Feb 26/GOLD UP $2.40 TO $1331.20/SILVER UP 8 CENTS TO $16.60/OPTIONS EXPIRY THIS WEDNESDAY/GOLD EFP ISSUANCE:2651 CONTRACTS/SILVER EFP ISSUANCE: 2651 CONTRACTS/ ANOTHER BIG INCREASE IN GOLD INVENTORY AT THE GLD (1.77 TONNES)..FOR 5 OUT OF THE LAST 6 TRADING DAYS, GOLD INVENTORY HAS ADVANCED AT THE GLD/TRUMP SET TO INITIATE ANOTHER ROUND OF HARSH TARIFFS AIMED AT CHINA AND SOUTH KOREA ON STEEL AND ALUMINIUM/THE MEXICAN PESO PLUNGED TODAY/NEW HOME SALES IN THE USA CRASHED AND YET THE DOW RISES BY ALMOST 400 POINTS/SWAMP STORIES/

 

 

GOLD: $1331.20 UP $2.40

Silver: $16.60 UP 8 cents

Closing access prices:

Gold $1333.50

silver: $16.65

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: $1344.69 DOLLARS PER OZ

NY PRICE OF GOLD AT EXACT SAME TIME: $1334.65

PREMIUM FIRST FIX: $10.04

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SECOND SHANGHAI GOLD FIX: $1348.69

NY GOLD PRICE AT THE EXACT SAME TIME: $1339.50

discount of Shanghai 2nd fix/NY:$9.14

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LONDON FIRST GOLD FIX: 5:30 am est $1339.65

NY PRICING AT THE EXACT SAME TIME: $1339.30

LONDON SECOND GOLD FIX 10 AM: $1333.50

NY PRICING AT THE EXACT SAME TIME. $1334.00

For comex gold:

FEBRUARY/

NUMBER OF NOTICES FILED TODAY FOR FEBRUARY CONTRACT: 825 NOTICE(S) FOR 82500 OZ.

TOTAL NOTICES SO FAR:2625 FOR 262500 OZ (8.1640 TONNES),

For silver:

FEBRUARY

20 NOTICE(S) FILED TODAY FOR

100,000 OZ/

Total number of notices filed so far this month: 407 for 2,035,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $9,701/OFFER $9,771: DOWN $231(morning)

Bitcoin: BID/ $10,358/offer $10,428: UP $421  (CLOSING/5 PM)

 

end

We are now entering options expiry week for the big gold and silver contracts for the LBMA/OTC contracts. Comex options expired on Friday.

Let us have a look at the data for today\

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In silver, the total open interest FELL BY A CONSIDERABLE SIZED 1992 contracts from 198,429  FALLING TO 196,437 WITH  FRIDAY’S 10 CENT LOSS IN SILVER PRICING.  WE HAD CONSIDERABLE COMEX LIQUIDATION. HOWEVER, WE WERE AGAIN NOTIFIED THAT WE HAD ANOTHER STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  1770 EFP’S FOR MARCH AND AND 139 EFP’S FOR MAY AND ZERO FOR ALL  OTHER MONTHS  AND THUS TOTAL ISSUANCE OF 1909 CONTRACTS.  WITH THE TRANSFER OF 1909 CONTRACTS, WHAT THE CME IS STATING IS THAT THERE IS NO SILVER (OR GOLD) TO BE DELIVERED UPON AT THE COMEX AS THEY MUST EXPORT THEIR OBLIGATION TO LONDON. ALSO KEEP IN MIND THAT THERE CAN BE A DELAY OF 24 HRS IN THE ISSUING OF EFP’S. THE 1909 CONTRACTS TRANSLATES INTO 9.54 MILLION OZ DESPITE  WITH THE CONTINUAL DROP IN OPEN INTEREST IN SILVER AT THE COMEX.

ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF FEBRUARY:

45,132 CONTRACTS (FOR 18 TRADING DAYS TOTAL 45,132 CONTRACTS OR 225.660 MILLION OZ: AVERAGE PER DAY: 2507 CONTRACTS OR 12.537 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  225.660 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 32.22% OF ANNUAL GLOBAL PRODUCTION

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:  474.19 MILLION OZ.

ACCUMULATION FOR JAN 2018: 236.879 MILLION OZ

RESULT: A CONSIDERABLE SIZED LOSS IN OI SILVER COMEX DESPITE THE  10 CENT LOSS IN SILVER PRICE.  WE ALSO HAD A GOOD SIZED EFP ISSUANCE OF 1909 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER . FROM THE CME DATA 1909 EFP’S  FOR  MONTHS MARCH AND MAY WERE ISSUED FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS.   WE LOST  83 OI CONTRACTS i.e. 1909 open interest contracts headed for London (EFP’s) TOGETHER WITH A DECREASE OF 1992  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF 10 CENTS AND A CLOSING PRICE OF $16.52 WITH RESPECT TO FRIDAY’S TRADING. YET WE STILL HAVE A FAIR AMOUNT OF SILVER STANDING AT THE COMEX.

In ounces AT THE COMEX, the OI is still represented by just UNDER 1 BILLION oz i.e. 0.985 BILLION TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED: 20 NOTICE(S) FOR 100,000 OZ OF SILVER

In gold, the open interest  ROSE BY 2189 CONTRACTS RISING TO 526,638 DESPITE THE FALL IN PRICE OF GOLD WITH RESPECT TO FRIDAY’S TRADING ($1.15). HOWEVER, IN ANOTHER DEVELOPMENT, WE RECEIVED THE TOTAL NUMBER OF GOLD EFP’S ISSUED FOR MONDAY AND IT TOTALED AN SMALL SIZED  2651 CONTRACTS OF WHICH  APRIL SAW THE ISSUANCE OF 2401 CONTRACTS AND  JUNE SAW THE ISSUANCE OF 250 CONTRACTS AND THEN ALL OTHER MONTHS ZERO.    The new OI for the gold complex rests at 526,638. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. DEMAND FOR GOLD INTENSIFIES GREATLY AS WE CONTINUE TO WITNESS A HUGE NUMBER OF EFP TRANSFERS TOGETHER WITH THE MASSIVE INCREASE IN GOLD COMEX OI  TOGETHER WITH  THE TOTAL AMOUNT OF GOLD OUNCES STANDING FOR FEBRUARY COMEX. EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER (BIG RISE IN BOTH GOFO AND SIFO) AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES. IN ESSENCE WE HAVE A GAIN OF 4840  CONTRACTS: 2189 OI CONTRACTS INCREASED AT THE COMEX AND A SMALL SIZED  2651 OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.(4840 oi gain in CONTRACTS EQUATES TO 15.05TONNES)

YESTERDAY, WE HAD 2746 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEBRUARY STARTING WITH FIRST DAY NOTICE: 187,370 CONTRACTS OR 18,737,000  OZ OR 582.79 TONNES (18 TRADING DAYS AND THUS AVERAGING: 10,409EFP CONTRACTS PER TRADING DAY OR 1,040,900 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :   SO FAR THIS MONTH IN 18 TRADING DAYS: IN  TONNES: 582.79 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2200 TONNES

THUS EFP TRANSFERS REPRESENTS 582.79/2200 x 100% TONNES =  26.49% OF GLOBAL ANNUAL PRODUCTION SO FAR IN FEBRUARY ALONE.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE:  1216.18 TONNES

ACCUMULATION OF GOLD EFP’S FOR JANUARY 2018: 653.22  TONNES

Result: A  GOOD SIZED INCREASE IN OI AT THE COMEX DESPITE THE FALL IN PRICE IN GOLD TRADING YESTERDAY ($1.15).  HOWEVER, WE HAD ANOTHER TINY SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 2651 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX AND YET WE ALSO OBSERVED A HUGE DELIVERY MONTH FOR THE MONTH OF DECEMBER. I GUESS IT EXPLAINS THE HUGE ISSUANCE OF EFP’S…THERE IS HARDLY ANY GOLD PRESENT AT THE GOLD COMEX FOR DELIVERY PURPOSES. IF YOU TAKE INTO ACCOUNT THE 2651 EFP CONTRACTS ISSUED, WE HAD A NET GAIN IN OPEN INTEREST OF 4840 contractON THE TWO EXCHANGES:

2651 CONTRACTS MOVE TO LONDON AND  2189 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 15.05 TONNES).

we had: 825 notice(s) filed upon for 82,500 oz of gold.

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

GLD

WITH GOLD UP $2.40 : A BIG CHANGE IN GOLD INVENTORY AT THE GLD/ANOTHER DEPOSIT OF 1.77 TONNES OF GOLD INTO THE GLD

Inventory rests tonight: 831.03 tonnes.

SLV/

WITH SILVER DOWN 10 CENTs TODAY: 

NO CHANGES IN SILVER INVENTORY AT THE SLV

/INVENTORY RESTS AT 316.590 MILLION OZ/

end

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

1. Today, we had the open interest in silver FELL BY 1992  contracts from 198,429 DOWN TO 196,437 (AND now A LITTLE FURTHER FROM THE NEW COMEX RECORD SET ON FRIDAY/APRIL 21/2017 AT 234,787) WITH THE FALL  IN PRICE OF SILVER  (10 CENT WITH RESPECT TO  FRIDAY’S TRADING).   OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE ANOTHER GOOD 1770 PRIVATE EFP’S FOR MARCH AND 139 EFP CONTRACTS OR MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM) AND 0 EFP’S FOR ALL OTHER MONTHS .  EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. WE HAD CONSIDERABLE COMEX SILVER COMEX LIQUIDATION. IF WE TAKE THE  OI LOSS AT THE COMEX OF  1518 CONTRACTS TO THE 1909 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A TINY LOSS OF 83  OPEN INTEREST CONTRACTS .  WE STILL HAVE A GOOD AMOUNT OF SILVER OUNCES THAT ARE STANDING FOR METAL IN FEBRUARY (SEE BELOW). THE NET LOSS TODAY IN OZ ON THE TWO EXCHANGES:  0.415 MILLION OZ!!!

RESULT: A CONSIDERABLE SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE  FALL OF 10 CENTS IN PRICE (WITH RESPECT TO FRIDAY’S TRADING ). BUT WE ALSO HAD ANOTHER GOOD 1909 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE GOOD  SIZED AMOUNT OF SILVER OUNCES STANDING FOR FEBRUARY, DEMAND FOR PHYSICAL SILVER INTENSIFIES AS WE WITNESS MAJOR BANK SHORT COVERING ACCOMPANIED BY INCREASES IN GOFO AND SIFO RATES INDICATING SCARCITY.

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 40.55 POINTS OR 1.23% /Hang Sang CLOSED UP 231.43 POINTS OR 0.74% / The Nikkei closed UP 260.0 POINTS OR 1.19%/Australia’s all ordinaires CLOSED UP 0.67%/Chinese yuan (ONSHORE) closed UP at 6.3090/Oil UP to 63.51 dollars per barrel for WTI and 67.06 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN  .   ONSHORE YUAN CLOSED UP AT 6.3090 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3076 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR AND ALL OTHER CURRENCIES. CHINA IS  HAPPY TODAY (STRONGER CURRENCY/STRONGER MARKETS) 

3a)THAILAND/SOUTH KOREA/NORTH KOREA

 i)North Korea

Trump initiates further sanctions against North Korea targeting 28 ships and 27 companies that still deal with this rogue nation. If this fails, then Trump warns of a devastating phase 2:

(courtesy zero hedge)

b) REPORT ON JAPAN

3 c CHINA

Trump is asking for the harshest import tariffs yet on global steel and in particular, Chinese steel at 24% and an additional 10% on aluminum.  Trump will soon be isolated.

( zerohedge)

4. EUROPEAN AFFAIRS

i)Riots break about ahead of next week’s Italian election as demonstrators protest the rise in the Northern League (far right) party under Salvini.  It seems that all parties are doing everything to keep the 5 star movement from taking office.

The natural coalition will be with the Far right Northern League and 5 star.  If they can clear a majority than Brussels will be in deep trouble

here is your preliminary handicapping for next week’s election

( zero hedge)

ii)Corbyn’s Brexit speech warning May to obtain an agreement with the EU with a significant political gamble.  One professor claims that it would leave the UK as a colony of the EU.  He is right

(courtesy zerohedge)
iii)The Eu is now proposing to tax hike tech firms and it will be based on revenue as opposed to where they are headquartered.  Almost of these are USA based.  It will be almost impossible for these guys to evade this new kind of tax
( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Iran/USA

Iran is again threatening..this time if western banks do not start doing business in Iran, they will abandon their nuclear deal

( zerohedge)

ii)Israel/ (Jerusalem)/USA

The USA is planning to officially move its embassy to Jerusalem on Israel’s Independence Day

( MiddleEastEye.com)

6 .GLOBAL ISSUES

Mexico;
the Mexican Peso is pounded after a poor retail sales report
( zerohedge)

7. OIL ISSUES

We have outlined to you the huge conflicts arising from the big discovery of oil by Israel but which borders Cyprus, and Lebanon.

GEFIRA provides a great commentary on the fact that war looms because of the huge discovery of natural gas.

( GEFIRA)

8. EMERGING MARKET

South Africa

First was announcements that the government was going to confiscate farm lands belonging to white farmers. This weekend, a second announcement that South Africa will cut off all diplomatic ties with Israel

I think we were better off with Zuma

( MiddleEastMonitor.com)

9. PHYSICAL MARKETS

i)Andrew Maguire’s Kinesis money which is a “bitcoin” but backed 100% by allocated gold and silver is set to go.

it think it would be a great idea to look at this!

please read at:  https://kinesis.money/#/

(Andrew Maguire)

ii)China is letting the yuan crush the dollar in an attempt to appease Trump so they would not be labelled a currency manipulator

( CNBC.GATA)

iii)It looks like Harvard grad, Liu He, a trained economist and a trusted confidant of Xi, which emerge as front runner for the next governor of the Central Bank of China

( Reuters/GATA)

iv)The Treasury Secretary of the USA Mnuchin urges markets not to worry about the effects of tax cuts and the rising debt. You should be worried..

( Bloomberg/Mohsin)

v)Regulators are looking into volatility funds and why many lost billions when one imploded

( Bloomberg/GATA)

vi)With low interest rates, some Fed officials are worried that they do not have the tools to fight the next recession

(Spicer/Saphir/Reuters/GATA)

10. USA stories which will influence the price of gold/silver

i)As Yellowstone is experiencing Quake Swarms, the San Francisco Bay area has been rattled by as many as 32 quakes in the past 24 hours

( zerohedge)

ii)January new home sales crash due to the higher interest rate

( zerohedge)

iii)The Dallas Fed Manufacturing Index (soft data) bucked the trend and soared to 13 yr highs due to the rise in oil production and price

(courtesy zerohedge)

iv)

It sure looks like this is what is going on:  the Fed is pumping stocks to keep public pensions solvent

( Dave Kranzler IRD)

v)SWAMP STORIES

a)The Democrats finally release their version of the facts behind the Nunes memo. It basically is garbage..it does not outline why “this politically driven document fails to answer serious concerns raised by the Majority’s memorandum about the use of partisan opposition research from one candidate, loaded with uncorroborated allegations, as a basis to ask a court to approve surveillance of a former associate of another candidate, at the height of a presidential campaign.”

and..” the FISA judge was never informed that Hillary Clinton and the DNC funded the dossier that was a basis for the Department of Justice’s FISA application. In addition, the Minority’s memo fails to even address the fact that the Deputy FBI Director told the Committee that had it not been for the dossier: no surveillance order would have been sought. As the President has long stated, neither he nor his campaign ever colluded with a foreign power during the 2016 election: and nothing in today’s memo counters that fact.”  Sarah Sanders.

(courtesy zerohedge)

Let us head over to the comex:

The total gold comex open interest ROSE BY  2189 CONTRACTS UP to an OI level 526,638  DESPITE THE FALL IN THE PRICE OF GOLD ($1.15 LOSS/ FRIDAY’S TRADING).   WE HAD ZERO COMEX GOLD LIQUIDATION.  HOWEVER THE CME REPORTS THAT  THE BANKERS ISSUED A RATHER SMALL COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. WE HAD A 2401 EFP’S ISSUED FOR APRIL  AND 250 EFP’s  FOR JUNE AND ZERO FOR ALL OTHER MONTHS:  TOTAL  2651 CONTRACTS. THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON FORWARD… THE COMEX IS NOW AN ABSOLUTE FRAUD!!

ON A NET BASIS IN OPEN INTEREST WE GAINED TODAY: 4840 OI CONTRACTS IN THAT 2,651 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED 2189 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 2189 contracts OR 218,900  OZ OR 6.808 TONNES.

Result: A  GOOD SIZED INCREASE IN COMEX OPEN INTEREST DESPITE THE SMALL LOSS IN FRIDAY’S GOLD TRADING ($1.15.)   TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 4840 OI CONTRACTS..

We have now entered the active contract month of FEBRUARY where we LOST 111 contracts DOWN to 973 contracts.  We had 16 notices filed upon yesterday, so we LOST 95 contracts or an additional 9500 oz will NOT stand in this active contract month of February AND NO DOUBT THAT THEY TRANSFERRED AS FORWARDS OVER TO LONDON.

March saw a LOSS of 79 contracts DOWN to 1258.  April saw a LOSS of 986 contracts DOWN to 352,607.  MARCH BECOMES THE FRONT MONTH FOR GOLD

We had 825 notice(s) filed upon today for  82,500 oz

THERE DOES NOT SEEM TO BE ANY GOLD AT THE COMEX TO BE SERVED UPON.

 

 PRELIMINARY COMEX VOLUME FOR TODAY: 249,839 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY:  178,237 CONTRACTS

comex gold volumes are RISING AGAIN

Here is a summary of the latest gold trading volumes at the Comex per year

certainly the introduction of EFP’s has certainly had an effect:

Trading Volumes on the COMEX

Meanwhile, gold-trading volumes on the COMEX have never been higher:

end

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And now for the wild silver comex results.

Total silver OI FELL  BY AN UNEXPECTED 1992  CONTRACTS FROM 198,429 DOWN TO 196,437 WITH FRIDAY’S 10 CENT FALL IN TRADING).   HOWEVER,WE WERE ALSO INFORMED THAT WE HAD ANOTHER STRONG SIZED 1770 EMERGENCY EFP’S FOR MARCH ISSUED BY OUR BANKERS (WITH 139 EFP CONTRACTS FOR MAY AND ZERO FOR ALL OTHER MONTHS) TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON: THE TOTAL EFP’S ISSUED: 1909.   THE SILVER BOYS HAVE STARTED TO MIGRATE TO LONDON FROM THE START OF DELIVERY MONTH AND CONTINUING RIGHT THROUGH UNTIL FIRST DAY NOTICE JUST LIKE WE ARE WITNESSING TODAY. USUALLY WE NOTED THAT CONTRACTION IN OI OCCURRED ONLY DURING THE LAST WEEK OF AN UPCOMING ACTIVE DELIVERY MONTH AS WE HAVE JUST SEEN IN GOLD TODAY. THIS PROCESS HAS JUST BEGUN IN EARNEST IN SILVER STARTING IN SEPTEMBER 2017. HOWEVER, IN GOLD, WE HAVE BEEN WITNESSING THIS FOR THE PAST 2 YEARS. NICK LAIRD WAS KIND ENOUGH TO SUPPLY US THE TOTAL FOR 2017 GOLD EFP’S AND IT WAS 6600 TONNES FOR THE ENTIRE YEAR.  WE OBVIOUSLY HAD CONSIDERABLE LONG COMEX SILVER LIQUIDATION WITH A SMALL SIZED LOSS IN TOTAL SILVER OI. WE ARE ALSO WITNESSING A FAIR AMOUNT OF SILVER OUNCES STANDING FOR COMEX METAL IN THIS NON ACTIVE JANUARY AS WELL AS THAT CONTINUAL MIGRATION OF EFPS OVER TO LONDON. ON A PERCENTAGE BASIS THERE ARE MORE EFP’S ISSUED FOR GOLD THAN SILVER.  ON A NET BASIS WE LOST  83  SILVER OPEN INTEREST CONTRACTS:

1992 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 1909 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET LOSS ON THE TWO EXCHANGES: 83 CONTRACTS 

We are now in the poor non active delivery month of FEBRUARY and here the front month LOST 1 contract FALLING TO  20 contracts.  We had 1 notice filed upon yesterday so we GAINED 0 contracts or NIL ADDITIONAL  oz will stand for delivery at the comex

The March contract lost 11,175 contracts DOWN to 33,811

April LOST 1 contract DOWN to 341 .

FIRST DAY NOTICE IS ON WEDNESDAY, FEB 28.2018

.

We had 20 notice(s) filed for 5000 OZ for the FEBRUARY 2018 contract for silver

INITIAL standings for FEBRUARY

Feb 26/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 100.06 oz
DELAWARE
Deposits to the Dealer Inventory in oz nil oz
Deposits to the Customer Inventory, in oz  nil
No of oz served (contracts) today
825 notice(s)
 82500 OZ
No of oz to be served (notices)
148 contracts
(14,800 oz)
Total monthly oz gold served (contracts) so far this month
2625 notices
262,500 oz
8.164 tonnes
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz
we had 0 kilobar transaction/
We had 0 inventory movement at the dealer accounts
total inventory deposit into the dealer accounts:  nil oz
we had 1 withdrawal out of the customer account:
Out of Delaware: 100.06 oz
total withdrawal: 100.06  oz
we had 0 customer deposit
total customer deposits: nil  oz
we had 0 adjustments
total registered or dealer gold:  466,694.488 oz or 14.516 tonnes
total registered and eligible (customer) gold;   9,132,954.478 oz 284.07 tones

For FEBRUARY:
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 825 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 820 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

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To calculate the INITIAL total number of gold ounces standing for the FEBRUARY. contract month, we take the total number of notices filed so far for the month (2625) x 100 oz or 262,500 oz, to which we add the difference between the open interest for the front month of FEB. (973 contracts) minus the number of notices served upon today (825 x 100 oz per contract) equals 277,300 oz, the number of ounces standing in this active month of FEBRUARY

Thus the INITIAL standings for gold for the FEBRUARY contract month:

No of notices served (2625 x 100 oz or ounces + {(973)OI for the front month minus the number of notices served upon today (825 x 100 oz )which equals 286,800 oz standing in this active delivery month of February (8.625 tonnes). THERE IS 14.516 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE LOST 95 CONTRACTS OR AN ADDITIONAL 9500 OZ WILL NOT  STAND IN THIS ACTIVE DELIVERY MONTH OF FEBRUARY AND THEY MORPHED INTO LONDON BASED FORWARDS. THERE DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AVAILABLE FOR OUR LONGS AT THE COMEX

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XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

IN THE LAST 17 MONTHS 70 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE DECEMBER DELIVERY MONTH

FEBRUARY FINAL standings

feb 26 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 606,736.780 oz
 Delaware
Scotia
Deposits to the Dealer Inventory
420,015.74
oz
brinks
Deposits to the Customer Inventory
851,167.920 oz
CNT
HSBC
No of oz served today (contracts)
20
CONTRACT(S
(100,000 OZ)
No of oz to be served (notices)
0 contracts
(NIL oz)
Total monthly oz silver served (contracts) 407 contracts

(2,035,000 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

we had 1 inventory movement at the dealer side of things

we had 1 inventory deposits into the dealer account

i) Into Brinks: 420,015.740  oz

total inventory deposits into dealer: 420,015.740 oz

we had two deposits into the customer account

i) into CNT:  600,225.690 oz

ii) into HSBC: 250,942.230 oz

*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.

JPMorgan now has 136 million oz of  total silver inventory or 55% of all official comex silver.

JPMORGAN TOOK A BREAK TODAY IN NOT ADDING ANYTHING APPRECIABLE TO ITS OFFICIAL INVENTORY COUNT.

we had 2 withdrawals from the customer account;

iii) Out of Delaware:: 5893.600 oz

ii) Out of Scotia:: 250,942.230oz

total withdrawals;  851,167.920  oz

we had 2 adjustments

i) Out of Scotia:  1,000,790.720 oz was adjusted out of the customer account and this landed into the dealer account of Scotia

ii) out of Delaware:  100,485.540 oz

total dealer silver:  47.858 million

total dealer + customer silver:  247.044 million oz

The total number of notices filed today for the FEBRUARY. contract month is represented by 20 contract(s) FOR 100,000 oz. To calculate the number of silver ounces that will stand for delivery in FEBRUARY., we take the total number of notices filed for the month so far at 407 x 5,000 oz = 2,035,000 oz to which we add the difference between the open interest for the front month of FEB. (20) and the number of notices served upon today (20 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the FEB contract month: 407(notices served so far)x 5000 oz + OI for front month of FEBRUARY(20) -number of notices served upon today (20)x 5000 oz equals 2,035,000 oz of silver standing for the FEBRUARY contract month. 

WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL STAND AT THE COMEX

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 123,404 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 88,180 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF 88,180 CONTRACTS EQUATES TO  440 MILLION OZ OR 62.89% OF ANNUAL GLOBAL PRODUCTION OF SILVER

COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.

The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -2.05% (FEB 26/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.56% to NAV (FEB 26/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.05%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.56%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA): NAV RISES TO -3.64%: NAV 13.78/TRADING 13.26//DISCOUNT 3.64.

END

And now the Gold inventory at the GLD/

FEB 26/WITH GOLD UP $2.40/WE HAD ANOTHER INVENTORY GAIN/THIS TIME 1.77 TONNE ADDITION TO THE GLD INVENTORY/INVENTORY RESTS AT 831.03 TONNES/WE HAVE HAD 5 INCREASES IN THE PAST 6 TRADING GOLD SESSIONS/

FEB 23/WITH GOLD DOWN $1.15, WE HAD A GOOD INVENTORY GAIN OF 1.47 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 829.26 TONNES

FEB 22/WITH GOLD UP 90 CENTS AGAIN TODAY, WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 827.79 TONNES

FEB 21/ WITH THE 90 CENT GAIN WE HAD ANOTHER DEPOSIT OF 3.15 TONNES OF GOLD INTO THE GLD INVENTORY/INVENTORY RESTS TONIGHT AT 827.79 TONNES

Feb 20/WITH GOLD DOWN BY $24.25, THE CROOKS DECIDED THAT THEY HAD BETTER RETURN (DEPOSIT) 3.34 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS TONIGHT AT 824,64 TONNES

Feb 16/WITH GOLD UP BY 25 CENTS, THE CROOKS DECIDED AGAIN TO RAID THE COOKIE JAR BY WITHDRAWING 2.36 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 821.30 TONNES

Feb 15/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 823.66 TONNES

Feb 14/AN ADDITIONAL OF 2.95 TONNES OF GOLD INTO GLD WITH THE HUGE GAIN OF 27.40 IN PRICE/INVENTORY RESTS AT 823.66 TONNES

Feb 13/WITH GOLD UP $3.40 WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 820.71 TONNES

Feb 12/STRANGE!!WITH GOLD RISING BY 12.00 DOLLARS, THE CROOKS DECIDED AGAIN TO WITHDRAW 5.6 TONNES OF GOLD FOR EMERGENCY USE ELSEWHERE/INVENTORY RESTS AT 820.71 TONNES

Feb 9/AGAIN WITH HUGE TURMOIL ON THE MARKETS, THE CROOKS WITHDREW 2 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 826.31 TONNES

Feb 8/DESPITE THE GOOD GAIN IN PRICE FOR GOLD TODAY/THE CROOKS REMOVED .96 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 828.31 TONNES

FEB 7/AN UNBELIEVABLE 12.08 TONNES WAS REMOVED BY THE CROOKED BANKERS AND THIS GOLD WAS USED IN THE ASSAULT THESE PAST FEW DAYS/INVENTORY RESTS AT 829.27 TONNES

Feb 6/AGAIN VERY STRANGE: WITH TODAY’S TURMOIL, THE CROOKS DID NOT ADD ANY GOLD INVENTORY INTO THE GLD/INVENTORY REMAINS AT 841.35 TONNES

Feb 5  Strange,with all of today’s turmoil, the crooks at the GLD decided to add zero ounces into GLD inventory/inventory rests at 841.35 tonnes

Feb 2/no change in gold inventory at the GLD/Inventory rests at 841.35 tonnes

Feb 1/with gold up by $8.00/the crooks decided not to add any new physical gold metal into the GLD./inventory rests at 841.35 tonnes

Jan 31/with gold up $3.15 today, GLD shed another 5.32 tonnes of gold from its inventory/inventory rests at 841.35 tonnes

jan 30/with gold down by $4.85/GLD shed another 1.47 tonnes of gold from its inventory/inventory rests at 846.67 tonnes

JAN 29/with gold down $11.25, the GLD shed 1.18 tonnes of gold/inventory rests at 848.14 tonnes

jan 26/2018/no changes in gold inventory at the GLD/inventory rests at 849.32 tonnes

jan 25/no changes in gold inventory at the GLD/inventory rests at 849.32 tonnes

Jan 24/A HUGE DEPOSIT OF 2.65 TONNES OF GOLD INTO GLD/INVENTORY RESTS AT 849.32 TONNES

Jan 23/NO CHANGE IN GOLD INVENTORY DESPITE GOLD’S RISE/INVENTORY RESTS AT 846.67 TONNES

Jan 22/a huge deposit of 5.71 tonnes of gold despite a drop in price/inventory rests at 846.67 tonnes. In 3 trading days, the GLD has added 17.71 tonnes/the bankers are now in trouble!!

Jan 19/no change in gold inventory at the GLD/Inventory rests at 840.76 tonnes

Jan 18/SHOCKINGLY A HUGE DEPOSIT OF 11.80 TONNES WITH GOLD DOWN ALMOST $12.00/INVENTORY RESTS AT 840.76

Jan 17/no changes in gold inventory at the GLD/inventory rests at 828.96 tonnes

Jan 16/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.96 TONNES

Jan 12/no changes in inventory at the GLD despite the rise in gold price/inventory rests at 828.96 tonnes

Jan 11/ANOTHER IDENTICAL WITHDRAWAL OF 2.95 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 828.96 TONNES

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
Feb 26/2018/ Inventory rests tonight at 831.03 tonnes

*IN LAST 329 TRADING DAYS: 110.12 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 259 TRADING DAYS: A NET 47.19 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory

FEB 26/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.590 MILLION OZ/

FEB 23/WITH SILVER DOWN 10 CENTS TODAY, WE HAD ANOTHER HUGE ADDITION OF 1.315 MILLION OZ/INVENTORY RESTS AT 316.590 MILLION OZ/

fEB 22.2018/WITH SILVER DOWN  1 CENT TODAY, WE HAD NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 315.271 MILLION OZ/

FEB 21/WITH SILVER UP 15 CENTS TODAY, WE HAD A GOOD SIZED INVENTORY ADDITION OF 1.226 MILLION OZ/INVENTORY RESTS AT 315.271 MILLION OZ/

Feb 20/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ

Feb 16/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 15/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 14./NO CHANGE IN SILVER INVENTORY DESPITE THE HUGE RISE IN PRICE/INVENTORY RESTS AT 314.045 MILLION OZ

Feb 13./NO CHANGE IN SILVER INVENTORY TODAY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 12/AGAIN, WITH TODAY’S HUGE RISE IN SILVER PRICE, IN TOTAL CONTRAST TO GOLD: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 9/AGAIN WITH TURMOIL ON THE MARKETS, STRANGELY IN TOTAL CONTRAST TO GOLD: NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 8/DESPITE THE TURMOIL TODAY AND A PRICE RISE: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

FEB 7/no change in silver inventory at the SLV/Inventory rests at 314.045 million oz/

Feb 6/WITH ALL OF TODAY’S TURMOIL/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 314.045 MILLION OZ/

Feb 5/ we had HUGE change in silver inventory at the SLV/ A DEPOSIT OF 1.131 MILLION OZ INTO THE SLV/Inventory rests at 314.045 million oz/

Feb 2/we lost 982,000 oz from the SLV inventory /inventory rests at 312.914 million oz/

Feb 1/no change in silver inventory at the SLV/Inventory rests at 313.896 million oz/

Jan 31/ no change in inventory at the slv in total contrast to gold/inventory rests at 313.896 million oz/

Jan 30/no change in inventory/SLV inventory rests at 313.896 million oz/

Jan 29/no change in inventory/SLV inventory rests at 313.896 million oz/

Jan 26.2018/inventory rests at 313.896  million oz

Jan 25/with silver up today and yesterday, the SLV could only muster a gain of 848,000 oz

Inventory rests at 313.896 oz

jan 24/NO CHANGE IN SILVER INVENTORY DESPITE THE GOOD ADVANCE IN PRICE/INVENTORY RESTS AT 313.048 MILLION OZ/

Jan 23/ANOTHER HUGE WITHDRAWAL OF 1.131 MILLION OZ OF SILVER DESPITE THE TINY LOSS/THE CROOKS ARE USING THE INVENTORY TO RAID ON SILVER.

JAN 22.2018/with silver down by 5 cents/ the crooks at the SLV liquidate 1.321 million oz of silver/inventory rests at 314.179 million oz/

Jan 19/ no changes in silver inventory at the SLV/inventory rests at 315.500 million oz/

jan 18/A WITHDRAWAL OF 848,000 OZ OF SILVER FROM THE SLV/INVENTORY RESTS AT 315.500 MILLION OZ/

Jan 17/no changes in silver inventory at the SLV/inventory rests at 316.348 million oz/

Jan 16/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.348  MILLION OZ

Jan 12/no changes in silver inventory at the SLV/inventory rests at 316.348 million oz/

Feb 26/2017: NO CHANGES TO SILVER INVENTORY/

Inventory 316.590 million oz

end

6 Month MM GOFO 1.86/ and libor 6 month duration 2.181

Indicative gold forward offer rate for a 6 month duration/calculation:

G0FO+ 1.86%

libor 2.181 FOR 6 MONTHS/

GOLD LENDING RATE: .300%

12 Month MM GOFO
+ 2.46%

LIBOR FOR 12 MONTH DURATION: 2.290

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = .170

end

end

Major gold/silver trading /commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

 GoldCore

Digital Gold Provide the Benefits Of Physical Gold?

– Will digital gold provide the benefits of physical gold?
– Digital gold and crypto gold products claim to combine efficiencies of blockchain with value of gold
– They are yet to provide the same benefits or safety as owning physical gold
– National mints jumping in on the ‘sexy blockchain’ act 
– BOE  declares bitcoin ‘not a currency;’ Royal Mint launches blockchain gold product
– Digital gold, blockchain gold and crypto gold is frequently not fully backed, unallocated, pooled and unsecured gold holdings

Editor: Mark O’Byrne

At the beginning of last week Bank of England Governor Mark Carney claimed bitcoin was not a currency on the grounds that it is neither a medium of exchange or a store of value.

Scoffs aside about what this means for the British Pound, there are many out there who are trying to satisfy Mark Carney’s definition of a currency by backing digital tokens with gold.

The Royal Mint is one of them. They announced a new digital gold investment service entitled RMG back in December 2016. Interesting that a sister organisation to the Bank of England is looking at jumping into the crypto currency market by combining the blockchain with gold.

There are plenty of others doing the same thing. It is unsurprising given the recent volatility and negative press around the cryptocurrency market that there are many  out there seeing opportunity in the interesting nexus that is blockchain and gold.

Is there value to be found in ‘digital’ money?

Is it possible to find ‘value’ in something which is as digital as fiat itself? For now, the jury is very much divided but there are some in the market who believe they can add value to cryptocurrency by backing it with gold (in some shape or form).

Many in the mainstream believe that this is bitcoin coming full-circle. Since its inception it has frequently been referred to as ‘digital gold’. Now, the backing of crypto currencies, or in fact just digital tokens, with gold has made the term come into its own.

Digital gold has, in fact, been around for many years. It is product offered by multiple online gold trading platforms. This involves buying ‘gold’ which is frequently pooled and the buyers locked into a closed-loop system with a single counter party. The owner does not own an actual physical gold coin or bar or coins or bars which are segregated and allocated in their name. They are captive to that particular platform with potentially poor liquidity, captive, monopoly pricing and counterparty risk exposure.

In the last few weeks there have been a plethora of announcements from both new and well-established organisations that have announced new digital gold products, either with a cryptocurrency, blockchain or just digital token angle. There is a serious danger that new investors believe they are getting decent exposure to this booming cryptocurrency market but with the security of the gold market to support them.

In truth, most of these new gold offerings are likely no better (and arguably worse) than the digital gold products that preceded them. As MoneyWeek’s Ben Judge concluded, last week, ‘my view is that so far, if you want exposure to gold, it’s better to stick with the real deal.’

Something not quite gold-standard about it all

The majority of those in the crypto space know there is something to be said for gold, hence the introduction of so many ‘gold-backed’ digital currencies. Many purport to have an advantage over more traditional means of gold ownership as there are low to zero transaction and storage fees.

This is fishy. Why store something for free and why buy something that is unallocated. We recently wrote about unallocated gold. We mentioned that whilst new gold investors might think that owning gold without having to pay storage fees seems highly attractive, it also comes with risks and, arguably hidden costs.

Unallocated gold is free to store because the bank or institution that you have chosen to buy it through, is using it for it’s own purposes. It is likely rehypotehated and loaned out. You the “investor” or “owner” is actually an unsecured creditor of multiple bank custodians.

Whilst the likes of the Royal Mint’s token is allocated, it is offering free storage. As we explained last year, this is a bit too picture perfect:

We’re all familiar with the expression ‘if it sounds too good to be true then that’s because it usually is’. The Royal Mint is owned by HM Treasury, it pays an annual dividend their way every year. It goes without saying that the United Kingdom is pretty broke at the moment and with the fallout of Brexit still playing out, against a backdrop of geopolitical uncertainty who knows how much worse it will become.

And when it does, how is the government planning on paying to keep the country going? Who knows, but it’s all happening at the same time that the government is trying to encourage you to hold gold in their vaults.

Ben Judge goes onto express our matching concerns about any national mint’s involvement in digital gold:

For many goldbugs, the Mint’s involvement might be a concern, given its ties to the government – governments have confiscated gold before (though not in the UK) and could well do so again. The Mint acknowledges this on its website, asking: “What protection against government confiscation does RMG offer?”, although it ducks the issue, as, of course, there is no protection.

Of course, this isn’t just an issue with offerings from the likes of the Royal Mint, the Canadian Mint or the Perth Mint’s soon-to-launch digital offering. It’s a common problem with many digital gold platforms, especially those purporting to be using blockchain technology.

MoneyWeek questions digital gold value

In a quick summary of the latest digital gold offerings Ben Judge addresses three of them and raises some serious concerns:

AurumCoin, for example, is creating a token that “will always be worth one gramme of pure gold”. Yet each coin is backed by just 0.75 grammes – AurumCoin claims that if each were backed by a full gramme, it would be “forced to charge a fee beyond the value of the currency”, which “defeats the idea”. The team behind it is a cagey outfit, saying that “we are obligated to operate legally and therefore we cannot reveal ourselves at this point”.

Digix, meanwhile, claims to be “fully allocated bullion”. Its DGX token represents “one gramme of 99.99% LBMA standard gold secured in Safe House vaults” in Singapore. The source of the bullion is Singaporean pawn shops. Digix will charge a transaction fee of 0.13% and a custody fee equivalent to 0.6% a year. To recast gold into 100g bars will cost 1DGX (one gramme of gold). It is slated for release at the end of the first quarter of 2018.

A third option is GoldMint, which operates “gold-backed” crypto assets, which “are 100% backed by physical gold or exchange-traded funds”. GoldMint’s physical reserves consist of gold from pawn shops around the world.

Many digital and crypto platforms claim to make the gold ownership process simple. What is simple about backing a currency with pawned gold? How many counterparties and owners are involved there? And why would you pay for one gramme when you only get 75% of it?

The jury might still be out on cryptocurrencies generally. For now, it makes sense to have a similar skepticism regarding the many new gold crytos.

Cybersecurity risk

No matter what you hear nothing is unhackable. Anything that has a presence online or is connected to a network is open to malicious cyber behaviour. All company’s, including digital gold providers, websites, servers and other technologies are vulnerable.

There is a great myth about cryptocurrencies that they are more secure than other offerings. In many ways they are but, conversely, there are many ways that they aren’t.

Internet shutdowns and cybersecurity attacks compromise our democratic freedoms. Malicious online activity is now about more than getting ahold of your credit card details or just showing off. It is about demonstrating power from one sovereign state to another. 

As we recently explained in the light of the internet shutdown news, digital assets in general and digital gold is too reliant on online access to be able to offer you the security gold should offer:

When our democratic freedoms are threatened it means our financial ones are also at risk. Many savers and investors consider these threats and choose to diversify their portfolios. They spread the risk and hedge their bets against such events.

This is a sensible first step, however it can be rendered pointless if your management of your assets is reliant on internet access. Gold has been bought by millions all over the world because of its role in protecting investors during times of war, financial hardship and economic disasters. It is only recently that the idea of cyber warfare and the misuse of this power by governments has become a point of consideration.

Gold is as relevant here as it always has been. But it is specifically allocated, segregated physical gold which must be considered.

Owning gold coins and bars either in one’s possession or in allocated and segregated storage will protect people and will be accessible and liquid should an internet shutdown be triggered in your country tomorrow.

Will digital gold serve you as well the real thing?

It was with some interest that we witnessed a flight to physical gold as digital gold bitcoin and its contemporaries fell from their meteoric 2017 rises at the start of 2018.

They have begun to climb once again this week but it has made many aware that gains in these currencies must be secured by something with real value. Many investors agree that the massive price appreciations in cryptocurrencies are unsustainable and they must secure gains. They do this by investing in gold and silver, as we saw with many new clients towards the end of last year and last month.

Those we have spoken to and have assisted are selling a very overvalued asset and putting it into a still undervalued asset. Gold prices remain quite depressed, especially from where they were compared to six or seven years ago, and sentiment is still quite poor.

If you want to benefit from owning gold then own gold. Don’t faff around with something that is purportedly on a blockchain or backed by a pawn shop, a bank or (worse) a central bank.

Ultimately it comes down to investing in and legally owning actual gold coins and bars. Bullion that will serve your wealth in the same way it has served millions of people in years gone by – as an asset that is a form of financial insurance, that cannot be devalued by central banks and will not be confiscated whether through bail-ins or more forceful means.

If using gold, blockchain and bitcoin together means that investors’ portfolios can meet the above criteria then we are on the dawn of something very exciting, but we don’t believe that we are quite there yet. We are in an arguably dangerous period in the adoption bell-curve where learning and education are giving way to misinformation and misunderstanding.

Related reading

Digital Gold On The Blockchain – For Now Caveat Emptor

Internet Shutdowns Show Risk of Digital Gold Platforms

‘Digital Gold’ Bitcoin Flight To Safe Haven Physical Gold

News and Commentary

Gold recoups half of last week’s loss as dollar softens (MarketWatch.com)

Equity Rally Builds From Sydney to Hong Kong (Bloomberg.comr)

Australia’s Top Gold Miner Boosts Bets on Ecuador’s Riches (Bloomberg.com)

Markets fret over Federal Reserve’s approach under new chair Powell (Reuters.com)

Treasury secretary urges markets to shrug off worries over tax cuts, debt (Bloomberg.com)


Source: CNBC

Three Charts That Show Gold Is Going To $1,400 (CNBC.com)

ECB accuses Trump of ‘currency war’ as surging euro exposes Europe’s fragility (Telegraph.co.uk)

Lessons From the Oracle: Warren Buffett’s Shareholder Letter, Annotated (Bloomberg.com)

With rates extremely low, Fed officials fret over next recession (Reuters.com)

Here’s what rising U.S. interest rates mean for the global economy (StansBerryChurcHouse.com)

Exchange For Physical (EFP) Remain Very High – 6,600 Ton Per 30 Day Month (HarveyOrganBlog.com)

Silver; Mother of All Bullish “Cup & Handle” Patterns? (ZeroHedge.com)

Gold Prices (LBMA AM)

26 Feb: USD 1,339.05, GBP 953.00 & EUR 1,085.30 per ounce
23 Feb: USD 1,328.90, GBP 951.09 & EUR 1,079.20 per ounce
22 Feb: USD 1,323.50, GBP 952.66 & EUR 1,076.40 per ounce
21 Feb: USD 1,328.60, GBP 952.87 & EUR 1,078.16 per ounce
20 Feb: USD 1,337.40, GBP 955.97 & EUR 1,083.83 per ounce
19 Feb: USD 1,347.40, GBP 961.10 & EUR 1,085.47 per ounce
16 Feb: USD 1,358.60, GBP 964.61 & EUR 1,086.47 per ounce

Silver Prices (LBMA)

26 Feb: USD 16.67, GBP 11.88 & EUR 13.52 per ounce
23 Feb: USD 16.61, GBP 11.88 & EUR 13.50 per ounce
22 Feb: USD 16.47, GBP 11.86 & EUR 13.40 per ounce
21 Feb: USD 16.44, GBP 11.80 & EUR 13.35 per ounce
20 Feb: USD 16.57, GBP 11.85 & EUR 13.42 per ounce
19 Feb: USD 16.72, GBP 11.92 & EUR 13.46 per ounce
16 Feb: USD 16.84, GBP 11.97 & EUR 13.49 per ounce


Recent Market Updates

– Russian Central Bank Buys Gold – 600,000 Ounces Or 18.7 Tons In January As Venezuela Launches ‘Petro Gold’
– Bitcoin or British Pound ‘Pretty Much Failed’ As Currency?
– Bank Bail-In Risk In European Countries Seen In 5 Key Charts
– US-China Trade War Escalates As Further Measures Are Taken
– Gold Up 3.8% In Week – If Closes Above $1,360/oz Will Be Biggest Weekly Gain In Nearly 2 Years
– Is The Gold Price Heading Higher? IG TV Interview GoldCore
– Global Debt Crisis II Cometh
– Sovereign Wealth Funds Investing In Gold For “Long Term Returns” – PwC
– Bitcoin and Crypto Prices Being Manipulated Like Precious Metals?
– “This Is Where They Completely Lost Their Minds” – Hussman
– Brexit Risks Increase – London Property Market and Pound Vulnerable
– Peak Gold: Global Gold Supply Flat In 2017 As China Output Falls By 9%
– Crypto Currency Backlash Sees Flight From Cryptos and Bitcoin

janskoyles

END

As GATA outlines below, the regulators are now beginning to probe the VIX (volatility) funds.  They will report on either misconduct, manipulation or malfeasance or nothing at all

(courtesy zerohedge)

Misconduct, Manipulation, Or Malfeasance? – US Regulators Begin Probe Of VIX Funds

Ten days after the reality of “rampant manipulation” in VIX was exposed yet again, perhaps because this time the market went down, US regulators are reportedly escalating their investigations into whether any wrongdoing occurred within VIX ETPs.

Following previous reports that The Financial Industry Regulatory Authority (FINRA) was scrutinizing whether traders placed bets on S&P 500 options in order to influence prices for VIX futures, and a whistleblower’s detailed explanation of how easy it is to spoof VIX’s tail to wag the market’s dog; Bloomberg reports that The Securities and Exchange Commission and the Commodity Futures Trading Commission have been conducting a broad review of trading since Feb. 5, when volatility spiked and investors lost billions of dollars, several people familiar with the matter said.

As a reminder, according to his letter, the whistleblower blames this VIX manipulation as the driver of last week’s volatility complex collapse:

We contend that the liquidation of the VIX ETPs last week was not due solely to flaws in the design of these products, but instead was driven largely by a rampant manipulation of the VIX index,”

And, Bloomberg notes that after the losses, SEC officials reached out to Credit Suisse, a person with direct knowledge of the conversations said. Neither Credit Suisse nor ProShares have been accused of any wrongdoing. The regulators’ examinations are at an early stage and won’t necessarily lead to sanctions or new rules.

As another reminder, in May of last year we academic confirmation of the rigged nature the US equity market’s volatility complex, when a scientific study found “systemic VIX auction settlement manipulation.”

Two University of Texas at Austin finance professors found “large transient deviations in VIX prices” around the morning auction, “consistent with market manipulation.”

​Griffin and Shams calculate that “the size of VIX futures with open interest at settlement is on average 5.7 times the size SPX options traded at settlement, and it is 7.3 times for VIX options that are in-the-money at settlement.”

*  *  *

Bloomberg concludes that there is no indication thus far that specific companies, including Credit Suisse, are being probed, and an SEC spokesman declined to comment, while CFTC officials didn’t respond to requests for comment; but with losses now piling up, allegations of market manipulation are getting more attention and government watchdogs face questions about why small-time investors were permitted to buy such products in the first place.

While we certainly won’t be holding out breath for any regulatory crackdown on these products (as they are the mothers’ milk of the stock market), it is at least a positive that there is finally some scrutiny on the volatility complex (that may, just may, prompt some retail investors to be at least a little less willing to pile all their investments into the short-vol trade once again).

END

Andrew Maguire’s Kinesis money which is a “bitcoin” but backed 100% by allocated gold and silver is set to go.

it think it would be a great idea to look at this!

please read at:  https://kinesis.money/#/

(Andrew Maguire)

Andrew Maguire

2:57 PM (1 hour ago)
to me

Harvey

Here It is my friend!  https://kinesis.money/#/ Please let everyone know.

Let catch up on Monday if you have time. We have billions in the hopper ready to be allocated on the 1st day of trading. The paper market days are over.

Warm regards

Andy

end

China is letting the yuan crush the dollar in an attempt to appease Trump so they would not be labelled a currency manipulator

(courtesy CNBC.GATA)

China is letting the yuan crush the dollar, and Trump is just one reason

 Section: 

By Huileng Tan
CNBC, New York
Friday, February 23, 2018

The Chinese yuan has appreciated 10 percent against the dollar since the start of 2017, quelling some criticism that the export giant has been deliberately suppressing its currency to gain economic advantage over its trading partners.

This is all going according to China’s plan, experts say.

Although the strength of the yuan against the dollar is in part due to the greenback’s weakness, experts say the world’s second-largest economy is also propping up its currency to appease President Donald Trump.

China has “reversed the rise” of the dollar against the yuan, and there’s now “meaningful” strength against the greenback, Bilal Hafeez, global head of G-10 foreign-exchange strategy at Nomura, wrote in a recent note.

“Part of this was likely a response to the election of President Trump and the need to avoid being labelled a currency manipulator,” Hafeez added. …

… For the remainder of the report:

https://www.cnbc.com/2018/02/22/chinese-yuan-against-the-dollar-china-cu…

END

It looks like Harvard grad, Liu He, a trained economist and a trusted confidant of Xi, which emerge as front runner for the next governor of the Central Bank of China

(courtesy Reuters/GATA)

Isn’t it bad enough that Harvard already runs the United States?

 Section: 

Xi Confidant Emerges as Front Runner to Head
China’s Central Bank, Sources Tell Reuters

By Xiaowen Bi, Benjamin Kang Lim, an dKevin Yao
Reuters
Friday, February 23, 2018

BEIJING — Liu He, a Harvard-trained economist who is a trusted confidant of Chinese President Xi Jinping, has emerged as the front runner to be the next governor of the People’s Bank of China, according to three sources with knowledge of the situation.

Liu may be in a position to become one of China’s most powerful economic and financial officials ever, as he is already top adviser to Xi on economic policy and is also expected to become vice premier overseeing the economy.

Liu would replace current PBOC chief, 70-year-old Zhou Xiaochuan, who is China’s longest-running head of the central bank, having taken the job in 2002. Zhou is expected to retire around the time of the annual session of parliament in March, sources previously told Reuters. …

… For the remainder of the report:

https://www.reuters.com/article/us-china-economy-pboc-exclusive/exclusiv…

end

The Treasury Secretary of the USA Mnuchin urges markets not to worry about the effects of tax cuts and the rising debt. You should be worried..

(courtesy Bloomberg/Mohsin)

Treasury secretary urges markets to shrug off worries over tax cuts, debt

 Section: 

By Saleha Mohsin
Bloomberg News
Thursday, February 22, 2018

Treasury Secretary Steven Mnuchin brushed aside signs that investors are nervous about rising prices and criticism that growing debt will harm U.S. economic security, declaring that President Donald Trump’s policies won’t cause inflation.

“There are a lot of ways to have the economy grow,” Mnuchin said in an interview aboard a train to Philadelphia on Thursday, where he toured the U.S. Mint. “You can have wage inflation and not necessarily have inflation concerns in general.”

He also said he isn’t concerned about foreign investment in new U.S. debt, which analysts expect will exceed $1 trillion this year. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-02-23/mnuchin-says-trump-po…

end

Regulators are looking into volatility funds and why many lost billions when one imploded

(courtesy Bloomberg/GATA)

Volatility funds face fresh scrutiny from U.S. regulators

 Section: 

By Benjamin Bain and Matt Robinson
Bloomberg News
Friday, February 23, 2018

U.S. regulators are scrutinizing this month’s implosion of investments that track stock-market turmoil, including whether wrongdoing contributed to steep losses for VIX exchange-traded products offered by Credit Suisse Group AG and other firms, several people familiar with the matter said.

The Securities and Exchange Commission and the Commodity Futures Trading Commission have been conducting a broad review of trading since Feb. 5, when volatility spiked and investors lost billions of dollars, the people said

Among those looking into what happened are lawyers in the SEC’s enforcement division, which investigates firms for potential misconduct and fines them if it finds violations of securities laws, two of the people said. There is no indication thus far that specific companies, including Credit Suisse, are being probed. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2018-02-23/vix-fund-blowups-spur…

* * *

end

With low interest rates, some Fed officials are worried that they do not have the tools to fight the next recession

(Spicer/Saphir/Reuters/GATA)

With rates low, Fed officials fret over next recession

 Section: 

By Jonathan Spicer and Ann Saphir
Reuters
Saturday, February 24, 2018

Federal Reserve policymakers are fretting that they could face the next U.S. recession with an arsenal of policies little different from that used in the last downturn but robbed of much of their punch because interest rates are still low.

In the midst of an unprecedented leadership transition, Fed officials are publicly debating how to prepare for the next downturn. Should they scrap their approach to inflation targeting? How big of a balance sheet should they retain? How much further can they raise interest rates and still keep the economy on a growth path?

All this comes against a backdrop of an unexpectedly large boost from tax cuts and government spending that will drive up deficits, leaving less room for a fiscal rescue in the next recession.

“The thing that keeps me up at night is that when that next recession happens, and hopefully not for a long time, I don’t think we have as strong a toolkit as we would like to have to respond to that,” San Francisco Federal Reserve Bank President John Williams said Friday at a Town Hall Los Angeles event. …

… For the remainder of the report:

https://www.reuters.com/article/us-usa-fed/with-rates-low-fed-officials-…




Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST

 

i) Chinese yuan vs USA dollar/CLOSED UP 6.3090  /shanghai bourse CLOSED UP 40.55 POINTS OR 1.23%  / HANG SANG CLOSED UP 231.43 POINTS OR 0.74%
2. Nikkei closed UP 260.00 POINTS OR 1.19% /USA: YEN FALLS TO 106.79/ STILL DEADLY AS YEN CARRY TRADERS DISINTEGRATE

3. Europe stocks OPENED DEEPLY IN THE GREEN    /USA dollar index FALLS TO 89.59/Euro RISES TO 1.2335

3b Japan 10 year bond yield: FALLS TO . +.047/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.79/ 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:: 63.51  and Brent: 67.06

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.658%/Italian 10 yr bond yield DOWN to 2.022% /SPAIN 10 YR BOND YIELD DOWN TO 1.562%

3j Greek 10 year bond yield RISES TO : 4.42?????????????????

3k Gold at $1338.10 silver at:16.68     7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 17/100 in roubles/dollar) 55.97

3m oil into the 63 dollar handle for WTI and 67 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 106.79 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 0.9349 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1531 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 +0.658%

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 2.8610% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.1490% /BOTH VERY DEADLY

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

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

Global Stocks, S&P Futures Surge As Dollar Resumes Plunge

Any hopes that the dollar may have halted its recent tumble have been, for now, dashed, when the greenback resumed its slide overnight, the DXY falling below 90 again and down for a third day against all G-10 peers ahead of Fed Chair Jerome Powell’s first Congressional testimony in which investors bet the new head of the Federal Reserve will steer a steady course on policy.

“Given he’s speaking on behalf of the committee it would be a big surprise to see much deviation from recent Fed commentary, but much will probably be made of how he handles the scrutiny,” said Deutsche Bank’s Jim Reid in preview of Powell’s comments.

“Powell’s testimony on Tuesday could be key in determining whether the recent market reluctance to price Fed much more aggressively despite inflationary impulses is warranted or not,” said Christin Tuxen, chief currency analyst at  Danske Bank. “If Powell comes out hawkish, the potential for EUR/USD downside would be non-negligible. Possible downside EUR risks loom this weekend with the general election in Italy and the SPD vote.”

Dollar weakness has pushed the euro higher and the yen strengthens after Governor Kuroda said “prices are gradually rising more and more” even as the BOJ has no plans to overhaul its current form of easing. U.S. 10-yr yields are little changed after falling 5bps Friday, while global stocks have all sprinted out of the gate in what right now is a sea of green…

… and S&P futures are currently at session highs, up 12 points or 0.4%.

With the dollar slumping, and 10Y TSY yields failing to rise above 2.90%, European shares followed their Asian counterparts higher amid some modest concerns what Jay Powell may say tomorrow.

In other macro news, the pound advanced, finding some support after the BOE Deputy Governor Dave Ramsden said in an interview that rates may need to be raised sooner than previously thought due to signs of accelerating pay growth. The euro rose ahead of ECB President Draghi’s statement before European lawmakers. Russia’s ruble appreciated the most in emerging markets after S&P Global Ratings boosted its credit score to investment grade. The yen firmed to a one-week high, gold climbed and European sovereign bonds were mixed. Asia’s emerging-market currencies rose as regional stocks tracked U.S. equities higher and lower Treasury yields supported demand for developing-nation assets. Most sovereign bonds also climbed.

FX recap from BBG:

  • The Bloomberg Dollar Spot Index falls for a third day as the euro grinds higher from a session low of 1.2280 to touch 1.2355. Treasuries pushed higher in Asian hours as Yen rallied, before sticking in tight range. Yield are lower by 1-1.5bps across the curve, with 7-year sector outperforming as futures lead gains
  • The cable rose to a 10-day high ahead of a speech by opposition leader Jeremy Corbyn that is expected to see him back a softer Brexit
  • The yen reversed earlier declines after BOJ Governor Kuroda said Japanese prices are rising; he also reaffirmed his view that the BOJ needs to continue with the current powerful monetary easing program to achieve its 2% inflation target
  • New Zealand dollar reverses losses after fund-related sales against Aussie have filtered through the market

Looking at global equities, the Europe Stoxx 600 Index jumped to its highest level in more than three weeks, with nearly all major industry groups rallying. The gains this morning have been largely broad-based across all major sectors, while material names outperform with miners tracking the moves higher in commodity prices which have been buoyed by the softer USD. Moves higher in the FTSE 100 have been capped by the GBP strength which had been given a boost by surprisingly hawkish comments from BoE’s Ramsden, while election risks have contained the upside in the FTSE MIB. All of 19 Stoxx 600 sectors rise; financial services sector has the biggest volume at 128% of its 30-day average; 529 Stoxx 600 members gain, 60 decline. Top Stoxx 600 outperformers include: Steinhoff International Holdings +6.5%, Telefonaktiebolaget LM Ericsson +3.8%, Nokia +3.8%, Swedish Orphan Biovitrum +3.5%, Suez +2.4%.

“This week looks set to be a long wait for the Italian election and the German SPD vote on a new Grand Coalition on Sunday,” Societe Generale strategists write in note. “While we expect a hung parliament in Italy and a small majority in favor in Germany, uncertainty remains high.”

Asia was also green across the board, with Australia’s ASX 200 (+0.7%) and the Nikkei 225 (+1.2%) both higher as earnings fuelled the biggest gainers in Australia, while Japanese exporters weathered a firmer JPY and led the  region’s advances. Elsewhere, Hang Seng (+0.7%) and Shanghai Comp. (+1.2%) were in the green with Geely Auto the outperformer after reports its parent amassed a near 10% stake in Daimler, although Chinese property names were less fortunate with the Shanghai Comp. Property Index slumping 3% in early trade after the latest House data showed efforts to curb the sector were gaining fruition. Elsewhere, Bank of Japan Governor Haruhiko Kuroda said the central bank has no plan to overhaul its current form of easing, adding that he saw no need to do another comprehensive assessment of the effectiveness of the bank’s policies.

Over in the US, as stocks rebound from their early February correction, the S&P P/E ratio is almost back to where it was when yields took off, which however is clearly not bothering investors for now.

Much of the market’s focus during the coming week will be on monetary policy, with the heads of the European Central Bank and Bank of England set to give speeches. But they are likely to be overshadowed by Fed chair Jerome Powell. U.S. stock markets calmed on Friday after the Fed said it saw steady economic growth continuing and no serious risks on the horizon.

Powell may help set a new direction for investors at a time when some of the biggest names in markets are at odds over the implications of this month’s surge in U.S. bond yields. Morgan Stanley put out a bullish call on Treasuries Monday, countering warnings on the securities from Goldman Sachs Group Inc. and Warren Buffett. Bond traders are still pricing less than the three quarter-point interest-rate hikes that Fed officials have signaled as likely this year.

A quick look at the latest Brexit events, where the UK’s Office for Budget Responsibility is set for an embarrassing U-turn as it prepares to dramatically hike forecasts for UK growth just months after they were suddenly downgraded. Also, media reports suggested that three cabinet ministers warned PM May during private talks on Brexit at her Chequers retreat last week that her government could collapse this year. According to a report in the Sunday Times, senior ministers said there are discussions about whether the prime minister should turn the vote into a confidence issue, threatening a general election if Tory MPs vote with the opposition. Finally, the FT reported that opposition leader Corbyn is set to confirm today that the Labour Party will oppose PM May’s plans to take Britain out of the
customs union with the EU. Also, the EU is said to stand firm over Northern Ireland border and that the Brexit treaty text is to not include crucial compromise language secured by UK PM May.

In central bank speakers, BoE’s Ramsden said there seems to be more impetus on wages and that they will keep a close eye on what happens through the early part of this year to see if that forecast [in a Bank survey] of wage growth picking up to 3% is realised. Ramsden also commented that certainly relative to where he was, he now sees the case for rates rising somewhat sooner rather than somewhat later. (Sunday Times) Note: Ramsden was one of the two dissenters on the MPC when the BoE decided to hike rates in November 2017, citing concerns over wage growth prospects as a reason to refrain from lifting rates.

In commodities, oil prices steadied after hitting their highest level in nearly three weeks, supported by comments from Saudi Oil Minister Khalid Al-Falih who said OPEC and its allies may ease output curbs in 2019 in a way that won’t disturb the market. Bitcoin fluctuated around $9,500.

Investors will watch for new home sales data, while Dean Foods, Fitbit and Tenet are among companies reporting results.

Market Snapshot

  • S&P 500 futures up 0.3% to 2,757.50
  • STOXX Europe 600 up 0.5% to 383.02
  • MXAP up 0.8% to 179.58
  • MXAPJ up 0.8% to 587.87
  • Nikkei up 1.2% to 22,153.63
  • Topix up 0.8% to 1,774.81
  • Hang Seng Index up 0.7% to 31,498.60
  • Shanghai Composite up 1.2% to 3,329.57
  • Sensex up 1% to 34,465.98
  • Australia S&P/ASX 200 up 0.7% to 6,042.18
  • Kospi up 0.3% to 2,457.65
  • German 10Y yield rose 0.2 bps to 0.655%
  • Euro up 0.4% to $1.2339
  • Brent Futures down 0.2% to $67.16/bbl
  • Italian 10Y yield fell 0.8 bps to 1.797%
  • Spanish 10Y yield fell 3.2 bps to 1.565%
  • Brent Futures down 0.2% to $67.16/bbl
  • Gold spot up 0.8% to $1,339.00
  • U.S. Dollar Index down 0.3% to 89.59

Bulletin Headline Summary from Ransquawk

  • A positive start to the week for European equities (Eurostoxx 50 +0.5%), which have taken the impetus from Asian
  • equities overnight.
  • The DXY is back below 90.000 yet again, and on broad losses for the Greenback vs G10 peers bar the Loonie
  • (Usd/Cad holding above 1.2600 towards the middle of a 1.2615-60 range)
  • Looking ahead, highlights include US New Home Sales and a slew of speakers from the ECB, BoE and Fed

Top Overnight News

  • China’s Communist Party is set to repeal presidential term limits in a move that would allow Xi Jinping to rule beyond 2023, completing the country’s move away from a political system based on collective leadership.
  • For pound traders seeking some degree of clarity on Brexit negotiations, speeches by Britain’s Prime Minister and the leader of the opposition will prove crucial in the coming week. Theresa May is scheduled to outline her plan on the future relationship in a speech on March 2, after Labour leader Jeremy Corbyn sets out his party’s Brexit position on Monday
  • Bank of Japan Governor Haruhiko Kuroda reaffirms his view that the BOJ needs to continue with the current powerful monetary easing program to achieve its 2% inflation target.
  • The White House said “we will see” after North Korean leader Kim Jong Un indicated he may be willing to hold talks, while reaffirming the U.S. insistence on Pyongyang’s “verifiable” denuclearization
  • Angela Merkel nominated an up-and- coming conservative to a post in Germany’s new cabinet, part of a bid to reassert control of the party by placating critics while maintaining her centrist approach to policy
  • NEX Group’s recently designed trading platform for China’s foreign exchange market saw 307 institutions conduct deals on Feb. 5 when phase 2 of the platform went live, the firm said in a statement
  • Bank of England Deputy Governor Dave Ramsden says in an interview with The Sunday Times that interest rates might need to be raised sooner than he previously thought due to signs of accelerating wage growth

Asian stock markets began the week on the front-foot as the region took impetus from last Friday’s late rally on Wall St and with energy names underpinned by recent strength in crude prices. ASX 200 (+0.7%) and Nikkei 225 (+1.2%) were both higher in which earnings fuelled the biggest gainers in Australia, while Japanese exporters weathered a firmer JPY and led the region’s advances. Elsewhere, Hang Seng (+0.7%) and Shanghai Comp. (+1.2%) were in the green with Geely Auto the outperformer after reports its parent amassed a near 10% stake in Daimler, although Chinese property names were less fortunate with the Shanghai Comp. Property Index slumping 3% in early trade after the latest House data showed efforts to curb the sector were gaining fruition. Finally, 10yr JGBs were marginally higher amid mild gains in USTs, while the Japanese yield curve was mixed as longer-dated bonds underperforming after the BoJ kept its operations concentrated in the belly. PBoC injected CNY 100bln via 7-day, CNY 30bln via 28-day and CNY 20bln via 63-day reverse repos. Chinese President Xi Jinping’s policy advisor Liu He is said to emerge as the front runner to head the PBoC when current Governor Zhou retires. China’s Communist Party is said to propose to drop limits on presidential terms which would allow President Xi Jinping to remain as the nation’s president indefinitely. BoJ Governor Kuroda reiterated that the BoJ will continue with powerful monetary easing to achieve the price target. Furthermore, Kuroda also commented that Japan’s economy needs persistent monetary easing and that there is currently no plan for a new comprehensive assessment.

Top Asian News

  • Kuroda Vows to Keep Stimulus Unchanged, Won’t Reassess Policy
  • China’s Xi Follows Putin in Laying Ground to Rule for Decades
  • SoftBank Outlook Cut to Negative at S&P on Fund Investments
  • Exxon Shuts Papua New Guinea Output to Inspect Quake Damage

A positive start to the week for European equities (Eurostoxx 50 +0.5%), which have taken the impetus from Asian equities overnight. The gains this morning have been largely broad-based across all major sectors, while material names outperform with miners tracking the moves higher in commodity prices which have been buoyed by the softer USD. Moves higher in the FTSE 100 have been capped by the GBP strength which had been given a boost by surprisingly hawkish comments from BoE’s Ramsden, while election risks have contained the upside in the FTSE MIB. In stock specific news, the troubled lender, Profident Financial are trading with losses of over 13% ahead of their earnings tomorrow.

Top European News

  • Deutsche Bank Presses Ahead With Asset Management Stock Sale
  • Renzi Cold Shoulder for Five Star Flirting: Italy Campaign Trail
  • With Daimler Deal, Geely Puts China Flag in German Heartland
  • PostNL Plunges as Profit Toll of Regulator’s Measures Increases
  • It’s Dalio Versus Everyone Else as Money Flows to Europe Stocks

In FX, the DXY is back below 90.000 yet again, and on broad losses for the Greenback vs G10 peers bar the Loonie (Usd/Cad holding above 1.2600 towards the middle of a 1.2615-60 range). Some market observers say the renewed bout of weakness reflects a pullback in yields, but that correlation remains tenuous given the fact that the Dollar did not rally in tandem with 10 year cash hitting peaks around 2.95% (circa 10 basis points above current levels) at the heights last week, or at least not to the same degree. Hence, it is concerns about the US fiscal situation and rising deficits that are still weighing on sentiment alongside some political angst as President Trump continues to push protectionist policies. Even month end demand has not given the Usd much of a boost, as yet anyway, with Eur/Usd firmly back above 1.2300 and testing 1.2346 DMA resistance despite bearish cross flow via Eur/Jpy that has tested near term chart support just ahead of 131.00. Cable has breached its 21 DMA and 1.4050 amidst ongoing Brexit uncertainty, and Usd/Jpy has retreated to 106.50 from 107.00+. The Greenback may derive some support from big option expiries, with circa 2 bn in both Cable and Usd/Jpy at 1.4000 and 107.00-05 respectively

In the commodities complex, WTI and Brent crude futures pulled off best levels with WTI running into resistance around USD 64 to move back down to the mid-USD 63s. Over the weekend, Saudi Energy Miniset Al Falih stated that he expects production cuts to ease next year (Current OPEC/ Non-OPEC production cut due to expire at year-end). Elsewhere, Barclays sees a significant risk of a market correction in H2 as a result of builds in inventories. Barclays says 2018 crude forecast of USD 60bbl for Brent and USD 55bbl for WTI is unchanged -Barclays expects backwardation in WTI and Brent Futures curves to subside later this year -Barclays also sees a significant risk of market correction in H2 2018 due to builds in inventories

We start the week with the January Chicago Fed National activity, February Dallas Fed manufacturing index and new home sales data are also due. Onto other events, the ECB’s Draghi will addresses the EU Parliament while the incoming ECB VP Mr De Guindos will also attend his confirmation hearing at the Parliament. Elsewhere, the ECB’s Coeure, BOE’s Cunliffe and the Fed’s Bullard will speak.

US Event Calendar

  • 8:30am: Chicago Fed Nat Activity Index, est. 0.2, prior 0.3
  • 8am: Fed’s Bullard Speaks on U.S. Economy and Monetary Policy
  • 10am: New Home Sales, est. 647,500, prior 625,000
  • 10am: New Home Sales MoM, est. 3.6%, prior -9.3%
  • 10:30am: Dallas Fed Manf. Activity, est. 30, prior 33.4
  • 3:15pm: Fed’s Quarles Gives Assessment of U.S. Economy

Key events on deck this week:

  • ECB President Mario Draghi speaks in Brussels on Monday.
  • Bank of Korea has policy decision and briefing on Tuesday.
  • Powell testifies before a House panel on Tuesday. He’ll discuss the Fed’s Semi-Annual Monetary Policy Report and the state of the economy. Powell returns on March 1 before a Senate committee.
  • Companies announcing earnings this week include: Vale, BASF, Standard Chartered, Bayer, Lowe’s, Galaxy Entertainment Group, Anheuser-Busch InBev, Peugeot, WPP, and London Stock Exchange Group.
  • U.K. Prime Minister Theresa May delivers a speech on Britain’s relationship with the European Union after Brexit.
  • A barrage of data is expected out of Japan including retail sales and industrial production Wednesday, and capital spending Thursday.
  • In China, the official and Caixin purchasing managers’ indexes on Wednesday and Thursday respectively may show growth momentum slowed slightly in February, though the signal may be clouded by the holidays.

DB’s Jim Reid concludes the overnight wrap

The highlight this week is new Fed Chair Powell’s inaugural testimony before the House Financial Services and Senate Banking Committees on Tuesday and Thursday, respectively. Given he’s speaking on behalf of the committee it would be a big surprise to see much deviation from recent Fed commentary (the recent Fed minutes the best template even if before recent inflation surprises) but much will probably be made of how he handles the scrutiny and grilling.

Staying with the US, Thursday also brings the core PCE deflator which is the Fed’s preferred inflation series and therefore an important release given the current market focus on prices. DB expect a pick-up (+0.3% forecast vs.  +0.2% previously; +0.3% expected) with medical and healthcare increases in the recent CPI and PPI reports providing some impetus. Also on inflation, Tuesday sees Germany’s latest numbers with the various European country and composite readings over the following 24 hours. Thursday sees the first of the month with the usual PMIs. The rest of the week’s highlights are printed at the end but remember that next Sunday sees the long awaited Italian election with no one really sure what the outcome will be but not many people being that concerned about a particularly negative scenario. Our economists have suggested that a hung parliament is slightly more likely than a centre-right coalition with the latter potentially more positive in the short-term but with risks to debt levels and the European/Brussels relationships later down the road given the likelihood of it being associated with fiscal easing. The former is likely to lead to a grand coalition (more likely) or fresh elections with both scenarios only likely to play out slowly and could therefore increase uncertainty in the short-term. See DB’s report here for more.

Over the weekend in China, the Party’s Central Committee announced it is seeking to change the Constitution to allow the President and VP to serve more than ten years, potentially enabling President Xi to stay beyond 2023. Ahead of the National People’s Congress meetings from 5th March, our Chinese economists highlight ten issues for investors to watch. These include: amendments of the constitution, economic growth targets, fiscal and monetary policy and property market policy.

Turning to central bankers commentaries. In the UK, the BOE’s Ramsden who was against the November rate hike, now “see(s) the case for rates rising somewhat sooner rather than later”, in part as he is “more confident than (he) was that wages are picking up”. Back on Friday, the Fed’s Williams said that “we should be moving ahead with a rate increase relatively soon, in the near future” and that “it makes sense to think about three or four rate increases in 2018”.

This morning in Asia, markets are trading broadly higher, with the Nikkei (+1.2%), Hang Seng (+0.72%), China’s CSI 300 (+1.25%) and the Kospi (+0.18%) all up as we type. Elsewhere, BOJ’s Kuroda noted the Japanese economy is expanding smoothly and “its’ essential for the BOJ to continue monetary stimulus so as to hit the price target” and there is “no plan for a new comprehensive assessment (of the bank’s monetary policy) at this point”. The YEN is up  c0.3% against the USD this morning.

Now recapping market performance from Friday. Core government bonds were firmer with the UST 10y and Bunds both c5.4bp lower while Gilts fell 2.4bp, in part as the Fed’s semi-annual report on monetary policy didn’t seem to add to  the relatively hawkish Fed Minutes earlier in the week. The weaker European PMIs last week also put a dampener on the recent rises in yields. Elsewhere US equities rebounded c1.5% (S&P +1.60%, Dow +1.39%; Nasdaq +1.77%) with all sectors within the S&P up and gains led by the utilities, tech and energy stocks. The VIX fell 11.9% to 16.49. In Europe, the Stoxx 600 and DAX edged up c0.2% while the FTSE and Spain’s IBEX fell 0.11% and 0.55% respectively.

Turning to currencies, the US dollar index and Sterling strengthened 0.16% and 0.11% respectively while the Euro fell 0.28%. In commodities, WTI oil was up 1.24% to $63.55/bbl. Elsewhere, precious metals weakened c0.3% (Gold -0.25%; Silver -0.46%) and other base metals were mixed but little changed (Copper -0.41%; Zinc -0.30%; Aluminium +0.39%).

Staying in the US, three unnamed sources noted to Bloomberg that President Trump wants the impose the harshest tariffs on steel and aluminium imports, which could include a global tariff of 24% on steel imports and up to 10% duty on aluminium imports. The process is ongoing and a final decision by President Trump on the recommendations made by the US Commerce Department is due before April.

Before we take a look at this week’s calendar, we wrap up with other data releases from Friday. In Europe, the final reading for Euro area’s January core CPI was unrevised at 1% yoy (headline CPI at 1.3% yoy). In Germany, the final reading of the 4Q GDP was also unrevised at 0.6% qoq and 2.9% yoy. Elsewhere, China reported January new home prices rose in 52 of 70 cities, down from 57 cities in December. According to a Reuters, the average rise across all cities was 0.3% mom and 5% yoy after excluding data on affordable housing (vs. 5.3% yoy previous if including affordable housing).

We start the week with the UK’s January Finance loans for housing. Across the pond, the January Chicago Fed National activity, February Dallas Fed manufacturing index and new home sales data are also due. Onto other events, the ECB’s Draghi will addresses the EU Parliament while the incoming ECB VP Mr De Guindos will also attend his confirmation hearing at the Parliament. Elsewhere, the ECB’s Coeure, BOE’s Cunliffe and the Fed’s Bullard will speak. The UK’s opposition leader Corbyn is expected to set out the Labour Party’s Brexit position today with the party set to announce that they would stay in the Customs Union. This will cause problems for Mrs May who has said the country will leave. Parliament is generally in favour of staying so this raises the possibility of a lost vote somewhere down the line.

3. ASIAN AFFAIRS

i)Late SUNDAY night/MONDAY morning: Shanghai closed UP 40.55 POINTS OR 1.23% /Hang Sang CLOSED UP 231.43 POINTS OR 0.74% / The Nikkei closed UP 260.0 POINTS OR 1.19%/Australia’s all ordinaires CLOSED UP 0.67%/Chinese yuan (ONSHORE) closed UP at 6.3090/Oil UP to 63.51 dollars per barrel for WTI and 67.06 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN  .   ONSHORE YUAN CLOSED UP AT 6.3090 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3076 /ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR AND ALL OTHER CURRENCIES. CHINA IS  HAPPY TODAY (STRONGER CURRENCY/STRONGER MARKETS) 

3 a NORTH KOREA/USA

Trump initiates further sanctions against North Korea targeting 28 ships and 27 companies that still deal with this rogue nation. If this fails, then Trump warns of a devastating phase 2:

(courtesy zero hedge)

Trump Warns World Of “Very, Very Unfortunate Phase 2” If North Korean Sanctions Fail

If you weren’t paying attention, you might have missed it; but during today’s joint press conference with Aussie PM Turnbull, US President Trump let slip a brief comment that the rest of the world should likely be paying close attention to.

After unveiling the “heaviest sanctions ever imposed on a country before” against North Korea earlier in the day, President Trump told the gathered media that the US will go to “Phase 2” if those sanctions do not have the desired effects of denuclearizing the Korean peninsula.

As Reuters reports, in addressing what the Trump administration calls its biggest national security challenge, the U.S. Treasury sanctioned one person, 27 companies and 28 ships, according to a statement on the U.S. Treasury Department’s website.

The United States also proposed a list of entities to be blacklisted under separate United Nations sanctions, a move “aimed at shutting down North Korea’s illicit maritime smuggling activities to obtain oil and sell coal.”

The U.S. Treasury said the sanctions were designed to disrupt North Korean shipping and trading companies and vessels and further isolate Pyongyang, but as we noted previously Russian and Chinese ships have been “caught red handed” breaking the sanctions.

All of which led to his comments during today’s press conference during which Trump made apparent reference to military options his administration has repeatedly said remain on the table.

“If the sanctions don’t work, we’ll have to go phase two,” Trump said.

Phase two may be a very rough thing, may be very, very unfortunate for the world. But hopefully the sanctions will work.”

The president did not specify exactly what he meant by ‘Phase 2’ and qualified the statement saying that he didn’t think he was “going to exactly play that card.”

As a reminder, in August, Trump threatened to go beyond sanctions by bringing “fire and fury like the world has never seen,” although his administration has repeatedly said it prefers a diplomatic solution to the crisis.

After today’s comments, the big question on everyone’s mind is – what is “phase 2”?

END

/NORTH KOREA

end
 

3 b JAPAN AFFAIRS

c) REPORT ON CHINA

Trump is asking for the harshest import tariffs yet on global steel and in particular, Chinese steel at 24% and an additional 10% on aluminum.  Trump will soon be isolated.

(courtesy zerohedge)

Trump Wants “Harshest” Import Tariffs: 24% On Steel, 10% On Aluminum

Defying threats of retaliation from the Chinese, Bloomberg reports that President Trump is pushing for a global tariff of 24% on all steel imports, a decision that will anger nearly every industrial manufacturer based in the US, while at the same time helping revive the fortunes of US steel producers.

The rates were first proposed by Commerce Secretary Wilbur Ross last week.

The commerce department released reports on the U.S. Department of Commerce’s investigations into the impact on our national security from imports of steel mill products and from imports of wrought and unwrought aluminum. These investigations were carried out under Section 232 of the Trade Expansion Act of 1962, as amended. All classified and business confidential information in the reports was redacted before the release.

Specifically, the department, found that the quantities and circumstances of steel and aluminum imports “threaten to impair the national security,” as defined by Section 232.

Ross

It also recommended several options, of which Trump now reportedly supports the stiffest.

On steel the options include:a global tariff of at least 24% on all steel imports from all nations; tariff of at least 53% on all steel imports from 12 nations with a quota by product for all steel products from all countries equal to 100% of their 2017 exports to U.S.; quota on all steel products from all nations equal to 63% of 2017 exports.

On aluminum the options include: tariff of at least 7.7% on all aluminum exports from all countries; 23.6% tariff on all products from key nations; quota on all imports from countries equal to maximum of 86.7% of 2017 exports.

Anticipating the administration’s support, six free trade advocacy groups sent an open letter to Trump on Thursday urging him not to impose the steel and aluminum tariffs. They also said the national security argument advanced by the Commerce Department wasn’t credible.

“The national security case to restrict steel and aluminum imports is thin and the toll such restrictions would take on the economy is considerable,” the letter said, adding that a thorough assessment of America’s suppliers, treaties and other agreements “makes clear that steel and aluminum imports do not jeopardize national security.”

Reports that Trump favors the stiffest tariffs recommended by the Commerce Department sent shares of steel producers soared in after hours trading:

Steel

The report followed a press conference Friday afternoon with Australian Prime Minister Malcolm Turnbull. The two men commented on trade issues, with Trump emphasizing that he prefers bilateral trade deals while bashing China for taking advantage of the US on trade.

Earlier this year, Trump slapped a 30% tariff on solar panel imports. And he’s also approved a massive nearly 300% tariff on the Bombardier C-Series jet.

end

4. EUROPEAN AFFAIRS

Riots break about ahead of next week’s Italian election as demonstrators protest the rise in the Northern League (far right) party under Salvini.  It seems that all parties are doing everything to keep the 5 star movement from taking office.

The natural coalition will be with the Far right Northern League and 5 star.  If they can clear a majority than Brussels will be in deep troube

here is your preliminary handicapping for next week’s election

(courtesy zero hedge)

Riots Breakout Across Italy Ahead Of General Election (And Markets Are Getting Anxious)

Heading into the weekend, the Italian government massively stepped up security across the country in anticipation of demonstrations by anti-fascist and far-right groups, ahead of the general election on March 04. Italians will go to the polls next Sunday, in an election that could rebalance the political environment or send shockwaves through the European Union.

According to CNBC, here are the three leading candidates dominating the race:

  • Silvio Berlusconi, former prime minister and head of Forza Italia.
  • Matteo Renzi, the embattled leader of the center-left Democratic Party (PD) and former prime minister who quit the post in 2016 after a referendum on constitutional reform failed.
  • Luigi Di Maio, the anti-establishment 5 Star Movement’s (M5S) leader.

Last night in Pisa, Italy, anti-fascist protestors formed a counter-demonstration against Lega (Northern League) leader Matteo Salvini, who was speaking at the center of town. Anti-fascist groups threw glass bottles and rocks and attacked police officers as they tried to silence Salvini, a leading anti-EU political figure, before next week’s elections.

Insane video of Anti-fascist activists fighting with police last night in Pisa

Soros puppets meet Italian police..

In the early hours of Saturday morning, riots have erupted on the streets as police and protesters have clashed in Pisa and Milan with massive marches expected in Rome later in the day, said the Daily Express.

Rome : la manifestation anti-fasciste arrive sur la place du peuple

Former Italian prime minister Matteo Renzi is expected to visit an anti-fascist protest hosted by the Democratic Party in Rome. Preliminary reports indicate more than 20,000 people are expected to protest in just one march by the National Association of Italian Partisans (ANPI) and ’Mai piu fascismo’ (Fascism Never Again). There will also be three other protests planned in the Italian capital later in the day.

Police commissioner Guido Marino told the Daily Express: “We have two objectives – guarantee a high standard of counter-terrorism prevention and prevent violent groups from infiltrating the marches with negative consequences for order and security.”

Protestors from the National Association of Italian Partisans (ANPI) are currently underway in Rome…

View image on TwitterView image on TwitterView image on Twitter

Italy – A day of agitation to protest against openly parties spreading their message of fear and intolerance.
The Association in right now. (Ph. @marimande2)

Demonstrators from ’Mai piu fascismo’ (Fascism Never Again) are lining up for a rally in the heart of Rome.

“At the call of the left, thousands of people parade against fascism in Rome, in the rain but in good humour #AFP,” said one Twitter blogger.

A l’appel de la gauche, des milliers de personnes défilent contre le fascisme à Rome, sous la pluie mais dans la bonne humeur

“MFJ in #Rome on #siCobas March for immigrant & workers rights-against #razzismo& #Fascismo #24febbraio Open the borders of Italy and Europe! Organize community proletarian defense against the fascists led by workers/gold immigrants, young and young! Solidarity!,” one activist said.

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

MFJ in on march for immigrant & Workers rights – against &
Aprire le frontiere d’Italia e d’ Europa! Organizzare difesa proletaria comunitaria contro i fascisti guidata da lavoratrici/ori immigrati, giovani e giovani! SOLIDARITY!

“Anti-fascist protests have kicked off outside Termini station in Rome!,” alerted one twitter user.

Anti-fascist protests have kicked off outside Termini station in Rome!

The Daily Express provides the economic and social backdrop in why Italy’s political environment is in chaos:

The bleak economic forecast and growing immigration concerns have resulted in toxic election campaigns for the upcoming vote amid fears of a revival of neo-fascist sentiment.

Tensions have risen across Italy ahead of the elections as right-wing Lega Nord Matteo Salvini has pledged large scale deportation of refugees.

He vowed to deport 500,000 migrants within five years if his party wins the election – including 100,000 in the first year.

Polls suggest the conservative coalition made up of former prime minister Silvio Berlusconi’s Forza Italia (Go Italy!) and its far-right allies will win the most parliamentary seats, but probably will fall short of an outright majority.

In that case, President Sergio Mattarella could ask a centre-right figure to try to form a government, or he could turn to Luigi Di Maio, leader of the anti-establishment 5-Star Movement, which looks set to become Italy’s largest party.

Before a poll blackout came into force on Saturday, 5-Star was polling at around 28 percent, ahead of the ruling PD on 23 percent and Forza Italia on 16 percent.

Maxime Sbaihi, a Euro-Area economist for Bloomberg said (Feb 19), “Italy’s general election, aka the euro-area’s top political event of 2018. Our composite poll tracker shows @Mov5Stelle and @pdnetwork, the 2 poll leaders, drifting further apart.”

Italy’s Nationalism verse Popularism explained in one chart:

And perhaps it is this chart more than others that has the market getting nervous.

As Tom Luongo detailswe are in the quiet period before the Italian elections.  No public opinion polls are published in the last two weeks of an election cycle per Italian law. Consequently, there is a bit of a news lockout on the subject.

These are the most important elections in Europe this year – laying aside the possibility of a German re-vote – and the amount of coverage it is getting is disturbingly scant.  Articles like this bit of pablum from Bloomberg is what passes for analysis, purporting to tell you “What You Need to Know about Italy’s March 4th Elections”

Even as the specter of populist revolt recedes elsewhere in Europe, Italy’s anti-establishment, Euroskeptic Five Star Movement is seeking a breakthrough.

That’s a lie.  And a bald-faced one at that.  There hasn’t been one election in Europe in the past two years where populism hasn’t been a major and rising factor.  The fact that Italy’s President dissolved parliament early and moved elections up from May to March 4th is proof they are scared of the trend.

Because the trend is against them.  Five Star Movement or M5S continues to rise in the polls and another two months would put them in a position to put a government together.

The writers of this article push a lie that M5S is uninterested in forming a coalition government.  The rules for this election were changed to allow the parties to fight as coalitions to freeze out M5S from ruling, even if they win the most votes.

The last polls taken had the Northern League tied at 15% with Silvio Berlusconi’s Forza Italia.  These two are campaigning together.  And the intention, clearly expressed by the Bloomberg writers, is to create a ‘grand coalition’ a la Germany, which no one in Italy wants except the political elites who back further integration with the European Union.

Bond Posturing

These are the real stakes in the Italian elections next week. And despite the gaslighting of the Bloombergs and worse, the Los Angeles Times, trying to tell everyone that M5S has no chance at winning, traders in the sovereign bond pits aren’t buying it.

Since the beginning of December European bond yields across the board have been rising.  The chart below is the magnitude of the rise in yields for Germany, France, Portugal and Italy.

Note how for most of February yields have been rangebound, treading water.  This is most likely the European Central Bank in there buying up supply to keep yields from rising despite the steady march higher of yields in the U.S.

Italy’s debt, however, is in free fall.  In the past five trading days Italian 10-year debt has risen a whopping 20 basis points. Rising yields equals lower bond prices and the bond vigilantes are calling the bluff of the media and the ECB by selling Italian debt with impunity.  They are rightly scared that the polling numbers are far worse than what we’ve seen at this point.

eurobond rates

Italy’s 10-year debt is now trading well above recent high at 2.10% (see chart below).  More importantly this week’s price action broke a long-running trend of lower highs and lower lows in yields, indicative of a bullish market.

italian debt

Now, it’s hard for that market to not be bullish when the ECB is the only marginal buyer of Italian debt and heretofore, traders bet on that behavior continuing in perpetuity, front-running the ECB’s buying.

But, rising yields means that the net volume of selling across the spectrum of European sovereign debt is more than the ECB is willing or allowed to buy So, what’s happening is the ECB is managing the rate of the rise in sovereign bond yields and that is clear in the chart above.

What is also clear is that it is losing control of the Italian bond markets.

Coalition Party Bingo

So, what’s next?  While new polls will not be published between now and the election, polls are being taken.  Someone has seen them.  And, by inference, the Italian bond market is telling us that those numbers are either far worse than we’ve been led to believe at this point or some traders are simply nervous.

I believe it’s the former, otherwise yields wouldn’t have pushed through 2.1% to the upside. If the Northern League and M5S can pull off something close to a clear majority together that would be a big blow to Brussels’ plans to control coalition talks.

Moreover, if this last bit of news about M5S candidates standing for specific seats gaining ground is accurate then the renegade party will have a much stronger hand to play as it will pick up more seats than poll watchers were anticipating.

The natural alliance here is the Northern League and M5S.  Berlusconi, I feel, has been acting as a stalking horse for the established political powers to freeze M5S out of coalition talks and hand a weak “cartel” government to Brussels for upcoming debt relief and banking reform talks.

NL leader Matteo Salvini has wrapped himself fully in the populist flag, echoing Donald Trump.  One of the few things the Bloomberg article linked above gets right is all of the parties backing off from a referendum on the euro.

For now that is off the table to get votes but Salvini and his M5S counterpart Luigi Di Maio both know that Italy’s path to prosperity lies through either a massive write-down of its sovereign debt, something German voters are clearly not in favor of (and are becoming moreso every day) or leaving the euro and depreciating it away.

Given the rate at which rates are rising that is moving that timetable up considerably.  And with no government in Germany yet that creates a lot of uncertainty for investors, who rightly, are beginning to panic that those in charge really aren’t.

A firming dollar and U.S. equity markets would also imply that we’re seeing capital begin a panic move out of Europe in case the populists win.

In any case, the markets will tell us what’s really happening even if the politicians and the media won’t.

 end
Corbyn’s Brexit speech warning May to obtain an agreement with the EU with a significant political gamble.  One professor claims that it would leave the UK as a colony of the EU.  He is right
(courtesy zerohedge)

8. EMERGING MARKET

South Africa

First was announcements that the government was going to confiscate farm lands belonging to white farmers.

This weekend, a second announcement that South Africa will cut off all diplomatic ties with Israel

I think we were better off with Zuma

(courtesy MiddleEastMonitor.com)

South Africa To Cut All Diplomatic Ties With Israel

Via MiddleEastMonitor.com,

The South African government is intending to cut diplomatic ties with Israel in protest of its treatment of the Palestinian people, the country’s Science and Technology Minister Naledi Pandor announced yesterday.

Pandor informed parliamentarians of the government’s resolution during a ten-hour joint debate on South African President Cyril Ramaphosa’s State of the Nation Address (SONA) that he delivered last week.

The majority party has agreed, that government must cut diplomatic ties with Israel, given the absence of genuine initiatives by Israel to secure lasting peace and a viable two-state solution that includes full freedom and democracy for the Palestinian people,” she said.

The comments were made in response to opposition leader Kenneth Meshoe, who had argued that it was disappointing that national and provincial authorities in South Africa had refused help from Israeli companies to address the country’s current water crisis.

https://videopress.com/embed/MTe116LK?hd=1&loop=0&autoPlay=0&permalink=0

However, the proposal was applauded by parliamentarians and Pandor, who is expected to be appointed vice president in Ramaphosa’s new Cabinet, was given a standing ovation as she left the podium.

The government’s decision was further confirmed on the South African Parliament’s official Twitter account.

: The majority party has resolved that government must cut diplomatic ties with Israel

South Africa has been a staunch ally of the Palestinian struggle and regularly spoken out against the atrocities committed by the Israeli government.

Last month, the South African representative to the UN told the Human Rights Council that Israel is the “only state in the world that can be described as an apartheid state”, just days after the ruling African National Congress (ANC) party called for government ministers to strengthen the country’s visa restrictions with Israel.

Last year, the government also resolved  to downgrade the South African Embassy in Israel to a liaison office, and cautioned Tel Aviv for blacklisting supporters of the Boycott, Divestment and Sanctions (BDS) movement, which included prominent figures of the ANC.

The BDS South Africa campaign has witnessed significant support from the nation’s public, with universities and churches backing a cultural and economic boycott of Israel affiliated organisations.

https://videopress.com/embed/QASYwFRG?hd=1&loop=0&autoPlay=0&permalink=0

 end

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

Euro/USA 1.2335 UP .0044/ REACTING TO MERKEL’S FAILED COALITION/ SPAIN VS CATALONIA/REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems + USA election:/TRUMP HEALTH CARE DEFEAT//ITALIAN REFERENDUM DEFEAT/AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA FALLING INTEREST RATES AGAIN/HOUSTON FLOODING/EUROPE BOURSES ALL IN THE GREEN 

USA/JAPAN YEN 106.79 DOWN  0.039 (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/DEADLY UNWINDING OF YEN CARRY TRADE

GBP/USA 1.4047 UP .0086(Brexit March 29/ 2017/ARTICLE 50 SIGNED

THERESA MAY FORMS A NEW GOVERNMENT/STARTS BREXIT TALKS/MAY IN TROUBLE WITH HER OWN PARTY/

USA/CAN 1.2643 UP .0014 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA)

Early THIS MONDAY morning in Europe, the Euro ROSE by 44 basis points, trading now ABOVE the important 1.08 level RISING to 1.2335; / Last night Shanghai composite CLOSED UP 40.55  OR 1.23% /   Hang Sang CLOSED UP 231.43 POINTS OR 0.74%  /AUSTRALIA CLOSED UP 0.67% / EUROPEAN BOURSES DEEPLY IN THE GREEN  

The NIKKEI: this MONDAY morning CLOSED UP 260.0 POINTS OR 1.19%

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

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 231.43 POINTS OR 0.74%  / SHANGHAI CLOSED UP 40.55 OR 1.23%   /

Australia BOURSE CLOSED UP 0.67% /

Nikkei (Japan)CLOSED UP 260.00 POINTS OR 1.19%

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1337.75

silver:$16.66

Early MONDAY morning USA 10 year bond yield: 2.8610% !!! DOWN 1  IN POINTS from FRIDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ VERY DEADLY

The 30 yr bond yield 3.1490 DOWN 1 IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/DEADLY

USA dollar index early MONDAY morning: 89.59 DOWN 29  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \1 PM

Portuguese 10 year bond yield: 1.996% DOWN 4  in basis point(s) yield from FRIDAY/

JAPANESE BOND YIELD: +.0.047% DOWN 7/10    in basis points yield from FRIDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.5566% DOWN 4  IN basis point yield from FRIDAY/

ITALIAN 10 YR BOND YIELD: 2.017 DOWN 6 POINTS in basis point yield from FRIDAY/

the Italian 10 yr bond yield is trading 46 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: +.652%  DOWN 0  IN BASIS POINTS ON THE DAY

END

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IMPORTANT CURRENCY CLOSES FOR MONDAY

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

Euro/USA 1.2309 UP.0018 (Euro UP 18 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 106.96 UP 0.137 Yen DOWN 14 basis points/

Great Britain/USA 1.3964 UP .0005( POUND UP 5 BASIS POINTS)

USA/Canada 1.2684 UP  .0054 Canadian dollar DOWN 54 Basis points AS OIL ROSE TO $63.91

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

This afternoon, the Euro was UP 18 to trade at 1.2309

The Yen FELL to 106.96 for a LOSS of 14 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

The POUND ROSE BY 5 basis points, trading at 1.3964/

The Canadian dollar FELL by 54 basis points to 1.2684/ WITH WTI OIL RISING TO : $63.96

The USA/Yuan closed AT 6.3161
the 10 yr Japanese bond yield closed at +.047%  DOWN 7/10  BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1 IN basis points from FRIDAY at 2.857% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.149  DOWN 2  in basis points on the day /

THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS

Your closing USA dollar index, 89.92 UP 4 CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED UP 45.17 POINTS OR 0.62%
German Dax :CLOSED UP 43/25 POINTS OR 0.35%
Paris Cac CLOSED UP 26.89 POINTS OR 0.51%
Spain IBEX CLOSED UP 80.00 POINTS OR 0.81%

Italian MIB: CLOSED  UP 34.06 POINTS OR 0.15%

The Dow closed UP 399.28 POINTS OR 1.58%

NASDAQ WAS UP 84.07 Points OR 1.15% 4.00 PM EST

WTI Oil price; 63.96 1:00 pm;

Brent Oil: 67.61 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 55.82 DOWN 32/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 32 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.652% FOR THE 10 YR BOND 1.00 PM EST EST

END

This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM

Closing Price for Oil, 4:30 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM:$64.03

BRENT: $67.56

USA 10 YR BOND YIELD: 2.862%   THIS RAPID ASSENT IN YIELD IS VERY DANGEROUS/DERIVATIVES START TO BLOW UP/ dangerous/stays extremely high in yield/

USA 30 YR BOND YIELD: 3.154%/BROKE GUNDLACH’S KEY 3.00% AGAIN WHERE ALL VALUATIONS ON STOCKS BLOW UP/ VERY DEADLY

EURO/USA DOLLAR CROSS: 1.2318 UP.0027  (UP 27 BASIS POINTS)

USA/JAPANESE YEN:106.95 UP 0.117/ YEN UP 6 BASIS POINTS/ very dangerous as yen carry traders are getting killed/yen continues to rise despite the NYSE rising.

USA DOLLAR INDEX: 89.81 DOWN 7 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.3967 : UP 0.0008  (FROM FRIDAY NIGHT UP 8 POINTS)

Canadian dollar: 1.2677 DOWN 48 BASIS pts

German 10 yr bond yield at 5 pm: +0.652%


VOLATILITY INDEX:  15.80  CLOSED  DOWN   0.69  

END

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

TRADING IN GRAPH FORM FOR THE DAY

Stocks, Bonds, Bitcoin, Dollar, & Gold Rise (As Housing Collapses)

While the sales of new (and existing) homes crashed most in five years (as rates have spiked), stocks were panic-bid as the manic-month draws to a close

Nasdaq managed to get back to even for February…

Trannies were best on the day – rising over 2% before giving some back

The Dow has retraced around 70-75% of its drop from record highs…

Trannies outperformed thanks to Warren Buffett’s comments on owning an airline…

Bank stocks were soaring again for the second day in a row (despite falling and flattening rates)…

Even homebuilders saw ‘buy the dip’ love…

VIX was smacked lower early on – to a 15 handle…

Russell 2000 and Nasdaq Vols are back below the start of February levels…

HY Credit spreads slipped lower again today but remain notably elevated on the month…

Bonds also rallied on the day (bid overnight then sold off during the US session as stock surged)

Remember when rising rates were a bad thing for stocks?

Once again, Breakevens dramatically decoupled from Treasury yields…meaning real yields lower and thus stocks higher.

Financial conditions continues to ease dramatically back towards record lows (as The Fed prepares for 4 or 5 or 6… rate hikes this year)…

The Dollar was sold in Asia but bought back in a hurry in Europe to scrape out a green close… barely…

Cryptos bounced back (Bitcoin back above $10k and up for Feb) after Goldman headlines…

Despite the rebound in the dollar, commodities mostly managed to hold on to gains (except copper)…

Copper’s relative weakness helped support lower bond yields…

Finally, we note that silver at a key level of ‘cheapness’ relative to gold…

END

As Yellowstone is experiencing Quake Swarms, the San Francisco Bay area has been rattled by as many as 32 quakes in the past 24 hours

(courtesy zerohedge)

“What Just Hit Us?” – Bay Area Rattled By Unusual Quake Swarm, Trains Delayed

Following “strained” magma chamber concerns at Yellowstone, Bay Area residents have grown increasingly concerned this week as a swarm of well over 50 earthquakes has struck in recent days…

Culminating in at least 32 quakes in the last 24 hours as large as magnitude 3.6 which struck the East Bay town of Danville around 3pmET today.

“It’s been nuts. It wakes us up every night. We have a little dog, sleeps on the bed with us, and he freaks out all the time,” said Danville resident Christian Sommer.

Bay Area Rapid Transit (BART) trains were impacted by the quakes with trains delayed.

“Looking in that general region, I’m counting 55 quakes just in the last week,” said Amy Vaughan, a geophysicist with the Geological Survey.

8 fault lines run through the bay.

Several more significant temblors then shook up Diablo area businesses at midday – the strongest being a 3.6.

“I was sitting at my desk when the first one hit,” said Danville resident Brenda Hammer. “And I thought something hit the building was my initial reaction. What just hit us?”

There was another swarm of quakes just three days ago on Tuesday.Some in the East Bay are busy retrofitting for a bigger quake.

This swarm comes just a few weeks after a 4.4 quake jolted much of Bay Area awake in January.

end

January new home sales crash due to the higher interest rate

(courtesy zerohedge)

January New Home Sales Crash As Rates Spike

Following the significant disappointment of January’s existing home sales, hopes were high for a rebound in new home sales (+3.5% expected after December’s 9.3% plunge) but those hopes were crushed as January new home sales crashed 7.8% MoM.

This is the lowest level since August, even as the supply of homes at current sales rate climbed to 6.1 months from 5.5 months.

This is the biggest two-month drop in new home sales SAAR since August 2013.

The Median price dropped from $336,700 to $323,000 – the lowest since October…

16% of new homes sold in January cost more than $500,000, down from 22% last month.

As sales in the Northeast collapsed:

  • Northeast -33.3%, from 36K to 24K
  • Midwest +15.4%, from 65K to 75K
  • South -14.2%, from 351K to 301K
  • West +1.0%, from 191K to 193K

So we are saure NAR will blame ‘inclement’ weather – as opposed to soaring rates and plunging affordability.

Just as we warned previously, the following chart shows, that surge in rates will have a direct impact on home sales (or prices will be forced to adjust lower) as affordability collapses…

This won’t end well.

end
The Dallas Fed Manufacturing Index (soft data) bucked the trend and soared to 13 yr highs due to the rise in oil production and price
(courtesy zerohedge)

Dallas Fed Bucks Survey Trend – Soars To 13 Year High

Despite multiple survey results sinking in recent weeks, it appears surging oil prices have sparked euphoria in the Dallas Fed region as their business survey just hit its highest level since 2005.

Dallas Fed hit 37.2 – smashing expectations of 30.0 – and well above the highest analyst estimate of 34.

New orders slipped modestly for the 2nd month in a row but production jumped, as did wages, employment, and hours worked.

The only cloud on the horizon is that hope (6mo ahead) fell to 3-month lows.

end

It sure looks like this is what is going on:  the Fed is pumping stocks to keep public pensions solvent

(courtesy Dave Kranzler IRD)

Is Fed Pumping Stocks To Keep Pensions Solvent?

February 26, 2018

The pension crisis is inching closer by the day. @CalPERS just voted to increase the amount cities must pay to the agency. Cities point to possible insolvency if payments keep rising but CalPERS is near insolvency itself. It may be reform or bailout soon. – Steve Westly, former California controller and CalPERS board member.

1.5 MILLION RETIREES AWAIT CONGRESSIONAL FIX FOR A PENSION TIME BOMB

In a story buried in the business section of the February 18th NY Times, it was reported that the spending budget passed by Congress included a provision that creates a 16-member bipartisan congressional committee to craft legislation that would provide for the potential bailout of as many as 200 multi-employer” pension plans. Like most State public pension plans most of these multi-employer plans are about to hit the wall of insolvency. A multi-employer plan is a union pension plan that covers employees of union working at different companies. This minor little detail was not reported anywhere else.

A good friend of mine who works at a public pension did an internal study of all major State pension plans and determined that a 10% or more decline in the stock market for an extended period of time would blow up every single public pension in the country. “Extended period of time” was defined as more than 3-4 months. Every pension fund he studied is a monthly net seller of assets in order to fund beneficiary payouts – i.e. the cash contributions from current payees into the fund plus investment returns on capital is not enough to fund current beneficiary payouts. Think about that for a moment.

As such, State pensions have dramatically ramped up their risk profile and most now invest at least 40-50% of their assets in stocks. If you include private equity allocations, the overall exposure to equity investments is 70-80%. CalPERS allocates 50% of its AUM to the stock market; the State of Kentucky is now at 60%. Historically, pension stock allocations have typically – and prudently – ranged from 25-35%.

The stock market has now experienced three 9-10% drawdowns since August 2015. Assuming the “V” move higher from the latest market plunge continues, each drawdown has been aggressively and swiftly negated by obvious Fed intervention. The Fed does not deny this allegation and even subtly alludes to a non- explicit goal of targeting asset prices.

With pensions now 50% or more invested in stocks, it seems pretty obvious that one way to inflate away the looming pension catastrophe is for the Fed to inflate the stock market. Two weeks ago the Fed reflated its balance sheet by increasing its SOMA holdings with $11 billion in mortgages. The SOMA account is the Fed’s QE account. An $11 billion SOMA injection to the banks translates into $100 billion in liquidity – through the magic of the fractional banking system – that can be pumped into the stock market. Who needs retail stool pigeons to chase extreme valuations even higher?

Most, if not all, pensions are quickly reallocating their equity investments for active to passive funds. “Passive” = indexing. This means that the Fed only has to worry about inflation the broad indices like the Dow, SPX and Nasdaq. That’s why an increasingly few number of stocks, like AMZN and Boeing, are driving the indices. There’s still plenty of stocks that continue to decline – GE, for instance.

I laugh and sometime sneer at those who think new Fed Head Jerome Powell will impose monetary discipline by raising interest rates at least up to the real rate of inflation and reduce the Fed’s balance sheet according the schedule as laid out by Yellen. After all, Powell is heavily invested in Carlyle Group, which owns many companies that are covered by union pension plans. He’s incentivized personally to keep the monetary gerbil running on the wheel.

And better yet, if the Fed can keep the pensions thinly solvent by pumping up the stock market, Congress and State Governments can defer the inevitable taxpayer bailout of public pension funds – for now.

***

end

SWAMP STORIES

The Democrats finally release their version of the facts behind the Nunes memo. It basically is garbage..it does not outline why “this politically driven document fails to answer serious concerns raised by the Majority’s memorandum about the use of partisan opposition research from one candidate, loaded with uncorroborated allegations, as a basis to ask a court to approve surveillance of a former associate of another candidate, at the height of a presidential campaign.”

and..” the FISA judge was never informed that Hillary Clinton and the DNC funded the dossier that was a basis for the Department of Justice’s FISA application. In addition, the Minority’s memo fails to even address the fact that the Deputy FBI Director told the Committee that had it not been for the dossier: no surveillance order would have been sought. As the President has long stated, neither he nor his campaign ever colluded with a foreign power during the 2016 election: and nothing in today’s memo counters that fact.”  Sarah Sanders.

(courtesy zerohedge)

House Intel Democrats Release GOP Counter-Memo

Following President Trump’s block (due to sources and methods needing to be redacted), and Rep Adam Schiff’s admission that the Democratic Party memo (rebuttal of the GOP memo) also needed to be redacted furtherHouse Intelligence Committee Democrats have released their memo countering the GOP document that alleged surveillance abuses in the Justice Department and FBI. 

After the memo’s release, its author, Dem. Adam Schiff said that “The Democratic response memo released today should put to rest any concerns that the American people might have as to the conduct of the FBI, the Justice Department and the FISC.”

The Democratic countermemo, which is published in entirety at the bottom, claims to “correct the record” on what the Democrats say is a “transparent effort to undermine” the FBI and Justice Department, as well as the Russia investigations, on the part of the committee’s GOP members.

“FBI and DOJ officials did not ‘abuse’ the Foreign Intelligence Surveillance Act process, omit material information, or subvert this vital tool to spy on the Trump campaign,” Democrats said in the 10-page document released Saturday.  (HARVEY: NONSENSE)

“Our extensive review of the initial FISA application and three subsequent renewals failed to uncover any evidence of illegal, unethical, or unprofessional behavior by law enforcement and instead revealed that both the FBI and DOJ made extensive showings to justify all four requests,” said Schiff of California, the top Democrat on the House Intelligence Committee. (NONSENSE)

As a result, as Bloomberg summarizes, “Americans now have two clashing, partisan accounts that claim to be true interpretations of a detailed court document that they can’t read for themselves because it remains classified.

In the memo, the House Intel Democrats claims that:

“FBI and DOJ officials did not “abuse” the Foreign Intelligence Surveillance Act (FISA) process, omit material information, or subvert this vital tool to spy on the Trump campaign. In fact, DOJ and the FBI would have been remiss in their duty to protect the country had they not sought a FISA  warrant and repeated renewals to conduct temporary surveillance of Carter Page, someone the FBI assessed to be an agent of the Russian government. DOJ met the rigor, transparency, and evidentiary basis needed to meet FISA’s probable cause requirement, by demonstrating:

  • contemporaneous evidence of Russia’s election interference;
  • concerning Russian links and outreach to Trump campaign officials;
  • Page’s history with Russian intelligence; and
  • Page’s suspicious activities in 2016, including in Moscow.

The memo’s key counterarguments are as follows (via Tim O’Brien):

  1. The Steele Dossier was not the catalyst for launching the Trump-Russia probe
  2. The rationale for surveilling Carter Page was carefully weighed.
  3. The Nunes memo used classified information selectively and included distortions and misrepresentations  
  4. Papadopoulos’ role as the original catalyst for the Trump-Russia investigation outlined.
  5. DOJ’s FISA application was carefully vetted and wasn’t used to spy on Trump or his campaign 
  6. Steele’s information about Page’s contacts with Kremlin insiders like Sechin was consistent with Papadopoulos information
  7. DOJ was transparent with the court about Steele’s role and why he had reliable information
  8. Nunes memo’s references to Ohr are misleading and the Strzok/Page texts are irrelevant

Some more details: as part of “correcting the record”, the HPSCI democrats claim that:

  • Christopher Steele’s raw intelligence reporting did not inform the FBI’s decision to initiate its counterintelligence investigation in late July 2016. In fact, the FBI’s closely-held investigative team only received Steele’s reporting in mid-September – more than seven weeks later. The FBI – and, subsequently, the Special Counsel’s – investigation into links between the Russian government and Trump campaign associates has been based on troubling law enforcement and intelligence information unrelated to the “dossier.”
  • DOJ’s October 21, 2016 FISA application and three subsequent renewals carefully outlined for the Court a multi-pronged rationale for surveilling Page, who, at the time of the first application, was no longer with the Trump campaign. DOJ detailed Page’s past relationships with Russian spies and interaction with Russian officials during the 2016 campaign [REDACTED]. DOJ cited multiple sources to support the case for surveilling Page — but made only narrow use of information from Steele’s sources about Page’s specific activities in 2016, chiefly his suspected July 2016 meetings in Moscow with Russian officials.[REDACTED] In fact, the FBI interviewed Page in March 2016 about his contact with Russian intelligence, the very month candidate Donald Trump named him a foreign policy advisor.
  • DOJ’s applications did not otherwise rely on Steele’s reporting, including any “salacious” allegations about Trump, and the FBI never paid Steele for this reporting. While explaining why the FBI viewed Steele’s reporting and sources as reliable and credible, DOJ also disclosed:
    • Steele’s prior relationship with the FBI;
    • the fact of and reason for his termination as a source; and
    • the assessed political motivation of those who hired him.
  • The Committee Majority’s memorandum, which draws selectively on highly sensitive classified information, includes other distortions and misrepresentations that are contradicted by the underlying classified documents, which the vast majority of Members of the Committee and the House have not had the opportunity to review and which Chairman Nunes chose not to read himself.

The countermemo keeps pounding that Steele had nothing to do with launching the FBI counterintel investigation into Russia interference:

Christopher Steele’s reporting, which he began to share with an FBI agent [REDACTED] through the end of October 2016, played no role in launching the FBI’s counterintelligence investigation into Russian interference and links to the  Trump campaign. In fact, Steele’s reporting did not reach the counterintelligence team investigating Russia at FBI headquarters until mid-September 2016, more than seven weeks after the FBI opened its investigation, because the probe’s existence was so closely held within the FBI. By then, the FBI had already opened sub-inquiries into [X] individuals linked to the Trump campaign.

In other words, it wasn’t just Page, but more individuals in the Trump campaign that were being surveilled as of Sept.2 2016.

The countermemo also claims that “FISA was not used to spy on Trump or his campaign.”

As the Trump campaign and Page have acknowledged, Page ended his formal affiliation with the campaign months before DOJ applied for a warrant. DOJ, moreover, submitted the initial application less than three weeks before the election, even though the FBI’s investigation had been ongoing since the end of July 2016.

So what was the DOJ warrant on Page based on? Allegedly, on “compelling evidence and probable cause to believe Page was knowingly assisting clandestine Russian intelligence activities in the U.S.” including:

Page’s Connections to Russian Government and Intelligence Officials: The FBI had an independent basis for investigating Page’s motivations and actions during the campaign, transition, and following the inauguration.

Page remained on the radar of Russian intelligence and the FBI. In 2013, prosecutors indicted three other Russian spies, two of whom targeted Page for recruitment. The FBI also interviewed Page multiple times about his Russian intelligence contacts, including in March 2016.

The counter memo also notes Page’s “Suspicious Activity During the 2016 Campaign: The FISA applications also detail Page’s suspicious activity after joining the Trump campaign in March 2016.” It is in this specific sub-section of the applications, the countermemo notes, that DOJ refers to Steele’s reporting on Page and his alleged coordination with Russian officials.

Steele’s information about Page was consistent with the FBI’s assessment of Russian intelligence efforts to recruit him and his connections to Russian persons of interest.

In particular, Steele’s sources reported that Page met separately while in Russia with Igor Sechin, a close associate of Vladimir Putin and executive chairman or Rosneft, Russia’s state-owned oil company, and Igor Divyekin, a senior Kremlin official.Sechin allegedly discussed the prospect of future U.S.-Russia energy cooperation and “an associated move to lift Ukraine-related western sanctions against Russia.” Divyekin allegedly disclosed to Page that the Kremlin possessed compromising information on Clinton (“kompromat”) and noted “the possibility of its being released to Candidate #1’s campaign.” [Note: “Candidate #1” refers to candidate Trump.} This closely tracks what other Russian contacts were informing another Trump foreign policy advisor, George Papadopoulos

President Trump’s approval for the public posting of the counter-memo was reached on redacting parts of an earlier version for national security reasons. With the response memo’s release, Democrats on the committee got to lay out their case: that the panel’s Republican majority had cherry-picked and distorted information in an effort to undercut the probe that’s now being led by Special Counsel Robert Mueller.

Moments after the memo’s release, the White House issued a statement saying “while the democrats’ memorandum attempts to undercut the president politically, the president supported its release in the interest of transparency.”

Here is the full White House Response to the House Intelligence Committees release of the minority’s memorandum, from Sarah Sanders:

While the Democrats’ memorandum attempts to undercut the President politically, the President supported its release in the interest of transparency. Nevertheless, this politically driven document fails to answer serious concerns raised by the Majority’s memorandum about the use of partisan opposition research from one candidate, loaded with uncorroborated allegations, as a basis to ask a court to approve surveillance of a former associate of another candidate, at the height of a presidential campaign.

As the Majority’s memorandum stated: the FISA judge was never informed that Hillary Clinton and the DNC funded the dossier that was a basis for the Department of Justice’s FISA application. In addition, the Minority’s memo fails to even address the fact that the Deputy FBI Director told the Committee that had it not been for the dossier: no surveillance order would have been sought. As the President has long stated, neither he nor his campaign ever colluded with a foreign power during the 2016 election: and nothing in today’s memo counters that fact.”

– Sarah Sanders: White House Press Secretary

Full Democratic Rebuttal Memo below (pdf link):

END

I will  see you TUESAY night

HARVEY

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One comment

  1. MORE CRAP AND USELESS INFO FROM ANOTHER SENILE GOLD BUG…. JUST COMPLETELY USELESS READING…SO SAVE TIME SKIP TO THE COMMENTS SECTION AND DONT PAY ANY ATTENTION TO THIS LOSER

    Like

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