this dossier, which somehow found its way into the hands of the FBI, that triggered the collusion investigations before being widely discredited.
She was harshly critical of William Browder, the head of Moscow investment firm Hermitage Capital Management, who successfully lobbied for U.S. sanctions on Russia after a Hermitage lawyer, Sergei Magnitsky, died in custody in Moscow in 2009 while facing charges for questionable tax evasion charges.
Mr. Browder told a Senate Judiciary Committee hearing looking into the Russian collusion charges July 27 that Ms. Veselnitskaya and other Russians at the June 2016 meeting were there representing Russian President Vladimir Putin and were trying to set up links to the Trump campaign.
“The Russian government and Vladimir Putin were in effect coming to this meeting,” Mr. Browder said.
But Ms. Veslenitskaya told the Russian news show the meeting was “innocent” and that Mr. Browder was running a ‘financial scam.’”
Veselnitskaya’s meeting with Trump Jr., Kushner and Manafort has become a focus for Special Counsel Robert Mueller and Congressional investigators because of an email exchange between Trump Jr. and British publicist Rob Goldstone. In it, Goldstone promised Trump Jr. a meeting with a “Russian government lawyer” who could provide damaging information about Hillary Clinton.
In an interview given shortly after reports of the meeting first surfaced, Veselnitskaya said she thought Trump Jr.’s intentions for taking the meeting involved finding evidence that the DNC was getting money from “inappropriate sources.”
6 .GLOBAL ISSUES
Mish Shedlock comments on the missing piece on global inflation. Actually we are experiencing inflation but not what the bozos want: wage inflation.
(courtesy Mish Shedlock/Mishtalk)
Central Banks Stumped As Global Inflation Hits Lowest Level Since 2009 – Here’s Why
Yesterday, I commented on “transitory” factors holding down inflation.
Today, the Wall Street Journal reports Global Inflation Hits Lowest Level Since 2009.
The Organization for Economic Cooperation and Development said Thursday that consumer prices across the G-20—the countries that account for most of the world’s economic activity—were 2% higher than a year earlier. The last time inflation was lower was in October 2009, when it stood at 1.7%, as the world started to emerge from the sharp economic downturn that followed the global financial crisis.
The contrast between then and now highlights the mystery facing central bankers in developed economies as they attempt to raise inflation to their targets, which they have persistently undershot in recent years.
According to central bankers, inflation is generated by the gap between the demand for goods and services and the economy’s ability to supply them. As the economy grows and demand strengthens, that output gap should narrow and prices should rise.
Right now, the reverse appears to be happening. Across the G-20, economic growth firmed in the final three months of 2016 and stayed at that faster pace in the first three months of 2017.
Growth figures for the second quarter are incomplete, but those available for the U.S., the eurozone and China don’t point to a slowdown. Indeed, Capital Economics estimates that on an annualized basis, global economic growth picked up to 3.7% in the three months to June from 3.2% in the first quarter.
Central bankers in developed economies are puzzled by the sluggish pace of pay rises, given continuing declines in jobless rates. However, they believe that economic growth will ultimately eliminate the gap between what their economies can produce and what they are now producing, supporting wages and prices.
Central banks are puzzled because they do not know what inflation is, or how to measure it.
For example, instead of using home prices in the CPI, they now use Owners’ Equivalent Rent.
In general, asset prices do not count. Bubbles in stocks and bonds do not count.
The massive global QE liquidity went someone, as money always does. The liquidity did not go where the central bankers wanted. It went into asset bubbles.
It’s no mystery why central bankers are mystified: Collectively, they are economically illiterate fools engaged in Keynesian and Monetarist group think.
Yes Virginia, there is inflation. Central banks don’t see it because they are clueless about how to measure it.https://mishtalk.com/2017/08/03/central-banks-puzzled-as-global-inflation-hits-lowest-level-since-2009-solving-the-puzzle/ …
On deck is another round of destructive asset price deflation, brought about by Central banks who cannot see the obvious.
7. OIL ISSUES
Rig Count Drops For 3rd Time In 6 Weeks As US Shale Heavyweights Boost Production
The pace of US oil rig count growth has slowed dramatically in the last six weeks as the lagged response to oil prices indicated. While US oil production continues to trend higher, in lagged response to the rise in rigs, it is also nearing its apex. However, four U.S. shale companies recently reported second-quarter production that beat targets and increased their respective full-year output growth guidance.
This is the 3rd weekly drop in the US oil rig count in the last six weeks…
Crude Production (in the Lower 48) topped 9mm last week for the first time since July 2015, and this week it rose once again to a new cycle high…but judging by the slowdown in rig count growth, production may be set to slow.
However, despite the slowdown in US oil rig count growth, OilPrice.com’s Tsvetana Paraskova notes that US shale heavyweights are set to boost production this year.
In a sign that the U.S. shale patch is boosting output that has been keeping a lid on oil prices, four U.S. shale companies reported second-quarter production that beat targets and increased their respective full-year output growth guidance.
EOG Resourcesreported on Tuesday Q2 total crude oil volumes rising 25 percent to 334,700 barrels of oil per day, setting a company oil production record. The company raised its full-year 2017 U.S. crude oil growth target to 20 percent from 18 percent and total company production growth target to seven percent from five percent, keeping capital spending plans intact.
“EOG can continue to grow at strong rates within cash flow,” Chairman and CEO Bill Thomas said.
Devon Energybeat its midpoint guidance with Q2 net production averaging 536,000 oil-equivalent barrels per day, and said that it was on track to achieve its full-year 2017 production targets. The company cut full-year capital outlook by US$100 million, citing “strong capital efficiencies” and saying it is keeping planned drilling activity for the year.
Diamondback Energyreported Q2 2017 production 25 percent higher than in Q1 2017, and raised full-year production guidance by 5 percent.
Newfield Exploration Company also beat its production targets and increased the mid-point of its full-year 2017 domestic production outlook.
Newfield Exploration now estimates that its year-over-year domestic production growth, adjusted for prior-year asset sales, will be around 8 percent.
“In the best parts of the basins, shale is here to stay,” Rob Thummel, managing director at Leawood, Kansas-based Tortoise Capital Advisors LLC, told Bloomberg, commenting on the shale drillers’ Q2 updates and guidance.
U.S. drillers expect to continue raising production this year, but some are adjusting spending to the expected cash flows in the current oil price environment, after prices failed to rise as much as analysts and investors had expected a few months ago.
“$50 a barrel is still a pretty critical number and that number is going to be even more critical as we move into next year,” Tortoise Capital Advisors’ Thummel told Bloomberg, noting that the lower oil prices could mean that companies would not hedge production as much as they would at higher prices to protect future output.
* * *
Furthermore, OPEC compliance with production cuts agreed last year fell to 86 percent in July, according to a Bloomberg survey published on Aug. 1. That’s the second consecutive monthly drop — now at the lowest since January — and is down from 105 percent in April and May.
OPEC output rose by 210,000 barrels to 32.87 million barrels a day in July, driven by Libya, which added 180,000 barrels a day.
8. EMERGING MARKET
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings FRIDAY morning 7:00 am
Euro/USA 1.1866 DOWN .0016/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 MIXED
USA/JAPAN YEN 110.07 UP 0.185(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/ HELICOPTER MONEY ON THE TABLE AND DECISION ON SEPT 21 DISAPPOINTS WITH STIMULUS/OPERATION REVERSE TWIST/LABOUR PARTY LOSES IN LOCAL ELECTIONS
GBP/USA 1.3139 DOWN .0004 (Brexit March 29/ 2017/ARTICLE 50 SIGNED
THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS
USA/CAN 1.2570 UP .0004 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/TRUMP INITIATES LUMBER TARIFFS ON CANADA)
Early THIS FRIDAY morning in Europe, the Euro FELL by 16 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1866; Europe is still reacting to Gr Britain HARD BREXIT,deflation, announcements of massive stimulation (QE), a proxy middle east war, and the ramifications of a default at the Austrian Hypo bank, an imminent default of Greece, Glencore, Nysmark and the Ukraine, along with rising peripheral bond yield further stimulation as the EU is moving more into NIRP, and now the Italian referendum defeat AND NOW THE ECB TAPERING OF ITS PURCHASES/ THE USA’S NON tightening by FAILING TO RAISE THEIR INTEREST RATE AND NOW THE HUGE PROBLEMS FACING TOO BIG TO FAIL DEUTSCHE BANK + THE ELECTION OF TRUMP IN THE USA+ TRUMP HEALTH CARE BILL DEFEAT AND MONTE DEI PASCHI NATIONALIZATION / Last night the Shanghai composite CLOSED DOWN 10.85 POINTS OR .33% / Hang Sang CLOSED UP 31.67 POINTS OR 0.12% /AUSTRALIA CLOSED DOWN 0.23% / EUROPEAN BOURSES OPENED ALL IN THE GREEN
We are seeing that the 3 major global carry trades are being unwound. The BIGGY is the first one;
1. the total dollar global short is 9 trillion USA and as such we are now witnessing a sea of red blood on the streets as derivatives blow up with the massive rise in the rise in the dollar against all paper currencies and especially with the fall of the yuan carry trade. The emerging market which house close to 50% of the 9 trillion dollar short is feeling the massive pain as their debt is quite unmanageable.
2, the Nikkei average vs gold carry trade ( NIKKEI blowing up and the yen carry trade HAS BLOWN up/and now NIRP)
3. Short Swiss franc/long assets blew up ( Eastern European housing/Nikkei etc.
These massive carry trades are terribly offside as they are being unwound. It is causing global deflation ( we are at debt saturation already) as the world reacts to lack of demand and a scarcity of debt collateral. Bourses around the globe are reacting in kind to these events as well as the potential for a GREXIT>
The NIKKEI: this FRIDAY morning CLOSED DOWN 76.93 POINTS OR .38%
Trading from Europe and Asia:
1. Europe stocks OPENED IN THE GREEN
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 31.67 POINTS OR 0.12% / SHANGHAI CLOSED DOWN 12.13 POINTS OR 0.37% /Australia BOURSE CLOSED DOWN 0.23% /Nikkei (Japan)CLOSED DOWN 76.93 POINTS OR .28% / INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1268.75
Early FRIDAY morning USA 10 year bond yield: 2.2317% !!! UP 2 IN POINTS from THURSDAY night in basis points and it is trading JUST BELOW resistance at 2.27-2.32%.
The 30 yr bond yield 2.810, UP 2 IN BASIS POINTS from THURSDAY night.
USA dollar index early FRIDAY morning: 92.80 DOWN 4 CENT(S) from THURSDAY’s close.
This ends early morning numbers FRIDAY MORNING
And now your closing FRIDAY NUMBERS
Portuguese 10 year bond yield: 2.867% up 1 in basis point(s) yield from THURSDAY
JAPANESE BOND YIELD: +.065% DOWN 4/10 in basis point yield from THURSDAY/JAPAN losing control of its yield curve
SPANISH 10 YR BOND YIELD: 1.483% up 3 IN basis point yield from THURSDAY
ITALIAN 10 YR BOND YIELD: 2.023 up 4 POINTS in basis point yield from THURSDAY
the Italian 10 yr bond yield is trading 54 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: +.468% up 1 IN BASIS POINTS ON THE DAY
IMPORTANT CURRENCY CLOSES FOR FRIDAY
Closing currency crosses for FRIDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/5:00 PM
Euro/USA 1.1769 down .0112 (Euro DOWN 112 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 110.64 UP 0.751(Yen DOWN 75 basis points/
Great Britain/USA 1.3026 DOWN 0.0117( POUND DOWN 117
USA/Canada 1.2610 UP .0041 (Canadian dollar DOWN 41 basis points AS OIL ROSE TO $49.58
This afternoon, the Euro was DOWN by 112 basis points to trade at 1.1869
The Yen FELL to 110.64 for a LOSS of 75 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 117 basis points, trading at 1.3026/
The Canadian dollar FELL by 46 basis points to 1.2610, WITH WTI OIL FALLING TO : $49.58
Your closing 10 yr USA bond yield UP 3 IN basis points from THURSDAY at 2.262% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.8420 UP 3 in basis points on the day /
Your closing USA dollar index, 93.54 UP 70 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 FRIDAY: 1:00 PM EST
London: CLOSED UP 36.94 POINTS OR 0.49%
German Dax :CLOSED DOWN 143.00 POINTS OR 1.18%
Paris Cac CLOSED UP 72.95 POINTS OR 1.42%
Spain IBEX CLOSED UP 109.37 POINTS OR 1.04%
Italian MIB: CLOSED UP 142.07 POINTS/OR 0.65%
The Dow closed UP 66.71 OR 0.30%
NASDAQ WAS closed UP 11.22 POINTS OR 0.18% 4.00 PM EST
WTI Oil price; 49.48 at 1:00 pm;
Brent Oil: 52.23 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 60.24 DOWN 32/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 32 BASIS PTS)
TODAY THE GERMAN YIELD FALLS TO +0.468% FOR THE 10 YR BOND 4.PM EST EST
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:$49.58
USA 10 YR BOND YIELD: 2.262% (ANYTHING HIGHER THAN 2.70% BLOWS UP THE GLOBE)
USA 30 YR BOND YIELD: 2.842%
EURO/USA DOLLAR CROSS: 1.1769 DOWN .0112
USA/JAPANESE YEN:110.64 UP 0.751
USA DOLLAR INDEX: 93.54 UP 70 cent(s)
The British pound at 5 pm: Great Britain Pound/USA: 1.3026 : DOWN 117 POINTS FROM LAST NIGHT
Canadian dollar: 1.2610 down 46 BASIS pts
German 10 yr bond yield at 5 pm: +0.468%
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Dow Gains 600 Points In 9 Days; S&P, Bonds, Gold & Dollar Unchanged
Despite the payrolls beat, “hard” data in the US economy closed the week lower for the 5th week of the last 6 to the lowest since May 2015… as The Dow surges for the 9th day in a row to the 8th record close in a row…
So this happened…
From the payrolls print, bonds and bullion were sold, stocks were flat…
Equity Futures also struggled post-payrolls with dip-buyers unable to sustain any gains…
The Dow just keeps on rising but Tech stocks suffered their second weekly drop in a row – Small Caps were worst as The S&P managed a small green close
FANG Stocks suffered their worst week since June…
Wells Fargo stumbled on revelatiosn from its 10Q that there could be more fake accounts and legal costs could be significantly higher than reserves…
Blue Apron had quite a day – plunging on news that it was slahing its workforce… and not rebounding on news that in fact it was merely moving its workforce…
Treasury yields ended the week lower (except 2Y) despite a major kneejerk higher (in yield) today on the jobs data…
The dollar index ramped higher today on a combination of the jobs data and chatter about HIA2 – that tagged the high stops from last week’s Fed dead cat bounce and while the dollar ended the week higher, it was fading back to unch rapidly into the close…
The Loonie was the week’s biggest loser against the greenback and the Euro the biggest winner..
All eyes were on EURUSD this week but today’s payrolls data slammed the pair lower… for now…
Gold had its worst day in a month today after payrolls printed, erasing the week’s gains but holding at the intersection of the 50- and 100DMA at around $1260…
WTI Crude ralied today but was unable to turn green on the week…
Finally...”You Are Here”
the official jobs numbers: a beat by 209,000 jobs. All of the gains were of the “seasonable adjustment” category. Adjusted saw a 1.3 million decline. Shear nonsense!
(courtesy zero hedge)
Payrolls Beat: 209K Jobs Added In July, Solid Wage Growth, Unemployment Drops
And now the dovish Fed has another problem: the BLS reports that in July the US added 209K jobs, beating consensus expectations of a 180K print, while June was revised higher to 231K from 222K, even as May was revised modestly lower from 152K to 145K, for a net gain of +2,000 in the prior two months.
Nonfarm private payrolls rose 209k vs last month’s 194k, and above the estimate of 180k, as the drop from durable manufacturing failed to materialize. In a familiar refrain, bars and restaurants hired the most workers of any sector in July.
Of course, keep in mind that the July gain was all in the seasonal adjustment factor: unadjusted, jobs declined by 1.308 million.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in July. In manufacturing, the workweek was also unchanged at 40.9 hours, and overtime remained at 3.3 hours.
Adding to the hawkish pressure, wages rebounded from last month’s 0.2%, rising 0.3% M/M, and 2.5% on a Y/Y basis, above the 2.4% expected, while average weekly earnings rose from 2.8% in line with the highest print over the past 7 years, and once again putting wage inflation back on the map.
The unemployment rate dropped from 4.4% to 4.3% as expected, while the participation rate rose from 62.8% to 62.9%, as the number of workers out of the labor force declined by 156K to 94.657 million.
That said, the gap between the unemployment rate and the unemployment to population ratio remains wide.
Some more details from the report:
Total nonfarm payroll employment increased by 209,000 in July. Job gains occurred in food services and drinking places, professional and business services, and health care. Employment growth has averaged 184,000 per month thus far this year, in line with the average monthly gain in 2016 (+187,000).
Employment in food services and drinking places rose by 53,000 in July. The industry has added 313,000 jobs over the year.
Professional and business services added 49,000 jobs in July, in line with its average monthly job gain over the prior 12 months.
In July, health care employment increased by 39,000, with job gains occurring in ambulatory health care services (+30,000) and hospitals (+7,000). Health care has added 327,000 jobs over the past year.
Employment in mining was essentially unchanged in July (+1,000). From a recent low in October 2016 through June, the industry had added an average of 7,000 jobs per month.
Employment in other major industries, including construction, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.5 hours in July. In manufacturing, the workweek was also unchanged at 40.9 hours, and overtime remained at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was 33.7 hours for the fourth consecutive month.
In July, average hourly earnings for all employees on private nonfarm payrolls rose by 9 cents to $26.36. Over the year, average hourly earnings have risen by 65 cents, or 2.5 percent. In July, average hourly earnings of private-sector production and nonsupervisory employees increased by 6 cents to $22.10.
The change in total nonfarm payroll employment for May was revised down from +152,000 to +145,000, and the change for June was revised up from +222,000 to +231,000. With these revisions, employment gains in May and June combined were 2,000 more than previously reported. Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors. Over the past 3 months, job gains have averaged 195,000 per month
What a phony jobs report: the big gains again in waiters and bartenders, the lowest on the wage scale totem pole:
Where The Jobs Were: Waiters And Bartenders Topped The List
We already showed that contrary to the strong headline payrolls print, the sole source of job gains in July was part-time jobs, which rose by 393K in the month, the biggest monthly increase since September 2016, as full-time jobs sunk by 54K. Which is why it should not surprise that of the 209K jobs added according to the Establishment survey, the sector that added the most jobs was the “food services and drinking places“, i.e. “waiters and barenders” category, which added 53,000 jobs, the highest monthly increase since March 2014. There have now been 89 consecutive months without a decline for waiter and bartender jobs, the strongest sector for US employment. Needless to say, these jobs fall within leisure and hospitality, that sector pays the worst wages, an average of $13.35 an hour, and $331.08 a week.
Next was professional and business services, which added 49,000 jobs. Within this category, administrative and waste services added 30,000 jobs, while temp workers rose by 14,700. The good news here is that hourly pay for this group averaged $26.07, and weekly pay $928.09, up 2.5% from a year ago. The bad news is that most of the jobs were in administrative and temp services, the lowest paying groupings.
Health care added 39,000 jobs, with job gains occurring in ambulatory health care services (+30,000) and hospitals (+7,000). Health care has added 327,000 jobs over the past year.
Employment in mining was essentially unchanged in July (+1,000).
While no other sector made a significant contribution to the July report, it is worth pointing out that for the second consecutive month there wasn’t a major job sector with a decline in jobs.
Commenting on the job distribution, Andrew Zatlin of SouthBay Research said “manufacturing hiring is settling down: oil related capex hiring is pausing and autos are hitting the brakes. This offsets other gains. That leaves services to drive the hiring, and it’s mostly positive. Healthcare hiring strengthened after the ACA repeal debacle. Temp hiring is also steady.”
In its observation of overall wge growth, which surprised to the upside rising 2.5% for all workers from a year ago, more than the 2.4% expected, that number can often be skewed by gains at the top. Furthermore, these are nominal numbers: assuming a 1.6% CPI as reported in June, that means “real” wage growth is roughly 1%. As the WSJ points out, “it’s hard to push the economy very far when consumers are seeing only 1% wage growth.”
393,000 part time jobs were added, offset by a drop of 54,000 full-time workers
and the algos reacted to the gain not realizing that a huge 54,000 full time workers lost their jobs
The Amazon Effect: Part Time Jobs Soar By 393K, Full Time Jobs Slide
On the surface the July jobs report was solid, with 209K jobs added, more than the expected, as the recent auto sector slowdown appears to skip the labor market (for now), with Trump quick to take credit for the report.
However, digging through the numbers reveals some troubling features: while the Household survey reported that an impressive 345K jobs were added, more than 50% higher than the Establishment survey, the bulk of these jobs was part-time. According to the BLS, in July 393,000 part time jobs were added, offset by a drop of 54,000 full-time workers.
This was the biggest increase in part-time jobs going back to September 2016.
Having monopolized the retail sector (and branching out to others), is Amazon – which recently hired 10 part time jobs for every full time job – starting to dominated the lobs report next?
Only Employment Gains In The Past Year: Those With A High School Diploma Or Lower
In its latest, July, snapshot of the US economy, the NY Fed observed something startling, and which hasn’t received much discussion in the media: when looking at the June report, over the past year the only employment gains have gone to less educated Americans, or as the NY Fed puts it, “over the last year, the employment-to-population ratio has risen for the less educated.” It added that “for those with less than a high school degree and for high school graduates, the employment-to-population ratio rose by 0.4 percentage point and 0.9 percentage point, respectively.
Meanwhile, “the employment-to-population ratio for the more highly educated has been on a downward trend, with the ratio for those with a college degree 0.2% percentage point lower in June relative to a year ago.”
Now that we have the July data we can update the NY Fed data, and find… more of the same: as the chart below shows, while on both a 1-month and 1-year basis, the Employment-to-Population ratio for workers with “some college” or “a bachelor’s degree and higher” declined or remained flat again, the biggest increase on both a 1-month and 1-year basis was for those with “less than a high school diploma” or “high school” graduates.
In retrospect, this should not come as a surprise: in an economy where wage growth is “inexplicably” failing to materialize, in which waiters and bartenders were the hottest hiring sector last month and over the past 7 years, and where part-time workers soared in July, it makes sense that the best job prospects are for those who never went to college. As for the adverse structural consequences for the US economy as a result of lack of demand for those with a college education, that is self-explanatory and is a giant hint as to the unprecedented collapse in US economic productivity in recent years.
Paul Craig Roberts:
Roberts explains the hoax created by the Democrats in their witch hunt to remove Trump from the Presidency
(courtesy Paul Craig Roberts)
“The Witch Hunt For Donald Trump Surpasses Salem”
We should be scared to death that Sally Q. Yates served as a prosecutor in the Justice (sic) Department for 27 years. In the New York Times, Sally takes high umbrage to Trump’s criticism of his attorney general, Sessions, and blows Trump’s disappointment with Sessions into an attack by Trump on the rule of law.
Sally has it backwards. The rule of law is being attacked by the appointment of a special prosecutor to find something on Trump in the absence of any evidence of a crime.
In 1940 US attorney general Robert Jackson warned federal prosecutors against “picking the man and then putting investigators to work, to pin some offense on him.
It is in this realm – in which the prosecutor picks some person whom he dislikes or desires to embarrass, or selects some group of unpopular persons and then looks for an offense – that the greatest danger of abuse of prosecuting power lies.
It is here that law enforcement becomes personal, and the real crime becomes that of being unpopular with the predominant or governing group, being attached to the wrong political views or being personally obnoxious to, or in the way of, the prosecutor himself.”
Robert Jackson has given a perfect description of what is happening to President Trump at the hands of special prosecutor Robert Mueller.Trump is vastly unpopular with the ruling establishment, with the Democrats, with the military/security complex and their bought and paid for Senators, and with the media for proving wrong all the smart people’s prediction that Hillary would win the election in a landslide.
From day one this cabal has been out to get Trump, and they have given the task of framing up Trump to Mueller. An honest man would not have accepted the job of chief witch-hunter, which is what Mueller’s job is.
The breathless hype of a nonexistent “Russian collusion” has been the lead news story for months despite the fact that no one, not the CIA, not the NSA, not the FBI, not the Director of National Intelligence, can find a scrap of evidence. In desperation, three of the seventeen US intelligence agencies picked a small handful of employees thought to lack integrity and produced an unverified report, absent of any evidence, that the hand-picked handful thought that there might have been a collusion. On the basis of what evidence they do not say.
That nothing more substantial than this led to a special prosecutor shows how totally corrupt justice in America is.
Furthermore the baseless charge itself is an absurdity. There is no law against an incoming administration conversing with other governments. Indeed, Trump, Flynn, and whomever should be given medals for quickly moving to smooth Russian feathers ruffled by the reckless Bush and Obama regimes. What good for anyone can come from ceaselessly provoking a nuclear Russian bear?
The new Russian sanctions bill passed by Congress is an act of reckless idiocy. It was done without consulting Europe which will bear the cost of the bill and might reject it, thus sending shock waves through the fragile American empire.
Congress’ thoughtless bill is a violation of the separation of powers. Foreign policy is the executive branch’s arena. The feckless Obama put the sanctions on. Obviously, if a president can put sanctions on, a president can take sanctions off.
Trump should take his case to the American people, not via Twitter, but with a major speech. Fox News and Alex Jones, either of which has a larger audience than CNN and the New York Times, would broadcast Trump’s speech. Trump should make the case that Congress is over-reaching its constitutional authority and also preventing a reduction in dangerous tensions between nuclear powers. Trump should ask the American people forthright if they want to be driven into war with Russia by gratuitous provocation after provocation.
Because of the powers that Bush and Obama thoughtlessly gave the presidency, Trump can declare a national emergency, cancel Congress, and arrest whomever he wishes. Of course, the presstitute media would do everything possible to sway the people and the US military against the state of emergency, but if there were a real “Russian collusion,” Trump would have Putin initiate a major crisis that would bring the people and the military to Trump’s side. That no such thing will happen is total proof that there is no “Russian collusion.”
Even the Washington Post, an initiator and leader of the breathless “Russian collusion” lie has now published an article, “The quest to Prove Collusion is Crumbling,” that concludes that the entire orchestration is a hoax.
As the Washington Post article says, “the story that never was is not happening.”
So the great “superpower America,” the “exceptional, indispensable country,” has wasted 7 months of a new presidency in a hoax when it could have been repairing the relations with Russia and China that were seriously damaged by the criminal Bush and Obama regimes. What are the utter fools that comprise the American Establishment thinking? Why do the morons want high tensions with the two powers that can remove the United States and its impotent European and British vassals from the face of the earth in a few minutes? Who gains from this? What is wrong with the American people that they cannot understand that they are being driven to their destruction? Insouciant America is clearly not a sufficiently strong term.
To come back to the ridiculous Sally Q. Yates, clearly Sally is the embodiment of the Insouciant American. She says she spent 27 years as a Justice (sic) Department prosecutor. Yet, she is able to write this utter nonsense: “I know from first hand experience how seriously the career prosecutors and agents take their responsibility to make fair and impartial decisions based solely on the facts and the law and nothing else”
Where was Sally Q. Yates when US attorney Rudy Giuliani used the presstitute media to frame up Michael Milken and Leona Helmsley? Giuliani never had any valid indictment against Milken but used the media and FBI harassment of Milken’s relatives to force Milken into a plea bargain and then had Milken double-crossed by the bimbo judge, who was denied her reward to the Supreme Court because it came to light that she illegally employed illegal aliens.
Today, thanks to the corrupt American media, 99.9% of people who remember the Milken case think that Milken was convicted of insider trading, a charge for which no evidence was ever presented and which was totally absent from the coerced plea bargain that the media helped Giuliani secure.
As best I remember my investigation of the Helmsley case, Rudy dropped charges against a corrupt accountant in exchange for false testimony against Helmsley. As I remember, both Judge Robert Bork and Alan Dershowitz, attorneys in the case, told me that the charge of tax evasion against Helmsley was preposterous. The Helmsley hotels were fully depreciated and were surviving by guest rentals alone. If the Helmsleys had wanted to reduce their income tax, all they needed to do was to sell their existing depreciated holdings and purchase other hotels in order to crank up the depreciation that reduces income tax.
Whatever Justice (sic) Department case you look at, it stinks to high heaven. It is extremely difficult to find any justice in America.
But Sally is certain that President Trump’s criticism of his weak AG means the end of the rule of law in the US.
As many on the left would say, the US has never had a rule of law. It has a rule of power. How else do we explain the enormous war crimes of the Clinton, Bush, and Obama regimes, and the war crimes to come from the Trump or successor Pence regime, that never will be tried at Nuremberg?
Sessions declares war on the leakers and will charge them with criminal activity:
(courtesy zero hedge)
Wells Fargo Shares Dive After 10Q Reveals Potential For “Significantly” More Fake Accounts
Wells Fargo just released a lengthy 10Q revealing a number of concerns for shareholders with regard higher-than-expected legal costs, new auto loan sales ‘issues’, and the potential for “significantly” more fake accounts based on a wider review. Ironically, WFC’s CEO Tim Sloan began his press release thus… “rebuilding trust became our top priority when I became CEO last October.”
Headlines from the 10Q (via Bloomberg)
- *WELLS FARGO SEES POSSIBLE LEGAL COSTS BEYOND RESERVES OF $3.3B
- *WELLS FARGO SAYS CFPB INVESTIGATING FREEZING OF CLIENT ACCOUNTS
- *WELLS FARGO TO INCREASE BOGUS ACCOUNTS REVIEW BY 3+ YEARS
- *WELLS FARGO:WIDER EXAM MAY FIND `SIGNIFICANTLY’ MORE FAKE ACCTS
- *WELLS FARGO `ANTICIPATES’ IDENTIFYING, REMEDIATING AUTO ISSUES
- *WELLS FARGO SAYS AUTO REVIEW MAY INCLUDE ORIGINATION, SERVICING
- *WELLS FARGO:AUTO INSURANCE ISSUE MAY RESULT IN REGULATOR PROBES
- *WELLS FARGO SAYS IT DISCLOSED CLIENT DATA LEAK TO AGENCIES
“We expect that our review of the expanded time periods, which adds over three years to the initial review period of approximately four years (May 2011 to mid-2015), and our review and validation efforts for the initial review period,may lead to a significant increase in the identified number of potentially unauthorized accounts.
However, we do not expect any incremental customer remediation costs as a result of these efforts to have a significant financial impact on the Company.”
And the result…
Special Prosecutor Robert Mueller is now in the Grand Jury phase of the Trump witch hunt. It is looking more and more like a “get Trump” at all costs affair. Mueller has many conflicts of interest and is required to be removed by law, and yet nothing is done to stop this circus. Meanwhile, renowned journalist Seymour Hersh says, “Russia Gate is a CIA planted lie and revenge against Trump.” Hersh says DNC staffer Seth Rich supplied some “juicy emails from the DNC” to WikiLeaks. That pretty much blows up the Russian hacking and collusion story. Now, about two dozen members of Congress want a Special Prosecutor to investigate Hillary and all the wrongdoing of the Obama Administration.
Former Fed Head Alan Greenspan is warning of a “bond bubble.” Greenspan thinks interest rates are “much too low,” and when they move up, they could move up “reasonably fast.” Even with this warning from a former Federal Reserve Chairman, the stock markets still hit all-time highs this week.
Donald Trump and members of the GOP are proposing a new immigration bill that will limit immigration. Trump says it will save “billions and billions of dollars.” The plan will limit unskilled labor and require people who want to become citizens to have skills and speak English. Massive legal and illegal immigration hurts the poor and minorities the hardest.
Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.
WELL THAT ABOUT DOES IT FOR TONIGHT