APRIL 30/OPTIONS EXPIRY NOW OVER BUT NOT BEFORE THEY KNOCK GOLD DOWN $4.05 TO $1318.35 AND SILVER DOWN ANOTHER 11 CENTS TO $16.36/NETANYAHU REPORTS THAT IRAN IS SECRETLY DEVELOPING NUCLEAR WEAPONS UNDER “PROJECT AMAD”/ISRAEL STRIKES TWO BASES INSIDE SYRIA LAST NIGHT/CHINA REFUSES TO CHANGE ITS STANCE ON RENEGOTIATING TRADE/ MORE SWAMP STORIES FOR YOU TONIGHT/

 

 

GOLD: $1318.35  DOWN $ 4.05  (COMEX TO COMEX CLOSINGS)

Silver: $16.36 DOWN 11 CENTS (COMEX TO COMEX CLOSINGS)

Closing access prices:

Gold $1315.50

silver: $16.33

For comex gold:

MAY/

NUMBER OF NOTICES FILED TODAY FOR MAY CONTRACT:10 NOTICE(S) FOR 1000 OZ.

TOTAL NOTICES SO FAR 10 FOR 10000 OZ (0.031 tonnes)

For silver:

MAY

780 NOTICE(S) FILED TODAY FOR

3,900,000 OZ/

Total number of notices filed so far this month: 780 for 3,900,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $9304/OFFER $9304: up $278(morning)

Bitcoin: BID/ $9248/offer $9348: up $321  (CLOSING/5 PM)

 

end

First Shanghai gold fix comes at 10 pm est

The second Shanghai gold fix:  2:15 pm

First Shanghai gold fix gold: 10 pm est:  1326.28

NY price  at the same time: 1324.25

PREMIUM TO NY SPOT: $2.03

ss

Second gold fix early this morning:  1327.24

USA gold at the exact same time:  1319.15

PREMIUM TO NY SPOT:  $8.09

AGAIN, SHANGHAI REJECTS NEW YORK PRICING.

WE WILL NOT PROVIDE LONDON FIXES AS THEY ARE NOT ACCURATE AS TO WHAT IS GOING ON AT THE SAME TIME FRAME.

Let us have a look at the data for today

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In silver, the total OPEN INTEREST  ROSE BY A SMALL 324 CONTRACTS FROM  189,858  RISING TO 190,177  WITH FRIDAY’S SMALL 5 CENT FALL IN SILVER PRICING. AFTER A  STRING OF 4 CONSECUTIVE OI GAINS, WE ENDED OUR 5 CONSECUTIVE DROPS IN OI WITH THE TINY RISE.  WE ARE NOW WITNESSING OUR USUAL AND CUSTOMARY COMEX LONG LIQUIDATION AS WE ENTERED INTO THE ACTIVE DELIVERY MONTH OF MAY AS LONGS PACK THEIR BAGS AND MIGRATE OVER TO LONDON.  WE WERE  NOTIFIED THAT WE HAD AN FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP : 0 EFP CONTRACTS FOR APRIL206 EFP’S FOR MAY , 1066 EFP’S FOR JULY AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE OF 1272 CONTRACTS. WITH THE TRANSFER OF 1272 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 24-48 HRS IN THE ISSUING OF EFP’S. THE 1272 EFP CONTRACTS TRANSLATES INTO 6.36 MILLION OZ  ACCOMPANYING:

1.THE FALL IN  SILVER PRICE (5 CENTS) AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES STANDING FOR MAY COMEX DELIVERY. (24.1 MILLION OZ)

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

77,150 CONTRACTS (FOR 21 TRADING DAYS TOTAL 77,150 CONTRACTS) OR 385.75 MILLION OZ: AVERAGE PER DAY: 3673 CONTRACTS OR 18.369 MILLION OZ/DAY

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  385.75 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 55.00% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S1.1424      BILLION OZ.

ACCUMULATION FOR JAN 2018:                                               236.879     MILLION OZ

ACCUMULATION FOR FEB 2018:                                               244.95         MILLION OZ

ACCUMULATION FOR MARCH 2018:                                       236.67         MILLION OZ

ACCUMULATION FOR APRIL 2018:                                          385.75         MILLION OZ

RESULT: WE HAD A SMALL SIZED RISE IN COMEX OI SILVER COMEX OF 324 WITH THE TINY  5 CENT LOSS IN SILVER PRICE AS OUR CUSTOMARY COMEX LONG MIGRATION  INTO LONDON BASED FORWARDS CONTINUED IN EARNEST AS WE HAVE NOW ENTERED THE NEW ACTIVE MONTH OF MAY.   THE CME NOTIFIED US THAT IN FACT WE HAD AN FAIR  SIZED EFP ISSUANCE OF 1272 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 (SEE COMEX DATA) . FROM THE CME DATA:  0 CONTRACTS WERE ISSUED FOR APRIL, 206  EFP’S WERE ISSUED  FOR THE  MONTH OF MAY, AND 1066 EFP CONTRACTS FOR JULY,   FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS (TOTAL: 1272). TODAY WE GAINED 1596  TOTAL OI CONTRACTS  ON THE TWO EXCHANGES: i.e. 1272 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH AN INCREASE OF 324  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE  FALL IN PRICE OF SILVER OF 5 CENTS AND A CLOSING PRICE OF $16.47 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THIS  ACTIVE MAY DELIVERY MONTH. IT SURE SEEMS THAT WE MUST HAVE HAD SOME BANKER SHORT COVERING ON BOTH EXCHANGES.

In ounces AT THE COMEX, the OI is still represented by UNDER 1 BILLION oz i.e. .951 MILLION OZ TO BE EXACT or 136% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED AT THE COMEX: 780 NOTICE(S) FOR 3,900,000 OZ OF SILVER

IN SILVER, WE HAVE NOW SET THE NEW RECORD OF OPEN INTEREST AT 243,411 AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $16.51  ON APRIL 9.2018.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH: 27 MILLION OZ , APRIL: 2.485 MILLION OZ  AND MAY: 24.1 MILLION OZ )
  2. HUGE RECORD OPEN INTEREST IN SILVER  243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ (FINAL)

PRIOR TO APRIL, WE AVERAGED APPROXIMATELY 238 MILLION OZ OF SILVER EFP’S ISSUED. WHEN WE SET THE RECORD IN APRIL  (APRIL 9) WE REGISTERED 243,411 OPEN INTEREST CONTRACTS AT THE COMEX. WE HAVE LOST EXACTLY 53,000 OI CONTRACTS WITH A FALL OF ONLY 7 CENTS. (OPEN INTEREST AT THE COMEX HAS DECLINED BY 53,000 CONTRACTS FROM THE RECORD SETTING DAY OF APRIL 9/2018 TO TODAY’S LEVEL OF 190,203) IN THE MONTH OF APRIL WE HAVE GAINED 148 MILLION OZ OF EFP FROM AN AVERAGE 238 MILLION OZ OR A GAIN OF 29,600 CONTRACTS.  WHEN THE COMEX OPEN INTEREST CONTRACTS WE MUST SEE A FALL IN PRICE AND THAT IS WHEN THE COMMERCIALS ENTER AND BUY UP THE LIQUIDATED CONTRACTS OF THE SPECULATORS.  SOMEHOW THIS DID NOT HAPPEN AS WE WITNESS A DIFFERENTIAL FALL OF 53,000 –  29600 =  23,400 CONTRACTS WITH HARDLY A CHANGE IN PRICE???/

AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND.  TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN  (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT). IT ALSO LOOKS LIKE BANKER CAPITULATION IN SILVER AS THEY STRUGGLE TO REMOVE SOME OF THEIR HUGE OBLIGATIONS.

In gold, the open interest FELL BY 4206 CONTRACTS DOWN TO 495,761 DESPITE THE RISE  IN THE GOLD PRICE/FRIDAY’S TRADING ( GAIN OF $5.90) WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF MAY.  THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A GOOD SIZED 7816 CONTRACTS :   JUNE SAW THE ISSUANCE OF 7816 CONTRACTS , MAY SAW THE ISSUANCE OF 0 CONTRACTS  AND AUGUST SAW THE ISSUANCE OF: 0 CONTRACTS WITH ALL OTHER MONTHS ZERO.  The new OI for the gold complex rests at 496,424. 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. . 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  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A FAIR SIZED  OI GAIN IN CONTRACTS ON THE TWO EXCHANGES: 4206 OI CONTRACTS DECREASED AT THE COMEX AND AN GOOD SIZED 7816 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS  TOTAL OI GAIN: 3610 CONTRACTS OR 361,000 OZ = 11.22 TONNES.

FRIDAY, WE HAD 8670  EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF APRIL : 229,436 CONTRACTS OR 22,943,600  OZ OR 713.64 TONNES (21 TRADING DAYS AND THUS AVERAGING: 10,925 EFP CONTRACTS PER TRADING DAY OR 1,092,500 OZ/ TRADING DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :    THIS MONTH IN 21 TRADING DAYS IN  TONNES: 713.84 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 713.84/2550 x 100% TONNES =  27.99% OF GLOBAL ANNUAL PRODUCTION SO FAR IN APRIL ALONE.*** THE ACCUMULATION OF EFP CONTRACTS IS RISING PER MONTH.

ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE 2,758.40*  TONNES   *SURPASSED ANNUAL PROD’N

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

ACCUMULATION OF GOLD EFP’S FOR FEBRUARY 2018:         649.45 TONNES

ACCUMULATION OF GOLD EFP’S FOR MARCH 2018:                741.89 TONNES  (22 TRADING DAYS)

ACCUMULATION OF GOLD EFP’S FOR APRIL 2018:                   713.84 TONNES  (21 TRADING DAYS)

WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS.  ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM.  IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE

Result: AN  DECREASE IN OI AT THE COMEX OF 4206  DESPITE THE RISE  IN PRICE // GOLD TRADING FRIDAY ($5.90 GAIN). WE ALSO HAD A GOOD SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 7816 CONTRACTS AS THESE HAVE ALREADY BEEN NEGOTIATED AND CONFIRMED.   THERE OBVIOUSLY DOES NOT SEEM TO BE MUCH PHYSICAL GOLD AT THE COMEX.  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 7816 EFP CONTRACTS ISSUED, WE HAD A GOOD SIZED NET GAIN OF 3610 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES: 

7816 CONTRACTS MOVE TO LONDON AND 4206 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 13.290 TONNES).

we had: 10 notice(s) filed upon for 1000 oz of gold at the comex.

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

GLD…

WITH GOLD DOWN  $4.04 /NO CHANGE IN GOLD INVENTORY AT THE GLD

Inventory rests tonight: 871.20 tonnes.

SLV/

WITH SILVER DOWN 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/

/INVENTORY RESTS AT 316.899 MILLION OZ/

end

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

1. Today, we had the open interest in SILVER ROSE BY A SMALL 324 CONTRACTS from 189,858 UP TO 190,177 (AND CLOSER TO THE  NEW COMEX RECORD SET /APRIL 9/2017 AT 243,411/SILVER PRICE AT THAT DAY: $16.53). THE PREVIOUS RECORD OTHER THAN WAS ESTABLISHED AT: 234,787, SET ON APRIL 21.2017 OVER ONE YEAR AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89. AFTER WE HAVE HAD FOUR CONSECUTIVE OI GAINS WE NOW ENDED FIVE  CONSECUTIVE OI DROPS.  OUR CUSTOMARY MIGRATION OF COMEX LONGS MORPH INTO LONDON FORWARDS CONTINUES AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE: 0 EFP CONTRACTS FOR APRIL, 206 EFP CONTRACTS FOR MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM), AND 1066 EFP’S FOR JULY AND ALL OTHER MONTHS ZERO. TOTAL EFP ISSUANCE:  1272 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI GAIN AT THE COMEX OF 324 CONTRACTS TO THE 1272 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A GOOD GAIN OF 1596 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES:  7.98 MILLION OZ!!! AND THIS OCCURRED DESPITE A TINY FALL IN PRICE OF 5 CENTS.  THE BANKERS ORCHESTRATED THEIR RAID THROUGHOUT THE WEEK TO DESPERATELY TRY AND PARE THEIR GIGANTIC OPEN INTEREST SHORT ON BOTH EXCHANGES BUT TO NO AVAIL. JUDGING BY THE RECORD NUMBER OF ISSUANCE DURING THIS MONTH OF APRIL AT 385.75 MILLION OZ. I DO NOT THINK THAT OUR BANKERS HAVE BEEN TOO SUCCESSFUL. IT SURE LOOKS TO ME LIKE WE HAD SOME GOOD OLD FASHIONED BANKER SHORT COVERING, YET THE PRICE REMAINS RELATIVELY CONSTANT.

RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE FALL IN SILVER PRICING / YESTERDAY (5 CENTS/) . BUT WE ALSO HAD ANOTHER GOOD SIZED 1272 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR APRIL, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

(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)MONDAY MORNING/SUNDAY NIGHT: Shanghai closed UP 7.20 POINTS OR 0.23%  /Hang Sang CLOSED UP 527.78 POINTS OR 1.74%   / The Nikkei closed UP 148.26 POINTS OR 0.66%/Australia’s all ordinaires CLOSED UP .48%  /Chinese yuan (ONSHORE) closed DOWN at 6.3330/Oil DOWN to 67.31 dollars per barrel for WTI and 73.03 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN.   ONSHORE YUAN CLOSED UP AT 6.3330 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3231/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH  STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/

/NORTH KOREA/SOUTH KOREA

 

i)North Korea/South Korea

b) REPORT ON JAPAN

3 c CHINA

Good reason for the boys to whack gold/silver today: China refuses to talk on concessions with the two biggest trade demands of the USA

( zerohedge)

4. EUROPEAN AFFAIRS

i)Europe

Tough words from Europe has they state that they will not talk with a gun pointed to their heads.  They are now expecting a huge trade war with the USA

( zerohedge)

ii)The French ambassador to Israel has stated that the USA withdrawal from the Iran deal may lead to war

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Iran/USA

Pompeo landed in Saudi Arabia seeking support for the upcoming sanctions on Iran.  It sure looks like the uSA will abandon the agreement.

( zerohedge)

ii)The French ambassador to Israel has stated that the USA withdrawal from the Iran deal may lead to war

( zerohedge)

iii)Last night:  “Enemy rockets”    (Israel) strikes two bases and kills 11 Iranians inside Syria.  Even bunker buster bombs were used.
( zerohedge)

iv)At 1025: Israel to announce dramatic news on Iran at 8 pm Israeli time/1pm est

(courtesy zerohedge)

v)Not surprising, Netanyahu claims that Iran has and is trying to produce nuclear weapons in a secret place in Tehran.  The project is called “Project Amad”:

( zerohedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

China’s future oil volumes increasing and gaining momentum.  This will be bad for the dollar and their petro dollar scheme

( zerohedge)

8. EMERGING MARKET

i)Venezuela

 

9. PHYSICAL MARKETS

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

i)Today’s morning data:
Soft data, National Chicago PMI registers its first year over year drop in over a year, as were are witnessing continual lower economic activity.
( zerohedge)
ii)Another set of hard data suggests the economy is in decline:  this time pending home sales decline for the 4th consecutive month( zerohedge)
iii)Today’s trading/market mover

Everything turned red ahead of BIbi speech:
(courtesy zerohedge)
iv)Looks like Illinois will finally get its downgrade to junk status.
( Dabrowki/Klinger/Wirepoints)

v)Super commentary by David Stockman on the subject of Amazon…

(courtesy David Stockman/ContraCorner)

vi)Calpers, the large California public pension system is heading for bankruptcy.  This does not stop the petty squabbling

( zerohedge)

vii)SWAMP STORIES

a)Sheer nonsense as Comey rages against the House Intelligence Report calling it a lie and politically motivated and he calls Trump a “liar”. Judge Jeanine rages that it is Comey that is liar and a leaker.

( zerohedge)

b)And now the next logical guy to leave the White HOuse is Kelly:

( zerohedge)

Let us head over to the comex:

The total gold comex open interest  FELL BY 4206 CONTRACTS DOWN to an OI level 495,761 DESPITE THE CONSIDERABLE RISE IN THE PRICE OF GOLD ($5.90 GAIN/ FRIDAY’S TRADING).   FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE.   THE CME REPORTS THAT  THE BANKERS ISSUED A GOOD SIZED  COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS. WE HAD A GOOD SIZED 7816 CONTRACTS ISSUED: FOR  JUNE, 7816 CONTRACTS ISSUED,  FOR AUGUST ZERO AND ZERO FOR ALL OTHER MONTHS:  TOTAL  7816 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 BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 3610 OI CONTRACTS IN THAT 7816 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST  4206  COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 3610 contracts OR 361,000  OZ OR 11.22 TONNES.

Result: A DECREASE IN COMEX OPEN INTEREST DESPITE THE RISE  IN PRICE ON FRIDAY  (ENDING UP WITH A GAIN OF $5.90)THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 3,610 OI CONTRACTS..

We have now entered the non  active contract month of MAY where we LOST 220 contracts LOWERING TO  413 contracts. Thus by definition, the initial amount of gold standing for May is 413 contracts x  100 oz per contract or  41,300 oz  ( 1.2846 tonnes)

The really big June contract month saw a LOSS of 5548 contracts DOWN to 354,871 contracts.   The next big delivery month after June is August and here the OI ROSE BY 1349 contracts UP to 57,896.

We had 10 notice(s) filed upon today for 1000  oz at the comex

THERE IS NO QUESTION THAT THE COMEX DOES NOT HAVE ANY  GOLD TO SATISFY UPON OUR LONGS.

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY:304,114  contracts

CONFIRMED COMEX VOL. FOR YESTERDAY: 250,204 contracts

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And now for the wild silver comex results.

Total silver OI ROSE BY A SMALL 324 CONTRACTS FROM 189,858 UP TO 190,177 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS)  WITH THE TINY CENT FALL IN SILVER PRICING. SINCE WE ARE NOW INTO THE  ACTIVE DELIVERY MONTH OF MAY. WE  WERE  INFORMED THAT WE HAD A GOOD SIZED 206 EFP CONTRACTS ISSUED FOR MAY,  A LARGER 1066 EFP CONTRACT ISSUANCE FOR JULY AND ZERO FOR ALL OTHER MONTHS.  THESE EFPS WERE ISSUED TO COMEX LONGS WHO RECEIVED A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  THE TOTAL EFP’S ISSUED: 1272.   ON A NET BASIS WE GAINED 1596  SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 324 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 1272 OI CONTRACTS NAVIGATING OVER TO LONDON. DUE TO THE FACT THAT THE BOYS WERE VERY BUSY NEGOTIATING LONG COMEX CONTRACTS EMIGRATING TO LONDON,(AND WAITING FOR THEIR PASSPORTS)

NET GAIN  ON THE TWO EXCHANGES:   1596  CONTRACTS 

AMOUNT STANDING FOR SILVER AT THE COMEX

We are now in the  active delivery month of MAY and here the front month LOST 9408 contracts FALLING TO 4822 contracts.  Thus by definition we have the following initial amount of silver standing

4822 contracts x 5000 oz per contract =   24,110,000 oz which is excellent for May.

June saw a GAIN of 64 contracts to stand at 807.  The next big delivery month for silver is July and here the OI ROSE by 10,217 contracts UP to 136,508. The next active delivery month after July for silver is September and here the OI fell by 355 contracts down to 19,035

We had 780 notice(s) filed for 3,900,000 OZ for the APRIL 2018 contract for silver

INITIAL standings for MAY/GOLD

APRIL 30/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
128.604 OZ
SCOTIA
Deposits to the Dealer Inventory in oz NIL oz
Deposits to the Customer Inventory, in oz  nil OZ
No of oz served (contracts) today
10 notice(s)
 1000 OZ
No of oz to be served (notices)
403 contracts
(40300 oz)
Total monthly oz gold served (contracts) so far this month
10 notices
1000 OZ
0.0311 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
total inventory withdrawals out of dealer accounts; nil oz
we had 1 withdrawals out of the customer account:
i) out of Scotia: 128.604 oz
total customer withdrawals:  128.604 oz
we had 0 customer deposit
total customer deposits: nil oz
we had 1 adjustment(s)
i) Out of HSBC: 52,523.632 oz was adjusted out of the dealer and this landed into the customer account of HSBC

For MAY:
Today, 0 notice(s) were issued from JPMorgan dealer account and 10 notices were issued from their client or customer account. The total of all issuance by all participants equates to  10 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (10) x 100 oz or 149200 oz, to which we add the difference between the open interest for the front month of MAY. (413 contracts) minus the number of notices served upon today (10 x 100 oz per contract) equals 41,300 oz, the number of ounces standing in this active month of APRIL (1.2846 tonnes)

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

No of notices served (10 x 100 oz or ounces + {(413)OI for the front month minus the number of notices served upon today (10 x 100 oz )which equals 41,300 oz standing in this  active delivery month of MAY . THERE IS 10.382 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

total registered or dealer gold:  333,796.716 oz or 10.382 tonnes
total registered and eligible (customer) gold;   9,049,628.092 oz 278.45 tones
THE COMEX IS AGAIN IN STRESS AS ONLY 10.382 TONNES OF GOLD ARE LEFT TO SERVICE DELIVERIES. THERE IS HARDLY ANY GOLD AT THE COMEX TO SERVE UPON LONGS AND THUS THE REASON FOR THE EFP TRANSFER OVER TO LONDON.

IN THE LAST 18 MONTHS 76 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE APRIL DELIVERY MONTH

MAY INITIAL standings/SILVER

APRIL 30/ 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 339,775.522 oz
CNT
Scotia
Deposits to the Dealer Inventory
1,195,331.347
CNT
oz
Deposits to the Customer Inventory
  578,784.320 oz
Scotia
No of oz served today (contracts)
780
CONTRACT(S)
(3,900,000 OZ)
No of oz to be served (notices)
4042 contracts
(20,210,000 oz)
Total monthly oz silver served (contracts) 780 contracts

(3,900,000 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

i) Into dealer: CNT: 1,195,331.347 oz

total dealer deposits: 1195,331.347 oz

we had 1 deposits into the customer account

i) Into JPMorgan: nil oz

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

JPMorgan now has 140 million oz of  total silver inventory or 53.4% of all official comex silver. (140 million/263 million)

JPMorgan did not  deposit  into its warehouses (official) today.

ii) Scotia 578,784.320 oz

total deposits today: 578,784.320  oz

we had 2 withdrawals from the customer account;

i) Out of CNT 279,753.962 oz

ii) Out of Scotia; 60,002.510

total withdrawals;  339,775.522  oz

we had 1 adjustment

i) Out of SCNT:

179,268.653 oz was adjusted out of the customer and this landed into the dealer account of CNT

.

total dealer silver:  65.226 million

total dealer + customer silver:  262.948 million oz

The total number of notices filed today for the MAY. contract month is represented by 780 contract(s) FOR 3,900,000 oz. To calculate the number of silver ounces that will stand for delivery in MAY., we take the total number of notices filed for the month so far at 780 x 5,000 oz = 3,900,000 oz to which we add the difference between the open interest for the front month of MAY. (4822) and the number of notices served upon today (780 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAY contract month: 780(notices served so far)x 5000 oz + OI for front month of MAY(4822) -number of notices served upon today (780)x 5000 oz equals 24,110,000 oz of silver standing for the MAY contract month 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 71,901 CONTRACTS (WOW)  635 MILLION OZ OR 89% OF ANNUAL PRODUCTION.

CONFIRMED VOLUME FOR YESTERDAY: 89,173 CONTRACTS (my goodness)

YESTERDAY’S CONFIRMED VOLUME OF  89173 CONTRACTS EQUATES TO 445 MILLION OZ (0..635 billion oz) OR 63.7% 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 RISES TO -1.64% (APRIL 30/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.57% to NAV (APRIL 30/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -1.64%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.57%/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 -1.98`%: NAV 13.55/TRADING 13.29//DISCOUNT 1.98

END

And now the Gold inventory at the GLD/

APRIL 30/WITH GOLD DOWN $4.05/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES.

APRIL 27./WITH GOLD UP $5.90/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES/

APRIL 26/WITH GOLD DOWN $4.90/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES

APRIL 25/AFTER 9 CONSECUTIVE DAYS OF NO MOVEMENT OF GOLD INTO OUT OF THE GLD, WE HAD A HUGE DEPOSIT OF 5.31 TONNES OF GOLD INTO THE GLD/INVENTORY RESTS AT 871.20 TONNES.

APRIL 24./WITH GOLD UP $9.90, WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

APRIL 23.2018/WITH GOLD DOWN $14.00/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES.

APRIL 20/WITH GOLD DOWN $10.20: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES

APRIL 19/WITH GOLD DOWN $4.25: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

APRIL 18/WITH GOLD UP $3.65: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES

APRIL 17/WITH GOLD DOWN $1.00 NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

April 16/WITH GOLD UP$2.80/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 865.89 TONNES/

April 13/WITH GOLD UP $6.15, A HUGE DEPOSIT OF 5.90 TONNES INTO THE GLD INVENTORY/INVENTORY RESTS AT 865.89 TONNES

April 12/WITH GOLD DOWN $17.40/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859.99 TONNES

April 11/WITH GOLD UP $13.85/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859,99 TONNES

APRIL 10/WITH GOLD UP $5.25/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859.99 TONNES

APRIL 9/WITH GOLD UP$4.50/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 859.99 TONNES

APRIL 6/WITH GOLD UP $7.50 ,A HUGE CHANGE IN INVENTORY AT THE GLD/ A DEPOSIT OF 5.90 TONNES/INVENTORY RESTS AT 859.99 TONNES

APRIL 5/WITH GOLD DOWN $8.20 WE HAD TWO ENTRIES: 1) TINY WITHDRAWAL OF .28 TONNES TO PAY FOR FEES AND 2) A DEPOSIT OF 2.06 TONNES//INVENTORY RESTS AT 854.09 TONNES

April 4/WITH GOLD UP $2.90 WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.31 TONNES

APRIL 3./WITH GOLD DOWN $9.30 WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.31 TONNES

APRIL 2/WITH GOLD UP $19.50, WE HAD A BIG  CHANGES IN GOLD INVENTORY AT THE GLD A DEPOSIT OF 6.19 TONNES/INVENTORY RESTS AT 852.31 TONNES

MARCH 29/WITH GOLD DOWN $3.20 AND OPTIONS EXPIRY FINISHED, WE HAD NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS A 846.12 TONNES

March 28/WITH GOLD DOWN $16.70, ANOTHER RAID ORCHESTRATED, AGAIN NO SURPRISES AS WE WITNESS ANOTHER 1.18 TONNES OF GOLD REMOVED/INVENTORY RESTS AT 846.12 TONNES

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

APRIL 30/2018/ Inventory rests tonight at 871.20 tonnes

*IN LAST 372 TRADING DAYS: 69.84 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 322 TRADING DAYS: A NET 86.46 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory/

APRIL 30/WITH SILVER DOWN 11 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 27/WITH SILVER DOWN 5 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 26/WITH SILVER DOWN 2 CENT/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316,899 MILLION OZ/

APRIL 25./WITH SILVER DOWN 18 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 24./WITH SILVER UP 8 CENTS/SOMETHING SPOOKED OUR CROOKS TO ADD SOME PAPER SILVER: A DEPOSIT OF 1.601 MILLION OZ/INVENTORY RESTS AT 316.899 MILLION OZ/

APRIL 23.2018/WITH SILVER DOWN 50 CENTS, ANOTHER HUGE WITHDRAWAL FROM THE SLV INVENTORY: A WITHDRAWAL OF 1.413 MILLION OZ/INVENTORY RESTS AT 315.298 MILLION OZ.

APRIL 20/WITH SILVER DOWN 11 CENTS: ANOTHER HUGE CHANGE IN SILVER INVENTORY: A WITHDRAWAL OF 1.13 MILLION OZ//SLV RESTS TONIGHT AT 316.711 MILLION OZ/

APRIL 19/WITH SILVER UP 3 CENTS TODAY: WE HAD A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.355 MILLION OZ/ MAKES ABSOLUTELY NO SENSE!!/INVENTORY RESTS AT 317.841 MILLION OZ

APRIL 18/WITH SILVER UP 44 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ

APRIL 17/WITH SILVER UP 10 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS  AT 320.196 MILLION OZ

April 16/WITH SILVER UP 7 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

April 13/WITH SILVER UP 17 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ.

April 12/WITH SILVER DOWN 27 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

April 11/2018/WITH SILVER UP 16 CENTS:  NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

APRIL 10/WITH GOLD UP 8 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 320.196 MILLION OZ/

APRIL 9/WITH SILVER UP 12 CENTS/WE HAD NO CHANGES IN SILVER INVENTORY/INVENTORY RESTS AT 320.196 MILLION OZ/

APRIL 6/WITH SILVER UP 4 CENTS, WE HAD A HUGE DEPOSIT OF 1.319 MILLION OZ INTO THE SLV INVENTORY/INVENTORY RESTS AT 320.196 MILLION OZ

APRIL 5/WITH SILVER UP 6 CENTS/NO CHANGES IN INVENTORY AT THE SLV/INVENTORY RESTS AT 318.877 MILLION OZ/

April 4/WITH SILVER DOWN 11 CENTS/A SMALL CHANGE IN SILVER INVENTORY AT THE SLV/ A WITHRAWAL OF 135,000 OZ AND THIS IS PROBABLY TO PAY FOR FEES/INVENTORY RESTS AT 318.877 MILLION OZ/

APRIL 3./WITH SILVER DOWN 16 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ/

APRIL 2/WITH SILVER UP 34 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.012 MILLION OZ/

MARCH 29/WITH SILVER UP 6 CENTS, THE CROOKS DECIDED THAT THEY HAD BETTER ADD SOME 943,000 PAPER OZ TO THEIR INVENTORY/INVENTORY RESTS AT 319.012 MILLION OZ

March 28/WITH SILVER DOWN 27 CENTS/AGAIN NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 318.069 MILLION OZ

APRIL 30/2018:  NO  CHANGES IN SILVER INVENTORY:  

Inventory 316.899 million oz

end

6 Month MM GOFO 1.99/ and libor 6 month duration 2.52

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

G0FO+ 1.99%

libor 2.52 FOR 6 MONTHS/

GOLD LENDING RATE: .53%

XXXXXXXX

12 Month MM GOFO
+ 2.78%

LIBOR FOR 12 MONTH DURATION: 2.49

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.29

end

Major gold/silver trading /commentaries for MONDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

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

Paris to decide fate of huge gold mine in forests of French Guiana

 Section: 

By Chloe Farand
The Guardian, London
Friday, April 27, 2018

Through the window of the small propeller plane leaving the capital, Cayenne, the jungle’s canopy stretches out as far as the eye can see.

More than 90% covered by luxuriant rainforest, French Guiana has little in common with mainland France bar the name

Yet this corner of the Amazon forest is awaiting a decision by Emmanuel Macron’s government over the development of a controversial open-pit gold mine that would be the country’s largest.

Wedged between Brazil and Suriname and about the size of Portugal, French Guiana is one of France’s lesser-known overseas departments.

Its dense primary forest boasts unique biodiversity and remains mysteriously wild, with most of the population concentrated along the coast.

The territory has attracted shallow artisanal mining of its gold-rich soil for more than 150 years. Now, multinational companies are eyeing up deeper, untouched gold reserves. …

… For the remainder of the report:

https://www.theguardian.com/environment/2018/apr/27/paris-to-decide-fate…

_end_______________

St Louis Fed has got it right:  bitcoin is like regular currency because it too has no instrinsic value

(courtesy Morris/Fortune Magazine)

St. Louis Fed says bitcoin is ‘like regular currency’

 Section: 

By David Z. Morris
Fortune magazine, New York
Saturday, April 28, 2018

http://fortune.com/2018/04/28/st-louis-federal-reserve-says-bitcoin-is-l…

The Federal Reserve Bank of St. Louis has provided some high-profile validation for a core premise of Bitcoin and other cryptocurrency. A blog post this week based on an earlier Fed research paper said that “bitcoin units have no intrinsic value” — but added that currencies “such as the U.S. dollar, the euro, and the Swiss france … have no intrinsic value either.”

he post, titled “Three Ways Bitcoin is Like Regular Currency,” doesn’t precisely endorse Bitcoin or cryptocurrency. In another recent report, the St. Louis Fed was critical of Bitcoin’s inefficiency. Cryptocurrency has also become rife with scams since its surge in value last year, and may constitute a global risk because it enables clandestine money laundering, capital flight, and tax evasion.

But the St. Louis Fed has provided a credible rebuttal to one of the most widespread and misguided criticisms of cryptocurrency: That, because it isn’t tied to a particular real-world commodity, it should have a monetary value of zero. As Fed researchers point out, since decoupling from the gold standard in the early 1970s, almost all global reserve currencies rely on nothing but trust to function as a media of value exchange.

In the case of the dollar, that’s mostly trust in the U.S. government and economy. For Bitcoin and other cryptocurrencies, it’s trust in computer code and, at least to some extent, developers.

Surprisingly, the Fed’s new statement also echoes one of the predominant arguments that cryptocurrency fans use to disparage government-backed currency — though in a rather roundabout way. The post argues in part that “there’s a limited supply” of both cash and Bitcoin. The libertarian boosters at the heart of the crytpocurrency movement have often argued that Bitcoin is better than government currency because central banks can devalue national currencies through inflation, while Bitcoin has a strictly fixed supply. Though the Fed’s post points out that it doesn’t actually print cash — in the sense of physical notes — it acknowledges its ability to expand the money supply.

end

Gono, Zimbabwe’s former central bankers states that he printed massive amounts of money to prevent a coup

(courtesy Bulawayo,Zimbabwe)

Zimbabwe’s former central banker says he printed money to prevent coup

 Section: 

From Bulawayo 24 News
Bulawayo, Zimbabwe
Sunday, April 29, 2018

Former Reserve Bank of Zimbabwe Governor Gideon Gono says he was forced to print money even when he knew it would cause hyperinflation because the government was desperate to forestall a coup by hungry soldiers.

Gono, who retired in 2013, told the Mashonaland West Business Conference in Chinhoyi last week that cash was used to pacify the troops.

“If we had not done what we did printing money and allowing inflation to skyrocket, then the men and women you see in those beautiful uniforms, they were ready to get out of their barracks,” he said.

“Operation Restore Legacy would have happened much earlier, but not one that we would have been commanding ourselves.” …

… For the remainder of the report:

https://bulawayo24.com/index-id-news-sc-national-byo-134280.html

end

___________________________________________________________________

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 6.3330  /shanghai bourse CLOSED UP 7.20 POINTS OR 0.23%   / HANG SANG CLOSED UP 527.78 POINTS OR 1.74%
2. Nikkei closed UP 148.26 POINTS OR 0.66%/  /USA: YEN RISES TO 109.26/  

3. Europe stocks OPENED GREEN     /USA dollar index RISES TO 91.78/Euro FALLS TO 1.20977

3b Japan 10 year bond yield: FALLS TO . +.06/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.26/ 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:: 67.31  and Brent: 73.03

3f Gold DOWN/Yen DOWN

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.58%/Italian 10 yr bond yield UP to 1.76% /SPAIN 10 YR BOND YIELD UP TO 1.28%

3j Greek 10 year bond yield FALLS TO : 3.84?????????????????

3k Gold at $1314.00 silver at:16.36     7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 69/100 in roubles/dollar) 62.78

3m oil into the 67 dollar handle for WTI and 74 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 109.26 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 0.9892 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1968 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 +0.58%

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 2.96% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.13%

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

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

Global Stocks Jump As Mega Merger Monday Closes April With A Bang

The ongoing surge in the dollar and the 10-Year Treasury’s daily battle with the 3.00% rate (which has proven to be a solid resistance level) have been pushed back to the backburner, as Merger Monday comes back with a bang following a trio of blockbuster deals announced over the weekend including:

While superficially, the renewed flood of deals suggests there is a storm brewing for corporate margins and that most/all of these deals will be drastically transformed by the time regulators are done with them (and some may be outright blocked), the deal euphoria has boosted US futures and stocks in both Europe and Asia higher ahead of what is shaping up to be a very busy week, one where the Fed may even surprise with an unexpected rate hike (odds of a May hike right now are a non-trivial 34.5%).

In the US, futures for the S&P 500, Dow Jones and Nasdaq all pointed to a higher open.

“A whole host of anxieties and disquieting news has appeared since the start of the year and has ranged from trade wars to a nuclear threat from N. Korea,” Jefferies equity strategists write in note. “In reality, it is the starting point of financial conditions which matter most for equity markets and these are principally determined by the dollar, long rates and credit markets. Two out of three are changing.”

Burst of M&A aside, it has been a quiet session, with China and Japan out on holiday until Wednesday, and mainland Europe on holiday tomorrow.

Despite the subdued volumes, in Europe the month is coming to an end on a positive note, with Euro Stoxx 50 up 0.2%. Things have improved for European equities with the Stoxx 600 outperforming the S&P 500 in April and now back above its 200-DMA, thanks in part to the euro, now trading back under $1.2100.

In the UK, shares in the FTSE 100 Index climbed to the highest in almost three months, with retailer J Sainsbury Plc jumping the most on record as it plans to buy Walmart Inc.’s U.K. arm, Asda. Rivals Tesco Plc and Marks & Spencer Group Plc slipped. Helping UK stocks was the latest drop in the pound which tumbled for a fourth day after Amber Rudd quit as U.K. home secretary, and Housing Secretary Sajid Javid was named her replacement.

in Asia, China’s H-shares and the Hang Seng index set the pace for stock gains after China’s PMI beat estimates for both manufacturing and services.

  • Chinese Manufacturing PMI (Apr) 51.4 vs. Exp. 51.3 (Prev. 51.5). (Newswires)
  • Chinese Non-Manufacturing PMI (Apr) 54.8 vs. Exp. 54.5 (Prev. 54.6)
  • Chinese Composite PMI (Apr) 54.1 (Prev. 54.0)

And while China and Japan markets were shut for local holidays, the MSCI Asia Pacific rose 0.6%; with Korean assets still enjoying a boost from last Friday’s historic North-South summit with Kospi index up 0.7% and USD/KRW down 0.9%.

In macro, After unexpectedly sliding on Friday despite the strong Q1 US GDP beat, this morning, the dollar jumped after London open, supported by higher U.S. yields amid lower-than-average flows as Japan and China were shut for holidays. With the BBDXY trading at session highs, the DXY is again back within range of 200-DMA. As noted above, the pound dropped a fourth day on renewed turbulence in the U.K. government, while the euro came under pressure following unexpectedly weak regional inflation readings out of Germany.  The won rallied on optimism over peace at the Korean peninsula and European equities followed Asia peers higher.  Commodity currencies weaker as crude and gold weaken through European open, with the Aussie worst performer among G-10 down 0.2%.

After last week’s fireworks, Treasury futures were little changed, and along with bunds traded in a very tight range, as curves slightly steepened; Italian BTPs underperform as latest indications on government negotiations point towards new elections. Australia 10-year yield falls to 2.78%.

In commodities, WTI crude slipped approaching month end, amidst multiple bearish factors: firstly, month end rebalancing, in thinner trading conditions due to Chinese and Japanese market holidays, a rise in US rig counts pointing to increased production and a firmer USD placing downward pressure ahead of key US data points such as the core PCE price index ahead of the upcoming Fed meeting. The data in particular focus as some analysts are suggesting that should the YY rate post 2.0% (vs. prev. 1.9%) we will be at the Fed’s stated inflation target, signalling a higher possibility for hawkish tones. In addition, technical impulses weighing, with USD 67.80 and USD 67.56 support levels tripped in WTI. Note June Brent futures expire later today. In the metals complex, gold sliding as the risk sentiment continues to improve following reduced Korean tensions, and thereby reducing safe haven demand flows. However, Copper bid following a strong Chinese PMI’s.

Bulletin headline summary from RanSquawk

  • M&A action in focus as Sainsbury’s surges up 20% on Asda merger news
  • Markets largely tepid in anticipation of US core PCE price index
  • Looking ahead, highlights include, German national CPI, US PCE Price Index and Personal Consumption

Top Headlines from Bloomberg

  • In M&A news, T-Mobile US Inc. agreed to acquire Sprint Corp. for $26.5 billion in stock, while Marathon Petroleum Corp. confirmed that it plans to buy rival oil refiner Andeavor in a deal that could create the largest fuel maker in the U.S.; U.K.’s J Sainsbury Plc said it plans to buy Walmart Inc.’s Asda unit in a 7.3 billion-pound ($10 billion) deal
  • U.K. PM Theresa May has lost a pro-Europe ally with the resignation of Home Secretary Amber Rudd, the fourth Cabinet member to quit in six months over a scandal, just as internal battles over Brexit come to a head; May named self-described euroskeptic Housing Secretary Sajid Javid to replace Rudd
  • Kim Jong Un is turning on the charm ahead of his summit with Donald Trump, adding pressure on the U.S. President to ease sanctions against North Korea even before it’s made any significant concessions
  • The 34-year-old dictator plans to invite foreign journalists to witness the shutdown of North Korea’s main nuclear weapons test site in May, South Korean President Moon Jae-in’s spokesman told reporters on Sunday
  • Crisis engulfing Australian wealth manager AMP deepened, with Catherine Brenner resigning as chairman after the company admitted misleading the regulator
  • China April manufacturing PMI at 51.4; est. 51.3
  • S. Korea March industrial output falls 4.3% y/y; est. -1.6%
  • Trump administration plans to extend relief from steel and aluminum tariffs to some countries, but not all, when their temporary exemptions expire on Tuesday, Commerce Secretary Wilbur Ross said

Market Snapshot

  • S&P 500 futures up 0.2% to 2,677.75
  • STOXX Europe 600 up 0.04% to 384.79
  • MXAP up 0.6% to 174.25
  • MXAPJ up 1% to 569.06
  • Nikkei up 0.7% to 22,467.87
  • Topix up 0.3% to 1,777.23
  • Hang Seng Index up 1.7% to 30,808.45
  • Shanghai Composite up 0.2% to 3,082.23
  • Sensex up 0.6% to 35,165.48
  • Australia S&P/ASX 200 up 0.5% to 5,982.73
  • Kospi up 0.9% to 2,515.38
  • German 10Y yield rose 0.6 bps to 0.577%
  • Euro down 0.2% to $1.2111
  • Brent Futures down 1.1% to $73.80/bbl
  • Italian 10Y yield fell 0.6 bps to 1.487%
  • Spanish 10Y yield unchanged at 1.263%
  • Brent Futures down 1.1% to $73.80/bbl
  • Gold spot down 0.5% to $1,317.57
  • U.S. Dollar Index up 0.1% to 91.67

Asian equity markets were positive but with gains mostly modest amid a holiday-quietened start for the region and ahead of the key risk events this week including the FOMC meeting and US NFP jobs data. ASX 200 (+0.5%) and KOSPI (+0.7%) were higher although weakness across Australia’s commodity sectors restricted upside, while South Korea continued to benefit from improving ties following Friday’s summit and after North Korea vowed to close its nuclear test site. Hang Seng (+1.7%) was the outperformer of the region with the index propped up by China’s largest banks following improved earnings reports and with sentiment also underpinned by better than expected Chinese Manufacturing and Non-Manufacturing PMI data. As a reminder, both Japan and mainland China were closed for holidays with Japan to only open Tuesday and Wednesday amid Golden Week, while China is shut today and tomorrow due to Labour Day. China is said to be planning trade offers for the US delegation including US Treasury Secretary Mnuchin when they visit this week. Reports stated that Beijing is likely to offer to import more goods from US to reduce and offer to negotiate a free trade agreement as well as other measures.

Top Asian News

  • Banks and Hedge Funds Drawn Into Noble Group’s Legal Fights
  • Noble Group’s Financial Position Is ‘Critical,’ Chairman Says
  • Indonesia, India May Hasten Rate Hikes to Stabilize FX, DBS Says
  • Philippine Treasury Working on a Bond Deal Amid Failed Auctions

European bourses opened mixed, but since then traded in positive territory (Eurostoxx 50 +0.2%) with modest gains as the region follows suit from Asia overnight. Looking at the sectors, Telecoms are outperforming following the merger of Deutsche Telekom’s (+1.3%) T-Mobile and Softbank’s Sprint; Vodafone (+1.6%) and Orange (+0.4%) higher in sympathy. Energy is the worst performing sector with names subdued amid declining oil prices, BP (-0.8%), Shell (-0.7%) and Total (-0.8%) shares are lower as a result. In terms of stock specifics; Sainsbury’s (+15.0%) shares soared on a merger with Walmart’s ASDA touted at around GBP 12bln. Shares in competitors are lower on this news, with Tesco (-1.2%) at the foot of the FTSE 100.

Top European News

  • Elliott, Telecom Italia Board Nominees Fully Support CEO Genish
  • U.K. Gender Pay Gap Wider Than in Most of Europe, Study Says
  • Pound Extends Drop as May Troubles Persist Amid Dollar Demand
  • Dixons Carphone Drops on Sainsbury Plan to Put Argos Into Asda

In FX, the Dollar is firmer vs all G10 peers approaching the end of April and a positive 1st month of Q2, with the index forming a solid base above 91.500. Rebalancing models are somewhat mixed, but indicating moderate Usd demand overall, while some are also positioning for a potential positive inflation assessment from this week’s FOMC and already looking ahead to Friday’s NFP. AUD/NZD: The weakest G10 links and still looking prone to further downside if 0.7550 and 0.7050 fail to hold amidst declines in commodity prices and holiday-thinned trade with China and Japan closed. Little support gleaned from better than expected Chinese PMIs, as the cross pivots 1.0700 ahead of the RBA meeting overnight that is not seen deviating from the neutral stance. GBP: Sterling remains under pressure and on course to end a 13 year sequence of gains vs the Usd in the month of April after a dramatic change in fortunes in the last 2 weeks. A run of disappointing data has seen May BoE hike prospects plunge from 90%+ to around 20% or just under, and PMIs in the next 3 days could wipe out tightening expectations altogether if weak. Adding further to the Pound’s woes, another top Government resignation, ongoing doubts about a Brexit deal and a marked reduction in CFTC long positions alongside RHS interest in Eur/Gbp for month end (cross above 0.8800 as a result).

In commodities, oil is falling approaching month end, amidst multiple bearish factors. Firstly, month end rebalancing, in thinner trading conditions due to Chinese and Japanese market holidays, a rise in US rig counts pointing to increased production and a firmer USD placing downward pressure ahead of key US data points such as the core PCE price index ahead of the upcoming Fed meeting. The data in particular focus as some analysts are suggesting that should the YY rate post 2.0% (vs. prev. 1.9%) we will be at the Fed’s stated inflation target, signalling a higher possibility for hawkish tones. In addition, technical impulses weighing, with USD 67.80 and USD 67.56 support levels tripped in WTI. Note June Brent futures expire later today. In the metals complex, gold sliding as the risk sentiment continues to improve following reduced Korean tensions,  and thereby reducing safe haven demand flows. However, Copper bid following a strong Chinese PMI’s.

On today’s calendar, inflation data should be the overwhelming focus for markets today with preliminary April CPI reports due in Germany and Italy, and the March PCE core and deflator readings along with personal income and spending due in the US. Other data worth highlighting is the official April PMIs in China along with the April Chicago  PMI, March pending home sales and April Dallas Fed PMI in the US. Earnings highlights on include McDonalds and Allergan

US Event Calendar

  • 8:30am: Personal Income, est. 0.4%, prior 0.4%; Personal Spending, est. 0.4%, prior 0.2%
  • 8:30am: PCE Deflator MoM, est. 0.0%, prior 0.2%; PCE Deflator YoY, est. 2.0%, prior 1.8%
  • 8:30am: PCE Core MoM, est. 0.2%, prior 0.2%; PCE Core YoY, est. 1.9%, prior 1.6%
  • 9:45am: Chicago Purchasing Manager, est. 58, prior 57.4
  • 10am: Pending Home Sales MoM, est. 0.5%, prior 3.1%; Pending Home Sales NSA YoY, prior -4.4%
  • 10:30am: Dallas Fed Manf. Activity, est. 25, prior 21.4

DB’s Jim Reid concludes the overnight wrap

Apple’s results on Tuesday may have some implications for the wider market and could go either way with investors worried about sales but with a possible mega payout as compensation. Definitely one to watch. In fact it’s a busy week of US data/events with plenty to keep US yields in the spotlight after a notable sell-off in the first half of the week followed by a notable rally over the last couple of days (US 10yr -2.4bp Friday to 2.958%, -7.5bps from intra week highs on Wednesday).

The highlights are a Fed meeting (Wednesday end), US Treasury quarterly refunding plan announcement (Wednesday), PCE inflation data (today) and the April employment report (Friday). Inflation data in Europe (Thursday) is also due out along with a first look at Q1 GDP (Wednesday), while the final PMI revisions are also due. Earnings will also continue with 147 S&P 500 companies reporting and 55 Stoxx 600 companies. In the US, 268 companies in the S&P 500 have reported their 1Q results so far (54% of market cap). DB’s Binky Chadha and team noted that 78% of the companies have beat on EPS, which is the highest ratio since 2010, while the aggregate earnings beat (8.9%) is also more than double the historical average. Further, growth appears to be broad based  with all sectors on track to post double digit EPS growth, led by Energy (91%), Technology (34%) and the Financials (28%). In aggregate, corporate earnings are on track to be up at least 24% yoy in the quarter.

Back to this week, in terms of the Fed on Wednesday, the consensus is for no change in policy which is a view also shared by the market with futures pricing implying odds of just 5% for a hike. There is no press conference so it’s the statement that will be of note. DB think there might be a tweak to the inflation language acknowledging the move towards 2% on YoY inflation rather than “have continued to run below 2 percent”. Outside of this the most important data come at the far end of the week. Today we’ll see the March PCE data with the consensus at a +0.2% mom core reading. Base effects (the well flagged wireless price rolloff) should help push the YoY core PCE reading to +1.9% (DB 1.9%) from +1.6%. For payrolls on Friday, the consensus expect a 195k nonfarm reading following the weather influenced 103k print in March. Average hourly earnings are also expected to have risen +0.2% mom and will be the centre point of the report (see details of strong ECI numbers from Friday below) while the unemployment rate is forecast to fall a tenth to 4.0% (it’s been remarkably steady at 4.1% for 6 months – DB think it breaks through 4% soon and continues lower this year and next). The other notable data worth noting in the US this week is the April ISM manufacturing print tomorrow which is expected to fall nearly a point to 58.5. Back to bonds and Wednesday’s US Treasury quarterly refunding plan will be closely watched with the expectation for another across the board boost to auction sizes in light of the tax cut announcement and increased spending.

In Europe GDP and CPI data will be the main focus. With regards to the former, on Wednesday we’ll get a first look at Q1 GDP for the Euro area with the consensus and DB currently expecting +0.4% qoq growth (averaged 0.7% qoq in 2017). For CPI, we’ll see the April report for the Euro area on Thursday with the consensus expecting a +0.9% yoy print for the core, having held at +1.0% yoy for the last 3 months. Also worth highlighting in Europe this week are the final revisions to the April PMIs including a first look at the data for the non-core and UK. Away from the data in Europe expect Brexit headlines to come back to the fore with EU and UK negotiators undergoing another round of talks from Wednesday. Staying in Europe, today’s latest CSPP will be a focus given the surprise sharp drop off in corporate purchases in April so far and Draghi’s refusal to acknowledge such a buying slowdown had begun in last week’s press conference. Something has to give here! For more on the week ahead, the full day-by-day guide is at the end today.

This morning in Asia, markets are trading higher with the Hang Seng (+1.50%), Kospi (+0.72%) and ASX200 (+0.54%) all up, while markets in China and Japan are closed for holidays. The Korean Won jumped c1% vs. the Greenback as tensions in the peninsula eased further this morning, in part as North Korea announced the symbolic step of shifting its time zone 30 minutes earlier to align with South Korea “as a first practical step for national reconciliation”. Datawise, China’s April manufacturing and non-manufacturing PMI were both slightly above consensus, at 51.4 (vs. 51.3 expected) and 54.8 (vs. 54.5 expected) respectively.

Now quickly recapping other markets performance from Friday. US bourses were little changed (S&P +0.11%, Nasdaq +0.02%; Dow -0.05%) as stronger results from tech companies were partly offset by weakness in energy stocks, such as Exxon Mobil, which dropped -3.8% post its result. In Europe, the Stoxx 600 edged up +0.23% and rose for the second consecutive day. Elsewhere, the US dollar index dipped -0.02% while Sterling dropped -0.99% following a softer than expected 1Q GDP print. Notably, the Bloomberg implied odds of a potential May rate hike in the UK fell 33ppt to c23% on Friday.

Moving onto some of the weekend headlines. On trade, the Commerce Secretary Ross noted that the US plans to extend the temporary exemption on steel tariffs to some countries post 1 May, but not all. On the other side, leaders from the UK, Germany and France have spoken via a joint conference call and a German spokesman noted afterwards that “they agreed that the US should take no measures against the EU or else the EU should be ready to defend its interests…” Back home in the UK, PM May’s ally Ms Amber Rudd has quit as the Home Secretary on Sunday, which could add to the recent Brexit uncertainties.

Over in Asia late on Friday afternoon, China’s PBoC issued the final version of the Guidelines on Asset Management Businesses, which aims to tackle risks arising from the shadow banking sector. Our Chinese economists believes the new regulations remove a good part of policy uncertainty in 2018, where a notable change is that the “transition period” of the new rules toward full compliance has been extended to end-2020 versus mid-2019 in the draft version. Overall, our team believes the downside risk of disorderly deleveraging has been mitigated, or at least delayed, by the new Guidelines and their GDP growth forecast remains unchanged (2018 of 6.6% – Link).

Before we take a look at today’s calendar, we wrap up with other data releases from Friday. In the US, the 1QGDP was firmer than expected (2.3% vs. 2.0% expected), in part as inventories made a 0.4ppt contribution to growth during the quarter. The employment cost index also beat at 0.8% qoq (vs. 0.7% expected) and lifted annual growth to 2.7% yoy. Notably, this is the fastest pace since 4Q 2008 and continues a steady uptrend over the past two years. Wage and salaries rose 0.9% qoq in 1Q and up 2.9% yoy. Elsewhere, the 1Q core PCE and personal consumption were both in line at 2.5% qoq and 1.1% respectively, with the former representing the biggest increase since 2011. Finally, the final reading of the University of Michigan consumer sentiment index was revised slightly upwards to 98.8 (vs. 98 expected).

In the UK, the 1Q GDP was below market at 0.1% qoq and 1.2% yoy (vs. 1.4% expected) and marked the lowest reading since the end of 2012 in the first quarter. Harsher weather and thereby a 3.3% qoq decline in construction activity were some of the key drags. Meanwhile the Nationwide house price index rose 2.6% yoy in March. Over in Germany, its April unemployment rate was in line at 5.3%. In France, 1Q GDP came in at 2.1% yoy (vs. 2.3% expected) as growth in household spending remained soft at 0.2% qoq and net exports made no contribution to growth this quarter. Elsewhere, France and Spain’s April CPI were both slightly below consensus, at 1.8% yoy (vs. 1.7% expected) and 1.1% yoy (vs. 1.2% expected) respectively. Finally, the Euro area’s April economic confidence (112.7 vs. 112 expected) were above market while the final reading of the April consumer confidence was confirmed at 0.4.

On today’s calendar, inflation data should be the overwhelming focus for markets today with preliminary April CPI reports due in Germany and Italy, and the March PCE core and deflator readings along with personal income and spending due in the US. Other data worth highlighting is the official April PMIs in China along with the April Chicago  PMI, March pending home sales and April Dallas Fed PMI in the US. Earnings highlights on include McDonalds and Allergan

3. ASIAN AFFAIRS

i)MONDAY MORNING/SUNDAY NIGHT: Shanghai closed UP 7.20 POINTS OR 0.23%  /Hang Sang CLOSED UP 527.78 POINTS OR 1.74%   / The Nikkei closed UP 148.26 POINTS OR 0.66%/Australia’s all ordinaires CLOSED UP .48%  /Chinese yuan (ONSHORE) closed DOWN at 6.3330/Oil DOWN to 67.31 dollars per barrel for WTI and 73.03 for Brent. Stocks in Europe OPENED DEEPLY IN THE GREEN.   ONSHORE YUAN CLOSED UP AT 6.3330 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3231/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH  STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/

3 a NORTH KOREA/USA

North Korea/South Korea

 

3 b JAPAN AFFAIRS

end

c) REPORT ON CHINA/HONG KONG

Good reason for the boys to whack gold/silver today: China refuses to talk on concessions with the two biggest trade demands of the USA

(courtesy zerohedge)

China Warns Ahead Of Trade-War Talks: “Don’t Expect A Comprehensive Deal Whatsoever”

It appears the US-China trade-war is nowhere near being over as NYTimes reports China will refuse to discuss President Trump’s two toughest trade demands when American negotiators arrive in Beijing this week.

Signalling ahead of the trade talks has been clear from Beijing. The New York Times reports that a half-dozen senior Chinese officials and two dozen influential advisers laid out the Chinese government’s position in detail during a three-day seminar that ended here late Monday morning. A handful of foreign writers were invited from around the world to make sure China’s stance would be known overseas. All of the officials and most of the advisers at the seminar insisted on anonymity because of diplomatic sensitivities.

The reason is simple: Beijing feels its economy has become big enough and resilient enough to stand up to the United States.

It is not clear what will happen when the two sides sit down this week or whether either will find a reason to waver. Still, as NYT points outthe Chinese and American positions are so far apart that China’s leaders are skeptical a deal will be possible at the end of this week. They are already raising the possibility that Chinese officials may fly to Washington a month from now for further talks.

“I don’t expect a comprehensive deal whatsoever,” said Ruan Zongze, the executive vice president of the China Institute of International Studies, which is the policy research arm of China’s Foreign Ministry. “I think there is a lot of game playing here.”

In some respects, the hard stance struck by Chinese officials reflects a hardening of public attitudes in China, as the Trump administration’s actions have sparked increased nationalism among the Chinese…

The ZTE case “has changed a lot of Chinese people’s opinion,” said Mr. Ruan, of the China Institute of International Studies. “In the past, people saw us as interdependent.”

The bottom line, as NYT notes, is that this position potentially forces Washington to escalate the dispute or back down… and given Trump’s history, the latter seems unlikely for now.

4. EUROPEAN AFFAIRS

Europe

Tough words from Europe has they state that they will not talk with a gun pointed to their heads.  They are now expecting a huge trade war with the USA

(courtesy zerohedge)

8. EMERGING MARKET

Venezuela

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

Euro/USA 1.20977 DOWN .0030/ 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 DEEPLY IN THE GREEN    

USA/JAPAN YEN 109.26 UP  0.0250 (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/

GBP/USA 1.3728 DOWN .0043  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.2856 UP .0036 (CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS MONDAY morning in Europe, the Euro FELL by 18 basis points, trading now ABOVE the important 1.08 level FALLING to 1.20892; / Last night Shanghai composite CLOSED  up 7.20 points or .23%/   Hang Sang CLOSED UP 527.75 POINTS OR 1.74% /AUSTRALIA CLOSED UP .48% / EUROPEAN BOURSES  OPENED GREEN

The NIKKEI: this MONDAY morning CLOSED UP 148.26 POINTS OR 0.66%

Trading from Europe and Asia

1/EUROPE OPENED  DEEPLY IN THE GREEN

2/ CHINESE BOURSES / : Hang Sang CLOSED UP 572.78 POINTS OR 1.74 %  / SHANGHAI CLOSED UP 7.20 POINTS OR 0.23%   /

Australia BOURSE CLOSED UP .48%

Nikkei (Japan) CLOSED UP 148.76 POINTS OR 0.66%

INDIA’S SENSEX  IN THE GREEN 

Gold very early morning trading: 1316.60

silver:$16.37

Early MONDAY morning USA 10 year bond yield: 2.96% !!! 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)/ 

The 30 yr bond yield 3.13 DOWN 2  IN BASIS POINTS from FRIDAY night. (POLICY FED ERROR)/

USA dollar index early  MONDAY morning: 91.77 UP 24  CENT(S) from FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 1.676% UP 2  in basis point(s) yield from FRIDAY/

JAPANESE BOND YIELD: +.0.055%  DOWN 0   in basis points yield from FRIDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.280% UP 2  IN basis point yield from FRIDAY/

ITALIAN 10 YR BOND YIELD: 1.785  UP 4  POINTS in basis point yield from FRIDAY/

the Italian 10 yr bond yield is trading 51 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD:FALLS TO +.559%   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 1.2079 DOWN .0048 (Euro DOWN 48 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 109.21 DOWN 0.196 Yen DOWN 20 basis points/

Great Britain/USA 1.3752 DOWN .019( POUND DOWN 19 BASIS POINTS)

USA/Canada 1.2808 DOWN  .0036 Canadian dollar UP 36 Basis points AS OIL ROSE TO $67.98

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This afternoon, the Euro was DOWN 48 to trade at 1.2079

The Yen FELL to 109.21 for a GAIN of 20 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 FELL BY 19 basis points, trading at 1.3752/

The Canadian dollar ROSE by 36 basis points to 1.2808/ WITH WTI OIL RISING TO : $68.25

The USA/Yuan closed AT 6.3300
the 10 yr Japanese bond yield closed at +.055%  DOWN 10   IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1   IN basis points from FRIDAY at 2.940% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.099  DOWN 8     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, 91.86  UP 31 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 7.09 POINTS OR 0.09%
German Dax :CLOSED UP 31.24 POINTS OR 0.25%
Paris Cac CLOSED UP 37.21  POINTS OR 0.68%
Spain IBEX CLOSED UP 55.20 POINTS OR 0.56%

Italian MIB: CLOSED DOWN 51.76 POINTS OR 0.22%

The Dow closed DOWN 118.10 POINTS OR 0.49%

NASDAQ closed DOWN 53.53  Points OR 0.75%      4.00 PM EST

WTI Oil price; 68.25 1:00 pm;

Brent Oil: 74.50 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 63.01 DOWN 81/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 81 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.559% 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:$68.45

BRENT: $74.55

USA 10 YR BOND YIELD: 2.95%   THIS RAPID RISE IN YIELD IS ALSO VERY DANGEROUS/RECESSION COMING/DERIVATIVES FRY!!

USA 30 YR BOND YIELD: 3.12%/DEADLY

EURO/USA DOLLAR CROSS: 1.2079 DOWN .0048  (DOWN 48 BASIS POINTS)

USA/JAPANESE YEN:109.31 UP 0.300/ YEN DOWN 30 BASIS POINTS/ .

USA DOLLAR INDEX: 91.81 UP 28 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.3765: DOWN 0.0006  (FROM FRIDAY NIGHT DOWN 6 POINTS)

Canadian dollar: 1.2833 DOWN 11 BASIS pts

German 10 yr bond yield at 5 pm: +0.559%


VOLATILITY INDEX:  15.93  CLOSED  UP 0.52  

LIBOR 3 MONTH DURATION: 2.3581%  .

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

TRADING IN GRAPH FORM FOR THE DAY

Crypto, Crude, & Credit Soar In April Amid Dollar, Bond Yield Explosion

For many investors in April…

Earnings up, stocks down…

Stocks managed to cling to gains in April for the first time since January…

And while Stocks ended almost unchanged, VIX tumbled in April – erasing all of February’s spike…

With VIX seeing its biggest monthly decline since July 2016… (NOTE – the seasonality in VIX in April/May in the last few years)…

Large speculators have cut their bets for turbulence in the stock market, as Bloomberg notes that After hitting a record earlier in April, the number of net-long positions on VIX futures plunged by more than 46,000 contracts, one of the fastest paces ever,

And finally on VIX, it appears the 15 level – seen as the ceiling for the vol index last year – is now the floor…

As Bloomberg reports, it doesn’t necessarily tells us where we go from here, but it shows that when the trading regime shifts, it tends to be swift and lasting. For what it is worth, the VIX averaged about 13 during the second half of the Fed’s tightening during the 2004-2006 cycle. So vol may have some room to decline, but not that much.

HY Credit spreads plunged in April (along with VIX) – the biggest monthly spread compression since Feb 2017…

Treasury yields ended the month higher across the curve…

Just as we warned, CTAs tried – and failed – to break 3.00% for good on the 10Y Treasury yield in April…

(And 10Y is now back the same level as the highs on fed rate hike day and 30Y Yield is 2bps below pre-rate-hike levels)

Despite the greatest short bond position in history…

And while yields were higher on the month, the yield continued its collapse – down 8 of the last 9 months, and 14 of the last 17 months… to the flattest since Oct 2007

The Dollar Index soared in April – its biggest monthly rise since Trump’s election in Nov 2016…

What is perhaps most notable in April is the surge in the USD and bond yields coincided with HKMA’s needing to intervene in the FX markets to sustain its peg band to the USD…

Cryptos had a yuuge April with Bitcoin up over 35% -the best month since 2017…but Bitcoin Cash was the big winner – up 100% in April…

Despite the huge gains in the dollar, April saw commodities generally unmoved (except Oil)…

WTI Crude was up for the 8th month in the last 10 in April to its highest monthly close since Nov 2014…

Silver notably outperformed gold mid-month but the last week or so has seen that unwound…

Finally, April saw a total collapse in ‘soft’ survey macro data – the biggest monthly drop since Feb 2015…

*  *  *

On the day, it was quite a frenetic day session as stocks opened higher, exuberant on earnings then gave it all back as Bibi broke the dead-cat-bounce’s back… Futures show the overnight exuberance faded at the open despite good earnings as hawkish comments from Bibi sent stocks reeling…

Cash markets ended the day “not off the lows”…

The Sprint, T-Mobile deal sparked some chaos…

Bank stocks gave up early gains…

Treasury yields were all lower on the day… (Japan was closed)

And the yield curve kept flattening…

The Dollar rebounded from Friday’s losses today but was unable to reach Friday’s highs…

Cryptos are up from Friday’s close…

Commodities were weaker on the dollar gains but crude managed to jump on Bibi statements…

WTI spiked today after Israeli Prime Minister Benjamin Netanyahu said Iran is lying about its nuclear weapons. But note that $69 was once again a resistance level…

-END-
Today’s trading/market mover
Everything turned red ahead of BIbi speech:
(courtesy zerohedge)

“Everything’s Red” – Stocks Slammed Ahead Of Bibi Speech

10Y Yields are back at 10-day lows and once again…

And the earnings-based, hope-strewn opening gap up in stocks has been erased once again…

zerohedge@zerohedge

S&P slides into the red after Gartman turns bullish https://www.zerohedge.com/news/2018-04-30/we-erred-bearishly-equities-gartman-turns-bullish 

“We Erred Bearishly Of Equities”: Gartman Turns Bullish

“Having erred bearishly of equities for most of this year that has been the proper course of action; but we shall change that this morning from “has been” to “was,” for it is now proper to err…

zerohedge.com

This latest leg down appears to have been triggered as Israeli PM Netanyahu prepares to speak shortly on Iran.

Perhaps of most note is that 30Y Yields are now lower since The Fed hiked rates despite 2Y remaining notably higher…

end

end
With war looming, as Bibi announces that Iran has a secret weapon plan in place  (Project Amad) we are surprised out of our wits that gold instead of falling by 3 or 4 dollars on the news it actually rose by one dollar
boy are crooks are good..must keep options from expiring in the money at the LBMA
(courtesy zerohedge)

WTI Soars Above $69, Gold Jumps After Bibi Alleges “Secret Iran Nuclear Weapon Plan”

Today’s morning data:
Soft data, National Chicago PMI registers its first year over year drop in over a year, as were are witnessing continual lower economic activity.
(courtesy zerohedge)

Soft’ Data Continues Collapse: Chicago PMI First YoY Drop in 15 Months

After a 3-month collapse, Chicago PMI rose very modestly in April to 57.6 (from 57.4 in March) but missed expectations (58.0).

However, year-over-year, Chicago PMI fell 1.1 points – the first decline since Jan 2017.

While the headline index managed a very small gain (only 3 subcomponents rose from last month):

  • Prices paid rose at a faster pace, signaling expansion
  • New orders rose at a slower pace, signaling expansion
  • Employment rose at a slower pace, signaling expansion
  • Inventories rose at a slower pace, signaling expansion
  • Supplier deliveries rose at a faster pace, signaling expansion
  • Production rose at a faster pace, signaling expansion

But:

  • Order backlogs fell and the direction reversed, signaling contraction

Did the trend just change?

It appears the trend of ‘soft’ survey weakness did not…

Trump ‘Hope’ is almost gone.

end

Another set of hard data suggests the economy is in decline:  this time pending home sales decline for the 4th consecutive month

(courtesy zerohedge)

Pending Home Sales Decline For 4th Straight Month, Weather Blamed

Pending Home Sales rose just 0.4% MoM (missing expectations of 0.7% MoM) and saw prior months revised notably lower(Feb down from +3.1% to +2.8%).

Weather remains the ‘go to’ blame factor from realtors as the regional differences suggest…

  • Northeast fell 5.6%; Feb. rose 10.3%
  • Midwest up 2.4%; Feb. rose 0.7%
  • South up 2.5%; Feb. rose 2.9%
  • West fell 1.1%; Feb. fell 0.7%

Unadjusted pending home sales dropped 4.4% YoY (the 4th straight month of declines – the longest streak since 2014)…

“Healthy economic conditions are creating considerable demand for purchasing a home, but not all buyers are able to sign contracts because of the lack of choices in inventory,” Lawrence Yun, NAR’s chief economist, said in a statement.

“Prospective buyers are increasingly having difficulty finding an affordable home to buy.”

“It is an absolute necessity for there to be a large increase in new and existing homes available for sale in coming months to moderate home price growth,” he said.

“Otherwise, sales will remain stuck in this holding pattern and a growing share of would-be buyers — especially first-time buyers — will be left on the sidelines.”

Purchases dropped 5.6 percent in the Northeast, reflecting multiple winter storms…

“As anticipated, the multiple winter storms and unseasonably cold weather contributed to the decrease in contract signings in the Northeast.”

As a reminder, economists consider pending sales a leading indicator because they track contract signings.

 end
Looks like Illinois will finally get its downgrade to junk status.
(courtesy Dabrowki/Klinger/Wirepoints)

One Year Later: Illinois On The Verge Of Downgrade To Junk; Its Residents $5 Billion Poorer

Submitted by Ted Dabrowki and John Klingner of Wirepoints

Illinois’ brutal political campaigns may have distracted attention from the reality of the state’s crumbling finances, but an upcoming $500 million bond borrowing by the state will remind investors and Illinoisans alike how little has improved.

Both Moody’s and S&P recently affirmed Illinois’ one-notch-above-junk rating in preparation for the state’s upcoming bond, even as Moody’s continues to maintain a negative outlook on Illinois’ rating. That means a downgrade by the agency is more likely than an upgrade in the next year.

The reasons for the rating agencies’ pessimism are obvious. It’s not just what lawmakers have failed to do, it’s what lawmakers continue to do that’s dragging the state down.

The state continues to operate at a deficit despite nearly $5 billion in new taxes in 2018. And the shortfalls aren’t being compensated with spending reforms. Instead, the state continues to primarily use interfund sweeps to make the general budget balance. And the agencies don’t expect any big reforms this year – not with a stalemate that might ensue during this campaign season.

Bond investors are demanding a heavy price from Illinois for the increased risk they are being asked to take.

According to Municipal Market Data, Illinois will pay yearly interest rates that are 2.1 percentage points higherthan the states with the best credit ratings – states that include Indiana, Iowa and Missouri. By comparison, states like Connecticut and New Jersey, states with severe pension crises, only pay about 0.85 percentage points more than the best-rated states. Illinois and its taxpayers are being heavily penalized for the state’s fiscal and governance mess.

The impasse script

Fitch, which still has Illinois two notches above junk, has warned what it would take to issue another downgrade. It reads like a script right out of Illinois’ impasse playbook:

“The rating will be lowered if the state (1) returns to a pattern of deferring payments for near-term budget balancing and materially increases the accounts payable balance. Specific risks include spending (2) above the level assumed in the budget, a significantly (3) slower revenue growth environment, as well as the (4) re-emergence of a political stalemate that negatively affects fiscal operations.” (numbers in parentheses ours)

Illinoisans should have very little confidence that lawmakers will avoid the pitfalls mentioned above. Let’s take each of Fitch’s points one-by-one:

1. Deferred payments

Illinois politicians have been deferring payments for more than 15 years. The state hasn’t had a truly balanced budget since 2001 and every year since then, lawmakers have engaged in a series of accounting gimmicks to keep the state “balanced” under the constitution – usually by borrowing or pushing off payments into the next year.

That’s led to a steady growth in the state’s unpaid bills, which reached as high as $9 billion in 2013, three years before the recent budget impasse even began. At the impasse’s peak, unpaid bills hit a high of $16.7 billion.

Today, the backlog is back below $10 billion, but don’t let that number fool you. It’s only lower because the state borrowed $6 billion from the bond market to pay down some of the bills. In the end, the state increased its mortgage to pay down the credit card.

2. Spending above the budget

It’s hard for lawmakers to avoid “spending above the level assumed in the budget” when they’ve been doing it for years and they continue to do so.

Wirepoints previously wrote on Illinois lawmakers’ inability to keep spending under control. The FY 2018 budget was on track to spend $1.7 billion more than expected – even though lawmakers had $5 billion in new tax hike dollars to work with.

The state has found ways to whittle that shortfall down via some fundsweeps and higher tax revenue growth, but a shortfall continues to exist. “Total Fiscal Year 2018 General funds expenditures are estimated to exceed Fiscal Year 2018 General funds base revenues by approximately 590 million,” according to the state’s official bond offering.

And that $5 billion won’t mean 2019’s budget is balanced either – it could be up to $3 billion out of balance. In fact, the latest predictions of the governor’s budget office have Illinois in deficit spending for the next 5 years.

3. Slower revenue growth environment

The only positive thing to say – and it’s not related to anything state lawmakers have done – is that thanks to national growth, the stock market and the reductions in regulations, Illinois tax revenues may do better than expected.

4. Re-emergence of a political stalemate

You’d think that none of the politicians in Springfield would want a repeat of the budget impasse. But the opposite is true. It’s an election year, so lawmakers are unlikely to reach deals that benefit the state or its residents. They’re more focused on scoring political points than on fixing anything. Neither Madigan nor Rauner will want to give the other a “success” for the campaign trail. And each side will blame the other as Illinois teeters on the brink.

So dysfunction will reign and a stopgap budget is likely, unless some Republicans break from Rauner like they did with the last budget. But everything’s up in the air. As state officials warn investors in the bond offering document, “There can be no assurance that a general funds budget will be enacted for fiscal 2019 or in future fiscal years.”

2019 is 2016 all over again

In 2017, Illinois politicians sold a record, permanent tax hike on its residents as the only way for the state to avoid ruin. Illinois was just one notch away from a junk rating and no state had ever received that designation.

One year later, with Illinoisans $5 billion poorer as a result of the tax hike, Illinois is still at the precipice.

The crisis is the fault of Illinois politicians. They’ve been given plenty of warning signals – 21 downgrades by the big three rating firms over the past decade – yet refuse to change the way they and the state operate.

“The state’s credit outlook is negative, based on our expectation of continued growth in the state’s unfunded pension liabilities, the state’s difficulties in implementing a balanced budget that will allow further reduction of its bill backlog, and elevated vulnerability to national economic downturns or other external factors,” the Moody’s report on the state’s bond offering said.

To reverse that trend, Illinois needs massive reforms that change from the way Illinois politicians do budgetsdole out retirementscontrol local governmentsmanage labor rules and handle education finance.

If there’s not a major reversal, prepare for a downgrade – and the plunge to junk.

end

Super commentary by David Stockman on the subject of Amazon…

(courtesy David Stockman/ContraCorner)

Amazon..

David Stockman: Jumping The Great White Shark Of Bubble Finance

Authored by David Stockman via Contra Corner blog,

Wall Street has now truly jumped the shark – the one jockeyed by Jeff Bezos.

Last night Amazon reported a whopping 41% plunge in free cash flow for the March 2018 LTM period compared to prior year. Yet it was promptly rewarded by a $50 billion surge in market cap—-with $10 billion of that going to the guy riding topside on the Great White Shark of Bubble Finance.

That’s right. Amazon’s relatively meager operating free cash flow for the March 2017 LTM period had printed at $9.0 billion, but in the most recent 12 months the number has slithered all the way down to just $5.3 billion.

And that’s where the real insanity begins. A year ago Amazon’s market cap towered at $425 billion—meaning that it was being valued at a downright frisky 47X free cash flow. But fast forward a year and we get $780 billion in the market cap column this morning and 146X for the free cash flow multiple.

Folks, a company selling distilled water from the Fountain of Youth can’t be worth 146X free cash flow, but don’t tell the giddy lunatics on Wall Street because they are apparently just getting started.

Already at the crack of dawn SunTrust was out with a $1900 price target—meaning an implied market cap of $970 billion and 180X on the free cash flow multiple.

At this point, of course, you could say who’s counting and be done with it. But actually it’s worse—-and for both Amazon and the US economy.

That’s because Amazon is both the leading edge of the most fantastic ever bubble on Wall Street and also a poster boy for the manner in which Bubble Finance is hammering growth, jobs, incomes and economic vitality on main street.

Moreover, soon enough a collapsing Wall Street bubble will bring the already deeply impaired main street economy to its knees. So Amazon is a double-destroyer.

In this context, Bezos e-Commerce juggernaut racked up $174 billion of sales during the March LTM period, which represented a massive $45 billion or 35% gain over prior year (both figures exclude AWS). By way of comparison, that one-year gain is nearly double Macy’s total annual sales!

Even when you adjust for the Whole Foods acquisition that was not in the 2017 LTM numbers, the sales gain was about $35 billion or 27%.

Either way, the robo-traders got damn excited, scooping up AMZN’s shares hand-over-fist on the back of its “great sales momentum”. But as we said yesterday, headline reading algos don’t get far below the surface, and in this case they didn’t even break the skin.

Fully 96% of Amazon’s $5.0 billion of  LTM operating income was accounted for by its cloud services business (AWS).

The e-Commerce juggernaut, by contrast, posted just $188 million of  LTM operating income, which am0unts to, well, 0.1% of sales on a computational basis. But we’d round that to zero—especially because Amazon’s e-Commerce business was already almost there in the year ago period when its margin on sales came in a tad higher at 0.6%!

Needless to say,  AWS  has nothing to do with e-Commerce, and, instead, is in the brute force, capital-intensive server farm business. As the leader of a rapidly growing pack of cloud farmers,  AWS racked up a 44% year-on-year sales gain.

Even then, the world can only migrate from desk tops and discrete devices to the cloud once—so there is no conceivable way that current growth rates can be sustained or should be capitalized in perpetuity.

Still, give AWS the benefit of the doubt and value it at Microsoft’s red hot multiple of 50X, which we don’t think makes much sense, either. After all, it’s a 42-year old company that has posted essentially zero earnings growth over the last 7 years and much volatility of results.

In any event, at Microsoft’s elevated multiple of the moment, the cloud business is worth $200 billion.That reflects 50X the $4 billion of LTM net income attributable to AWS, which happens to be 100% of AMZN’s net income because e-Commerce earned zero after attributable interest and taxes.

Needless to say, that means the loony bins down on Wall Street are valuing Bezos’ profit-free e-Commerce monster at $580 billion. And that goes right to our double-destroyer point.

Amazon is undoubtedly one of the craziest momo stocks of all-time—meaning that there is $300 billion or even more of bottled air lodged in the implied $580 billion value of e-Commerce. That’s because the vast bulk of Amazon is in the GDP business—-that is, the moving and storage and delivery of good and services.

These grow at 3-4% per year in today’s geriatric US economy, and therefore merit perhaps a 15X multiple of steady-state operating free cash flow. And that would be generous in a world with normalized cap rates, which sooner or later must come.

Accordingly, to be worth even $280 billion, e-Commerce would have to generate nearly $19 billion of free cash flow, and that would be no lay-up. There are not that many malls left in the US to destroy and AMZN’s attempt to go international has been a huge thumb-sucker.

To wit, North American e-Commerce sales ex-Whole Foods were $26.5 billion in the quarter just ended and represented a 26% gain from prior year. At the same time, the LTM operating loss for the international e-Commerce business has grown from $1.2 billion in the December 2016 LTM period to $2.6 billion in Q3 2017 and $3.2 billion for the LTM period just ended.

In other words, Amazon’s e-Commerce business is digging deeper and deeper into red ink abroad and growing steadily slower at home, where it does manage to eek out a marginal profit. So how does it ever generate the above postulated $19 billion of free cash flow?

Indeed, therein lies the skunk in the woodpile. Customers love Amazon precisely because it doesn’t generate any free cash flow at all and never could. The implicit business model is that Amazon returns to customers 100% of the prices they pay in the form of costs for logistics, storage, transportation, fulfillment and the underlying goods and services.

Moreover, minor tweaks like the announced increase of the Prime membership fee to $119 per year ( from $99) won’t make any difference because more than the resulting $2 billion gain ($20 X 100 million members) is being absorbed into the maws of Amazon video streaming and entertainment content services which are free to Prime members.

In short, there is $300 billion$400 billion or even more bottled air in the e-Commerce business and the $200 billion we have ascribed to AWS isn’t all that rock solid, either. That’s because you simply can’t value “growth” stemming from a one-time shift to the cloud at a 50X multiple—-especially in the case of a capital intensive business like server farms.

Perhaps that’s why Amazon doesn’t break-out assets by segment: the return on capital at AWS, as opposed to sales, might look at lot less impressive.

Stated differently, Amazon’s $780 billion market cap is a giant momo hotel, and when that mega-bubble finally breaks the contagion and spillover effect will be monumental. Even our Microsoft benchmark will take a pasting.

After all, if not for the enormous forces of momentum in the casino, you couldn’t explain the chart below, either.

During the LTM period reported last night, Microsoft generated net income of $14.2 billion, and even if you reverse out the huge write-downs last year, the annualized run-rate is no higher than $20 billion. Yet its net income has been cycling around the $20 billion mark for the last 7 years.

At the same time, its market cap more than tripled from $200 billion to $740 billion—meaning that its valuation multiple also tripled.

Why?

We’d bet its the same reason that AMZN is capitalized at $780 billion: Namely, it reflects a casino that has run wild on central bank Bubble Finance, and that is itching for a giant fall now that central bankers are trying to climb off the ledge.

MSFT Net Income (TTM) Chart

And that gets us to the second part of the doubly-whammy. Amazon is just the poster boy for value destruction on main street owing to the Fed’s Bubble Finance regime.

In this case, Jeff Bezos was paid another $10 billion last night for filling a report with the SEC which implicitly documented his massive predation on the main street economy and Amazon’s far reaching destruction of assets embodied in regional malls, shopping centers and mom and pop emporiums alike.

Yes, we understand all about Schumpeter’s “creative destruction” and that the genius of free market capitalism is that it continuously innovates and invents the new and discards the old, inefficient and obsolete. But the great Austrian also presumed that there was a level playing field—an honest free market, and most especially when it comes to pricing capital, debt and money.

Today there is no such thing—-that’s the ultimate evil of monetary central planning. It substitutes the fallible will of 12 mortals on the FOMC for the genius and continuously self-correcting verdicts of the free market.

And that lamentable result is not a bad thing just in the abstract. In fact, it’s a terrible thing in the concrete here and now because it utterly distorts the signaling system of the capital markets.

At the moment, those central bank engineered signals are telling Bezos and his army that their profit-free predator is worth nearly $600 billion, and that they should keep doing more of the same.

We will address this point at greater length in the near future, but suffice it to say that the C-suites all over the US economy are being given the same kind of false signals. And, most especially, signals to invest their cash flows and balance sheet capacity in Wall Street financial engineering schemes rather than main street growth, productive assets and human resources.

Unfortunately, the metrics which inform the daily economic narrative are rooted in the Keynesian models from which the GDP statistics are derived. That means current spending for consumption and capital goods get added to GDP but the current period costs of destroyed malls and their support infrastructure including employees don’t get deducted.

In the longer run, of course, the premature and non-free market based destruction of capital and other economic resources takes its toll. Ultimately, the result is lower productivity, reduced output, less GDP and lower living standards.

In the interim, however, Amazon’s predation is actually contributing to officially measured GDP because it’s building warehouses and distribution infrastructure like there is no tomorrow.

Yet that’s just another version of Bastiat’s broken window fallacy. The stones are being thrown by the Great White Shark of Bubble Finance, but the incentive to do so was mediated by Wall Street and fostered in the Eccles Building.

That is worth mentioning because  lurking beneath this morning’s slight beat on real GDP was a living example of this very broken window fallacy. When you strip-out the volatile short-term impact of inventories and exports, you get a reasonably serviceable measure of contemporaneous economic activity as measured by the Keynesian concept of “spending”.

Needless to say, a lot of windows were broken last summer during the great storms of 2017 and heavily repaired during Q4. So it is not surprising that the annualized rate of real final sales surged by 4.5%.

It’s also not surprising that the number reverted back to its tepid trend line in Q1, when real final sales expanded by only 1.6% at an annual rate.

As is also evident from this chart, even Keynesian style spending is running out of gas after 9-years of tepid business expansion, and in the Amazon story we have the reason why.

Bubble Finance is breaking way too many windows.

end

Calpers, the large California public pension system is heading for bankruptcy.  This does not stop the petty squabbling

(courtesy zerohedge)

Dysfunctional CalPERS Board Distracted By Petty Squabbling As Fund Lurches Toward Bankruptcy

California’s perennially underfunded pension system is struggling with an internecine conflict among its governing board members that some observers worry could impact the fund’s performance as it goes all-in on “creative” scam financials and projections that have pushed the fund further into the bubbly equities.

And what’s worse, the dispute is escalating just as CalPERS is heading into its busy season: Seemingly never-ending stream of annual shareholder meetings where CalPERS makes always unwelcome activist recommendations to the companies in which it owns shares.

Brown

The conflict started when newly elected CalPERS administrative board member Margaret Brown, a SoCal school district administrator who unseated an incumbent CalPERS advisory board member during last fall’s election, leaked a video to the press purporting to show that she had been locked out of her office. In the footage, she suggests that the lock-out was the work of board chairwoman Priya Mathur, who has clashed with Brown on a number of issues including allegations that she leaked sensitive information to the press. Mathur insists the lockout wasn’t intentional, and was instead a glitch in the board’s security system.

But that excuse did little to quiet hostilities. Brown has since leaked a story to a friendly financial blog about her conflict with Mathur, which has only further inflamed the situation.

Here’s more from the Sacramento Bee.

CalPERS Board of Administration member Margaret Brown recorded herself failing to open the door, shared the video with a friendly financial blog and allowed it be posted to YouTube under a headline calling the incident an “illegal lockout.” “I have a badge and I’m trying to get in my office, and, yeah, it doesn’t work. Very, very nice,” she says in the video.

Her assumption that she was being “locked out” and her decision to share the video on social media are signs of escalating tension on the board that handles $350 billion in assets for 1.9 million California public employees and retirees.

Brown declined an interview request from The Sacramento Bee. She wrote in an email, “I was elected as an outsider and defeated an incumbent who had the endorsement of nearly every then-member of the board, including Mathur. So it’s not surprising, though disappointing, that some of the people who opposed my candidacy have continued to make me unwelcome, to the point of interfering with my rights and privileges as a board member.”

The conflict first came into view of the public when Brown theatrically declared that she feared being arrested at the next board meeting – which swiftly aroused the interest of the press.

Their rift blew into the open at a public meeting where Brown asked whether she would be arrested for showing up at the job California public employees and retirees elected her to do.

The conflict is “extraordinary,” said Charles Elson, the director for the Center of Corporate Governance at the University of Delaware. “It’s unusual with a large pension fund where you have seemingly dysfunctional conflict. They’re going to have to resolve it. It’s not good for the fund.”

The conflict has also aroused widespread interest since Brown ran as a reformer and upset a longtime incumbent – something that her peers on the board haven’t forgiven her for, she alleges.

In some ways, the drama at CalPERS is a hangover from last fall’s election. Brown as an underdog challenger unseated union-backed incumbent Michael Bilbrey.

Brown cast herself as a watchdog for retirees and Bilbrey as an uncritical board member; Bilbrey’s campaign drew attention to four settlements one of Brown’s previous employers paid to resolve workplace retaliation claims that initially named her.

Brown declined an interview request from The Sacramento Bee. She wrote in an email, “I was elected as an outsider and defeated an incumbent who had the endorsement of nearly every then-member of the board, including Priya Mathur. So it’s not surprising, though disappointing, that some of the people who opposed my candidacy have continued to make me unwelcome, to the point of interfering with my rights and privileges as a board member.”

Some board members told the Bee that Brown and Mathur’s deteriorating relationship wouldn’t impact the fund’s performance – and added that it would likely be put to rest at the next CalPERS board meeting, where the organization is set to review procedures for how board members are disciplined.

Board member Bill Slaton said the public disagreements were not “irreversible.”

“I think that any organization as large and complex as CalPERS is going to have disputes and is going to have from time to time conflict. That is all the more reason for us to put as much effort as possible into resolving disagreements in ways that advance the mission of CalPERS,” he said.

New board member David Miller viewed the conflict as a learning curve for Brown and Mathur. He considered Mathur’s reprimand to Brown as an “extremely judicious” message not to bring visitors into restricted areas again.

He and other board members said they’d like CalPERS to hold an open discussion on how board members are disciplined.

“The board doesn’t really have clear, systematic tools to deal with those issues,” he said.

But regardless of how this dispute is resolved, the pension fund which has been described as “near insolvency” by a former board member will still need to figure out how it can right itself and return to a path of long-term sustainability, before the resources in its fund are drained by overly generous pension benefits which cannot be supported by returns or current contributions. Back in February, former board member Steve Westly made the following admission after the fund voted to increase the amount of contributions made by California’s cities by making a “relatively small” ($350 billion) change to its amortization policy.

As things stand now, CalPERS, once more than 100 percent funded, now has scarcely two-thirds of what it would need to fully cover all of the pension promises to current and future retirees. And that assumes it will hit a lofty investment earnings target of 7% per year, which many authorities have criticized as too optimistic.

At some point, the board members will need to band together to make an unpopular decision (cutting benefits) that could risk all of them being thrown out by the public union employees who elect them.

But as long as this squabbling continues, the already remote likelihood of the board embracing radical change continues to shrink.

end

SWAMP STORIES

Sheer nonsense as Comey rages against the House Intelligence Report calling it a lie and politically motivated and he calls Trump a “liar”. Judge Jeanine rages that it is Comey that is liar and a leaker.

oh fun in Washington DC

(courtesy zerohedge)

Comey Rages Against House Intel Report, Calls Trump Liar With “Serious Credibility Problems”

The House Intel Committee probe which found no evidence of Russian meddling in the 2016 US election was nothing more than a charade, according to former FBI Director Jim Comey, who called it politically motivated and suggested that it “wrecked” the committee.

Comey sat down with NBC’s Chuck Todd on Meet the Press Sunday, where he did his best to discredit the GOP-authored findings released on Friday: “It wrecked the committee,” Comey said, adding “It damaged relationships with the FISA Court, the intelligence communities. It’s just a wreck.”

Meet the Press

@MeetThePress

WATCH: Former FBI Director James @Comey tells Chuck Todd that partisanship has “wrecked” the House Intelligence Committee

Comey: The House Republicans’ report “strikes me as a political document”

The former FBI director then suggested that the report was politically motivated.

“That is not my understanding of what the facts were before I left the FBI, and I think the most important piece of work is the one the special counsel’s doing now. This strikes me as a political document.”

Comey then suggested Trump “might lie” and has serious credibility problems.

Meet the Press

@MeetThePress

“Sometimes people who have serious credibility problems can tell the truth when they realize that the consequences of not telling the truth… But you’d have to go in with a healthy sense that he might lie to you,” @comey says on Trump.

Former FBI Director Comey had kind words for Former FBI Director (and current Special Counsel) Robert Mueller and his team, “I know there are no leaks coming out of the special counsel’s office, so by necessity, nobody who really knows what’s going on is talking,” adding that Mueller is “attentive to the calendar” and “wants to finish as quickly as he can.”

Meet the Press

@MeetThePress

EXCLUSIVE THIS MORNING: Former FBI Director James @Comey tells Chuck that Mueller is “attentive to the calendar” when it comes to the Russia investigation and upcoming elections.

Comey says he got the sense that Trump didn’t know about the “salacious and personal” details from the Steele dossier (and again suggested he’s a liar).

Meet the Press

@MeetThePress

EARLIER: In an exclusive interview, @Comey tells @ChuckTodd that he didn’t believe President Trump was aware of salacious allegations when he first briefed him.

Comey: “I didn’t get a sense” that Trump knew about Steele dossier allegations

In stark contrast to Chuck Todd’s mollycoddling of Comey, Fox News host Judge Jeanine Pirro unloaded on the former FBI director: “He’s a liar, he’s a leaker, and he’s a leftist liberal,” said Pirro.

If anyone was not convinced of former FBI director Jim Comey’s involvement in the attempted coup from within our own government of the duly elected winner of the 2016 Presidential election, I have just one question for you: Are you stupid?

Josh Caplan@joshdcaplan

Judge Jeanine unloads on James Comey: “Jim, you were part of an anti-Trump conspiracy, violating the fundamental rules of your own agency… Power, Jim, don’t ever forget it – Power is rented – and you, my friend, have been evicted!”

Meanwhile, as James Comey floats around peddling his new book, A Higher Loyalty, and trash-talking the House Intel Committee’s findings, he’s currently subject to two criminal referrals and a battle brewing with his former Deputy, Andy McCabe, over who’s lying in regards to illegal leaks to the New York Times

COuld it be that Comey’s boyscoutish charm is starting to wear thin?

end

And now the next logical guy to leave the White HOuse is Kelly:

(courtesy zerohedge)

“He’s An Idiot”: John Kelly Reportedly Insults Trump In Front Of Aides, Plans May Departure: NBC

White House chief of staff John Kelly has reportedly been undermining morale in the West Wing in recent months – commenting to aides that President Trump is an idiot, while touting himself as the “savior of the country,” reports NBC News, citing “eight current and former White House officials.”

The officials said Kelly portrays himself to Trump administration aides as the lone bulwark against catastrophe, curbing the erratic urges of a president who has a questionable grasp on policy issues and the functions of government. He has referred to Trump as “an idiot” multiple times to underscore his point, according to four officials who say they’ve witnessed the comments. –NBC News

NBC notes that three White House spokespeople say the “idiot” thing just isn’t true, and he may have spoken in jest about saving the country.

In one heated exchange between the two men before February’s Winter Olympics in South Korea, Kelly strongly — and successfully — dissuaded Trump from ordering the withdrawal of all U.S. troops from the Korean peninsula, according to two officials.

For Kelly, the exchange underscored the reasoning behind one of his common refrains, which multiple officials described as some version of “I’m the one saving the country.

“The strong implication being ‘if I weren’t here we would’ve entered WWIII or the president would have been impeached,'” one former senior White House official said. –NBC News

“He doesn’t even understand what DACA is. He’s an idiot,” Kelly said in one meeting, according to two officials who were present. “We’ve got to save him from himself.”

According to NBC’s sources, Kelly has been hiding behind his public image as a four-star, while in truth operating in an “undisciplined and indiscreet” manner. “The private manner aides describe may shed new light on why Kelly now finds himself — just nine months into the job — grappling with diminished influence and a drumbeat of questions about how long he’ll remain at the White House.”

“He says stuff you can’t believe,” one senior White House official tells NBC News. “He’ll say it and you think, ‘That is not what you should be saying.‘”

According to presidential historian Michael Beschloss, Kelly’s comments about Trump vs. prior White House chiefs of “suggest a lack of respect for the sitting president of a kind that we haven’t seen before,” adding that the closest would have to be President Ronald Reagan’s chief of staff, Don Regan, who “somewhat looked down on” The Gipper, and eventually lost Reagan’s support – having been replaced after two years by Howard Baker.

Meanwhile, Trump is said to have soured on Kelly – and is aware of some, “though not all” of Kelly’s comments. And as NBC News points out, “The last time it became public that one of Trump’s top advisers insulted his intelligence behind his back, it didn’t go over well with the president. White House aides have said Trump never got over former Secretary of State Rex Tillerson calling him a “moron” in front of colleagues, which was first reported by NBC News. Trump later challenged Tillerson to an IQ test and fired him several months after the remark became public.”

Current and former White House officials said Kelly has at times made remarks that have rattled female staffers. Kelly has told aides multiple times that women are more emotional than men, including at least once in front of the president, four current and former officials said.

And during a firestorm in February over accusations of domestic abuse against then-White House staff secretary Rob Porter, Kelly wondered aloud how much more Porter would have to endure before his honor could be restored, according to three officials who were present for the comments. He also questioned why Porter’s ex-wives wouldn’t just move on based on the information he said he had about his marriages, the officials said.

So in addition to Kelly allegedly calling Trump an idiot, he’s also a misogynist, according to NBC.

Kelly is expected to leave by July – his one-year mark, according to sources, however others say it’s anyone’s guess. That said, “what’s clear is both Trump and Kelly seem to have tired of each other.”

Kelly appears to be less engaged, which may be to the president’s detriment,” a second senior White House official said.

If NBC is correct, we’re about to once again play White House Musical Chairs.

I will  see you TUESDAY night

HARVEY

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