GOLD: $1312,80 DOWN $ 0.55 (COMEX TO COMEX CLOSINGS)
Silver: $16.52 UP 6 CENTS (COMEX TO COMEX CLOSINGS)
Closing access prices:
Gold $1312.60
silver: $16.49
For comex gold:
MAY/
NUMBER OF NOTICES FILED TODAY FOR MAY CONTRACT:274 NOTICE(S) FOR 27400 OZ.
TOTAL NOTICES SO FAR 448 FOR 44800 OZ (1.3934 tonnes)
For silver:
MAY
59 NOTICE(S) FILED TODAY FOR
295,000 OZ/
Total number of notices filed so far this month: 5518 for 27,590,000 oz
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Bitcoin: BID $9171/OFFER $9271: UP $49(morning)
Bitcoin: BID/ $9389/offer $9264: DOWN $147 (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: 1319.06
NY price at the same time: 1311.75
PREMIUM TO NY SPOT: $7.31
ss
Second gold fix early this morning: 1314.51
USA gold at the exact same time: 1309.40
PREMIUM TO NY SPOT: $5.11
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 631 CONTRACTS FROM 195,286 RISING TO 195,865 DESPITE YESTERDAY’S 2 CENT LOSS IN SILVER PRICING. 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 A TINY SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP : 439 EFP’S FOR JULY AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE OF 439 CONTRACTS. WITH THE TRANSFER OF 439 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 439 EFP CONTRACTS TRANSLATES INTO 2.195 MILLION OZ ACCOMPANYING:
1.THE TWO CENT FALL IN SILVER PRICE AT THE COMEX AND
2. THE STRONG AMOUNT OF SILVER OUNCES STANDING FOR MAY COMEX DELIVERY. (29.56 MILLION OZ)
ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF APRIL: (FINAL)
10,902 CONTRACTS (FOR 7 TRADING DAYS TOTAL 10902 CONTRACTS) OR 54.510 MILLION OZ: AVERAGE PER DAY: 1557 CONTRACTS OR 7.787 MILLION OZ/DAY
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH: 54.510 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 7.787% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)
ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S: 1,199.9 MILLION 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 631 DESPITE THE 2 CENT LOSS IN SILVER PRICE. WE HAVE NOW ENTERED THE NEW ACTIVE MONTH OF MAY. THE CME NOTIFIED US THAT IN FACT WE HAD AN SMALL SIZED EFP ISSUANCE OF 439 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: 439 EFP CONTRACTS FOR JULY, AND ZERO FOR ALL OVER MONTHS FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS (TOTAL: 439). TODAY WE GAINED 1070 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: i.e. 439 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH AN INCREASE OF 631 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE FALL IN PRICE OF SILVER OF 2 CENTS AND A CLOSING PRICE OF $16.45 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. .980 MILLION OZ TO BE EXACT or 140% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT MAY MONTH/ THEY FILED AT THE COMEX: 59 NOTICE(S) FOR 295,000 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:
- HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY (MARCH: 27 MILLION OZ , APRIL: 2.485 MILLION OZ AND MAY: 29.56 MILLION OZ )
- HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018
- HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
- RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ (FINAL)
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 A CONSIDERABLE 3759 CONTRACTS DOWN TO 491,398 DESPITE THE TINY FALL IN THE GOLD PRICE/YESTERDAY’S TRADING (LOSS OF $0.10). WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF MAY. THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A HUGE SIZED 11,535 CONTRACTS : JUNE SAW THE ISSUANCE OF 8058 CONTRACTS , MAY SAW THE ISSUANCE OF 0 CONTRACTS AND AUGUST SAW THE ISSUANCE OF: 3477 CONTRACTS WITH ALL OTHER MONTHS ZERO. The new OI for the gold complex rests at 491,398. 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 GOOD SIZED OI GAIN IN CONTRACTS ON THE TWO EXCHANGES: 3759 OI CONTRACTS DECREASED AT THE COMEX AND AN CONSIDERABLE SIZED 11535 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS TOTAL OI GAIN: 7776 CONTRACTS OR 776,700 OZ = 24.18 TONNES. AND ALL OF THIS OCCURRED WITH A LOSS OF $0.10
YESTERDAY, WE HAD 3096 EFP’S ISSUED.
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY : 65,238 CONTRACTS OR 6.523,800 OZ OR 202.917 TONNES (7 TRADING DAYS AND THUS AVERAGING: 9,319 EFP CONTRACTS PER TRADING DAY OR 931,900 OZ/ TRADING DAY),,
TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 7 TRADING DAYS IN TONNES: 202.917 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES
THUS EFP TRANSFERS REPRESENTS 202.917/2550 x 100% TONNES = 7.95% 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: 2,960.86* 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: A CONSIDERABLE SIZED DECREASE IN OI AT THE COMEX OF 3759 DESPITE THE TINY 10 CENT FALL IN PRICE // GOLD TRADING YESTERDAY ($0.10 LOSS). HOWEVER WE ALSO HAD A GIGANTIC SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 11,535 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 11,535 EFP CONTRACTS ISSUED, WE HAD A HUMONGOUS SIZED NET GAIN OF 7776 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:
11,535 CONTRACTS MOVE TO LONDON AND 3759 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 24.18 TONNES).
we had: 274 notice(s) filed upon for 27400 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 $0.55 /NO CHANGES IN GOLD INVENTORY
Inventory rests tonight: 864.13 tonnes.
SLV/
WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV
/INVENTORY RESTS AT 323.263 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 SIZED 631 CONTRACTS from 195,234 UP TO 195,865 (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. 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, 0 EFP CONTRACTS FOR MAY (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM), AND 439 EFP’S FOR JULY AND ALL OTHER MONTHS ZERO. TOTAL EFP ISSUANCE: 439 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 631 CONTRACTS TO THE 439 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A GAIN OF 1070 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 5.35 MILLION OZ!!! AND THIS OCCURRED WITH THE TWO CENT FALL IN PRICE . THE BANKERS ORCHESTRATED THEIR RAID THROUGHOUT LAST WEEK DESPERATELY TRYING TO PARE THEIR GIGANTIC OPEN INTEREST SHORT ON BOTH EXCHANGES BUT TO NO AVAIL. JUDGING BY THE RECORD NUMBER OF EFP ISSUANCE DURING LAST MONTH OF APRIL AT 385.75 MILLION OZ AND THE TOTAL OI GAIN ON THE TWO EXCHANGES, I DO NOT THINK THAT OUR BANKERS HAVE BEEN TOO SUCCESSFUL. THE CONSTANT RAIDS ARE NOW BEING CALLED UPON BY OUR BANKER FRIENDS ARE DONE IN AN ATTEMPT TO SHAKE AS MANY SILVER LEAVES FROM THE SILVER TREE AS POSSIBLE.
RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 2 CENT FALL IN SILVER PRICING YESTERDAY. BUT WE ALSO HAD ANOTHER TINY SIZED 439 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)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 2.35 points or 0 .07% /Hang Sang CLOSED UP 133.33 points or 0.44% / The Nikkei closed DOWN 99.91 POINTS OR .44% /Australia’s all ordinaires CLOSED UP .34% /Chinese yuan (ONSHORE) closed DOWN at 6.3698/Oil UP to 70.92 dollars per barrel for WTI and 77.09 for Brent. Stocks in Europe OPENED MIXED. ONSHORE YUAN CLOSED DOWN AT 6.3698 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3644/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING 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/USA
Mike Pompeo returns to the uSA from North Korea with the 3 Americans on board
( zerohedge)
b) REPORT ON JAPAN
3 c CHINA
4. EUROPEAN AFFAIRS
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
i)Looks like Trump really wants a new agreement with Iran as sanctions will not begin until months
( zerohedge)
ii)TURKEY
As the Turkish lira plummets to almost 4.382 last night, Erdogan summons his economic team in an effort to stem the losses on his currency. The short term interest rate is 17%
( zerohedge)
iii)Iran/
6 .GLOBAL ISSUES
- the South Korean export indicator is always a good indicator of global growth and it is falling
- the 2/10 USA yield curve is flattening and there is only 43 basis points of difference between the two
- consumers are saving more as they are worried about the economy
( Tumerkan/Palisade Research.com)
7. OIL ISSUES
Interesting data points today:
1.huge crude draw
2 production continues to spike to record levels
3. small crude imports
and thus WTI tops 71 dollars per barrel
( zerohedge)
8. EMERGING MARKET
Venezuela We are now witnessing a mass exodus of the Venezuela army as they desert to Columbia and other jurisdictions
( zero hedge)
9. PHYSICAL MARKETS
ii)With the Riyal in a death spiral no wonder citizens are seeking gold coins( Bullion Vault)
10. USA stories which will influence the price of gold/silver
ii)This morning’s data:
a)The PPI price growth slows down quite dramatically in April and this pushed the 10 yr bond yield below 3.00%
( zerohedge)
b)Both wholesale inventories and wholesale sales growth disappoint at only .3%. This will be a drag on final first quarter GDP
( zerohedge)
iii)A terrific commentary from our resident expert of USA consumer debt, Wolf Richter. He certainly emphasizes the problems the economy will face as the consumer has hit peak debt
(courtesy WolfRichter)
iv)SWAMP STORIES
b)The following is quite a claim: Stormy Daniel’s lawyer is making a stretch by claiming that a Putin linked oligarch paid Cohen 500,000 and some of that money went for hush payment. However what is troubling is the 4 payments of 50,000 dollars from AT and T..and no doubt that this money was used for influence( zerohedge)
c)This is interesting; there seems to be a top secret intelligence source which is aiding Mueller in the witch hunt and yet somehow mistakenly Trump is agreeing with the FBI not to provide the stuff to Nunes. Judging from the previous non ” national security” redactions, our hope is that Trump will finally get the message and allow this intelligence to flow
( zerohedge)
d)Now the bank Inspector General is probing how confidential bank records belonging to Cohen were leaked
( zerohedge)
e)I JUST DO NOT LIKE HOW THIS LOOKS: TRUMP TELLS LAWYERS THAT HE KNEW NOTHING ABOUT COHEN PAYMENTS
( ZEROHEDGE)
Trading Volumes on the COMEX
PRELIMINARY COMEX VOLUME FOR TODAY: 220,614 contracts
CONFIRMED COMEX VOL. FOR YESTERDAY: 259,169 contracts
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And now for the wild silver comex results.
Total silver OI ROSE BY A SMALL SIZED 631 CONTRACTS FROM 195,234 UP TO 195,865 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS) DESPITE THE 2 CENT LOSS IN SILVER PRICING. SINCE WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF MAY. WE WERE INFORMED THAT WE HAD A SMALL SIZED 439 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: 459. ON A NET BASIS WE GAINED 1070 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 631 CONTRACT GAIN AT THE COMEX COMBINING WITH THE ADDITION OF 459 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: 1070 CONTRACTS
AMOUNT STANDING FOR SILVER AT THE COMEX
We are now in the active delivery month of MAY and here the front month LOST 193 contracts FALLING TO 453 contracts. We had 298 notices filed upon yesterday so we SURPRISINGLY AGAIN GAINED 105 contracts or 525,000 additional ounces will stand for delivery in this active delivery month of May AS SOMEBODY AGAIN WAS DESPERATE FOR PHYSICAL SILVER..
June saw a GAIN of 36 contracts to stand at 797 The next big delivery month for silver is July and here the OI FELL by 1081 contracts DOWN to 140,959. The next active delivery month after July for silver is September and here the OI ROSE by 1076 contracts UP to 22,356
We had 59 notice(s) filed for 295,000 OZ for the MAY 2018 contract for silver
INITIAL standings for MAY/GOLD
MAY 9/2018.
| Gold | Ounces |
| Withdrawals from Dealers Inventory in oz | nil oz |
| Withdrawals from Customer Inventory in oz |
52,523.631 OZ
HSBC
|
| Deposits to the Dealer Inventory in oz | NIL oz |
| Deposits to the Customer Inventory, in oz | 58,346.717 OZ
jpm |
| No of oz served (contracts) today |
274 notice(s)
27,400 OZ
|
| No of oz to be served (notices) |
204 contracts
(20400 oz)
|
| Total monthly oz gold served (contracts) so far this month |
448 notices
44,800 OZ
1.3934 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 |
For MAY:
Today, 0 notice(s) were issued from JPMorgan dealer account and 219 notices were issued from their client or customer account. The total of all issuance by all participants equates to 274 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 180 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
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To calculate the INITIAL total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (448) x 100 oz or 44,800 oz, to which we add the difference between the open interest for the front month of MAY. (478 contracts) minus the number of notices served upon today (274 x 100 oz per contract) equals 65,200 oz, the number of ounces standing in this active month of APRIL (2.027 tonnes)
Thus the INITIAL standings for gold for the MAY contract month:
No of notices served (448 x 100 oz) + {(364)OI for the front month minus the number of notices served upon today (274 x 100 oz )which equals 65,200 oz standing in this active delivery month of MAY . THERE ARE 9.525 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.
WE GAINED 27,400 OZ OF GOLD STANDING IN THIS NON ACTIVE DELIVERY MONTH OF MAY AS SOMEBODY BADLY NEEDED PHYSICAL GOLD AT THIS SIDE OF THE POND..
IN THE LAST 18 MONTHS 73 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
MAY INITIAL standings/SILVER
| Silver | Ounces |
| Withdrawals from Dealers Inventory | nil oz |
| Withdrawals from Customer Inventory |
10,042.84 oz
CNT
|
| Deposits to the Dealer Inventory |
nil
oz
|
| Deposits to the Customer Inventory |
1006.85 oz
Delaware
|
| No of oz served today (contracts) |
59
CONTRACT(S)
(295,000 OZ)
|
| No of oz to be served (notices) |
394 contracts
(1,970,000 oz)
|
| Total monthly oz silver served (contracts) | 5518 contracts
(27,590,000 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 0 inventory movement at the dealer side of things
i) Into CNT: 1,294,431,590 oz
total dealer deposits: nil 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) Into Delaware: 1,006.85 oz
total deposits today: 1006.85 oz
we had 1 withdrawals from the customer account;
i) out of CNT: 10,042.840 oz
total withdrawals; 10,042.840 oz
we had 0 adjustment
total dealer silver: 68.811 million
total dealer + customer silver: 268,034million oz
The total number of notices filed today for the MAY. contract month is represented by 59 contract(s) FOR 295,000 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 5518 x 5,000 oz = 27,590,000 oz to which we add the difference between the open interest for the front month of MAY. (646) and the number of notices served upon today (59 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the MAY contract month: 5518(notices served so far)x 5000 oz + OI for front month of MAY(646) -number of notices served upon today (59)x 5000 oz equals 29,560,000 oz of silver standing for the MAY contract month
WE GAINED 105 CONTRACTS OR AN ADDITIONAL 525,000 OZ WILL STAND AT THE COMEX AS SOMEBODY WAS IN URGENT NEED OF PHYSICAL SILVER ON THIS SIDE OF THE POND.
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ESTIMATED VOLUME FOR TODAY: 72,729 CONTRACTS
CONFIRMED VOLUME FOR YESTERDAY: 83930 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 83930 CONTRACTS EQUATES TO 420 MILLION OZ OR 59.95% OF ANNUAL GLOBAL PRODUCTION OF SILVER
COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end
NPV for Sprott
1. Sprott silver fund (PSLV): NAV FALLS TO -1.36% (MAY8/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.41% to NAV (MAY 8/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -1.36%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.41%/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 FALLS TO -2.26%: NAV 13.59/TRADING 13.31//DISCOUNT 2.26.
END
And now the Gold inventory at the GLD/
MAY 9/WITH GOLD DOWN $0.55/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.13 TONNES
MAY 8/WITH GOLD DOWN $0.10/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 864.13 TONNES
MAY 7/WITH GOLD DOWN $0.55/ANOTHER WITHDRAWAL OF 1.47 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 864.13 TONNES
MAY 4/WITH GOLD UP $2.05/A WITHDRAWAL OF 1.13 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 865.60 TONNES
MAY 3/WITH GOLD UP $7.05/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 866.77 TONNES
MAY 2/WITH GOLD DOWN $1.15/ A HUGE WITHDRAWAL OF 4.43 TONNES FROM THE GLD/INVENTORY RESTS AT 866.77 TONNES
MAY 1/WITH GOLD DOWN $12.15/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 871.20 TONNES
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
MAY 9/2018/ Inventory rests tonight at 864.13 tonnes
*IN LAST 379 TRADING DAYS: 76.87 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 329 TRADING DAYS: A NET 79.43 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
end
Now the SLV Inventory/
MAY 9/WITH SILVER UP 6 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 323.263 MILLION OZ/
MAY 8/WITH SILVER DOWN 2 CENTS:NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 323.263 MILLION OZ.
MAY 7/WITH SILVER FLAT: A BIG CHANGE IN SILVER INVENTORY AT THE SLV// A WITHDRAWAL OF 942,000 OZ OF SILVER FROM THE SLV INVENTORY/INVENTORY RESTS AT 323.263 MILLION OZ/
MAY4/WITH SILVER UP 5 CENTS/A BIG CHANGES IN SILVER INVENTORY AT THE SLV/ A DEPOSIT OF 1.224 MILLION OZ/INVENTORY RESTS AT 324.205 MILLION OZ/
MAY 2/WITH SILVER UP 24 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV// A DEPOSIT OF 6.082 MILLION OZ INTO THE SLV/INVENTORY RESTS AT 322.981 MILLION OZ/
MAY 1/WITH SILVER DOWN 24 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.899 MILLION OZ/
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
MAY 9/2018:
Inventory 323.263 million oz
end
6 Month MM GOFO 2.08/ and libor 6 month duration 2.52
Indicative gold forward offer rate for a 6 month duration/calculation:
G0FO+ 2.08%
libor 2.52 FOR 6 MONTHS/
GOLD LENDING RATE: .44%
XXXXXXXX
12 Month MM GOFO
+ 2.77%
LIBOR FOR 12 MONTH DURATION: 2.55
GOFO = LIBOR – GOLD LENDING RATE
GOLD LENDING RATE = +.22
end
Major gold/silver trading /commentaries for WEDNESDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
“Money Is Gold — and Nothing Else”
- Gold now has limited downside (20%) but substantial upside (650%)
- Gains on gold are likely to come at a time when stocks are crashing
- Investors and savers without an allocation to gold will be wiped out
- Time to consider saving in physical gold? Editors note
by James Rickards, Daily Reckoning
Following the Panic of 1907, John Pierpont Morgan was called to testify before Congress in 1912 on the subject of Wall Street manipulations and what was then called the “money trust” or banking monopoly of J. P. Morgan & Co.
Source: Quotefancy
In the course of his testimony, Morgan made one of the most profound and lasting remarks in the history of finance. In reply to questions from the congressional committee staff attorney, Samuel Untermyer, the following dialogue ensued as recorded in the Congressional Record:
Untermyer: I want to ask you a few questions bearing on the subject that you have touched upon this morning, as to the control of money. The control of credit involves a control of money, does it not?
Morgan: A control of credit? No.
Untermyer: But the basis of banking is credit, is it not?
Morgan: Not always. That is an evidence of banking, but it is not the money itself. Money is gold, and nothing else.
Morgan’s observation that “Money is gold, and nothing else,” was right in two respects. The first and most obvious is that gold is a form of money. The second and more subtle point, revealed in the phrase, “and nothing else,” was that other instruments purporting to be money were really forms of credit unless they were redeemable into physical gold.
My readers know that I am a big proponent of gold. We should all be mindful of Morgan’s admonition, and not lose sight of the way in which real wealth is preserved through manias, panics and crashes.
Today I’ll provide an overview on why I recommend gold in every portfolio, and why gold may be the best performing asset class in the years ahead.
Specifically, my intermediate term forecast is that gold will reach $10,000 per ounce in the course of the current bull market that began in December 2015. I recommend that investors keep 10% of their investable assets in physical gold (with room left in the portfolio for “paper gold” in the form of ETFs and mining stocks).
Here’s the analysis:
We begin with the 10% allocation. The first step is to determine “investable assets.” This is not the same as net worth. You should exclude your home equity, business equity and any other illiquid or intangible assets that constitute your livelihood. Do not take portfolio market risk with your livelihood or the roof over your head. Once you’ve removed those assets, whatever is left are your “investable assets.” You should allocate 10% of that amount to physical gold.
Jim Rickards in a vault near Zurich, Switzerland during a recent visit. The pallet in front of him has $25 million in gold bars arrayed.
This gold should not be kept in a bank safe deposit box or bank vault. There is a high correlation between the time you’ll want your gold the most and the time banks will be closed by government order. Keep your gold in safe, non-bank storage.
The next part of the analysis concerns my $10,000 per ounce forecast for the dollar price of gold. This is straightforward.
Excessive Federal Reserve money printing from 2008–2015 combined with projected U.S. government deficits over $1 trillion per year for the foreseeable future, and a U.S. debt-to-deficit ratio of 105% rising to over 110% in a few years, leave the U.S. dollar extremely vulnerable to a collapse of confidence on the part of foreign investors and U.S. citizens alike.
That collapse of confidence will not happen in a vacuum. It will coincide with a more general loss of confidence in all major central banks and reserve currencies. This loss of confidence will be exacerbated by malicious efforts on the part of Russia, China, Turkey, Iran and others to abandon dollars entirely and to bypass the U.S. dollar payments system.
The evolution of oil pricing from dollars to IMFs special drawing rights, SDRs, will be the last nail in the dollar’s coffin. All of these trends are well underway now, but could climax quickly into a general loss of confidence in the dollar.
At that point, either the U.S. acting on its own or a global conference resembling a new Bretton Woods will turn to gold to restore confidence. Once that route is chosen, the critical factor is to set a non-deflationary price for gold that restores confidence, but does not lead to a new depression.
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Here’s the math on how to compute a non-deflationary price of gold using the latest available data:
The U.S., China, Japan and the Eurozone (countries using the euro), have a combined M1 money supply of $24 trillion. Those same countries have approximately 33,000 tons of official gold.
Historically, a successful gold standard requires 40% gold backing to maintain confidence. That was the experience of the United States from 1913 to 1965 when the 40% backing was removed.
Taking 40% of $24 trillion means that $9.6 trillion of gold is required.
Taking the available 33,000 tons of gold and dividing that into $9.6 trillion gives an implied gold price of just over $9,000 per ounce. Considering that global M1 money supply continues to grow faster than the quantity of official gold, this implied price will rise over time, so $10,000 per ounce seems like a reasonable estimate.
I believe this kind of monetary reset is just a matter of time. It could happen through a planned process such as a new Bretton Woods, or a chaotic process in response to lost confidence, heightened money velocity, and runaway inflation.
The portfolio recommendation is to put 10% of investable assets into physical gold as a diversifying asset allocation and as portfolio insurance. The following example demonstrates that insurance aspect.
For purposes of simplification, we’ll assume the overall portfolio contains 10% gold, 30% cash, and 60% equities. Obviously those percentages can vary and the equity portion can include private equity and other alternative investments.
Here’s how the 10% allocation to gold works to preserve wealth:
If gold declines 20%, unlikely in my view, the impact on your overall portfolio is a 2% decline (20% x 10%). That’s not highly damaging and will be made up as equity assets outperform.
Conversely, it gold goes to $10,000 per ounce, that’s a 650% gain from current levels, highly likely in my view. That price spike gives you a 65% gain on your overall portfolio (650% x 10%).
There is a conditional correlation between a state where gold goes up 650% and where stocks, bonds and other assets are declining. For this purpose, we’ll assume a scenario similar to the worst of the Great Depression from 1929 – 1932 where stocks fell 85%.
An 85% decline in stocks making up 60% of your portfolio produces an overall portfolio loss of just over 50%.
In this scenario, the gains on the gold (650% separately and 65% on your total portfolio) will more than preserve your wealth against an 85% decline in stocks comprising 60% of your portfolio (85% separately and 50% on your total portfolio). The 30% cash allocation holds constant.
So, if 60% of your portfolio drops 85% (about equal to the stock market drop in the Great Depression), and 10% of your portfolio goes up 650% (gold’s performance in a monetary reset) you lose 50% of your portfolio of stocks, but you make 65% on your portfolio on gold.
Your total wealth is preserved and even increased slightly. Total portfolio performance in this scenario is a gain of 15%. That’s the insurance aspect at work.
In summary:
1. Gold has asymmetric performance characteristics. It has limited downside (20%) but substantial upside (650%).
2. The gains on gold are likely to come at a time when stocks are crashing. That’s an example of conditional correlation.
3. In the scenario where gold rises 650% and stocks fall 85%, the gain on gold (10% allocation) exceeds the loss on stocks (60% allocation), so the overall portfolio is enhanced.
Investors without an allocation to gold will be wiped out. Those with a 10% allocation will have survived the storm with their wealth intact. That’s why I recommend gold.
Regards,
Jim Rickards
for The Daily Reckoning
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Editors Note: Jim Rickards is always worth a read. We do not agree with all of his calls but it is hard to argue with much of his analysis. We too view gold and silver as financial insurance and this is why we have been providing bullion coin and bar delivery and storage since 2003.
Regarding the 10% allocation to physical gold, since 2003 we have recommended such an allocation and our clients who adopted this strategy protected and grew their wealth during the financial crisis. Today, we feel that given the scale of the risks posed by the “everything bubble” with many frothy stock, bond and property markets, higher allocations to physical precious metals of 20%, 30% and 40% can be justified.
Indeed, today there is also the additional risk posed to “cash” of bail-ins and deposit confiscation. For this reason, some of our more “wealth preservation” minded clients have now allocated much (and in some cases all) of their wealth to gold and silver coins and bars in allocated and segregated storage. Some use their precious metals allocation as a form of highly liquid pension fund. They keep relatively small balances in bank accounts and simply sell a small portion of their bullion holding to get fiat euros, pounds and dollars etc. every few months in order to fund their living and other expenses.
We are hearing of more and more clients doing this and believe this is a trend that we are likely to see more of. Those who understand that ‘gold is money’ save in physical gold and spend in paper or digital fiat.
“Money is gold,” so why only own a small amount of gold and have much of your wealth exposed to over valued paper and digital assets and indeed fiat currencies in vulnerable bank accounts. More prudent to have larger allocations to gold (and to an extent silver) and smaller allocations to risk assets and fiat currencies in digital deposit accounts.
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News and Commentary
Stocks Mixed as 10 Year Yields Rise to 3%, Oil Climbs on Iran (Bloomberg.com)
Gold prices dip as dollar regains footing (Reuters.com)
Gold reports losses as DXY holds near 4.5-month high (FXStreet.com)
Trump announces withdrawal from Iran nuclear deal: recap (MarketWatch.com)
Trump pulls U.S. from Iran nuclear deal, to revive sanctions (Reuters.com)
Source: Michalowski via ForexLive
Gold keeps above 200 day MA and 50% retracement (ForexLive.com)
BIS gold derivatives down in March, back up in April (Gata.org)
The Big One Coming? Los Angeles Area Rocked By 4.5 Magnitude Earthquake (ZeroHedge.com)
The Fed Has Robbed the Future (DailyReckoning.com)
This mania for mergers is not how capitalism is meant to be (MoneyWeek.com)
Listen on SoundCloud , Blubrry & iTunes. Watch on YouTube below
Gold Prices (LBMA AM)
08 May: USD 1,310.05, GBP 969.44 & EUR 1,101.88 per ounce
04 May: USD 1,309.35, GBP 965.78 & EUR 1,094.09 per ounce
03 May: USD 1,313.30, GBP 966.19 & EUR 1,094.64 per ounce
02 May: USD 1,310.75, GBP 960.52 & EUR 1,091.99 per ounce
01 May: USD 1,309.20, GBP 956.37 & EUR 1,087.68 per ounce
30 Apr: USD 1,316.25, GBP 958.62 & EUR 1,087.62 per ounce
27 Apr: USD 1,317.70, GBP 954.41 & EUR 1,090.79 per ounce
Silver Prices (LBMA)
08 May: USD 16.45, GBP 12.17 & EUR 13.85 per ounce
04 May: USD 16.42, GBP 12.10 & EUR 13.72 per ounce
03 May: USD 16.47, GBP 12.12 & EUR 13.74 per ounce
02 May: USD 16.35, GBP 11.98 & EUR 13.62 per ounce
01 May: USD 16.25, GBP 11.87 & EUR 13.51 per ounce
30 Apr: USD 16.38, GBP 11.93 & EUR 13.54 per ounce
27 Apr: USD 16.53, GBP 12.01 & EUR 13.68 per ounce
Recent Market Updates
– U.K. Home Prices Plunge 3.1% In April – Largest Monthly Drop Since Financial Crisis In 2011
– Weekly Gold Update – Gold In Dollars Lower Despite Poor US Jobs and Other Data
– Own Some Gold and Avoid Overvalued Assets
– Gold Demand Falls In Q1 Despite Robust Central Bank and Investment Demand and Surging Demand In Turkey and Iran
– Smart Money Diversifying Into Gold – One Billionaire Invests Half His Net Worth
– “Blood In The Streets” Of U.S. Gold Bullion Market As Sale Of Gold Coins Collapse
– Most Important Chart Of The Century For Investors?
– Gold Mining Shares Are Speculative Making Gold Bullion A Better Investment
– Gold Price Increasingly Influenced By Declining Dollar Rather Than Interest Rates
– Cash “Vanishes” From Bank Accounts In Ireland
– Russia Buys 300,000 Ounces Of Gold In March – Nears 2,000 Tons In Gold Reserves
– Family Offices and HNWs Invest In Gold Again
– New All Time Record Highs For Gold In 2019
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)
|
2:57 PM (1 hour ago) | ||
|
|||
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
Robert Lambourne: BIS gold derivatives down in March, back up in April
Submitted by cpowell on Tue, 2018-05-08 23:56. Section: Daily Dispatches
By Robert Lambourne
Tuesday, May 8, 2018
The Bank for International Settlements has just published, on the same day, its monthly statement of account for March 2018 as well as its monthly statement for April 2018:
https://www.bis.org/banking/balsheet/statofacc180331.pdf
https://www.bis.org/banking/balsheet/statofacc180430.pdf
From these statements it is possible to deduce that during March the BIS reduced by about 165 tonnes its use of gold swaps and other gold-related derivatives, but subsequently in April the bank’s use of gold swaps and other gold-related derivatives increased by about 60 tonnes.
It seems that the BIS is continuing to trade actively in gold derivatives and the amounts disclosed each month have been following an irregular pattern.
The information provided in the BIS monthly statements is not sufficient to calculate a precise amount of gold-related derivatives, including swaps, but it appears that the bank’s total exposure as of April 30, 2018, was 420 tonnes of gold.
This compares to estimates of 360 tonnes, 525 tonnes, 580 tonnes, 450 tonnes, 600 tonnes, and 570 tonnes, respectively, at the February, January, December, November, and October month-ends and an audited swaps figure of 438 tonnes as of March 31, 2017.
When it comes to its activities in the gold market, the BIS provides little information on what it is doing, why, and for whom. This lack of transparency fuels suspicion that the bank’s trading is related to official efforts to suppress the gold price.
—–
Robert Lambourne, a consultant for GATA, is a retired business executive in the United Kingdom who studies the activity of the Bank for International Settlements in gold market.
end
With the Riyal in a death spiral no wonder citizens are seeking gold coins
(courtesy Bullion Vault)
Iran Targets Gold Coin ‘Bubble’ as US Quits Nuclear Deal
Wednesday, 5/09/2018 13:18
Middle East’s strongest market shifts to investment units…
GOLD COIN and bar buying in Iran is likely to rise as a result of President Trump withdrawing US support for the nuclear non-profileration deal with Tehran according to leading bullion-market analysts.
Already the “stand out” country in the Middle East, Iran is expected to see a rise in “safe haven purchases” of gold “due to heightened tensions with the US,” said consultancy Metals Focus last month.
“We therefore forecast Iranian physical investment to rise by around one-third in 2018.”
Trump’s action saw the Iranian Rial fall Wednesday to new all-time lows on the foreign exchange market, pushing local gold prices higher again for private households.
Iran’s consumer gold demand – steadily recovering from multi-year lows since the easing of economic sanctions against Iran following the 2015 agreement – has already shifted towards bar and coin thanks to a 9% VAT sales tax on jewelry imposed last year.
Gold coin and bar demand leapt 2.5-fold between January and March compared with the first quarter of 2017, while gold jewelry consumption fell 16% said Bloomberg last week, citing data from the mining-backed World Gold Council’s latest Gold Demand Trends report.
The Central Bank of the Islamic Republic of Iran today said it will sell 5.9 million of its 8.1 gram ‘Spring Freedom’ gold coin – the 90% fine Bahar Azadi – by the end of this financial year in March 2019.
Close to 0.8 million pieces have already been pre- bought and are now set for release, a CBI spokesman said.
“This is expected to deflate the bubble in gold prices,” says Iranian business site Financial Tribune.
Data from the Tehran Gold and Jewelry Union on Wednesday showed the price of Bahar Azadi gold coins trading at a 52% premium to global US Dollar quotes for wholesale bullion.
Chart of Middle East household gold demand. Source: BullionVault via World Gold Council. 2018 annualized from Q1 data
For Middle Eastern household gold demand, “Iran was a stand out in the region again last year,” says this week’s new Gold Survey 2018from specialist analysts Thomson Reuters GFMS, “enjoying a 13% annual rise, the second consecutive double-digit increase in as many years.”
New jewelry fabrication rose 10% from 2016 thanks to better economic and household income growth, says GFMS, while investment demand for bars and coin rose despite “greater stability” in Iranian politics following Hassan Rouhani’s re-election as president last May.
Seen as a “moderate” among Iran’s theocratic leaders, it was Rouhani who agreed the nuclear deal with the US administration of Barack Obama in 2015.
Official coin minting more than doubled in 2017 to 6.3 tonnes, but remained well below pre-2016 levels after the Central Bank allowed only limited sales to the public following “to help curb money laundering and prevent tax evasion” explains Metals Focus.
“The US’s breach of duty will not interrupt Iran’s foreign exchange needs or provision,” said Iran’s central bank in a separate statement on Wednesday, adding that it “has long thought about America’s anti-Iranian offensive, and a series of measures has been taken.
“The country’s banking system, based on the central bank, has the full ability to meet all the country’s currency needs…controlling the flow of foreign currency inflows and outflows [and] supporting national production.”
Last month the CBI set a limit on how much foreign currency private citizens can hold outside the banking system, setting a cap equivalent to US$12,000 with legal action promised against anyone failing to sell down their holdings for Rial.
Your early WEDNESDAY 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 DOWN 6.3694 /shanghai bourse CLOSED DOWN 2.35 POINTS OR 0 .07% / HANG SANG CLOSED UP 133.33 POINTS OR 0.44%
2. Nikkei closed DOWN 99.91 POINTS OR .44% / /USA: YEN RISES TO 109.71/
3. Europe stocks OPENED MIXED /USA dollar index FALLS TO 93.00/Euro RISES TO 1.1874
3b Japan 10 year bond yield: RISES TO . +.05/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.71/ 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:: 70.92 and Brent: 77.09
3f Gold DOWN/Yen DOWN
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.57%/Italian 10 yr bond yield UP to 1.85% /SPAIN 10 YR BOND YIELD DOWN TO 1.29%
3j Greek 10 year bond yield RISES TO : 4.24?????????????????
3k Gold at $1310.95 silver at:16.47 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 6/100 in roubles/dollar) 63.14
3m oil into the 70 dollar handle for WTI and 77 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 109.71 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 1.0016 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1897 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017
3r the 10 Year German bund now POSITIVE territory with the 10 year RISING to +0.57%
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 3.00% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.15%
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Oil Surges, 10Y Yield Back Over 3%, Futures Jump In Iran Deal Fallout
For those curious what the fallout from the US withdrawal from the Iranian nuclear deal looks like in the capital markets, the answer is as follows: higher US stock futures, a stronger dollar (at least initially, the greenback has since turned slightly negative) ahead of a $25BN 10Y auction (which may carry the first 3.00% cash coupon in almost 7 years), and perhaps critically, a 10Y Treasury yield rising back above 3.00% again.
But the most closely watched response was how oil would react, and sure enough the bulls have enjoyed the upper hand for now with WTI reversing Tuesday’s “fake CNN news” inspired slump to briefly surpass $71 per barrel, a new 4 year high, while Brent nudged $77 as the market came to terms with a U.S. message that buyers of Iranian crude have six months to curb their purchases.
Oil’s rise has been predicated by fresh concerns what the US withdrawal from the Iran deal means for oil markets: while Trump warned sanctions will be extremely strong for Iran, and any nations collaborating with it, Treasury Secretary Mnuchin said the US will be working with allies on a comprehensive deal, also states that firms can seek waivers or special licenses to operate in Iran, sending conflicting messages. Meanwhile, the Iranian parliament is set to vote on “proportional and reciprocal” action vs. the US after leaving the nuclear pact, while the Iranian deputy oil minister says the nuclear deal can exist without the US. Meanwhile, UBS estimates that sanctions could lead to the reduction of Iran oil exports by 200-500k BPD over the next 6 months, although both China and India have said they will continue importing Iranian oil.
In global markets, the MSCI Asia Pacific index started off on the wrong foot, dropping 0.3% on weakness in Japan and China, however, sentiment reversed when Europe opened, and the Stoxx Europe 600 Index rose a fourth day as energy companies surged, while US equity futures were trading solidly in the green.
In what may prove to be the most notable development, however, 10-year Treasury yields extends yesterday’s rally to again cross 3% for the first time since late April, ahead of today’s 10Y auction; investors waiting to see if the new bonds will carry a 3% coupon for the first time in almost seven years.
Having erased its 2018 losses earlier this week, the greenback gave up an earlier advance; the biggest losses against the dollar were in the Japanese yen, while Sweden’s krona was the largest gainer. As shown below, the BBDXY initially rose for a fourth day, touching its highest level in more than four months before paring gains, and was unchanged as of 7am ET.
Still, the next big move in the dollar is likely even higher: “with the dollar unable to fall further and U.S. rates steady in a higher range, pressure on short positions was slowly but surely growing,” said Kit Juckes, a strategist at Societe Generale.
In any case, the ongoing dollar strength continues to complicate the picture for emerging markets as traders digest the U.S.’s decision to walk away from the nuclear deal with Iran. And while the EMs were largely a sea of red again…
… it was a little shallower today, with the TRY the outlier. As discussed earlier, Turkey’s lira reversed losses to surge 1.4% against the dollar on speculation policy makers will take action to support the battered currency; President Erdogan was said to be meeting later on Wednesday with economic officials, including the central bank’s Governor, Murat Cetinkaya. Meanwhile, Indonesia’s rupiah fell to a fresh 29-month low on worries about capital outflows from emerging markets.
Elsewhere, Swedish inflation data released Wednesday supported the possibility of the Riksbank tightening policy later this year and pushed the krona higher. Meanwhile, the euro’s weakness persists, with the currency touching a 4 1/2-month low versus the dollar, while the British pound was weighed down by dismal retail sales data and ongoing political battles within the U.K. on Brexit.
In overnight geopolitical developments, Mexico proposed a 70% regional content requirement for autos in response to US proposal, according to sources. Elsewhere, US Secretary of State Pompeo is expected to return from North Korea with 3 detainees, according to South Korean press reports.
In the commodity sector, aside from the latest burst higher in oil prices, gold prices have continued the slide seen on Tuesday (-0.58%), as the USD held strong on higher treasury yields. Copper currently up 0.4% at USD 6773.50/tonne as Chinese demand remains strong. This demand is not seen in Chinese rebar however, which is currently down for the fourth straight Wednesday, at USD 559.90/t
Economic data on Wednesday include PPI and wholesale trade sales. Mylan, 21st Century Fox and Booking Holdings are among companies due to release results
Bulletin Headline Summary from RanSquawk
- WTI breaks USD 71/BBL and Brent over 77/BBL as US pulls out of Iran nuclear accord
- USD firm above 93.000 as US 10 year yield revisits 3%
- Looking ahead, highlights include DoEs, Fed’s Bostic, RBNZ and US 10yr Auction
Market Snapshot
- S&P 500 futures up 0.3% to 2,679.00
- STOXX Europe 600 up 0.2% to 390.84
- MXAP down 0.3% to 172.96
- MXAPJ down 0.03% to 564.77
- Nikkei down 0.4% to 22,408.88
- Topix down 0.4% to 1,772.91
- Hang Seng Index up 0.4% to 30,536.14
- Shanghai Composite down 0.07% to 3,159.15
- Sensex up 0.4% to 35,368.63
- Australia S&P/ASX 200 up 0.3% to 6,108.02
- Kospi down 0.2% to 2,443.98
- Gold spot down 0.6% to $1,306.27
- U.S. Dollar Index up 0.1% to 93.25
- German 10Y yield rose 2.1 bps to 0.582%
- Euro down 0.2% to $1.1844
- Brent Futures up 3% to $77.06/bbl
- Italian 10Y yield rose 10.5 bps to 1.61%
- Spanish 10Y yield fell 0.6 bps to 1.314%
Top Overnight News
- The European Union joined the fight to keep the Iran nuclear deal alive as President Donald Trump’s opponents warned his decision to withdraw the U.S. from the pact could lead America into another war in the Middle East
- Iranian President Rouhani said his country will continue to work with the other participants — though he warned that it could step up enrichment of uranium if those talks don’t yield tangible results
- Crude oil held near $70 a barrel after Trump withdrew from the Iranian accord and the U.S. told buyers of Iranian crude they have six months to curb their purchases or face tough penalties
- A company tied to a Russian oligarch sent $500,000 last year to an entity that Trump’s lawyer, Michael Cohen, used to pay hush money to porn actress Stephanie Clifford, her attorney claimed
- U.K. PM May suffered multiple defeats over her key Brexit law as legislators ripped up her plans and demanded that she keep the U.K. in the EU’s single market
- President Trump said the U.S. will withdraw from the 2015 accord to curb Iran’s nuclear program and reinstate financial sanctions on the Islamic Republic
- U.K. Prime Minister May suffered multiple defeats over her Brexit law as legislators ripped up her plans and demanded she keep the U.K. in the European Union’s single market
- Argentina asked the IMF for financing to help stem a rout in the peso that is sparking a surge in interest rates and threatening to derail the country’s economic recovery
- Deutsche Bank is considering a sweeping restructuring in the U.S. that could result in the firm cutting about 20% of staff in the region, according to people briefed on the matter
- Japanese human-resources and consumer-information provider Recruit Holdings has agreed to buy Glassdoor for $1.2b in cash. Recruit will gain access to the U.S. website’s extensive cache of content
Asia stocks traded mixed after a lacklustre close in the US as markets digested US President Trump’s decision to withdraw from the Iran nuclear agreement which in turn underpinned oil prices. ASX 200 (+0.2%) was kept afloat as energy names coattailed on the upside in oil, although gains were limited by weakness in financials after Australia’s largest lender CBA reported earnings. Elsewhere, Nikkei 225 (-0.4%) failed to benefit from JPY weakness and traded subdued, in which electricity names took a power dive on the higher input costs, while both Shanghai Comp. (+0.1%) and Hang Seng (+0.5%) were initially weaker after a daily net liquidity drain by the PBoC and the verbal spat between US and China envoys at the WTO. However, Chinese markets later recovered with Hong Kong leading the rebound as money market rates eased, in which the 1-month HIBOR declined for a 6th consecutive session. Finally, 10yr JGBs were uneventful despite the cautious risk tone and BoJ’s presence in the market for over JPY 1tln in 1yr-10yr JGBs. This was amid gains in yields which tracked upside in their US counterparts with the US 10yr yield homing in again on the 3.000% level.
Top Asian News
- Asia High-Yield Bonds Continue Sell-Off in Near ‘Perfect Storm’
- Foreign Investors Pull Most Cash From Taiwan Stocks Since 2012
- Emerging-Market Currencies Say Adios to 2018 Gain Amid Iran Risk
- Fosun International Increases FF Group Stake to 15%
- Tencent Music Names Five Banks to Arrange U.S. IPO: IFR
Major European bourses are trading mostly higher (Eurstoxx 50 +0.3%), with outperformance in the FTSE MIB . UK’s FTSE 100 (+0.5%) is buoyed by energy names amid higher oil prices post-Trump (Shell +2.4% and BP +2.1%). On the downside, Peugeot (-1.4%), Renault (-1.0%) and Airbus (-1.1%) are at the foot of the CAC 40 on their ties to Iran. Moving onto independent factors, Imperial Brands (+4.7%), Siemens (+4.5%) and Heidelbergcement (+1.4%) are higher following promising earnings while Compass Group (-6.1%) and Prosiebensat (-9.4%) are taking a hit on dissapointing metrics. Burberry (-6.2%) is lagging on the FTSE 100 after Belgian tycoon Albert Frère is to sell his whole GBP 520mln shareholding in the company.
Top European News
- Burberry Slumps After Billionaire Frere Sells Entire 6.6% Stake
- Germany’s Tightening Labor Market Might Spell More Trade Trouble
- Siemens Lifts Profit Outlook on Demand for Factory Software
- Pound Approaches Four-Month Low as Retail Sales Data Add to Woes
- Compass Sinks as Earnings Miss, Margins Narrow, Jefferies Says
- Dialog Semi Gains After Apple Hint Leaves Room for Optimism
In FX, The Dollar’s bull run continues and the index has duly posted another new 2018 peak in the process just above 93.400 and inching closer to the well-flagged next key technical resistance level at 93.522. This comes amidst broad-based Greenback gains, albeit with Turkey’s beleaguered Lira regaining some poise on increased efforts by the CBRT to stem the tide via direct intervention and ahead of a midday (BST) meeting between the PM and Economy Ministry to discuss currency market developments and the overall state of the economy (Usd/Try back below 4.3000 from 4.3700+ at one stage). JPY: The biggest G10 loser as the Buck extends its winning streak, with reaction to US President Trump’s withdrawal from the Iranian nuclear accord and threat of severe sanctions largely confined to crude that has spiked higher, and limited risk-aversion or contagion thus far. Hence, Usd/Jpy as bounced firmly from sub-109.00 lows above 109.50 and towards recent peaks just above 110.00, with the 200 DMA and a key Fib (around 110.19 and 110.24 respectively) also lying in wait beyond the big figure. EUR: Yet more bearish fundamentals (via Italian and French data misses) to compound the positional and Dollar related downside for the single currency below 1.1850, and having relinquished 1.1900 on Tuesday there is little in the way of technical support before 1.1800 aside from a late December 2017 low (1.1812), though the round number may offer some sentimental respite given that a major Fib sits just below (1.1790).
In commodities, oil prices have continued upwards on Wednesday after President Trump confirmed the withdrawal of the US from the Iran nuclear agreement and imposing of sanctions on the nation; WTI and Brent June ’18 futures at USD 71.00 (+2.8%) and USD 76.89 (+2.7%) respectively. Said sanctions could lead to the reduction of oil exports by 200-500k BPD over the next 6 months for the middle-eastern nation, according to UBS. Gold prices have continued the slide seen on Tuesday (-0.58%), as the USD held strong on higher treasury yields. Copper currently up 0.4% at USD 6773.50/tonne as Chinese demand remains strong. This demand is not seen in Chinese rebar however, which is currently down for the fourth straight Wednesday, at USD 559.90/t
Looking at the day ahead, the main focus is likely to be the April PPI report in the US ahead of the all important CPI tomorrow. March wholesale trade sales and inventories data will also be released while in Europe the only data of note is the March industrial production print in France. The Fed’s Bostic is also due to speak again, later in the evening. It’s worth noting that Japan PM Abe is also due to host South Korean President Moon Jae-in and Chinese Premier Li Keqiang.
US Event Calendar
- 7am: MBA Mortgage Applications, prior -2.5%
- 8:30am: PPI Final Demand MoM, est. 0.2%, prior 0.3%;
- PPI Ex Food and Energy MoM, est. 0.2%, prior 0.3%; PPI Ex Food, Energy, Trade MoM, est. 0.2%, prior 0.4%
- PPI Ex Food and Energy YoY, est. 2.4%, prior 2.7%; PPI Ex Food, Energy, Trade YoY, prior 2.9%
- 10am: Wholesale Trade Sales MoM, prior 1.0%; Wholesale Inventories MoM, est. 0.5%, prior 0.5%
- 1:15pm: Fed’s Bostic Speaks on Economic Outlook and Monetary Policy
DB’s Jim Reid concludes the overnight wrap
After much speculation Mr Trump last night announced that the US will leave the Iran Nuclear deal which has been the focal point for markets this week. The mini-roller coaster ride for WTI oil started a few hours earlier as it dropped -4.38% following a CNN story which noted the Iran accord may not collapse altogether. It then pared back losses after President Trump announced the US will leave the accord and re-impose the sanctions on Iran. Notably, the sanctions are subject to 90-180 days of wind down (petroleum related transactions have 180 days) and he also added that the US is willing to negotiate a new deal with Iran. As we type this morning, WTI has recovered to $70.64/bbl ($68.11 at yesterday’s lows), slightly below Monday’s intra day YTD highs and c.17.5% up in 2018.
In terms of other initial reactions, the EU leaders and Iran’s President Rouhani noted they will aim to continue to comply with the deal’s terms, although France’s President Macron added “we’ll work collectively” on a wider accord. Elsewhere, Treasury Secretary Mnuchin said he didn’t expect the sanctions to raise the oil price, since “to a certain extent, some of this was already in the market on oil prices”.
Following on, DB’s Michael Hsueh noted that because of the 180-day winddown period, neither Iranian oil production nor exports will drop before the 5 November 2018 effective date. In fact, if behaviour follows the example from 2012, there is the possibility of a short spike in Iranian exports just before the effective date, after which a slow decline may set in. In his note, he considers the possibility of a pullback in the oil price as a result of the 5 remaining JCPOA partners continuing to import Iranian oil at existing levels. However, with increasing likelihood of a third year of crude oil market deficit in 2019, and no sign of OPEC retreat, he would look for opportunities to accumulate long exposure on Brent weakness. Refer to his note for more details.
Over in equities yesterday, US bourses fluctuated before closing virtually flat (S&P -0.03%; Nasdaq +0.02%; Dow +0.01%). Have the 3 main bourses ever collectively closed so close to being unchanged? Within the S&P, modest gains in the energy and financials sectors were broadly offset by losses from telco and utilities stocks. Across the pond, European equities were broadly lower (DAX -0.28%; FTSE -0.02%), weighed down by the Italian FTSE MIB (-1.64%) as Bloomberg reported that the leaders of the two largest parties opposed the idea of a “neutral government”, thereby raising the likelihood of fresh elections, potentially as early as 8th July.
Now moving to government bonds, the yields on UST 10y nudged up 2.6bp to 2.977% (2.985% in Asia) in part as Fed Chair Powell endorsed the market pricing on rates, indicating that “…market participants’ expectations for policy seem reasonably well aligned with policymakers’ expectations” and that “markets should not be surprised by our actions if the economy evolves in line with expectations”. He added that “there is good reason to think the normalisation of monetary policies in advanced economies should continue to prove manageable” for emerging economies. Over in Europe, the yields on 10y Italian BTPs jumped to the highest since late March (+10.3bp) given the aforementioned political developments, while Bunds (+3.3bp), Gilts (+4.5bp) and OATs (+4.0bp) also rose in sympathy.
This morning in Asia, markets are trading mixed with the Nikkei (-0.38%) and Kospi (-0.27%) both down while the Hang Seng (+0.40%) and Shanghai Comp. (+0.06%) are up. Elsewhere, the UST 10y yield is up c1bp.
Back to yesterday and the US dollar index firmed for the third consecutive day to the highest since late December (+0.40%). The Euro fell -0.49% while Sterling was marginally lower at -0.07%. Over in EM, the Argentina Peso pared losses to -2.43% vs. the Greenback yesterday, in part as Argentina’s President Macri said he has “spoken with IMF Director Lagarde (for assistance), and she confirmed we would start working on an agreement”. Reuters and local newspaper Clarin noted Argentina is seeking a US$30bln financing deal with the IMF to “strengthen growth” and help avoid crises as in the past.
Away from the markets, there seemed to be more political traction in North Korean. China’s President Xi has met with North Korea’s leader Kim Jong Un over the past two days and the Xinhua press agency has quoted Kim saying “as long as relevant parties eliminate the hostile policy…against North Korea….(we) do not need to have nuclear weapons, and de-nuclearisation is achievable”. Elsewhere, President Trump has despatched US Secretary of State Pompeo to Pyongyang to prepare for the upcoming summit between himself and Kim later on.
Now reverting back to Italian politics, our European economists believes that while a July election is unusual for Italy, it is a possibility, in part as the other option of voting in September may be too risky in the eye of the president, as there is no guarantee that a clear majority might emerge. Further, a vote in September may not leave enough time to approve the budget, while a July election would reduce the risk of not changing 2019 budget which currently includes a VAT increase that could seriously damage the Italian recovery. Overall, they believe in the coming days we will see if the moral pressure of the President on the parties to support this neutral government will bear fruits or not.
Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the JOLTS job openings rose to an all-time high and was above expectations at 6.55m (vs. 6,1m). Meanwhile the quits rate rose to a new cyclical high of 2.3%, signalling that job seekers may be increasingly inclined to leave their jobs in search of a better deal. Elsewhere, the April NFIB small business optimism index was slightly above market (104.8 vs. 104.5 expected). In Europe, Germany’s IP print was above expectations and rose the most since November, leading to an annual rate of 3.2% yoy (vs 3% expected). The March trade surplus was €25.2bln (vs. €22.5bln expected) as exports outpaced a decline in imports (4.0% yoy vs. 1.6% yoy). Overall, our European economists interpret these data as being consistent with their estimate that the German economy grew 0.3% qoq in Q1. Elsewhere, the UK’s April Halifax house price index fell to 2.2% yoy (vs. 3.2% expected).
Looking at the day ahead, the main focus is likely to be the April PPI report in the US ahead of the all important CPI tomorrow. March wholesale trade sales and inventories data will also be released while in Europe the only data of note is the March industrial production print in France. The Fed’s Bostic is also due to speak again, later in the evening. It’s worth noting that Japan PM Abe is also due to host South Korean President Moon Jae-in and Chinese Premier Li Keqiang.
3. ASIAN AFFAIRS
i)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 2.35 points or 0 .07% /Hang Sang CLOSED UP 133.33 points or 0.44% / The Nikkei closed DOWN 99.91 POINTS OR .44% /Australia’s all ordinaires CLOSED UP .34% /Chinese yuan (ONSHORE) closed DOWN at 6.3698/Oil UP to 70.92 dollars per barrel for WTI and 77.09 for Brent. Stocks in Europe OPENED MIXED. ONSHORE YUAN CLOSED DOWN AT 6.3698 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3644/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING 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/usa
Mike Pompeo returns to the uSA from North Korea with the 3 Americans on board
(courtesy zerohedge)
Pompeo Expected To Return With 3 Americans Held In North Korea
Shortly after arriving in Pyongyang for meetings with North Korean officials, news broke that the new US Secretary of State may have a big surprise when he returns to the US: according to Yonhap, which cited a South Korean presidential official, North Korea is expected to release three U.S. citizens held in the communist state “in an apparent goodwill gesture ahead of a historic meeting between its leader Kim Jong-un and U.S. President Donald Trump.”
The official reportedly added that Pompeo was expected to return with “the exact time of the Trump-Kim summit, along with the three U.S. captives in North Korea.”
“We expect him to bring the date, time and the captives,” the official said, while speaking on condition of anonymity.
Pompeo arrived in Pyongyang earlier in the day, according to reports, marking his second trip to the reclusive North in less than a month, although this one not nearly as top secret as his first one over Easter.
Trump earlier said the location of his meeting with Kim has already been set.
Pompeo earlier said the North’s release of the three U.S. citizens would be a “great gesture,” noting the U.S. has been asking for their freedom for 17 months. Pompeo was earlier expected to bring the three captives through the inter-Korean border, but the Cheong Wa Dae official said that will likely not be the case. The three U.S. citizens are all said to be Korean-Americans.
It was not clear when Pompeo is set to leave Pyongyang
END.
3 b JAPAN AFFAIRS
end
c) REPORT ON CHINA/HONG KONG
4. EUROPEAN AFFAIRS
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
Looks like Trump really wants a new agreement with Iran as sanctions will not begin until months
(courtesy zerohedge)
Mnuchin Reveals Trump’s Iran Deal Gamble: “The Objective Is To Enter Into A New Agreement”
One of the growing concerns resulting from Trump’s decision to pull the US out of the Iran deal, is that oil – and gasoline – prices will jump so much, now that anywhere between 200kb/d and 700kb/d in Iran exports is taken out of the market, they will offset most benefits to US consumers from the Trump tax cuts. We covered this topic three weeks ago in “Rising Gas Prices Threaten To Wipe Out Trump’s Tax Cut Benefits.”
Incidentally, that’s just one of the less severe complications that could emerge over the next 6 months as the full extent of the new Iran sanctions is rolled out. As we reported earlier, Trump said the U.S. would levy the “highest level” of sanctions against Iran—including the punishment of Western companies and banks if they continue to do business with the country—as Washington pulled out of the Iranian nuclear accord.
And while new contracts are banned, companies and banks will have 90 days or 180 days to wind down their ties before risking penalties.
“Any nation that helps Iran in its quest for nuclear weapons could also be strongly sanctioned by the United States,” Trump said, envisioning a complete paralysis of the Iranian economy. As the WSJ summarizes, financial or business activities outlawed by Aug. 6, Treasury said, include exports of airplanes and parts, dollar transactions, trade in gold and other metals, sovereign debt and auto-industry deals. By Nov. 4, sanctions ban oil purchases, dealings with Iran’s ports and shipping industry, any ties to its insurance sector and dealings with the central bank.
But is the president really willing to alienate any of the countless European and global states that will continue trading with Iran, especially since the latest sanctions cover every major aspect of Iran’s economy, most importantly banning oil exports from the country, but also hitting the financial sector and the automotive and aviation industries.
That’s the big question.
Speaking at a press conference after Trump’s announcement, Treasury Secretary Steven Mnuchin said that “this administration is resolved to addressing the totality of Iran’s destabilizing activities”
And here something interesting emerged.
Ahead of the Trump sanction announcement, many had speculated that the president is playing hard ball only for purely populist/theatrical purposes, and in reality Trump is exiting the deal only so he can re-enter it, but on his own terms.
Furthermore, the adverse impact to Trump’s approval rating that would accompany a surge in gasoline prices would be fat worse than any number of Russian kompromats the NSA can leak to the WaPo/NYT.
And the reality is that both Trump and Mnuchin realize this, and are hardly willing to gamble with Trump’s freedom, especially since none other than Trump himself warned that should the Democrats win the midterm elections, that he may be impeached. Yet while Mnuchin said during today’s press conference that he does “not expect oil prices to go higher”, absent Iranian oil returning fully into the market, it seems improbably that oil will slide right back to $50-60.
So then was today’s historic unraveling of Obama’s biggest foreign policy achievement just another grand performance by Trump?
One possible sign pointing to “yes” is that Mnuchin said the hiatus before enforcing compliance is to buy time for allies to exit the Iran deals. But much more importantly, it is also meant to get Iran and European allies to back a potential new accord on nuclear development and other activities deemed hostile by Washington.
And, as the WSJ adds, “the wind down periods allow for more than enough time that if there’s not a deal that the sanctions will take effect,” Mnuchin said and added what we believe is the punchline: Trump’s objective in re-imposing sanctions on Iran and threatening to penalize allies “is to enter into a new agreement” even though sanctions will remain in place until the nuke program is stopped. Then again, according to Iran and countless independent observes, Iran’s program already is stopped, which means that Trump himself deliberately set up the strawmen so he can then take them down, and upon “revising” the Iran deal, reincarnate the Iran nuclear deal, only this time it will be “Trump’s Iran Deal“, not “Obama’s Iran Deal.”
And there you have it: according to Mnuchin, Trump’s goal is not to punish and leave Iran out of the global community – while sending the price of oil soaring -but to threaten and pressure. In fact, as the WSJ adds, “just as the Trump administration announced steel tariffs but later provided temporary exceptions for allies, the U.S. is leaving itself wiggle room should its actions prove to be too disruptive or too tough to enforce.”
The loophole were also a mile wide: “Mr. Mnuchin said that the U.S. could give exemptions to countries proving they were significantly reducing their purchases from Iran. Treasury didn’t elaborate on what “significant” means.”
Finally, addressing the underlying futility of the sanctions, the head of MENA research at MUFG Bank, Ehsan Khoman, said that China, India, Russia and Turkey will likely oppose U.S. sanctions and keep current levels of Iranian crude purchases, even as the occasional U.S. allies – including Japan and South Korea – may comply with U.S. sanctions because of concerns they could lose U.S. security umbrella against North Korea.
Meanwhile, the EU could also escape Trump’s retribution and protect its entities operating in Iran by offering non-USD denominated currencies through institutions including European Investment Bank.
“It is unclear whether the potential use of non-USD denominated finance lines will offer much protection to European entities, and thus such a move could be largely symbolic in nature.”
Finally, Khoman notes that in a sign of de-escalation, the EU may not reinstate sanctions on shipping insurance, which were “critical in disrupting Iranian crude exports between 2012 and 2016.”
In short, Trump’s “draconian” sanctions, which will be delayed for months, have extensive loopholes, and allow most of Iran’s existing oil trade partners to continue buying oil, may be just a big smokescreen that will allow Trump to say he achieved one more campaign promise. Meanwhile, in reality, both Trump and Mnuchin are doing their best behind the scenes to “enter a new agreement”, one which Trump can bring to the masses and say: “here, I took Obama’s unacceptable, defective deal, and made it better…. and i also brought down the price of oil too.”
END
Iran
They are burning the USA flag and are shouting “death to America”
(courtesy zerohedge0
Watch: Iran Lawmakers Burn US Flag, Shout “Death To America”
Hard-line lawmakers celebrated President Donald Trump’s announcement to pull the US out of the Iran deal – a decision that will mostly help them win the sympathies of the Iranian people – by burning a US flag while shouting “Death to America!” in Parliament, the Telegraphreported.
They also burned a piece of paper representing the nuclear deal (despite Iranian President Hassan Rouhani declaring during his rebuttal to Trump that Iran would seek further cooperation with its European partners and China, but barring that would begin enriching uranium “in the next weeks”) and stomped on the paper’s ashes.
The Telegraph
✔@Telegraph
Iranian MPs set US flag ablaze in parliament, shouting ‘death to America’https://www.telegraph.co.uk/news/2018/05/09/iranian-mps-set-us-flag-ablaze-parliament-shouting-death-america/ …
Rouhani dispatched his foreign minister, Javad Zarif, to begin negotiating with the countries still in the deal – a group that includes, France, the UK, Germany, Russia and China. Even so, Rouhani stressed that he could restart the country’s centrifuges at any time.
“So if necessary, we can begin our industrial enrichment without any limitations,” the Iranian leader said. “Until implementation of this decision, we will wait for some weeks and will talk with our friends and allies and other signatories of the nuclear deal, who signed it and who will remain loyal to it. Everything depends on our national interests.”
After the flag burning demonstration, Parliament Speaker Ali Larijani said responsibility for saving the accord now falls to the European Union.
“The period is only a window in which the EU can prove if it has enough weight for settling down international issues or not?” he said.
Larijani also urged the country’s nuclear program to prepare for “resumption of all aspects of nuclear activities.”
All of the remaining signatories to the deal expressed their disappointment with the US decision.
On Wednesday, China vowed to “safeguard” the agreement.
“China calls on all relevant parties to assume a responsible attitude, bear in mind the long-term and general interest, persist towards a political and diplomatic resolution and properly control disputes, so as to return at an early date to the right track of implementing the deal,” foreign ministry spokesman Geng Shuang told a regular press briefing.
Sergei Lavrov, Russia’s acting foreign minister, said Russia remained committed to the deal.
Meanwhile, Saudi Arabia and other members of the Gulf Cooperation Council basked in what they see as an immense political victory over their regional rival, Tehran.
Saudi Arabia, the United Arab Emirates and Bahrain swiftly backed U.S. President Donald Trump’s decision to reimpose sanctions on Tehran, reflecting their concern about Iran’s ballistic missile programme and support for militant groups.
“Paris and London may not like Trump’s decision, but how would the French or British feel if their capital cities came under direct threat by the Iranians?” Faisal Abbas wrote in Saudi Arabia’s English-language Arab News daily next to a headline that read: “The deal is dead.”
Many observers said that, while harsh criticism of the US has been a staple of Iranian politics for years, it was the first time anybody could remember something being burned inside the Parliament building.
The demonstration reflects broad public anger in Iran following Trump’s decision, which effectively puts an end to the 2015 Joint Comprehensive Plan of Action, otherwise known as the Iran deal (although as noted earlier, there are many unknowns on just how the unwind will take place). While Iranian officials, including the parliament speaker, say they hope Europe will work with them to preserve the deal, many are pessimistic.
The lawmakers, including a Shiite cleric, held the flaming flag alight as their colleagues joined their chants.
While US flag-burning is common in Iran and harsh criticism of America has been a staple of Iranian parliamentary politics for years, it was the first time political observers could remember anything being burned inside the parliament itself.
TURKEY
As the Turkish lira plummets to almost 4.382 last night, Erdogan summons his economic team in an effort to stem the losses on his currency. The short term interest rate is 17%
(courtesy zerohedge)
Turkish Lira Jumps After Erdogan Summons Economic Officials To His Palace
With Turkish capital markets in free fall, the Turkish lira crashing to record lows…
… and one year TRY swap spreads hitting 17%, the highest since the days just after Lehman’s failure and AIG’s bailout…
… and chaos increasingly gripping the Turkish economy as the central bank is barred from doing the one thing that is so desperately needed to arrest the TRY plunge, i.e., hiking rates, by a president who is not a fan of monetary tightening, this morning Turkey’s cartoonish president Recep Tayyip Erdogan decided he had had enough of watching a run on his currency and summoned economic decision makers to his palace to discuss the plunge in the lira, Bloomberg reported.
With the lira extending its longest losing streak in seven months on Wednesday after the U.S. exit from the Iran nuclear deal sent oil prices surging, the lira reversed losses after news of the meeting, fueling speculation that authorities may take measures to stem a market rout.
Earlier on Wednesday, Turkey’s central bank announced measures to boost foreign exchange liquidity and stop the run on the currency, although it failed to stem the plunge. Central Bank Governor Murat Cetinkaya was also expected to attend the meeting at Erdogan’s palace at 2 p.m. local time, according to the Bloomberg sources.
Separately, Deputy Prime Minister Mehmet Simsek said on Wednesday that Turkey’s government has “never fought the markets” and the central bank will continue to do what’s needed. Market fluctuations are temporary and won’t create permanent damage, Simsek said, although it was not clear from his comment that after waging war against the Kurds for the past two years, Erdogan would now shift his sights to Lira sellers.
Of course, when nothing of substance is revealed following today’s “gathering”, which may reveal that one or more top Turkish policymakers are also traitors and supporters of Gulen, just so Erdogan has a scapegoat for a day or two on whom to blame the ongoing economic collapse, we expect the TRY freefall to accelerate.
end
Iran/
The Iranian Rial’s Economic Death Spiral
Authored by Steve H. Hanke of the Johns Hopkins University. Follow him on Twitter @Steve_Hanke.
The Grim Reaper has taken his scythe to the Iranian rial (see chart below). The Islamic Republic of Iran remains in the ever-tightening grip of an economic death spiral. The economy is ever-vulnerable because of problems created by the last Shah, and added to massively by the theocratic regime. Indeed, the economy is more vulnerable to both internal and external shocks than ever. That vulnerability will become more apparent in the face of President Trump’s tearing up of the Joint Comprehensive Plan of Action (JCPOA), and the laying on of more primary and secondary sanctions against Iran.
How fast the death spiral will spin is anyone’s guess.
The most important price in an economy is the exchange rate between the local currency and the world’s reserve currency — the U.S. dollar.
[ZH: In fact, the Rial traded at 85,000 Rials per dollar late last night…]
In Iran, the IRR/USD exchange rate, represents the most important price. By using active and available black-market (read: free market) data for the Iranian rial, I have transformed the black-market exchange rate into accurate measurements of country wide inflation.The economic principle of Purchasing Power Parity (PPP) allows for this reliable transformation, so long as the annual inflation rate exceeds 25%.
The chart below shows how Iran’s implied annual inflation rate has surged to an annual rate of 75.8% with the collapse of the rial’s value against the U.S. dollar. Indeed inflation has spiked in 2018.
So, what is to come of Iran’s economic death spiral? It can be summed up in one word: misery.
To get a sense of how miserable Iran is, we can look to Hanke’s Annual Misery Index. Back in February when the index was calculated, Iran ranked the 11th most miserable country, out of the 98 countries in the index. Using today’s surging inflation rate of 75.8% in our calculation of misery, Iran would a rank 3rd, just behind Venezuela and Syria.
Without meaningful reform in Iran, more of the same will be expected for its economy and the rial. In the words of George W. Bush, “this sucker could go down.”
6 .GLOBAL ISSUES
Three good indicators proving economic problems are facing headwinds
- the South Korean export indicator is always a good indicator of global growth and it is falling
- the 2/10 USA yield curve is flattening and there is only 43 basis points of difference between the two
- consumers are saving more as they are worried about the economy
(courtesy Tumerkan/Palisade Research.com)
These 3 Important Indicators Are Signaling Economic Problems Ahead
Authored by Adem Tumerkan via Palisade-Research.com,
The consensus is that the economy’s doing great – and will continue to do well.
Everything seems fine – right?
Well, not exactly.
I have been looking at some important – but little used – indicators that are showing very troublesome economic data.
Here are three important indicators that will throw ice on the hot economy narrative the mainstream media is pushing…
Right now, the yield curve is dangerously close to flattening – then soon after will invert.
Looking at the 2 n’ 10 Rule – the spread between the 2-year Treasury and the 10-year Bond – we see the spread is at the lowest it’s been since The Great Recession of 2008.
43 basis points. . . That’s it.
To put this in perspective, if the Fed hikes just two more times (which is 50 basis points) and the 10-year keeps sticking below 3%, then the yield curve will invert.
This is important because yield curve inversion – when the spread turns negative – has preceded the last seven straight recessions.
If we only look at more modern times – say the last 30 years – we can see the spread collapse negative before a recession strikes.
This 2 n’ 10 Rule is still one of the most important indicators we can use to forecast recessions. And it’s saying that the U.S. economy is more fragile than many like to admit.
There is also the cash hoarding problem going on – and that’s a bad signal of economic health.
To summarize, when things are going well in the economy – people spend more money and save less. Because they feel confident they will be able to make that money back.
But when things are uncertain and become difficult – people save their money. They will put off dining out and buying things they wanted and instead keep money in their bank account for a ‘rainy day’.
Today, Americans are saving at the highest levels since the 1991 recession. They are skittish about the future.
“The average checking account customer has more than $3,700 stashed away. The median amount in checking accounts since 1991 is $2,263… Anything lower than this signifies the economy is doing well… Anything above this indicates the economy is not doing well.”
This problem coincides with soaring credit card debt. And what that means is Americans would rather go into debt and finance their consumption while paying some interest instead of spending all their money upfront.
They’re opting to keep their checking accounts full incase they will need cash – not credit – immediately in the future.
That doesn’t sound like confidence – does it?
Finally, and most importantly, another situation signaling trouble ahead is a little-followed indicator – but is eerily accurate. . .
The South-Korean Export Growth (SKEG) Indicator…
Many wouldn’t have guessed that South Korean exports are a great leading indicator of global corporate earnings (EPS).
But historically – it is.
And right now, the SKEG indicator just turned negative.
That means so will global corporate earnings.
Just look at the 25-year correlation between the two. . .
I should also remind you that the last time the SKEG indicator dropped this steeply negative was around the time China devalued their currency – the Yuan – in January 2016. Sending global markets spiraling and causing the Fed to tone back their hawkish attitude.
Also, gold ended the multi-year bear market it was in and rallied over $300 during the next few months.
If the SKEG indicator continues its accuracy – as it always has if you study the chart above – then we can forget about the mainstream media’s view of soaring earnings in the coming months.
Instead, I expect earnings to underperform over the next 12 months.
* * *
So, even with the flattening yield curve, a cash hoarding problem, and South Korean Export Growth signaling problems ahead – the Fed continues to tighten credit.
These are some widening cracks in the global growth story.
One of these cracks isn’t anything to shout “WATCH OUT” over – but three of them is worrying.
If history is any indicator – there is a high chance of big problems ahead. . .
Interesting data points today:
1.huge crude draw
2 production continues to spike to record levels
3. small crude imports
and thus WTI tops 71 dollars per barrel
(courtesy zerohedge)
WTI Tops $71 After Surprise Crude Draw, Production Spikes
WTI/RBOB extended gains overnight (WTI at 3.5yr highs) following Trump’s Iran decision and a surprise crude draw reported by API, and DOE data confirmed the draw (even larger) along with gasoline and distillate draws. US crude production jumped to a new record high.
“It’s the time of year when you expect oil draws because refiners start coming back fairly soon from maintenance season,” says James Williams, president of energy researcher WTRG Economics.
API
- Crude -1.85mm (+1mm exp)
- Cushing +1.653m
- Gasoline -2.055mm
- Distillates -6.674mm – biggest draw since 2004
DOE
- Crude -2.197mm (+1mm exp)
- Cushing +1.388mm
- Gasoline -2.174mm
- Distillates -3.791mm
Over the last couple of weeks, U.S. crude inventories have built up, in part helped by an unusual drop in refining activity, at least compared with last year’s trends, but that trend is over this week with crude surprisingly drawing down 2.197mm barrels…
Distillate inventories are near their five-year lows on a seasonal basis…very unseasonal!
Additionally, Bloomberg reports that gasoline demand soared at its fastest rate since Feb 2016.
Bloomberg’s Javier Blas notes a key statistic: Year-to-date, U.S. crude inventories have risen by ~11.5 million barrels. To put that into perspective, consider that over the same period in 2017 they built ~48.8 million barrels.
The difference shows the impact of OPEC and its allies production cuts, particularly Saudi Arabia. The kingdom is shipping a lot less crude into the U.S. year-to-date (722,000 barrels a day) than it did during the same period of last year (1.20 million barrels a day).
Crude imports tumbled…
US Crude Production continues to soar – up an impressive 84k b/d last week to 10.703mm b/d
With WTI hovering around $71 ahead of today’s DOE data (ramping off yesterday’s Iran decision) and popped above it as the dat hit…
“One of the most important deadlines for oil markets was yesterday, with the announcement the U.S. is reinstating sanctions against Iran,” said Luisa Palacios, a director at Medley Global Advisors LLC, in a telephone interview Tuesday. “The second most important deadline is May 20, when Venezuela holds presidential elections.”
Investors traded about $1.8 billion worth of the SPDR S&P Oil & Gas Exploration & Production ETF yesterday, more than three times the average daily turnover for the fund and the most since November 2016.
The largest trade was worth $13.8 million when a trader bought 348,000 shares of the fund.
8. EMERGING MARKET
ARGENTINA
VENEZUELA
We are now witnessing a mass exodus of the Venezuela army as they desert to Columbia and other jurisdictions
(courtesy zero hedge)
Mass Exodus: Venezuelan Army Troops Desert In Droves Ahead Of Presidential Election
The Venezuelan Army could be nearing a collapsing point, as high-ranking military officers and enlisted troops “are joining the exodus of Venezuelans to Colombia and Brazil, fleeing barracks and forcing President Nicolas Maduro’s government to call upon retirees and militia to fill the void,” said Bloomberg.
Venezuela’s economic crisis keeps getting worse, as high desertion rates are now plaguing military bases in Caracas and the countryside, which poses significant security challenges in the upcoming presidential election on May 20. By law, the military oversees all voting centers throughout the country, including the electoral materials and voting machines.
“The number is unknown because it used to be published in the Official Gazette. Now, it is not,” said San Miguel, director of Control Ciudadano, a military watchdog group in Caracas. She said soldiers are fleeing for the same reason citizens are: “Wages are low, the quality of food and clothing isn’t good.”
A massive shortage of enlisted troops and military officers comes as more than one million Venezuelans have escaped the collapsed economy, according to the International Organization for Migration. Hyperinflation has made the country’s currency worthless, which has sparked a biblical humanitarian crisis across the failed state.
According to one unnamed retired officer, military personnel who rank as high as generals were recently “called in and quartered for several days at their units.” The government has called in retired officers and militia members, as the hemorrhaging continued before the election in twelve days. “Government officials are training these fill-in personnel for the election,” said a second anonymous retired officer.
Bloomberg said the U.S. and regional organizations would not “recognize the balloting as legitimate,” due to the military’s deep involvement with the election process.
“As the once-prosperous nation fell apart, Maduro consolidated power by creating an all-powerful assembly to bypass the national legislature. The regime jailed and banned opponents and launched a wave of arrests before the May 20 vote. The U.S. and regional organizations have refused to recognize the balloting as legitimate, and the main opposition coalition has promised a boycott in the face of what it says will be a rigged contest.
Venezuelan elections are overseen by its military, the strongest force in the country and one increasingly intertwined with Maduro’s regime. The rush to fill out units is required by the so-called Plan Republica, the security deployment of the Defense Ministry that begins on the eve of election day and lasts until the day after. By law, the armed forces are guarantors of peace and security, guarding ballots and voting machines at all 14,000-odd voting sites. They transport these materials and machinery to each voting center, often a school, and guard it,” said Bloomberg.
Control Ciudadano’s San Migue said in March that the level of desertion from the Fuerza Armada Nacional Bolivariana has increased to dangerous levels in the last year, noting that the exodus is primarily enlisted troops. She said 10,000 troops have recently asked to retire.
“Since 2015 there has been an increase in military detainees accused of treason, desertion and other crimes,” she added. “Our estimate is that there are 300 people who are imprisoned, mostly troops. A few are senior officers, others are civilians linked to the military.”
Gonzalo Himiob, director of Foro Penal, a human-rights group, said, “those who ask to retire are put into arrest for a week at the military counterintelligence headquarters.”
Himiob added, “that’s how worried the government is.” He also said most flee the country after they are released from jail. In recent days, the government has run out of jail cells for military personnel who have asked to retire.
A flashpoint could be developing as President Maduro suggested that he will start an armed revolution if his opposition comes into power that wants to hand the country’s “riches” to “imperialist” forces [Americans]. In a campaign speech last week, President Maduro — who is hoping to win a new six-year presidential term in the highly disputed May 20 election — attacked his opposition rival, Henri Falcón, of wanting to sell the country’s vast natural resources to “the gringos.”
Nevertheless, Venezuela could soon face the first full-blown civil war the Western world has experienced in more than 100-years, as it now appears the country’s military is imploding before an election that the U.S. will not recognize the results.
END
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:00 am
Euro/USA 1.1874 UP .0007/ 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 MIXED
USA/JAPAN YEN 109,71 UP 0.679(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 1.3571 UP.0018 (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED
USA/CAN 1.2926 DOWN .0022 (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 WEDNESDAY morning in Europe, the Euro ROSE by 7 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1865; / Last night Shanghai composite CLOSED DOWN 2.35 POINTS OR 0.07% / Hang Sang CLOSED UP 133.33 POINTS OR 0.44% /AUSTRALIA CLOSED UP.34% / EUROPEAN BOURSES MIXED
The NIKKEI: this WEDNESDAY morning CLOSED DOWN 99.91 OR .44%
Trading from Europe and Asia
1/EUROPE OPENED MIXED
2/ CHINESE BOURSES / : Hang Sang CLOSED UP 133.33 POINTS OR 0.44% / SHANGHAI CLOSED DOWN 2.35 POINTS OR 0.07% /
Australia BOURSE CLOSED UP .34%
Nikkei (Japan) CLOSED DOWN 99.91 POINTS OR .44%
INDIA’S SENSEX IN THE GREEN
Gold very early morning trading: 1308.05
silver:$16.44
Early WEDNESDAY morning USA 10 year bond yield: 3.00% !!! UP 3 IN POINTS from MONDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/
The 30 yr bond yield 3.15 UP 2 IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/
USA dollar index early WEDNESDAY morning: 93.00 DOWN 12 CENT(S) from TUESDAY’s close.
This ends early morning numbers WEDNESDAY MORNING
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And now your closing WEDNESDAY NUMBERS \1: 00 PM
Portuguese 10 year bond yield: 1.713% DOWN 2 in basis point(s) yield from TUESDAY/
JAPANESE BOND YIELD: +.0.054% UP 1/5 in basis points yield from TUESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.304% DOWN 2 IN basis point yield from TUESDAY/
ITALIAN 10 YR BOND YIELD: 1.882 UP 3 POINTS in basis point yield from TUESDAY/
the Italian 10 yr bond yield is trading 58 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 WEDNESDAY
Closing currency crosses for WEDNESDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1849 DOWN .0019(Euro DOWN 19 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 109.73 UP 0.697 Yen DOWN 70 basis points/
Great Britain/USA 1.3555 DOWN .0002( POUND DOWN 2 BASIS POINTS)
USA/Canada 1.2850 DOWN .0097 Canadian dollar UP 97 Basis points AS OIL ROSE TO $71,23
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This afternoon, the Euro was DOWN 19 to trade at 1.1849
The Yen FELL to 109.73 for a LOSS of 70 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 2 basis points, trading at 1.3555/
The Canadian dollar ROSE by 97 basis points to 1.2850/ WITH WTI OIL RISING TO : $71.23
The USA/Yuan closed AT 6.3623
the 10 yr Japanese bond yield closed at +.054% UP 1/5 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield UP 3 IN basis points from TUESDAY at 3.002% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.153 UP 1 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, 93.07 DOWN 5 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 WEDNESDAY: 1:00 PM EST
London: CLOSED UP 96.77 POINTS OR 1.28%
German Dax :CLOSED UP 30.85 POINTS OR 0.24%
Paris Cac CLOSED UP 12.70 POINTS OR .23%
Spain IBEX CLOSED UP 53.10 POINTS OR 0.52%
Italian MIB: CLOSED UP 124.02 POINTS OR 0,51%
The Dow closed UP 182.33 POINTS OR 0.75%
NASDAQ closed UP 72.00 Points OR 1.00% 4.00 PM EST
WTI Oil price; 71,23 1:00 pm;
Brent Oil: 77.17 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 62.98 DOWN 23/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 60 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:$71.18
BRENT: $77,20
USA 10 YR BOND YIELD: 3.00% THIS RAPID RISE IN YIELD IS ALSO VERY DANGEROUS/RECESSION COMING/DERIVATIVES FRY!!
USA 30 YR BOND YIELD: 3.16%/DEADLY
EURO/USA DOLLAR CROSS: 1.1849 DOWN .0018 (DOWN 18 BASIS POINTS)
USA/JAPANESE YEN:109.72 UP 0.681/ YEN DOWN 68 BASIS POINTS/ .
USA DOLLAR INDEX: 93.13 UP 1 cent(s)/dangerous as the lower the dollar the higher the inflation.
The British pound at 5 pm: Great Britain Pound/USA: 1.3546 DOWN 0.0007 (FROM YESTERDAY NIGHT DOWN 7 POINTS)
Canadian dollar: 1.2854 UP 93 BASIS pts
German 10 yr bond yield at 5 pm: +0.559%
VOLATILITY INDEX: 13.40 CLOSED DOWN 1.31
LIBOR 3 MONTH DURATION: 2.353% .
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Stormy Daniels Lawyer’s Bombshell Claim: Putin-Linked Oligarch Paid Cohen $500K For “Hush” Payment
Update: While representatives for Cohen declined to comment, a spokesperson for Vekselberg told CNN.
A lawyer for Columbus Nova, the company that cut Cohen a $500,000 check that Avenatti says could’ve been used as a reimbursement for the money used to reimburse Stormy Daniels, providing a purportedly “definitive” link between Russian President Vladimir Putin and one of Trump’s closest associates.
But in the statement, the lawyer said the money was for business consulting work “regarding potential sources of capital and potential investments in real estate and other ventures.”
“Reports today that Viktor Vekselberg used Columbus Nova as a conduit for payments to Michael Cohen are false. The claim that Viktor Vekselberg was involved or provided any funding for Columbus Nova’s engagement of Michael Coehn is patently untrue,” said Columbus Nova’s attorney, Richard Owens of the firm Latham & Watkins.
Neither Viktor Vekselberg nor anyone else other than Columbus Nova’s owners, were involved in the decision to hire Cohen or provided funding for his engagement.
Before being questioned by Mueller, Vekselberg attended Trump’s inauguration after Columbus Nova made a $250,000 donation to the president’s inauguration committee. Mueller’s team reportedly asked Vekselberg about that contribution.
* * *
Michael Avenatti, the lawyer (and former Michael Rahm opposition researcher) handling adult film star Stormy Daniels’ multiple lawsuits, is doing his best to steal the spotlight from Trump’s cancellation of the Iran nuclear deal, because on an otherwise quiet Tuesday evening, Avenatti has published a report alleging that Trump long-time lawyer and fixer, Michael Cohen – who testified under oath that the funds for a $130,000 “hush money” payment to Daniels came from a loan he took against his home – may have in reality been reimbursed for the payment by none other than Viktor Vekselberg, a Russian oligarch with close ties to Russian President Vladimir Putin.
Avenatti learned that Vekselberg sent a $500,000 payment to Essential Consultants LLC just 75 days after Cohen used the same company to pay Daniels her $130,000.
Michael Avenatti✔@MichaelAvenattiAfter significant investigation, we have discovered that Mr. Trump’s atty Mr. Cohen received approximately $500,000 in the mos. after the election from a company controlled by a Russian Oligarc with close ties to Mr. Putin. These monies may have reimbursed the $130k payment.
If Vekselberg’s name sounds familiar, that’s probably because the New York Times reported last week that the Russian billionaire, and head of the Russian Renova conglomerate, was stopped at a New York-area airport, searched and questioned by the FBI while entering the US earlier this year. The interrogation, the Times said, was linked to the Mueller probe.
Viktor Vekselberg
While the sum that Vekselberg paid Cohen is far larger than what he paid Daniels, Avenatti claims that some of the money may have been intended as a “hush money” reimbursement.
If this is true, it would contradict President Trump’s admission that Cohen received money through his retainer agreement with the president that offset his payments to Daniels, which Trump was ignorant of at the time.
Avenatti lays out these claims in a 7-page executive summary he released today titled “Project Sunlight”, and which list this and other allegations of potential impropriety by Cohen.
On October 27, 2016 Mr. Cohen caused a wire of $130,000 from Essential Consultants’ account at First Republic Bank to be sent to an Attorney -Client Trust Account of Keith M. Davidson & Associates at City National Bank located in California. The wire originated from First Republic Bank’s operations located in California.
Note: this fact may provide the State of California with jurisdiction over possible state criminal charges associated with this payment.
Mr. Cohen has previously claimed that the source of funds from the $130,000 payment was a home equity line of credit advance conducted on October 26, 2016. This has yet to be confirmed.
However, as detailed below, within approximately 75 days of the payment to Ms. Clifford, Mr. Viktor Vekselberg, a Russian Oligarch with close ties to Russian President Vladimir Putin, caused substantial funds to be deposited into the bank account from which Mr. Cohen made the payment. It appears that these funds may have replenished the account following the payment to Ms. Clifford.
Oddly enough, this isn’t the only big (if true) bombshell included in Avenatti’s report.
In a list of other “possible fraudulent and illegal financial transactions,” Avenatti highlighted the fact that AT&T paid Cohen $200,000 in four separate $50,000 installments between late 2017 and early 2018, which is odd considering Trump had said during the campaign that he would block the announced AT&T-Time Warner deal, and, after a year-long review, his Justice Department sued to block the deal in November.
In addition, Essential received $200,000 in four separate payments of $50,000 in late 2017 and early 2018 from AT&T.
[…]
Monies Received from AT&T:
October 3, 2017 –$50,000
November 7, 2017 –$50,000
December 5, 2017 –$50,000
January 3, 2018 –$50,000
This could become a problem for Cohen if investigators determine that the money was intended to influence a DOJ anti-trust probe seeking to block the merger of AT&T and Time Warner.
In a statement released just minutes after the report was released, AT&T confirmed the payments to Essential Consulting, claiming Essential was retained “to provide insights into understanding the new administration.”
“Essential Consulting was one of several firms we engaged in early 2017 to provide insights into understanding the new administration. They did no legal or lobbying work for us and the contract ended in December 2017.”
So AT&T paid Cohen for his “insight” into the mind of Trump…not for any actual work.
Avenatti also published details from the application Cohen filed with First Republic Bank when he was opening an account for Essential Consulting back in October 2016. In the application, Cohen identified Essential as a real-estate consulting company that “collects fees for investment consulting work.” He also said he didn’t expect any “outgoing wire transfers and debits related to ACH”.
In order to establish the account, Mr. Cohen subsequently submitted information claiming, among other things, the following:
(a) Essential is a real estate consulting company that collects fees for investment consulting work;
(b)The company’s typical clients are U.S.-based high net worth individuals;
(c)The company’s primary source of funds will be derived from within the U.S. or a U.S.-based company;
(d)The company expected one(1)totwenty (20) incoming domestic only wires totaling $1,000 to $10,000 each month for consulting fees, and one(1)to twenty (20) ACH credits and electronic transfers totaling $1,000 to $10,000 each month;
(e)No outgoing wire transfers and debits related toACH or electronic transfers were expected; and(f)Receipts of the business would be internally transferred to Mr. Cohen’s personal account at First Republic Bank.
The timing of the release was deliberate: Now, President Trump’s decision to scrap the Iran deal – which represents one of his biggest foreign policy achievements to date – will be forced to share the news cycle with more Russia-linked allegations related to his attorney.
And now, it’s only a matter of time before we see these allegations spark another round of “will Cohen flip?” stories from the New York Times, Washington Post and CNN and their peers in the mainstream press.
We also can’t help but wonder: Is this what was on that mystery disc Avenatti kept waving around during all those cable news interviews? Or is there another shoe left to drop?
For what it’s worth, Avenatti says there’s more to come.
Michael Avenatti✔@MichaelAvenattiWe are just getting started…
end
This is interesting; there seems to be a top secret intelligence source which is aiding Mueller in the witch hunt and yet somehow mistakenly Trump is agreeing with the FBI not to provide the stuff to Nunes. Judging from the previous non ” national security” redactions, our hope is that Trump will finally get the message and allow this intelligence to flow
(courtesy zerohedge)
Top Secret Intel Source Aiding Mueller Probe Is Behind Latest Clash Between DOJ And Nunes
House Intel Committee Chairman Devin Nunes (R-CA) was denied a cache of classified information by the Department of Justice (DOJ) after the White House backed senior FBI and national intelligence officials who told them the materials were too hot to give to him – and “could risk lives by potentially exposing the source, a U.S. citizen who has provided intelligence to the CIA and FBI, reports the Washington Post, citing multiple sources. The FBI made the urgent request to the White House last Wednesday claiming that even a redacted version of the request could risk lives by exposing a top-secret intelligence source.
Which begs the question:
Benjamin Weingarten✔@bhweingartenIf this individual working with law enforcement is such a high value asset of paramount importance to national security, why are we finding out about it via the Washington Post? https://www.washingtonpost.com/politics/risk-to-intelligence-source-who-aided-russia-investigation-at-center-of-latest-showdown-between-nunes-and-justice-dept/2018/05/08/d6fb66f8-5223-11e8-abd8-265bd07a9859_story.html …
Risk to intelligence source who aided Russia investigation at center of latest showdown between…
The White House sided last week with FBI and intelligence officials, who said information sought by the House Intelligence Committee chairman could endanger the source.
washingtonpost.com
White House officials agreed to the DOJ’s request with President Trump’s blessing – however the Post notes “it is unclear whether Trump was alerted to a key fact — that information developed by the intelligence source had been provided to the Mueller investigation.”
Whatever the case, the U.S. intelligence community clearly doesn’t trust Nunes with this information.
For the intelligence agencies, Nunes’s request threatened to cross a red line of compromising sources and methods of U.S. intelligence-gathering, according to people familiar with their views. Intelligence officials fear that providing even a redacted version of the information Nunes seeks could expose that person and damage relationships with other countries that serve as U.S. intelligence partners. –Washington Post
Nunes requested the information in a classified April 24 letter to the Justice department. Due to the confidential nature, we don’t know exactly what the DOJ is holding back, however he told reporters this week that he is investigating FBI Foreign Intelligence Surveillance Act (FISA) abuse and “other matters.”
The Post notes that the involvement of the White House marks a rare “moment of alignment between the Justice Department and Trump, who has relentlessly criticized Attorney General Jeff Sessions and other top Justice officials for the probe into Russia’s interference in the 2016 election led by special counsel Robert S. Mueller III.”
House Republicans and the DOJ are now in a heated battle over the actual risk to the agency’s top-secret source – with Nunes saying Sunday that he may try to hold Sessions in contempt for refusing to comply with his request.
Nunes told OAN News: “The bottom line is we’ve had this investigation going for a long time into FISA abuse that occurred by the executive branch.”
“We need documents to be able to verify if things were done properly or improperly, so that’s what we’re waiting on. So we sent a letter a few weeks ago, a classified letter. That letter was not responded to, it was ignored. We issued a subpoena… We got back on Thursday that they will not comply, so now we have no other choice but to move to hold the Attorney General in contempt if they don’t provide the documents.”
“They are citing spurious national security concerns to evade congressional oversight while leaking information to The Washington Post ostensibly about classified meetings,” Nunes told The Post. “Congress has a right and a duty to get this information and we will succeed in getting this information, regardless of whatever fantastic stories the DOJ and FBI spin to the Post.”
Administration officials tell The Post that they are concerned Trump will change his mind and support Nunes’ argument.
The role of the intelligence source in the Mueller investigation may now be seized upon by conservative Republicans who have publicly accused the Justice Department and intelligence agencies of overreach and misuse of their surveillance powers. –WaPo
To that end, several House GOP drafted articles of impeachment against Deputy Attorney General Rod Rosenstein as a “last resort” if he doesn’t hand Congress more information.
In a similar vein, Nunes threatened to impeach DAG Rosenstein and FBI Director Chris Wray if they didn’t immediately hand over an unredacted copy of the two-page document outlining the original scope and mandate of the Mueller Special Counsel investigation. The DOJ eventually acquiesced to Nunes’ threat, providing him with access to modestly redacted copies – for which Nunes thanked Rosenstein.
That said, Rosenstein pushed back in comments at the Freedom Forum Institute – telling the audience that while he is willing to work with Congressional investigators – he will draw the line when he needs to, exclaiming that the Justice Department was “not going to be extorted” into handing over documents that could harm national security or interfere with ongoing investigations.
“If we were to just open our doors to allow Congress to come and rummage through the files, that would be a serious infringement on the separation of powers, and it might resolve a dispute today, but it would have negative repercussions in the long run, and we have a responsibility to defend the institution,” Rosenstein said.
Not everyone agrees…
Sean Davis✔@seanmdavNot buying it, given constant games played by DOJ to obstruct Congress. This looks a lot more like pre-emptive hostage-taking for PR purposes, hence the leak that insinuates a bunch of stuff it doesn’t quite deliver. https://twitter.com/CarolLeonnig/status/994007419310235649 …
Jordan Schachtel✔@JordanSchachtelWaPo is doing a poor job masking the fact they’re playing defense for Mueller. Nunes must stop because “national security”. Yet FBI Obama holdovers have been busted countless times using nat sec excuse only to find out in unredactdd reports they had a purely political motive. https://twitter.com/evan_rosenfeld/status/994023547474362368 …
Mollie✔@MZHemingwayIf, as with previous such claims, “national security risk” translates most accurately as “deeply embarrassing to DOJ/FBI,” this story is very interesting. https://wapo.st/2rv6nzg?tid=ss_tw&utm_term=.c66f1bb2ce2b …
Mollie✔@MZHemingwayLast time DOJ claimed Nunes was “reckless” and “harming national security” was when they were trying to hide their FISA abuse. Proponents of Russia probe later said HPSCI memo on same was no biggie. It was of public interest, but it obviously wasn’t a threat to national security.
end
I do not like the looks of this: somehow Avenatti got a hold of Cohen’s bank records which:
- shows the $130,000 payment to a lawyer in trust for Stormy
- shows a $500,000 payment by Russian oligarch to Cohen which is payment for incoming Government philosophy.
- this may be damaging: 4 x 50,000 dollars from AT and T locked in a dispute with Time Warner
- payments by Novartis, 100,000 dollars per month for incoming Government philosophy.or you’ve basically got Michael Cohen selling access to the president of the United States.”
(courtesy zerohedge)
Stormy Daniels’ Lawyer Says Trump, Cohen Should Release Bank Statements
After several news organizations including NBC and the New York Times independently corroborated the allegations included in a scandal-laden dossier published last night by Stormy Daniels attorney (and former Rahm Emanuel oppo researcher) Michael Avenatti, the lawyer took to the cable news shows Wednesday, where he continued his assault on Cohen.
During an interview with MSNBC’s “Morning Joe”, Avenatti told his hosts – who have a long history of quarreling with the president – that any doubts about Cohen’s financial dealings – which included a business link with a Russian oligarch who is now under US sanction – could easily be dispelled if Trump and his personal attorney would just release their financial statements.
“Look, let me say this, to the extent that it’s not accurate, the president and Michael Cohen should clear this up this morning…they should release the bank statements this morning,” Avenatti said.
Cohen, who had paid Daniels $130,000 so she would stay quiet about an affair she’d had with Trump roughly 10 years earlier, was swiftly paid $500,000 by Viktor Vekselberg – money that Avenatti suggested could’ve been a reimbursement for the Daniels payment. President Trump has said that the money used to pay Daniels came from a retainer agreement with Cohen – while Cohen once testified that he took the money from a home equity line.
Asked by his hosts whether the money could’ve possibly been used to pay off other women, Avenatti admitted that he hasn’t found anything to confirm that.
Asked by his hosts whether the money could’ve possibly been used to pay off other women, Avenatti admitted that he hasn’t found anything to confirm that.
But lest their audience get the wrong idea, Avenatti assured his hosts that the payments appear to be evidence that Cohen was selling access to the president.
“I don’t know yet whether this particular account connects to other women but I do know that this is an enormous amount of money flowing into this account beginning in October and November 2016 you’ve got millions of dollars flowing into this account – you’ve basically got Michael Cohen selling access to the president of the United States.”
“We understand that it was a one-year relationship now thanks to the statement Novartis just issued.”
Avenatti also joked about the explanations provided by some of the companies named in the dossier, including pharmaceutical company Novartis and AT&T, among others. AT&T, for example, said it paid Cohen for his “insight” into Trump’s mind – not for any specific consulting work.
“We now have multiple different things that Cohen is doing for all these companies. Now we hear from Novartis that he was hired on health care matters evidently he’s a doctor, another company hired him on real-estate matters evidently he’s a real-estate agent, another company hired him for accounting advice…so he’s a doctor, a real-estate agent, a lawyer and an accountant…I’m just a lawyer, I’m not that bright I guess,” Avenatti said.
Avenatti also highlighted Novartis’s admission that it had paid Cohen in four installments of $99,980 because the company, which is based in Switzerland, would’ve been forced to notify regulators about a payments.
“The reason why it wouldn’t have been $100,000 is because there’s an internal reporting at Novartis that would’ve required the parent company to report the money in Switzerland.”
Regardless of how Avenatti got his hands on Cohen’s banking records (we imagine somebody inside First Republic, or perhaps one of Cohen’s accountants, might’ve leaked it to him after seeing him on TV), companies that made payments to Cohen are scrambling to produce explanations for why the money ended up in his account.
According to Bloomberg, their explanations have mostly raised further questions like: How were these companies steered toward Cohen, where did the money – more than $4 million by Avenatti’s count – go? And are there any other companies that haven’t yet been exposed?
To that list, we’d like to add another: how are these payments factoring into the federal probe, which purportedly includes allegations of bank fraud.
Avenatti revealed Tuesday night during an interview with MSNBC that First Republic had flagged some of the transactions to the US Treasury. He’s asked Treasury Secretary Steven Mnuchin to make those reports public.
Novartis revealed Wednesday that it had been contacted by Special Counsel Robert Mueller and had cooperated fully. It also said its business relationship with Cohen had ended after a one-year contract had expired.
And with Avenatti hinting at a possible “Dossier Part II” in the works, we imagine there could be dozens of other companies scrambling to assemble a PR strategy to explain exactly how and why their money ended up in Cohen’s bank account.
END
Now the bank Inspector General is probing how confidential bank records belonging to Cohen were leaked
(courtesy zerohedge)
Treasury Launches Probe How Cohen’s Bank Records Were Leaked To Stormy Daniels’ Lawyer
When we commented earlier on the latest document leak involving Stormy Daniels’ lawyer and former Rahm Emanuel opposition researcher, Michael Avenatti, who “somehow” had gotten access to Michael Cohen’s wire transfer documents obtained by Bob Mueller as part of his investigation into Russian collusion, we asked just how it was possible that this critical piece of Mueller’s probe had been strategically leaked to the man who is now leading the legal charge against President Trump.
It appears we were not the only ones to ask that question because less than a day after Avenatti unveiled he had access to Cohen’s bank records…
Michael Avenatti✔@MichaelAvenattiAfter significant investigation, we have discovered that Mr. Trump’s atty Mr. Cohen received approximately $500,000 in the mos. after the election from a company controlled by a Russian Oligarc with close ties to Mr. Putin. These monies may have reimbursed the $130k payment.
… the WaPo reported that the Treasury Department’s inspector general has begun an investigation whether and how the confidential banking information for Essential Consultants LLC, the company controlled by President Trump’s personal attorney, was leaked.
Rich Delmar, counsel to the inspector general, said that in response to media reports the office is “inquiring into allegations” that Suspicious Activity Reports on Cohen’s banking transactions were “improperly disseminated.”
Bloomberg confirmed:
- TREASURY INQUIRY ON HOW BANK-SECRECY ACT DATA GOT TO THE PRESS
- U.S. TREASURY SAYS PROBING POSSIBLE LEAK OF COHEN BANK DETAILS
For those who missed yesterday’s main event, here is another recap from WaPo:
On Twitter, Avenatti circulated a dossier that purports to show that Cohen was hired last year by the U.S.-based affiliate of a Russian company owned by Viktor Vekselberg, a Russian business magnate who attended Trump’s inauguration and was recently subjected to sanctions by the U.S. government. The affiliate, New York investment firm Columbus Nova, confirmed the payment, saying it was for consulting on investments and other matters, but denied any involvement by Vekselberg.
Avenatti’s dossier also alleged that, after Trump’s inauguration, Cohen’s company Essential Consultants had received payments from several others with business considerations before the federal government, including telecommunications giant AT&T, aircraft manufacturer Korea Aerospace Industries and pharmaceutical company Novartis. All three companies subsequently confirmed the payments.
When he was reached by WaPo, Avenatti predictably refused to disclose his source:
“The source or sources of our information is our work product, and nobody’s business,” Avenatti said. “They can investigate all they want, but what they should be doing is releasing to the American public the three Suspicious Activity Reports filed on Michael Cohen’s account. Why are they hiding this information?”
Amusingly, Avenatti preempted this probe just last night, when he told CNN’s Anderson Cooper: “There’s been some criticism of our media strategy and how often I’m on CNN and how often I’ve been on your show and other networks. It’s working. It’s working in spades. Because we’re so out front on this, people send us information, people want to help our cause. People contact us with information.”
What was left unsaid is that it was not “people” who sent Avenatti the Cohen bank records, it was most likely someone deep inside Mueller’s probe who is leaking confidential information, making what was already a politicized probe, even more so.
And with the past 1.5 years of the Trump administration marked almost entirely by leaks, traditionally of the NSA/CIA/FBI to WaPo/NYT variety, it was long overdue that someone decided to finally took a look.
end
I JUST DO NOT LIKE HOW THIS LOOKS: TRUMP TELLS LAWYERS THAT HE KNEW NOTHING ABOUT COHEN PAYMENTS
(COURTESY ZEROHEDGE)
Trump Tells Lawyers He “Didn’t Know Anything” About Cohen Payments
Rudy Giuliani has struck again.
Time Magazine reported Wednesday afternoon that President Trump told Giuliani and his lead personal attorney, Jay Sekulow, that he wasn’t aware of the “consulting fees” paid by several corporations and one Russian oligarch to Michael Cohen – payments that were publicly revealed last night by Stormy Daniels’ lawyer Michael Avenatti.
And once again, Giuliani’s poorly phrased on-the-record comments appear to have opened the door to criminality on the part of President Trump and/or Cohen, his former personal attorney.
Did Trump direct Cohen to accept payments from AT&T and Novartis (the former of which is suing Trump’s Department of Justice to stop it from blocking its merger with Time Warner.
“I have no idea, I doubt it,” said Giuliani.
Asked if the President directed Cohen to accept payments from companies like Novartis and AT&T, Guiliani said, “I have no idea. I doubt it.” Guiliani believes the news helps Trump’s legal team because it feeds the impression that the investigations are moving far from Russian interference.
“They are chasing rainbows,” Guiliani said. “This is yet another irrelevant thing that is made into a big thing.”
A definitive “no” would’ve been a much better answer from a lawyer who is supposed to be defending Trump’s best interests.
How about Avenatti’s claims that Trump and Cohen were engaged in blatant pay-to-play self-dealing?
“It’s probably two-thirds false,” Giuliani said.
Guiliani said he was reluctant to call the President Tuesday night because he didn’t want to take him away from monitoring his Secretary of State’s negotiations over a summit with the North Korean leader Kim Jong Un and the release of three Americans from North Korea. Sekulow and Guiliani initially left a message at the White House saying they would like to talk to Trump, but it wasn’t urgent and only if he had free time. Sekulow declined to comment on the phone call.
During the call, Trump sounded “exhilarated and happy and satisfied” with what was happening on North Korea, Guiliani said. “Which is a hell of a lot more important than some stupid claim that is probably two-thirds false from this ambulance-chasing lawyer.”
How about negotiations between the special counsel about a potential interview with Trump?
They’re on hold, Giuliani said.
Given that the special counsel’s initial mandate is to investigate Russian collusion with Trump’s campaign, Trump’s legal team will “try to block them from everything they can do which would be far afield from that,” he said.
Discussions over whether Trump will agree to be interviewed by Mueller are “right now on hold,” he said. Trump shouldn’t take steps to shut down Mueller investigation, he said, but Mueller himself should bring it to a close “because they don’t really have anything.”
While these weren’t the most embarrassing comments Giuliani has made in the past week, they still weren’t anywhere near the type of tight-lipped damage control that we’d expect from a personal attorney. We can’t help but wonder: Is this some kind of revenge plot by Giuliani to get back at his “longtime friend” for choosing Rex Tillerson over him to serve as the Trump administration’s first Secretary of State?
Of course, if Giuliani wanted to take Trump down, we imagine there are more expeditious options that he could choose.
But regardless of Giuliani’s intentions, it’s starting to look that way.
HARVEY
harveyorganblog.com 