May 23/FOMC DOVISH ON THEIR STATEMENT OF INFLATION AND THAT SENDS GOLD HIGHER IN THE ACCESS MARKET/GOLD AT COMEX CLOSING: $1290.35 AND SILVER AT COMEX CLOSING: $16.39/TROUBLE IN ITALY AS ITALIAN PRESIDENT MATTERELLA OK’S CONTE AS PREMIER AND THAT CAUSES ITALIAN BOND YIELDS TO RISE AND STOCK MARKETS TO PLUMMET AS BUDGETS WILL BASICALLY BLOW UP WITH THE HUGE EXTRA SPENDING/TURKISH LIRA AT FIRST COLLAPSES, THEN CENTRAL BANK RAISES RATES BY 3% TO 16.5% TO STABILIZE THE CURRENCY: IT WILL NOT WORK!/HUGE SWAMP STORIES FOR YOU TONIGHT/

 

 

GOLD: $1290.35  DOWN  $2.35  (COMEX TO COMEX CLOSINGS)

Silver: $16.39 DOWN  17 CENTS (COMEX TO COMEX CLOSINGS)

Closing access prices:

Gold $1293.30

silver: $16.45

For comex gold:

MAY/

NUMBER OF NOTICES FILED TODAY FOR MAY CONTRACT:34 NOTICE(S) FOR 3400 OZ.

TOTAL NOTICES SO FAR 719 FOR 71900 OZ (2.2365 tonnes)

For silver:

MAY

22 NOTICE(S) FILED TODAY FOR

110,000 OZ/

Total number of notices filed so far this month: 6192 for 30,960,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: BID $7823/OFFER $7923: DOWN $112(morning)

Bitcoin: BID/ $7509/offer $7609: DOWN $425  (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: 1298.56

NY price  at the same time: 1292.80

PREMIUM TO NY SPOT: $5.76

ss

Second gold fix early this morning: 1297.56

USA gold at the exact same time:1290.50

PREMIUM TO NY SPOT:  $7.06

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 FELL BY  A CONSIDERABLE 1648 CONTRACTS FROM  198,248  FALLING TO 198,304  DESPITE YESTERDAY’S 6 CENT GAIN 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 STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP :   2180 EFP’S FOR JULY AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE OF 2180 CONTRACTS. WITH THE TRANSFER OF 2180 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 2180 EFP CONTRACTS TRANSLATES INTO 4.715 MILLION OZ  ACCOMPANYING:

1.THE  6 CENT GAIN IN  SILVER PRICE  AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES STANDING FOR MAY COMEX DELIVERY. (31.93 MILLION OZ)

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

31644 CONTRACTS (FOR 17 TRADING DAYS TOTAL 31644 CONTRACTS) OR 158.220 MILLION OZ: (AVERAGE PER DAY: 1861 CONTRACTS OR 9.307 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH:  158.220 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 22.60% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)

ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S:            1,303.54      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 CONSIDERABLE SIZED DECREASE IN COMEX OI SILVER COMEX OF 1648 DESPITE THE 6 CENT GAIN IN SILVER PRICE.  WE HAVE NOW ENTERED THE NEW ACTIVE MONTH OF MAY.   THE CME NOTIFIED US THAT IN FACT WE HAD AN STRONG SIZED EFP ISSUANCE OF 2180 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:  2180 EFP CONTRACTS FOR JULY, AND ZERO FOR ALL OVER MONTHS   FOR  A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS (TOTAL: 2180). TODAY WE GAINED 532  TOTAL OI CONTRACTS  ON THE TWO EXCHANGES: i.e. 2180 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH AN DECREASE OF 1648  OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE  6 CENT GAIN IN PRICE OF SILVER  AND A CLOSING PRICE OF $16.56 WITH RESPECT TO FRIDAY’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 LOOKS LIKE A FAILED BANKER SHORT COVERING EXERCISE!!

In ounces AT THE COMEX, the OI is still represented by UNDER 1 BILLION oz i.e. 0.991 MILLION OZ TO BE EXACT or 141% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MAY MONTH/ THEY FILED AT THE COMEX: 22 NOTICE(S) FOR 110,000 OZ OF SILVER

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

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH: 27 MILLION OZ , APRIL: 2.485 MILLION OZ AND MAY: 31.445
  2.  MILLION OZ )
  3. HUGE RECORD OPEN INTEREST IN SILVER  243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018
  4. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  5. 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 SIZED 3537 CONTRACTS DOWN TO 502,942 DESPITE THE TINY GAIN IN THE GOLD PRICE/YESTERDAY’S TRADING (GAIN OF $1.05).  WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF MAY.  THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED AN STRONG SIZED 9,200 CONTRACTS :   JUNE SAW THE ISSUANCE OF 4215 CONTRACTS , MAY SAW THE ISSUANCE OF 0 CONTRACTS  AND AUGUST SAW THE ISSUANCE OF: 5075 CONTRACTS WITH ALL OTHER MONTHS ZERO.  The new OI for the gold complex rests at 502,942. 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 STRONG SIZED  OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES: 3,537  OI CONTRACTS DECREASED AT THE COMEX AND AN STRONG SIZED 9,200 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON.THUS  TOTAL OI GAIN: 5663 CONTRACTS OR 566,300 OZ = 17.614 TONNES. AND ALL OF THIS OCCURRED WITH A TINY GAIN OF $1.05 

YESTERDAY, WE HAD 10,793  EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY : 162,621 CONTRACTS OR 16,262,100  OZ OR 505.816 TONNES (17 TRADING DAYS AND THUS AVERAGING: 9,565 EFP CONTRACTS PER TRADING DAY OR 956,500 OZ/ TRADING DAY),,

TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS :    THIS MONTH IN 17 TRADING DAYS IN  TONNES: 505.816 TONNES

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

THUS EFP TRANSFERS REPRESENTS 505.82/2550 x 100% TONNES =  19.83% 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 3,263.45*  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 3537  DESPITE THE $1.05 RISE  IN PRICE // GOLD TRADING YESTERDAY ($1.05 GAIN).  WE ALSO HAD AN STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 9,200 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 9200 EFP CONTRACTS ISSUED, WE HAD A GOOD SIZED NET GAIN OF 5663 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES: 

9200 CONTRACTS MOVE TO LONDON AND 3537 CONTRACTS DECREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 17.614 TONNES). ..AND BELIEVE IT OR NOT BUT ALL OF THESE OCCURRED AT THE COMEX WITH A TINY GAIN OF $1.05 IN TRADING!!!. 

we had: 34 notice(s) filed upon for 3400 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  $2.35 / NO CHANGES IN GOLD INVENTORY AT THE GLD/ HOWEVER I READ THE NUMBER INCORRECTLY:/INVENTORY RESTS AT 852.04 TONNES

Inventory rests tonight: 852.04 tonnes.

SLV/

WITH SILVER DOWN 17 CENTS  NO CHANGES IN THE SILVER INVENTORY AT  THE SLV INVENTORY/ 

/INVENTORY RESTS AT 321.003 MILLION OZ/

end

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

1. Today, we had the open interest in SILVER FELL BY A CONSIDERABLE SIZED 1648 CONTRACTS from 199,896 DOWN TO 198,248 (AND, FURTHER FROM 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 MAY  (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM), AND 2180 EFP’S FOR JULY AND ALL OTHER MONTHS ZERO. TOTAL EFP ISSUANCE:  2180 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI LOSS AT THE COMEX OF 1648 CONTRACTS TO THE 2180 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A  FAIR SIZED GAIN OF 532 OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES:  2.660 MILLION OZ!!! AND THIS OCCURRED WITH A 6 CENT GAIN 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, THE CONSTANT RAIDS, LIKE YESTERDAY ARE NOW BEING CALLED UPON BY OUR BANKER FRIENDS  IN AN ATTEMPT TO SHAKE AS MANY SILVER LEAVES FROM THE SILVER TREE AS POSSIBLE AND JUDGING BY THE RESULTS TO YESTERDAYS ACTION THEY WERE NOT AT ALL SUCCESSFUL.

RESULT: A CONSIDERABLE SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 6 CENT GAIN  IN SILVER PRICING YESTERDAY. BUT WE ALSO HAD ANOTHER STRONG SIZED 2180 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

)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 45.39 points or  1.41%   /Hang Sang CLOSED DOWN 568.71points or 1.82%    / The Nikkei closed DOWN 270.60 POINTS OR 1.38% /Australia’s all ordinaires CLOSED DOWN .16%  /Chinese yuan (ONSHORE) closed DOWN at 6.3879/Oil DOWN to 71.72 dollars per barrel for WTI and 78.88 for Brent. Stocks in Europe OPENED ALL RED.   ONSHORE YUAN CLOSED DOWN AT 6.3879 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3826/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH WEAKER 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

b) REPORT ON JAPAN

3 c CHINA

i)_Trump revokes China’s invitation to the world’s largest naval exercise.

(courtesy zerohedge)

4. EUROPEAN AFFAIRS

i)Europe:

Trump much to the anger of the EU is pushing for a 10% cut in aluminum and steel imports into the USA/or a tariff increase on that 10%

( zerohedge)

ii)Italy

trouble in Italy as there is a sense of panic due to the fact that Matterella has given the green light to Conte and these guys are totally fiscally irresponsible..they will blow up their budget deficits skyhigh!!

( zerohedge)

iii)Jeffery Snider outlines what happened in Italy in 2008 and how that has morphed into the current problems of a banking crisis:  a huge amount of non performing loans on bankers balance sheet from which nothing can be off loaded.

this is the crisis before us…

( Jeffrey Snider/Alhambra Investments Partners.

iv)DEUTSCHE BANK/GERMANY/GLOBE

Conditions must be good:  Deutsche bank is now set to fire 10,000 global employees.

(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)ISRAEL

This is probably a good indicator that Israel will attack Iran inside Syria: meetings are held in a secret underground bunker for fears of leaks.

( zerohedge)

ii)Israel becomes the first state ever to use the new F 35 fighter jets in combat to much success

( zerohedge)

iiii)Turkey

Last night:  Turkish lira flash crashes again

( zerohedge)

iv) then….

Good way to kill an economy:  the Central Bank of Turkey much to the chagrin of Erdogan, hiked rates to 16.5% a full 3%

( zerohedge)

v) then ….

With the Turkish lira at 4.92 to one uSA dollar and after the Turkish Central Bank raises rates to 16.5% Erdogan tells his citizens not to convert lira into foreign exchange.  I can assure you that this will fall on deaf ears

( zerohedge)

vi)IRAN

Iran list 7 conditions to remain in the nuclear deal which has not chance of succeeding

This should cause Europe to cancel the agreement outright

(courtesy zero hedge)

6 .GLOBAL ISSUES

7. OIL ISSUES

i)NY gas hits 5 dollars a gallon.   That should stymie the economy

( zerohedge)

ii)Both crude and gasoline plunge on a huge crude build up in inventory and record production

( zerohedge)

8. EMERGING MARKET

i)SOUTH AFRICA

No wonder most of the white South African farmers are vacating their properties and heading to Australia

( zerohedge)

9. PHYSICAL MARKETS

i)Pretty interesting:  a new book on American default as it examines the dollar devaluation against gold and gold’s confiscation in 1933
( Chris Powell/.Sebastian Edwards)

ii)Craig Hemke strongly believes (and so do I) that gold/silver will rise following options expiry,  Comex options expire:  Friday, May 25/LBMA/OTC: expires May 31.( Craig Hemke/Sprott/GATA)

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

i)MARKET DATA

a)Soft data and perennially biased to the upside shows a good mfg PMI report as well as a service PMI report.  This contrasts totally with Europe PMI.

( zerohedge)

b)In a booming economy, one would expect new home sales to rise.  However it just did not happen as April reports a slide in new homes sales as well as an average price spiking to record highs

( zerohedge)

ii)Beleaguered Wells Fargo dismisses senior bankers in its struggling muni bond division.  They also have huge troubles in their mortgage division( zerohedge)

iv)FOMC minutes: slightly dovish

v)SWAMP STORIES

a)This is getting worse by the minute:  Cohen’s business partner flips and now cooperates with the Feds and thus Cohen will now be a target.  He will probably flip on something and then the Feds will go over Trump

( zerohedge)

b)THE PLOT: the real genesis of the phony Russian collusion tale
( George Neumayr/Spectator)

c)Four important points here:

1. Comey states that it is OK to spy on the Trump candidate for the good of the country.
2  However, with the use of this spy (informant) why did he not find evidence of Russian collusion in the election?
3  if the spy finds nothing, then what is Mueller investigating?
4  there seems to a link with the Steele dossier and CNN and the leak to this news organization through McCabe
( zerohedge)

d)big news:  the rank and file FBI agents are sickened by the actions of Comey and McCabe and others and want to come forward and testify but only by subpoena as they cannot be thrown under the bus.  If they go through the route of a whistleblower there is no protection(courtesy zerohedge)

e)FAKE NEWS?? Supposedly 400,000 dollars was secretly paid to Cohen for a meeting between Ukraine President Poroshenko and Trump. Everybody denies the story but it is out there.  Also there is a report that supposedly Trump asked Poroshenko to kill the Manafort investigation by the Ukrainian bureau.

( zerohedge)

Let us head over to the comex:

The total gold comex open interest FELL BY A CONSIDERABLE SIZED 3537  CONTRACTS DOWN to an OI level 502,942 DESPITE THE TINY GAIN IN THE PRICE OF GOLD ($1.05 RISE/ YESTERDAY’S TRADING)  FOR TWO YEARS STRAIGHT WE HAVE NOTICED THAT ONE WEEK PRIOR TO FIRST DAY NOTICE OF AN ACTIVE DELIVERY MONTH THE COMEX OPEN INTEREST CONTRACTS AND EFP’S NOTICES EXPONENTIALLY INCREASE.   THE CME REPORTS THAT THE BANKERS ISSUED AN STRONG SIZED  COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 9,200 CONTRACTS WERE ISSUED: FOR  JUNE, 4215 CONTRACTS ISSUED,  FOR AUGUST 5075 CONTRACTS AND ZERO FOR ALL OTHER MONTHS:  TOTAL  9200 CONTRACTS.  THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 5663 OI CONTRACTS IN THAT 9200 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOSS 3537  COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES: 5663 contracts OR 566,300  OZ OR 17.614 TONNES.

Result: A CONSIDERABLE SIZED DECREASE IN COMEX OPEN INTEREST DESPITE THE  GAIN IN PRICE /YESTERDAY  (ENDING UP WITH AN RISE PIN PRICE OF $1.05).  THE  TOTAL OPEN INTEREST GAIN ON THE TWO EXCHANGES: 5663 OI CONTRACTS..

We have now entered the non  active contract month of MAY where we LOST 46 contracts FALLING TO 46 contracts. We had 35 notices filed upon yesterday, so we LOST 11 contracts STANDING AT THE COMEX or an additional 1100 oz will NOT stand in this non active delivery month of May  BUT THESE GUYS MORPHED INTO LONDON BASED FORWARDS AS THERE WAS NO GOLD AT THE COMEX TO SATISFY THEIR DELIVERY.

The really big June contract month saw a LOSS of 16,080 contracts DOWN to 174,208 contracts. JULY saw a GAIN of 2 contracts to stand at 367   The next big delivery month after June is August and here the OI ROSE BY 10,714 contracts UP to 232,559.

We had 35 notice(s) filed upon today for 3500  oz at the comex

ON MAY 23.2017 WE HAD 177,423 CONTRACTS STILL OUTSTANDING.

FOR THE JUNE/2017 CONTRACT INITIALLY 19.95 TONNES STOOD FOR DELIVERY.  AT THE END OF JUNE/2017:  9.176 TONNES STOOD AND THE REST MORPHED INTO LONDON BASED FORWARDS.

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

Trading Volumes on the COMEX

PRELIMINARY COMEX VOLUME FOR TODAY: 429,549  contracts

CONFIRMED COMEX VOL. FOR YESTERDAY: 348,425 contracts

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And now for the wild silver comex results.

Total silver OI FELL BY A CONSIDERABLE SIZED 1648 CONTRACTS FROM 199,896 DOWN TO 198,248 (AND FURTHER FROM THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS)  DESPITE THE 6 CENT GAIN IN SILVER PRICING/ FRIDAY. SINCE WE ARE NOW INTO THE  ACTIVE DELIVERY MONTH OF MAY. WE  WERE  INFORMED THAT WE HAD A GOOD SIZED 2180 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: 2180.   ON A NET BASIS WE GAINED 532  SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 1648 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 2180 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN  ON THE TWO EXCHANGES:   532  CONTRACTS 

AMOUNT STANDING FOR SILVER AT THE COMEX

We are now in the  active delivery month of MAY and here the front month ROSE BY 44 contracts RISING TO 216 contracts. We had 13 notices filed upon yesterday so we SURPRISINGLY GAINED 57 contracts or 285,000 additional ounces will  stand for delivery in this  active delivery month of May AS SOMEBODY AGAIN WAS DESPERATE FOR PHYSICAL SILVER ON THIS SIDE OF THE POND..

June saw a GAIN of 3 contracts to stand at 723.  The next big delivery month for silver is July and here the OI LOST 990 contracts DOWN to 135,834. The next active delivery month after July for silver is September and here the OI ROSE by 65 contracts UP to 28,464

We had 13 notice(s) filed for 65,00OZ for the MAY 2018 contract for silver

INITIAL standings for MAY/GOLD

MAY 23/2018.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
3899.277 OZ
Brinks
HSBC
JPM
Deposits to the Dealer Inventory in oz NIL oz
Deposits to the Customer Inventory, in oz   98.073  OZ

jpm

No of oz served (contracts) today
34 notice(s)
 3400 OZ
No of oz to be served (notices)
12 contracts
(1200 oz)
Total monthly oz gold served (contracts) so far this month
719 notices
71900 OZ
2.2363 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
 FINALLY AFTER MANY WEEKS, WE HAVE A PULSE AT THE GOLD COMEX TODAY
we had 0 kilobar transaction/
We had 0 inventory movement at the dealer accounts
total inventory deposit into the dealer accounts:  NIL  oz
total inventory withdrawals out of dealer accounts; nil oz
we had 3 withdrawals out of the customer account:
i) Out of Brinks:  99.46 oz
ii) Out of HSBC: 3701.755 oz
iii) Out of JPMorgan: 98.062 oz
total customer withdrawals:  3899.277 oz
we had 1 customer deposit
i) Into JPMorgan: 98.073 oz
total customer deposits: 98.073 oz
we had 0 adjustment(s)

For MAY:
Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to  34 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 22 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the MAY. contract month, we take the total number of notices filed so far for the month (719) x 100 oz or 71900 oz, to which we add the difference between the open interest for the front month of MAY. (46 contracts) minus the number of notices served upon today (34 x 100 oz per contract) equals 73,100 oz, the number of ounces standing in this active month of APRIL (2.2737 tonnes)

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

No of notices served (719 x 100 oz)  + {(92)OI for the front month minus the number of notices served upon today (34 x 100 oz )which equals 73,100 oz standing in this  active delivery month of MAY . THERE ARE 8.923 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY SO FAR.

WE LOST 1100 OZ OF GOLD (11 CONTRACTS) STANDING IN THIS NON ACTIVE DELIVERY MONTH OF MAY AS THEY MORPHED INTO LONDON BASED FORWARS.

total registered or dealer gold:  286,891.437 oz or 8.923 tonnes
total registered and eligible (customer) gold;   9,028589.239 oz 280.82 tones
THE COMEX IS AGAIN IN STRESS AS ONLY 8.923 TONNES OF GOLD ARE LEFT TO SERVICE DELIVERIES. THERE IS HARDLY ANY GOLD AT THE COMEX TO SERVE UPON LONGS AND THUS THE REASON FOR THE EFP TRANSFER OVER TO LONDON.

IN THE LAST 18 MONTHS 73 NET TONNES HAS LEFT THE COMEX.

end

And now for silver

AND NOW THE APRIL DELIVERY MONTH

MAY INITIAL standings/SILVER

MAY 23/ 2018
Silver Ounces
Withdrawals from Dealers Inventory nil oz
Withdrawals from Customer Inventory
 115,829.210 oz
HSBC
Scotia
Deposits to the Dealer Inventory
nil
oz
Deposits to the Customer Inventory
 133,523.74,
oz
JPMorgan
Scotia
No of oz served today (contracts)
22
CONTRACT(S)
(110,000 OZ)
No of oz to be served (notices)
194 contracts
(970,000 oz)
Total monthly oz silver served (contracts) 6192 contracts

(30,960,000 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

total dealer deposits: nil oz

we had 2 deposits into the customer account

i) Into JPMorgan: 20,167.300 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 52.3% of all official comex silver. (140 million/268 million)

ii) Into Scotia: 113,356.440 oz

total customer deposits today: 133,523,74 oz

we had 2 withdrawals from the customer account;

i) out of HSBC:  25,228.300 oz

ii) Out of Scotia: 90,600.910 oz

total withdrawals;  115,829.210 oz

we had 0 adjustments

total dealer silver:  69.156 million

total dealer + customer silver:  268.981 million oz

The total number of notices filed today for the MAY. contract month is represented by 22 contract(s) FOR 110,000 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 6192 x 5,000 oz = 30,960,000 oz to which we add the difference between the open interest for the front month of MAY. (216) and the number of notices served upon today (22 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAY contract month: 6192(notices served so far)x 5000 oz + OI for front month of MAY(214) -number of notices served upon today (22)x 5000 oz equals 31,930,000 oz of silver standing for the MAY contract month 

WE GAINED 57 CONTRACTS OR AN ADDITIONAL 285,000 OZ WILL  STAND AT THE COMEX AS SOMEBODY WAS IN URGENT NEED OF PHYSICAL SILVER ON THIS SIDE OF THE POND.

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

ESTIMATED VOLUME FOR TODAY: 84,729 CONTRACTS

CONFIRMED VOLUME FOR YESTERDAY: 80,143 CONTRACTS

YESTERDAY’S CONFIRMED VOLUME OF  80,143 CONTRACTS EQUATES TO 400 MILLION OZ  OR 57.2% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -2.01% (MAY23/2018)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -0.23% to NAV (MAY 23/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -2.01%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.23%/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 -1.98%: NAV 13.44/TRADING 13.18//DISCOUNT 1.98.

END

And now the Gold inventory at the GLD/

MAY 23/WITH GOLD DOWN $2.35 NO CHANGES BUT I READ THE TONNAGE INCORRECTLY IN PREVIOUS SESSIONS:  PROPER INVENTORY AT 852.04

MAY 22/WITH GOLD UP $1.05/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 852.04 TONNES

MAY 21/WITH GOLD DOWN 50 CENTS/A HUGE CHANGE IN GOLD INVENTORY/A WITHDRAWAL OF 3.24 TONNES FORM GLD INVENTORY/INVENTORY RESTS AT 852.04 TONNES

MAY 18/WITH GOLD UP $1.80/A HUGE CHANGE IN GOLD INVENTORY AT THE GLD/ A DEPOSIT OF 9.11 TONNES INTO GLD INVENTORY/INVENTORY RESTS AT 865.28 TONNES/

GLD WAS ONE MASSIVE FRAUD

May 17/WITH GOLD DOWN $1.75/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 856.17 TONNES

MAY 16./WITH GOLD UP $1.05: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 856.17 TONNES

MAY 15/WITH GOLD DOWN $27.35, THE CROOKS WITHDREW 10 TONNES OF GOLD FROM THE GLD WHICH WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 856.17 TONNES

MAY 14/ WITH GOLD DOWN $2.35: A HUGE DEPOSIT OF 4.68 TONNES OF GOLD INTO THE GLD and then a withdrawal of 1.48 tonnes /INVENTORY RESTS AT 866.17

A net gain of 3.2 tonnes of gold.

MAY 11/WITH GOLD DOWN $1.75/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 862.96 TONNES/

MAY 10/WITH GOLD UP $9.60/A WITHDRAWAL OF 1.17 TONNES FROM THE GLD/INVENTORY RESTS AT 862.96 TONNES/SUCH CROOKS

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

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

MAY 23/2018/ Inventory rests tonight at 852.04 tonnes

*IN LAST 386 TRADING DAYS: 88.97 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 336 TRADING DAYS: A NET 67.33 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.

end

Now the SLV Inventory/

MAY 23/WITH SILVER DOWN 17 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.003 MILLION OZ/

MAY 22/WITH SILVER UP 6 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.003 MILLION OZ/

MAY 21/ WITH SILVER UP 5 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 321.003 MILLION OZ/

MAY 18/WITH SILVER DOWN 5 CENTS  A SMALL CHANGE IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 942,000 OZ/INVENTORY RESTS AT 321.003 MILLION OZ/

May 17/WITH GOLD UP 6 CENTS/A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 471,000 OZ//INVENTORY RESTS AT 321.945 MILLION OZ/

MAY 16./WITH SILVER UP 10 CENTS/A HUGE DEPOSIT OF 1.883 MILLION OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 321.474 MILLION OZ

MAY 15/WITH SILVER DOWN 33 CENTS, NO CHANGES AT THE SLV; THE CROOKS COULD NOT BORROW ANY SILVER BECAUSE THERE IS NONE: INVENTORY RESTS AT 319.591 MILLION OZ

MAY 14/WITH SILVER DOWN 10 CENTS/A SMALL CHANGES IN SILVER INVENTORY AT THE SLV/ A WITHDRAWAL OF 858,000 FROM THE SLV/INVENTORY RESTS AT 319.591 MILLION OZ/

MAY 11/WITH SILVER DOWN 2 CENTS/THE CROOKS WITHDREW A MONSTROUS 2.824 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 320.439 MILLION OZ/

MAY 10/WITH SILVER UP 22 CENTS/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 323.263 MILLION OZ/

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

MAY 23/2018:  

Inventory 321.003 million oz

end

6 Month MM GOFO 2.10/ and libor 6 month duration 2.50

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

G0FO+ 2.10%

libor 2.50 FOR 6 MONTHS/

GOLD LENDING RATE: .40%

XXXXXXXX

12 Month MM GOFO
+ 2.76%

LIBOR FOR 12 MONTH DURATION: 2.58

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.18

end

Major gold/silver trading /commentaries for WEDNESDAY

GOLDCORE/BLOG/MARK O’BYRNE.

GOLD/SILVER

Gold Looks A Better Bet Than UK Property

Dominic Frisby of Money Week looks at the historical relationship between UK house prices and gold (including some great charts), and concludes that your money is better off in the yellow metal than bricks and mortar.


Source: Money Week

Today we return to a subject that has been a favourite of mine over the years: UK house prices – but with a twist.

We don’t consider them in the debased, devalued currency that is the pound. Rather, we measure them in the eternal currency that is gold.

What is the use of money?

Money has three functions: to be a medium of exchange, a store of value, and a unit of account.

Sterling functions well as a medium of exchange within the confines of our national borders (though it is less effective overseas).

As a store of value, it’s been awful. Every year it loses purchasing power, and the interest that is paid does not compensate the loss. Real inflation is much higher than the Bank of England’s traditional measures – RPI and latterly CPI – show.

Indeed, sterling has lost more than 95% of its value over the last 100 years, which measures sterling’s purchasing power, shows.

Value of the pound, 1750-2011

(Irony of ironies, this chart – which is based on a range of official inflation measures – comes from a Bank of England paper. The Bank of England is supposed to be sterling’s steward.)

A few years ago, Lloyds Bank showed how sterling had lost more than 90% of its purchasing power in the last 40 years alone, and no doubt over the next 40 years, it will have lost 90% of the purchasing power it has today.

When money loses its purchasing power like this it also means that its value as a unit of account is brought into doubt.

A good unit of account must maintain its value, which sterling does not. As a result, if we want to measure prices over an extended period of time, we must resort to “inflation-adjusted” prices and the like, which are extremely arbitrary.

By way of illustration, let’s start with UK house prices, in sterling, since 1953.

UK house price chart

(All of these charts, by the way, come courtesy of my main man, Nick Laird, over at goldchartsrus.com.)

You can see it’s a virtually never-ending climb higher, with two interludes – one in the 1990s, and the other following the global financial crisis of 2008.

However, this inexorable rise is as much due to sterling’s loss of purchasing power as it is to rising UK house prices. It could never have been allowed to happen if house prices had been included in the Bank of England’s measures of inflation, but they were deliberately ignored.

The easiest way for ordinary people to hedge against the debasement of their money has been housing – and that’s probably the main reason that buy-to-let grew to become so popular (although new tax laws look like they have killed that particular game).

Gold, which cannot be printed or debased, is all but useless as a medium of exchange. But it has made for a much better store of value and a much better unit of account than sterling.

Thus we consider UK house prices in gold.

Gold – a much more reliable financial measuring tape

As of now, one ounce of gold is worth around £960. The average UK house is, according to the Nationwide, worth £211,625 – or 220 ounces of gold.

(By the way, I’m fully aware these ratios don’t take into account the utility of a house; the yield if you let it out; the fact that mortgages have been so dirt cheap these last ten years; the tax costs of selling gold at a profit and so on. Comparing the ratio between two markets is nevertheless a useful exercise in determining relative value.)

Here are UK house prices measured in gold, going back to 1953.

UK house prices in ounces of gold

Comparing those two charts – house prices in sterling and house prices in gold – the story is quite different. When you look at the journey UK house prices have been on measured in gold, you also get a clearer idea of just how much sterling has been debased, particularly since 2008.

(And, by the way, the received wisdom is that currency debasement most hurts savers. Actually, the hardest hit are the asset-light, salaried classes – usually the under 35s).

Measured in gold, from 2005, house prices fell for six years, so that by 2012, at 150oz for the average UK home, they were briefly back to where they were in 1987. It’s astonishing.

Even today, at 220oz for the average UK home, we are only at mid-1990s prices.

You can see the rally that housing has enjoyed post-2012, from 150oz to around 275oz in 2016 (which now looks like it was the peak of the market, in gold terms at least), which was as much to do with gold’s decline as it was housing’s appreciation. Post-Brexit, gold had a good rally against sterling, and house prices have fallen in gold terms.

It’s also amazing to look at how low housing got in gold terms back in the 1980s – to less than 100oz. Will we ever go back to those levels? Possibly.

A crisis in the bond market; inflation; rising interest rates; a rush to gold; all coupled with the fact that, with a generation priced out, it is no longer politically desirable to prop up house prices in the way that it once was.

It looks far-fetched just now, but it really wouldn’t take that much to get us there.

What’s next for London house prices?

So to London. London and the rest of the UK are two very different beasts when it comes to house prices.

First, here’s Greater London since 1968 in sterling terms.

Greater London house prices

Up, up and away.

And now here’s Greater London in gold.

Greater London house prices in ounces of gold

Where London has differed from the rest of the UK (perhaps with the exception of the likes of Oxford, Cambridge, Bristol and Brighton) is in the breathtaking rally it has enjoyed since 2012, whether in sterling or gold. The average London house went from 150oz to almost 450oz. From low to high it nearly tripled.

The market got massively overheated by about 2015-16 and has since pulled back. We now have atrophy at the top of the market, thanks to George Osborne’s higher stamp duty, and central London, agents report, appears to have pulled back by 10% or 15%. In gold terms, we are back at 350oz.

Unlike the rest of the UK, we are nowhere near the early 1990s levels of around 200oz.

Where London goes next depends, to my mind at least, on the current chancellor. Stamp duty is punitively high: it’s 10% above £925,000 and 13% above £1.5m – even more for second homes. It’s killed the top of the market.

But despite lower transactions levels, revenue to the Treasury is also high, so that will be a deterrent to any chancellor wishing to reduce it. If stamp duty stays high, London property heads lower. If it doesn’t, then the outlook is brighter.

As for gold, meanwhile, my outlook remains as it’s been for a while: that we will range trade. Out on the horizon, the dominoes are slowly lining up for another bull market in gold – excuse the mixed metaphor – but we are just not there yet.

In all, of the two, gold – trading in a range – looks a better bet than property, which looks as though it’s heading lower.

PS Nick Laird has put together charts for each region in London. I’ll post them on on my twitter feed later today.

Related Content

London Property Market Vulnerable To Crash

London Property Crash Looms As Prices Drop To 2 1/2 Year Low

 Listen on SoundCloud , Blubrry & iTunesWatch on YouTube above

News and Commentary

Gold rises, market eyes US-China trade talks, Fed minutes (Reuters.com)

Nikkei leads Asian-market losses as investors’ geopolitical worries grow (MarketWatch.com)

Brent rises on supply concerns, U.S.-China trade worries weigh (Reuters.com)

Stocks Retreat as North Korea Summit Looks Iffy (Bloomberg.com)

Trade, geopolitical uncertainty puts stock-market rally on pause (MarketWatch.com)

War warning: Sweden issues its people with booklet on how to cope with crisis (News.com.au)


Source: Investing.com

Silver Attempting Breakout At 20-Year Support (Investing.com)

Italy is testing Mario Draghi to step in and do “whatever it takes” (MoneyWeek.com)

Europe’s Italian Problem Is Bigger Than Brexit (Bloomberg.com)

7 Reasons Why European Banks Are In Trouble (Mises.com)

The Untold Story of FDR and the Battle Over Gold (Bloomberg.com)

Listen on SoundCloud , Blubrry & iTunesWatch on YouTube below

Gold Prices (LBMA AM)

22 May: USD 1,293.90, GBP 961.24 & EUR 1,095.29 per ounce
21 May: USD 1,285.85, GBP 959.24 & EUR 1,095.67 per ounce
18 May: USD 1,287.20, GBP 954.20 & EUR 1,091.16 per ounce
17 May: USD 1,288.85, GBP 952.07 & EUR 1,090.50 per ounce
16 May: USD 1,291.75, GBP 958.61 & EUR 1,093.60 per ounce
15 May: USD 1,310.05, GBP 966.42 & EUR 1,098.35 per ounce

Silver Prices (LBMA)

22 May: USD 16.58, GBP 12.32 & EUR 14.04 per ounce
21 May: USD 16.34, GBP 12.19 & EUR 13.91 per ounce
18 May: USD 16.39, GBP 12.16 & EUR 13.92 per ounce
17 May: USD 16.39, GBP 12.14 & EUR 13.90 per ounce
16 May: USD 16.26, GBP 12.07 & EUR 13.79 per ounce
15 May: USD 16.41, GBP 12.12 & EUR 13.77 per ounce


Recent Market Updates

– Gold 2048: The Next 30 Years For Gold
– Beware “Snollygosters” and the Empty Promises of Pathological Politicians
– US 10-Year Surges, Emerging Markets Implode…Where Next for Gold?
– Welsh Gold Being Hyped Due To The Royal Wedding?
– Oil Price Is Going To Keep Rising And Inflation Is Coming
– Gold Price Manipulation – A Comprehensive Guide By James Rickards
– EU ‘Nightmare Scenario’ As Popular Anti-Euro and Anti-EU Government Takes Power In Italy
– “Oil price highest in 3 years, gold ready to follow”, by Daniel March
– Gold Mining Supply Globally Looks Set To Decline
– Gold Bullion Demand In Iran May Surge On Trump Sanctions
– “Money Is Gold — and Nothing Else”
– 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

Mark O’Byrne
Executive Director
END

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

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

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

(Andrew Maguire)

Andrew Maguire

2:57 PM (1 hour ago)
to me

Harvey

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

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

Warm regards

Andy

 END
Pretty interesting:  a new book on American default as it examines the dollar devaluation against gold and gold’s confiscation in 1933
(courtesy Chris Powell/.Sebastian Edwards)

New book, ‘American Default,’ examines dollar devaluation, gold confiscation of 1933

 Section: 

2:49p ET Tuesday, May 22, 2018

Dear Friend of GATA and Gold:

Bloomberg News today begins publishing a four-part excerpt from a new book about the U.S. government’s devaluation of the dollar, repudiation of debt, and confiscation of monetary gold in 1933.

The book is titled “American Default — The Untold Story of FDR, the Supreme Court, and the Battle over Gold,” and it’s written by Sebastian Edwards, Henry Ford II professor of international economics at the University of California at Los Angeles.

“American Default” is published by Princeton University Press, whose publicity for the book —

https://press.princeton.edu/titles/11230.html

— says:

“Sebastian Edwards provides a compelling account of the economic and legal drama that embroiled a nation already reeling from global financial collapse. It began on April 5, 1933, when FDR ordered Americans to sell all their gold holdings to the government.

“This was followed by the abandonment of the gold standard, the unilateral and retroactive rewriting of contracts, and the devaluation of the dollar. Anyone who held public and private debt suddenly saw its value reduced by nearly half, and debtors — including the U.S. government — suddenly owed their creditors far less.

Revaluing the dollar imposed a hefty loss on investors and savers, many of them middle-class American families.

“The banks fought back, and a bitter battle for gold ensued. In early 1935 the case went to the Supreme Court. Edwards describes FDR’s rancorous clashes with conservative Chief Justice Charles Evans Hughes, a confrontation that threatened to finish the New Deal for good — and that led to FDR’s attempt to pack the court in 1937.”

The more conspiratorily minded among gold’s observers may wonder if the book’s timing anticipates a similar default in the near future. In any case the book won’t be formally published for another week.

Bloomberg’s first excerpt is pretty interesting and it’s posted here:

https://www.bloomberg.com/view/articles/2018-05-22/fdr-s-battle-over-the…

Amazon is already offering the book for sale here:

https://www.amazon.com/American-Default-Untold-Supreme-Battle/dp/0691161…

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

END

Craig Hemke strongly believes (and so do I) that gold/silver will rise following options expiry,  Comex options expire:  Friday, May 25/LBMA/OTC: expires May 31.

(courtesy Craig Hemke/Sprott/GATA)

Craig Hemke at Sprott Money: Looking forward to gold’s next rally

 Section: 

3:43p ET Tuesday, May 22, 2018

Dear Friend of GATA and Gold:

If the “wash-rinse-repeat” cycle played in the gold futures market by the market-rigging bullion banks against lesser traders is still operating, the TF Metals Report’s Craig Hemke writes at Sprott Money today, a strong rally in gold is just about a week away.

Hemke’s analysis is headlined “Looking Forward to Gold’s Next Rally” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/looking-forward-to-golds-next-rally-cra…

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

END



___________________________________________________________________

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 TO 6.3879  /shanghai bourse CLOSED DOWN 45.39 POINTS OR 1.41%    / HANG SANG CLOSED DOWN 568.71 POINTS OR 1.82%
2. Nikkei closed DOWN 270.60 POINTS OR 1.38% /  /USA: YEN FALLS TO 109.76/  

3. Europe stocks OPENED RED     /USA dollar index RISES TO 93.92/Euro FALLS TO 1.1710

3b Japan 10 year bond yield: FALLS TO . +.05/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.76/ 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:: 71.72  and Brent: 78.88

3f Gold UP/Yen UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +.51%/Italian 10 yr bond yield UP to 2.43% /SPAIN 10 YR BOND YIELD UP TO 1.47%

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

3k Gold at $1296.60 silver at:16.53   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 47/100 in roubles/dollar) 61.69

3m oil into the 71 dollar handle for WTI and 78 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 109.76 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 0.9910 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1602 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 +0.560%

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 3.01% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.17%

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

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

Global Stocks, US Futures Slammed By Quartet Of

Risks

It is a “risk off” sea of red in global markets this morning, with US equity futures tumbling (Dow -191, ES -18) following European and Asian market sharply lower, as a quartet of growing risks spooks traders, among them i) the ongoing Turkish lira meltdown, ii) unexpectedly weak European PMIs which missed across the board, iii) the ongoing Italian political quagmire where president Matarella is stalling the formation of a new government, and iv) the return of geopol/trade war fears rose after Trump cast doubts over the North Korean summit and expressed dissatisfaction regarding trade talks with China.

While risk assets slumped and treasuries rose alongside the dollar as while oil dropped with most commodities, the main story overnight remains the unprecedented collapse in the Turkish lira, which started with a flash crash just as futures reopened for trading overnight, with many blaming Japanese flows suggesting domestic retail traders – i.e. Mrs Watanabe – were stopped out in TRYJPY, with the consequent spillover pushing USDJPY lower.

As European trading began, the TRY gapped even lower, dropping to a new all time low of 4.9253 after the release of a series of weak European PMIs which slammed the euro to fresh 2018 lows, while the USDJPY broke 110 and EURCHF touched 1.16.

As risk off gripped stocks, treasuries extended the overnight rally with 10Y TSY yields dropping to just above 3.00%.

In Europe, 10Y bund yields broke back under 50bps after further loss in European manufacturing momentum and the bund/BTP spread snapped wider amid growing concerns about the political situation in Italy, where President Sergio Mattarella is due to announce his decision on whether to give law professor Giuseppe Conte a chance to lead a populist government as early as Wednesday. For now, Mattarella has not yet decided whether to give the PM role to Conte according to sources.

As Mark Cudmore pointed out earlier, Matarella has no good options as far as markets are concerned: “If he blocks the coalition, it’ll leave the country in limbo and stir up popular resentment before new elections. But if he approves the coalition, then it’s even more worrying because of the government’s fiscally irresponsible proposals.

And if Italian politics wasn’t enough of a problem for euro longs, German and French PMI data missed forecasts adding to the bearish sentiment surrounding the Euro lately. This morning Europe’s PMIs disappointed across the board, with momentum in France’s private sector slowed to the weakest since the start of 2017, with a lull in services offsetting a pickup in manufacturing numbers, while both German manufacturing and services PMIs missed and dropped.

  • EU Markit Manufacturing Flash PMI 55.5 vs. Exp. 56.0 (Prev. 56.2)
  • EU Markit Services Flash PMI 53.9 vs. Exp. 54.6 (Prev. 54.7)
  • German Markit Manufacturing Flash PMI (May) 56.8 vs. Exp. 57.9 (Prev. 58.1)
  • French Markit Manufacturing Flash PMI (May) 55.1 vs. Exp. 53.7 (Prev. 53.8)

Following the release of the soft French, German and EU PMI data, Bund futures pushed to session highs amid renewed concerns the ECB’s tapering plans may be delayed.

As a result, European stocks tumbled as the Stoxx Europe 600 Index sank the most since March alongside U.S. equity-index futures, after US President Trump expressed doubt over the US-North Korean summit before further expressing dissatisfaction in regards to trade talks with China. European sectors are almost all in the red, with consumer staples outperforming while energy plumb the depths amid the retreat in oil prices overnight. In terms of stock specifics, Marks & Spencer (+3.5%) is higher (despite reporting a second straight decline in annual profits) amid faster than expected store closures. Standard Chartered (+1.6%) is in the green following an FT report that Barclays (-0.8%) was looking at a potential merger with rival banks, however Reuters later said the FT report was just more fake news.

Earlier in the session, Asian stocks likewise traded mostly negative after US President Trump placed doubts on the summit with North Korea and expressed dissatisfaction regarding trade talks with China. ASX 200 (-0.2%) was led lower by the energy sector following weakness in crude as Santos shares slumped about 9% after the Co. rejected the approach from Harbour Energy and disengaged from further talks. Nikkei 225 (-1.2%) underperformed as exporters suffered the brunt of a firmer currency, while Shanghai Comp. (-1.4%) and Hang Seng (-1.8%) conformed to the broad risk averse tone amid Trump discontentment with trade discussions. Furthermore, the PBoC conducted a net daily liquidity drain from the interbank market, while basic materials names were pressured by NDRC plans to reduce benchmark coal prices and after US Treasury Secretary Mnuchin clarified that steel and aluminium tariffs were not part of the recent truce and will remain in place for China.

Finally, S&P futures dropped in Asian hours and accelerated further to the downside as European cash equity markets opened, trading near session lows just above 2,700.

In FX, the euro tumbled to a six-month of 1.17 as the abovementioned PMI misses added to concern economic momentum is slowing. The yen strengthened more than 1% against the dollar in the London session as European stocks followed Asia lower, with gains boosted amid a scramble among Japanese margin traders to cut losses from a slide in the Turkish lira as hopes faded that the central bank may step in to rescue the battered currency. Risk sensitive currencies such as the Swedish krona and Norwegian krone were the worst Group-of-10 performers as the worsening geopolitical climate as well as weak European PMIs weighed on the sentiment; EUR/USD fell to a day low of 1.1699 before paring some losses. The pound slid and U.K. government bonds rose as U.K. inflation unexpectedly slowed to a 13-month low in April, denting prospects for rate increases with money markets reducing bets of a Bank of England interest-rate hike in August.

As expected, thanks to the latest move higher in the dollar, emerging markets continue to be a bloodbath, with the TRY sticking out meanwhile the Turkish central bank continues to do nothing.

In commodities, oil has extended the losses seen over night in the current risk averse environment, with downward pressure seen from both a rising USD and overnight source reports suggesting OPEC could increase production in June to offset Venezuelan and Iranian shortages. Prices were also dealt a blow by the latest API reports which posted a narrower  than expected drawdown in headline crude inventories (-1.3mln vs. Exp. -1.6mln). Elsewhere, gold is trading range-bound with participants tentative ahead of today’s FOMC minutes release, while copper was lacklustre overnight alongside the downbeat risk sentiment. Steel has fallen for the fourth consecutive session hitting one month lows as supply glut concerns continue. OPEC and non-OPEC producers are to discuss potential changes to way in which they assess oil stockpiles, according to sources.

In other overnight news, ECB’s Coeure said QE will not end abruptly after September and is not worried by the slowdown in growth, confident that inflation will rise.  US President Trump said the House Ways and Means Committee are working on additional tax cuts by November and that he will propose new tax cuts before that month.

US House passed the Dodd-Frank rollback bill which was then sent to President Trump to sign, while the US House also passed the “right to try” bill which seeks to permit terminally ill patients to try experimental drugs still in clinical trial stage.

Expected data include mortgage applications, new home sales, and PMIs. Fed is scheduled to publish its latest FOMC meeting minutes, while Lowe’s, Target, Tiffany, Synopsys, and CIBC are among companies reporting earnings

Bulletin Headline Summary from Ransquawk

  • Sentiment remains downbeat in Europe amid Trump comments on China and NK. EZ data added to woes
  • TRY at record lows, GBP at 2018 lows with CPI below forecast, CHF at month highs in risk averse markets
  • Looking forward, highlights include, US New Home Sales, DOEs, FOMC minute and a slew of speakers

Market Snapshot

  • S&P 500 futures down 0.6% to 2,708.75
  • STOXX Europe 600 down 0.9% to 393.22
  • MXAP down 0.4% to 173.52
  • MXAPJ down 0.8% to 563.63
  • Nikkei down 1.2% to 22,689.74
  • Topix down 0.7% to 1,797.31
  • Hang Seng Index down 1.8% to 30,665.64
  • Shanghai Composite down 1.4% to 3,168.96
  • Sensex down 0.4% to 34,498.59
  • Australia S&P/ASX 200 down 0.2% to 6,032.51
  • Kospi up 0.3% to 2,471.91
  • German 10Y yield fell 4.7 bps to 0.513%
  • Euro down 0.5% to $1.1718
  • Italian 10Y yield fell 6.1 bps to 2.066%
  • Spanish 10Y yield fell 1.5 bps to 1.442%
  • Brent futures down 0.6% to $79.10/bbl
  • Gold spot up 0.2% to $1,294.02
  • U.S. Dollar Index up 0.2% to 93.79

Top Overnight News from Bloomberg

  • European May Composite PMIs: France 54.5 vs 56.8 est; Germany 53.1 vs 54.6 est; Eurozone 54.1 vs 55.1 est; Markit note it’s becoming increasingly evident that underlying growth momentum has slowed
  • U.K. Apr. CPI y/y: 2.4% vs 2.5% est; Core CPI 2.1 vs 2.2% est; ONS note base effects of airfare prices dropping out of calculation
  • Italian President Mattarella is due to announce his decision as early as Wednesday on whether to give law professor Giuseppe Conte a chance to lead a populist government following a last-minute wobble over the candidate’s suitability; according to Repubblica he is taking extra time before the decision as he is critical of Finance Minister candidate Savona.
  • Trump says House panel is working on more tax cuts by November
  • President Donald Trump expressed pessimism about whether the summit with North Korea’s leader would take place, even as U.S. officials continue to press ahead with plans for a historic meeting to be held on June 12
  • Emerging-market companies and governments straining to deal with the rising cost of borrowing in dollars face increasing pressure as a record slew of bonds come due
  • Divisions among Federal Reserve officials over the yield curve and inflation will be under scrutiny on Wednesday when the U.S. central bank releases minutes of its policy meeting at the start of the month
  • Turkey’s main stock exchange in Istanbul converted its foreign-currency assets into liras, a mostly symbolic gesture meant to express confidence in the nation’s rapidly depreciating currency
  • Add skittish Japanese investors to the list of woes for Turkish assets. With Turkey’s lira breaking below the 24-yen level on Tuesday for the first time, Japanese margin traders cut their losses early Wednesday in Asia, said Takuya Kanda, general manager at Gaitame.Com Research Institute Ltd. in Tokyo
  • Italian President Sergio Mattarella is due to announce his decision as early as Wednesday on whether to give law professor Giuseppe Conte a chance to lead a populist government following a last-minute wobble over the candidate’s suitability
  • Foreign Secretary Boris Johnson set Theresa May a list of Brexit demands, saying she must “get on with” taking the U.K. out of the European Union’s trading rules as fast as possible
  • The Spanish Budget Ministry is working on a plan to reorganize the debt of the country’s regional governments to help them sell bonds in the public markets again after a six- year absence

Asian equity markets traded mostly negative as the downbeat sentiment rolled over from US where stocks retreated and DJIA pulled back from the 25k level, after US President Trump placed doubts on the summit with North Korea and expressed dissatisfaction regarding trade talks with China. ASX 200 (-0.2%) was led lower by the energy sector following weakness in crude as Santos shares slumped about 9% after the Co. rejected the approach from Harbour Energy and disengaged from further talks. Nikkei 225 (-1.2%) underperformed as exporters suffered the brunt of a firmer currency, while Shanghai Comp. (-1.4%) and Hang Seng (-1.8%) conformed to the broad risk averse tone amid Trump discontentment with trade discussions. Furthermore, the PBoC conducted a net daily liquidity drain from the interbank market, while basic materials names were pressured by NDRC plans to reduce benchmark coal prices and after US Treasury Secretary Mnuchin clarified that steel and aluminium tariffs were not part of the recent truce and will remain in place for China. Conversely, baby related stocks gained in Hong Kong as participants reacted took their first opportunity to react to the prospects of China relaxing its child policy restrictions and Standard Chartered was boosted on reports Barclays was examining a potential merger with rivals including the dual-listed lender. Finally, 10yr JGBs are marginally higher amid gains in T-notes and a broad risk-averse tone, while the BoJ were also present in the market for JPY 840bln of JGBs in maturities spread across the curve.

Top Asian News

  • Lira Tumbles to Record as Lack of Central Bank Action Fuels Rout
  • Bank Indonesia Conducting Dual-Intervention as Rupiah Weakens
  • Fallen Singapore High-Flyer Gets Court Protection to Reorganize

European equities are firmly in the red as the downbeat sentiment rolled over from Asia overnight and Wall St. yesterday. Markets took a risk averse stance after US President Trump expressed doubt over the US-North Korean summit before further  expressing dissatisfaction in regards to trade talks with China. European sectors are almost all in the red, with consumer staples outperforming while energy plumb the depths amid the retreat in oil prices overnight. In terms of stock specifics, Marks & Spencer (+3.5%) is higher (despite reporting a second straight decline in annual profits) amid faster than expected store closures. Finally, Standard Chartered (+1.6%) is in the green following an FT report that Barclays (-0.8%) was looking at a potential merger with rival banks, however source reports denied this news later

Top European News

  • Politics Engulf Euro Junk Bond Market With Big Italy Exposure
  • StanChart Says Focus Is on Strategy, Denting Merger Speculation
  • Boris Johnson Warns May to ‘Get on With It’ and Deliver Brexit
  • Thyssenkrupp’s CEO Under Fire as Activist Elliott Buys Stake
  • Bond Investors Burned by Sanctions Creep Back Into Russian Debt

In FX, the JPY has been a beneficiary of the broad risk aversion which subsequently took USD/JPY below 111.00 during Asia-Pacific trade, thereafter the pair continued to fall victim to selling pressure and took out the widely-watched 200DMA at 110.21 and psychological 110.00 (which holds USD 2bln in option expiries due to roll-off at the NY cut) before eventually taking out Fib support at 109.78. The potential damage for the USD from the JPY has been somewhat offset by the softer EUR (DXY +0.25%) with the shared currency dealt a blow by this morning’s PMI releases which thus far have painted a dreary picture for the Eurozone. IFR highlight that if we get a break of the 1.1700 level to the downside, large stops and gamma below this level could see 1.1500 on the cards. The EUR initially also lost ground to the GBP with the EUR/GBP cross around 0.8750 before the cross was dealt some reprieve by softer than expected UK inflation figures (Y/Y CPI 2.4% vs. Exp. 2.5%) which saw GBP/USD briefly slip below 1.3350. Elsewhere, commodity-linked currencies have been subdued as oil prices retreated from multi-year highs with AUD also dampened after weak construction data, while NZD has seen a bout of pressure after the RBNZ published an article on unconventional monetary policy in which it stated it has significant room for easing in a conventional manner with the OCR at 1.75%. The losses in NZD were then instantly pared given the context of the comments which were made as an implicit argument against adopting unconventional measures, before the broad risk averse sentiment pressured currencies across the FX space and saw NZD/USD test 0.6900 to the downside. Elsewhere, TRY experienced a flash crash which saw the currency drop over 2.5% against the greenback and extend on its recent trend of record lows approaching into next month’s election, in which President Erdogan has vowed to take greater control of the central bank if he wins, although the currency has since pared some of the losses amid a lack of immediate fresh news catalyst behind the latest bout of selling

In commodities, oil extended the losses seen over night in the current risk averse environment, with downward pressure seen from both a rising USD and overnight source reports suggesting OPEC could increase production in June to offset Venezuelan and Iranian shortages. Prices were also dealt a blow by the latest API reports which posted a narrower than expected drawdown in headline crude inventories (-1.3mln vs. Exp. -1.6mln). Elsewhere, gold is trading range-bound with participants tentative ahead of today’s FOMC minutes release, while copper was lacklustre overnight alongside the downbeat risk sentiment. Steel has fallen for the fourth consecutive session hitting one month lows as supply glut concerns continue. OPEC and non-OPEC producers are to discuss potential changes to way in which they assess oil stockpiles, according to sources.

Looking at the day ahead, the highlight is the May PMIs across the globe, which includes the manufacturing, services and composite prints in Europe and the US. Away from that, Q1 employment indicators in France and April’s  CPI/RPI/PPI in the UK is due in the morning (CPI 0.5% mom; core CPI 2.2% yoy expected), while April new home sales in the US is due in the afternoon. The May consumer confidence print for the Euro area is also due in the afternoon, while in the evening the latest FOMC meeting minutes will be released. Also worth noting is the House Foreign Affairs Committee holding a hearing to question Secretary of State Mike Pompeo regarding Trump’s foreign policy priorities, and the European Commission publishing country specific recommendations for economic policy.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -2.7%
  • 9:45am: Markit US Manufacturing PMI, est. 56.5, prior 56.5; US Services PMI, est. 55, prior 54.6
  • 10am: New Home Sales, est. 679,500, prior 694,000; New Home Sales MoM, est. -2.09%, prior 4.0%
  • 2pm: FOMC Meeting Minutes
  • 2:15pm: Fed’s Kashkari Speaks in Moderated Q&A in North Dakota

DB’s Jim reid concludes the overnight wrap

How time flies. Yesterday was the 5th anniversary of the start of the taper tantrum as Mr Bernanke hinted at an upcoming reduction in stimulus and created a few weeks of mini-panic. Meanwhile we’re only a few months away from the 10th anniversary of the Lehman Brothers collapse and its 6 and half years ago this week that Italy was on the brink with 10 years yields at over 7.25% and around +500bp over Bunds. Makes one feel very old.

Italy continues to grab the headlines even if yesterday was a much calmer day market wise 24 hours after the highest yields since ECB QE started. The main story was confusion surrounding who will be Italy’s next Premier, as La Repubblica reported that President Mattarella still needs time to consider the proposed candidate Giuseppe Conte  while the paper also noted that endorsement from the two populist parties for the Florence University law professor may no longer be certain and that the 5SM Party leader Di Maio may be back in running for the Premier. This morning, Bloomberg noted the President will decide on a PM as soon as today.

In government bonds yesterday, peripherals bonds outperformed with yields on Italian 10y BTPs down for the first time in three days (-5.3bp) while treasuries were unchanged and Bunds partly reversed its gains on Monday (+3.7bp). Meanwhile, 10y Gilts also rose 4.7bp in part as BOE Governor Carney told Parliament that “it made sense to take a bit of time” to assess the economic outlook in light of the soft advance GDP reading for 1Q, while noting that “it’s more likely to have been temporary and idiosyncratic factors that slowed the economy”.

Over in equities, US bourses closed modestly lower following President Trump’s comments on trade and North Korea. The S&P initially traded +0.34% higher on news that China will cut import tax on passenger cars from 25% to 15%, but later reversed gains to close -0.31% as Trump noted that trade talks with China “were a start” and that he was “not really” pleased with the recent results so far. Elsewhere on next month’s scheduled summit with North Korea, he noted “there’s…a very substantial chance, it won’t work out” but added that this is “OK” and “that doesn’t mean it won’t work out over a period of time”. Meanwhile in Europe, the Stoxx 600 (+0.27%), FTSE (+0.23%) and Italy’s FTSE MIB (+0.54%) were all modestly higher while the DAX (+0.71%) led the gains as it resumed trading following Monday’s holiday.

As for today when the market isn’t fixating on Italy or North Korea the big focus will be on the flash May PMIs around the globe and the Fed minutes tonight. Overnight we’ve already had the manufacturing reading out of Japan which came in at 52.5 compared to 53.8 in April. In a couple of hours’ time it’ll be Europe’s turn and the current market consensus is for no change in the composite reading for the Euro area at 55.1. Indeed the manufacturing reading is expected to fall a very modest 0.1pts to 56.1 – although this would make it the fifth consecutive monthly decline if so and also the lowest reading since February last year – while the services reading is expected to stay at 54.7. As always with the flash print we’ll also get the data for Germany and France. Germany’s manufacturing reading is expected to also fall very modestly, by 0.2pts to 57.9 while the data in France is expected to fall a marginal 0.1pts to 53.7. Later this afternoon we’ll get the flash PMI data for the US where the manufacturing reading is expected to stay steady mom at 56.5, and the services reading nudge up 0.4pts to 55.0. So all that to look forward too.

This morning in Asia, markets are trading lower with the Nikkei (-1.08%), Hang Seng (-1.01%) and Shanghai Comp. (-0.77%) all down while the Kospi is modestly higher (+0.36%), In the US, President Trump told Reuters he will  propose “new tax cuts prior to November”, when the mid-term elections are due but did not provide more details. Elsewhere, the Lower House has approved a bill (258 to 159 vote) to give regulatory and capital relief to smaller lenders by raising the asset threshold from $50bn to $250bn before lenders face stricter oversight from the Federal Reserve.

Now recapping other markets from yesterday. The US dollar index fell for the first time in seven days (-0.07%), while the Euro dipped -0.10% and Sterling nudged up 0.04%. Elsewhere, the Turkish Lira closed -2.04% vs. the USD yesterday after Fitch noted it was concerned about the erosion of its central bank’s independence. This morning it is down a further c2% to mark another fresh record low. In commodities, WTI oil fluctuated before closing -0.21% lower while precious metals were little changed (Gold -0.11%; Silver +0.21%).

Finally we turn to some Brexit headlines. The BOE Governor Carney has told Parliament that the UK economy is up to 2ppt worse off than they would have been without Brexit, which is equivalent to £900 worse off for each British household, to which Foreign Secretary Johnson quickly refuted “it’s absolutely not the case” but did not elaborate more. Meanwhile Chancellor Hammond noted “…the future trajectory of household income…will depend in part on the quality of the deal that we negotiate as we exit the EU…” Elsewhere, the BOE’s Vlieghe seemed slightly hawkish as he sees one or two rate hikes a year for the next three years, in part as a tightening labour market is supporting wage growth.

Before we take a look at today’s calendar, we wrap up with other data releases from yesterday. In the US, the May Richmond Fed manufacturing index rebounded 19pts mom to an above consensus print of 16 (vs. 10 expected). In the details, the shipments and new orders indices rebounded from even weaker April readings and there were more evidence of pricing pressure with the wages component at the highest since 1997 while the prices paid index was the highest in 6 years. These broad trends on pricing pressure were also similar to readings from the NY and Philly surveys. Meanwhile in the UK, the CBI’s industrial trends total order book index fell 7pts mom to -3 in May, marking the softest reading since November 2016. Elsewhere, the April public sector net borrowing ex-banking groups was slightly lower than expected at £7.8bln (vs. £8.5bln).

Looking at the day ahead, the highlight is the May PMIs across the globe, which includes the manufacturing, services and composite prints in Europe and the US. Away from that, Q1 employment indicators in France and April’s  CPI/RPI/PPI in the UK is due in the morning (CPI 0.5% mom; core CPI 2.2% yoy expected), while April new home sales in the US is due in the afternoon. The May consumer confidence print for the Euro area is also due in the afternoon, while in the evening the latest FOMC meeting minutes will be released. Also worth noting is the House Foreign Affairs Committee holding a hearing to question Secretary of State Mike Pompeo regarding Trump’s foreign policy priorities, and the European Commission publishing country specific recommendations for economic policy.

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/TUESDAY NIGHT: Shanghai closed DOWN 45.39 points or  1.41%   /Hang Sang CLOSED DOWN 568.71points or 1.82%    / The Nikkei closed DOWN 270.60 POINTS OR 1.38% /Australia’s all ordinaires CLOSED DOWN .16%  /Chinese yuan (ONSHORE) closed DOWN at 6.3879/Oil DOWN to 71.72 dollars per barrel for WTI and 78.88 for Brent. Stocks in Europe OPENED ALL RED.   ONSHORE YUAN CLOSED DOWN AT 6.3879 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.3826/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH WEAKER 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

3 b JAPAN AFFAIRS

end

c) REPORT ON CHINA/HONG KONG

Trump revokes China’s invitation to the world’s largest naval exercise.

(courtesy zerohedge)

Trump Shuns Xi As US Uninvites China From World’s Largest Naval Exercise

In the latest sign that contrary to the official rhetoric, tensions between the US and China are in fact escalating as China reaffirms its dominance of contested territory in the South China Sea (see “China Releases Footage Of Bombers Landing On Disputed Island For The First Time“) the US has disinvited China from the Pacific Rim Military Exercises, the Pentagon told AFP.

AFP news agency

@AFP

US disinvites China from Pacific military exercises: Pentagon

According to Inside Defensethe US military revoked the invitation because of Beijing’s aggressive actions in the South China Sea, which have recently included reports that it quietly installed “defensive” missiles capable of striking US territory in the Spratly Islands. More than 20 countries, 40 ships, 200 aircraft and 25,000 personnel are expected to participate in the exercises.

As the WSJ notes, China’s inclusion in the previous two Rimpac exercises was among the most tangible results of an effort by both sides since late 2010 to stabilize military ties that had often been interrupted by China over American arms sales to Taiwan.

The U.S. decision to revoke the invitation is likely to heighten tensions between Beijing and Washington amid fraught negotiations that aim to avoid a trade war.

“I think throwing them out of Rimpac would be a major political statement,” said a Senate staff member who follows the issue closely.

The US said it has “strong evidence” that China deployed anti-ship missiles, surface to air missiles and electronic jammers in contested parts of the Spratlys. The US called on China to remove the items.

“The United States is committed to a free and open Indo-Pacific,” the Pentagon states. “China’s behavior is inconsistent with the principles and purposes of the RIMPAC exercise.”

The Pentagon asserts it has “strong evidence” that China has deployed anti-ship missiles, surface-to-air missile systems and electronic jammers to contested areas in the Spratly Islands region of the South China Sea.

“China’s landing of bomber aircraft at Woody Island has also raised tensions,” according to the Pentagon, referencing China’s largest military outpost in the South China Sea.

[…]

“We have called on China to remove the military systems immediately and to reverse course on the militarization of disputed South China Sea features,” the Pentagon states. “We believe these recent deployments and the continued militarization of these features is a violation of the promise that President Xi made to the United States and the world not to militarize the Spratly Islands.”

The decision also comes as trade negotiations between the US and China are apparently unraveling, with President Trump telling the US not to expect a deal right away.

Ship

Two

Three

Meanwhile, China says its developments on the islands are only meant to “ensure safety at sea, navigation assistance, search and rescue, fisheries protection, and other non-military functions the placement of these weapon systems is only for military use,” according to the Pentagon.

China recently carried out its largest live fire drills in the Strait of Taiwan in years.

China’s first appearance at RIMPAC was back in 2014. The drills are typically held in the summer.

end

4. EUROPEAN AFFAIRS

Europe:

Trump much to the anger of the EU is pushing for a 10% cut in aluminum and steel imports into the USA/or a tariff increase on that 10%

(courtesy zerohedge)

Trump Is Pushing For 10% Cut In Aluminum, Steel Imports From EU

While the US-China trade talks have dominated headlines in the financial press this week, the Wall Street Journal on Tuesday published details from the Trump administration’s ongoing trade negotiations with the European Union, which increasingly look like they, too, have arrived at an impasse.

According to WSJTrump is pushing the EU to reduce steel and aluminum exports to the US by about 10%, according to several high-ranking EU officials who have apparently chafed at the administration’s demands. Officials have gone so far as to declare the measures illegal under World Trade Organization rules.

Negotiations are unfolding rapidly as the EU seeks to extend its temporary exemption from steel and aluminum tariffs that the Trump administration has said will expire June 1.

EU

The Trump proposal has offered two avenues for arriving at the US’s desired result. One is a quota fixed at 90% of US imports from the EU in 2017. The other would impose tariffs on a certain quota of imports with the aim of achieving the same 10% reduction, according to Poland’s Entrepreneurship and Technology Minister Jadwiga Emilewicz, who added that EU governments discussed the matter on Tuesday. However, the exact scope and details of the quotas have not yet been made clear.

“We are under the impression that somehow they want to limit steel imports to the U.S.,” European Trade Commissioner Cecilia Malmstrom said of continuing negotiations with Washington before briefing EU governments.

“Aluminum as well,” she said, without providing details.

European Trade Commissioner Cecilia Malmstrom has reportedly been in regular contact with Commerce Secretary Wilbur Ross ever since the US surprised the world by announcing its steel and aluminum tariffs back in March. Still, despite their close cooperation, Malmstrom said that deciphering Trump’s wants and needs has been by far the most frustrating aspect of the negotiations.

* * *

When it comes to setting a benchmark for their discussions with Trump, European countries have interpreted South Korea’s trade concessions as a cautionary tale. Seoul agreed to cap its US steel exports at 70% of their average from the past three years – a decision that created daunting problems for Korean steelmakers.

Seoul agreed to cap its U.S. steel exports at 70% of the average export total over the past three years. That created a daunting task for South Korean steelmakers, the third-largest supplier to the U.S., which filled their annual quota in nine out of 54 categories in the first four months of 2018. Quarterly limits imposed by the Trump administration pose another challenge, with any steel exports exceeding the cap facing delays, redirection or destruction.

“The devil is in the details,” an EU official said. “There is more to a quota than catches the eye, it’s about how you manage it.”

European officials have asked Trump not to punish US allies for a global steel glut precipitated by Chinese overproduction. The EU has readied countermeasures, including €2.8 billion ($3.3 billion) in levies against US goods, should the US reject the trade bloc’s offers to accept US import quotas and lower some EU trade barriers in exchange for receiving a permanent waiver on steel and aluminum tariffs. European officials have also scoffed at the US’s justification of tariffs on national security grounds, claiming this approach violates WTO rules.

European officials have repeatedly called on Mr. Trump not to punish U.S. allies for the global steel glut driven by overproduction in China. The president’s national security justification for steel and aluminum tariffs amounts to illegal protectionism under WTO rules, according to the EU. The bloc also balks at the notion that its exports threaten the U.S.. Twenty two of the EU’s 28 members are also in North Atlantic Treaty Organization allies.

“We are allies, but we are not vassals,” French State Secretary Jean-Baptiste LeMoyne said Tuesday at the Brussels gathering, adding the EU was prepared to counter the Trump administration if it doesn’t grant an unlimited waiver to the bloc.

[…]

“We want to avoid a trade war,” German Economic Affairs and Energy Minister Peter Altmanier said Tuesday in Brussels. “It’s important to come to an agreement that is in the interest of both sides.”

Overall, Trump’s trade relationship with China has continued to deteriorate despite a “trade truce” touted by Treasury Secretary Steven Mnuchin over the weekend. And what’s worse, NAFTA negotiations have apparently stalled, ratcheting up the likelihood that Congress won’t be able to ratify a new agreement until next year at the earliest.

Given these problems, preserving a strong trade relationship with the European Union is looking increasingly important – particularly where markets are concerned.

end

Italy

trouble in Italy as there is a sense of panic due to the fact that Matterella has given the green light to Conte and these guys are totally fiscally irresponsible..they will blow up their budget deficits skyhigh!!

(courtesy zerohedge)

“There Is A Sense Of Panic In The Air”: Italian Bond Carnage Returns

Update: The speculation of “will he, won’t he” is over as Italy’s president Mattarella gives Conte the green light to form a populist government, one which will blow out the Italian budget, and set the country on collision course with Brussels and Berlin:

  • ITALY PRESIDENT TO ASK CONTE TO TRY TO FORM GOVT: REPUBBLICA

* * *

The blow out in Italian yields has returned after taking a brief one day hiatus, with the 10Y BTP yield hitting a fresh 2018 high of 2.46%, the highest going back to 2014

… as the carnage in the short end resumes, send the 2Y to 0.28%…

… while the Bund-BTP spread has blown out again to 194 bps on Wednesday.

Today’s selling was prompted by a report that Italian President Mattarella has not yet decided whether to give the PM role to PM appointee, law professor Giuseppe Conte, with Repubblica reporting that Mattarella is to take time on the Premier candidate over concerns that his cabient may be far too anti-establishment.

As the FT notes, the anti-establishment Five Star Movement and the far-right League have become locked in a stand-off with Sergio Mattarella after pushing for a staunchly Eurosceptic economist, Paolo Savona, to be finance minister. As Repubblica adds, Mattarella is taking extra time before his decision on premiership as he is highly critical of Finance Minister candidate Savona.

Meanwhile, the public debt contagion has started to spread, as Monte dei Paschi’s bonds are also selling off with the yield on its €750m Tier 2 bond climbing to a record high of 8.2%: Monte dei Paschi raised the debt, which counts towards its capital ratios, at 5.375% in January and had planned to sell a further €700m of such paper before the year-end to strengthen its balance sheet.

Concerns have emerged about Italian banks’ non-performing loans; the two populist parties have said they will repeal laws allowing banks to forcibly recover debts from Italian citizens without judicial approval. The share prices of bad debt collection specialists such as Cerved and DoBank have fallen heavily this past week.

Quoted by the FT, Fidelity portfolio manager David Simner said there had been “a sense of panic in the air” in recent days as “investors have scrambled to reduce risk as the spending implications of the new government has naturally caused concerns over the future dynamics of the debt load of a country which is already very heavily laden.” He concluded that many investors remain in a wait and see mode “if [the market] has found a new lower clearing level that may provide some consolidation.”

However, the best summary of Italy’s troubles came from Bloomberg’s Mark Cudmore overnight with the following damning summary:

In Italy, the president has no good options as far as markets are concerned. If he blocks the coalition, it’ll leave the country in limbo and stir up popular resentment before new elections. But if he approves the coalition, then it’s even more worrying because of the government’s fiscally irresponsible proposals.

Of course, the real catalyst for the ongoing selling in Italy is the market’s much delayed reaction to the electoral victory of the anti-establishment parties which now threaten to blow out the Italian budget, at a time when the ECB is not only the only buyer of Italian bonds

1

… and worse, coming just as the ECB is tapering its BTP purchases.

What happens next? Well, as most sellside desks predict, the Bund-BTP spread is virtually assured of hitting 200 bps, and until there is some further clarity on how the current political power moves play out, it will be impossible to call a bottom to the Italian rout, which meanwhile is starting to “contage” across Europe as that old Europe bogeyman, redenomination risk

…is slowly but surely rising.

END

Jeffery Snider outlines what happened in Italy in 2008 and how that has morphed into the current problems of a banking crisis:  a huge amount of non performing loans on bankers balance sheet from which nothing can be off loaded.

this is the crisis before us…

(courtesy Jeffrey Snider/Alhambra Investments Partners.

 

Italy Went Boom A Long Time Ago (And That’s The Point!)

Authored by Jeffrey Snider via Alhambra Investment Partners,

On June 21, 2017, Italy’s Parliament approved Law #96. The new regulation altered Law #130 of 1999. Pertaining to limitations on the activities of Special Purpose Vehicles (SPV), the 2017 amendment expanded their scope. The intention was clear; SPV’s were going to be used as the primary method of cleaning up Italian banks as a conduit for the country’s mountain of bad debts and non-performing loans (NPL).

Less than a month later, the sales team at the accounting firm PwC (what used to be known as PricewaterhouseCoopers) actually and intentionally described Italy’s NPL problem as the “place to be.”

The Italian NPL market is now definitively “The Place To Be”, due to the volumes of NPL, the highest in Europe yet (€324bn of GBV at the end of 2016) and the recent trends in the Italian NPL arena. Ailing banks are going through a restructuring process, significant banks are engaged in massive NPL deleverage plans, overall the NPL management is passing through a prominent overhaul under new ECB guidelines and the NPL servicers are experiencing a deep evolution and facing consolidation manoeuvres.

Those who live in Italy, this “place to be” is only pain from the past and a great deal still left for the future. For well-capitalized individual firms loaded with spare capacity, picking through the bones of Italy’s desperate bank sector is a necessary profit opportunity. This is how it’s supposed to work, the healthy gobbling up what’s left of the profligate and, quite frankly, stupid. The only question to ask is, what took so long?

Economists fear prolonged periods of unsuitable economic conditions because in the past it has led to structural alterations nearly all of them having been unpleasant. Unemployed workers are transformed, for one example, into unemployable workers. Though economists hold monetary policy as neutral in the long run, the same can be witnessed (starting with Japan) of banks stuck in monetary uncertainty and chronic dysfunction.

At some point, they stop acting like banks and head in direct line toward zombie status. That was true for Italy almost immediately during the 2008 panic. Italian banks just stopped lending altogether; it is stunningly remarkable to witness the trend for Italian loans over the space of just about an entire decade, to see it as an almost perfect straight line recalls only the unnaturalness of it.

The first stage of zombification was straight up liquidity preferences. Italian banks didn’t stop expanding the size of their overall balance sheet, it’s more that they did so by buying as much Italian government (almost all central government) debt as they could. It wasn’t just a matter of safety in terms of perceived credit risk, the overriding problem was liquidity risk (collateral required in both repo as well as the ECB’s ever-expanding funding windows).

Draghi’s July 2012 “promise” seen in this light becomes something other than what has been described. In short, Italy’s banks jumped out of the frying pan of stupidity (bad loans revealed as really bad in 2008) and into the official fire (PIIGS, of which one or the other middle “I” standing for Italy).

By the time Italian authorities last year finally authorized the “bad bank” option, Italian banks had accumulated €200 billion of bad debts. And I’m only including those loans that have already been reported as soured, there is another ~€120 billion of NPL’s that can be easily classified as unlikely to ever be paid off.

What did Draghi’s promise actually accomplish? For one, it’s not just the zombie banks but also what those zombies did to the Italian economy. While the ECB was buying up sovereign debt (in separate episodes, the PSPP, or QE, being only the latest non-sterilized scheme) Italy’s economy did only appear to stabilize. PR is not nothing for central bankers, but it is ultimately useless for Italians.

Real GDP is growing again, and has been positive for fifteen consecutive quarters, just shy of four years. There was even some acceleration indicated during this latest “reflation.”

And yet, Italians opted for a radical change in their government as a result of Parliamentary elections held earlier this year. An entirely populist government has engendered almost total mainstream condemnation.

None of the mainstream commentary takes any note whatsoever of what’s really been going on in Italy. These stories are (often purposefully) stripped of the necessary economic and financial context to de-legitimize anti-establishment opposition.

Italy’s new government, likely to be formally confirmed within the next few days, sets a perilous precedent for Brussels: it marks the first time a founding member of the EU has been led by populist, anti-EU forces.

Might not Italians have some very good reason for being upset with the EU? The political experiment was once wildly popular in Italy. The Italian economy had always been an underperformer among the rest of Europe, North and South. It enjoyed, however, some measure of sustained growth and success – but only until October 2008.

Since, the Italians have witnessed one hackneyed scheme after another, none of them – whether domestic or originating in Brussels – having so much as a measurable impact on Italy’s truly dire economic situation.

Over the past few years, they have even been subjected to constant claims of a European recovery, even a complete renaissance. And they might wonder if that’s true, why haven’t most Italians felt it?

Here’s why…

The disdain only continues, however, and it is entirely unhelpful for much beyond Italy’s borders. This weekend it was announced that an obscure formerly leftist lawyer has been named Italy’s next leader (awaiting approval of Italy’s President, Sergio Mattarella). Giuseppe Conte was apparently the compromise candidate most palatable to the League (dominating the North of Italy) and M5S (South).

In Brussels, Conte’s nomination to be PM was met with puzzlement. “Nobody knows who he is and he is not even a high-profile academic,” said one EU official, noting that even Italians had been joking that the man who could be their next prime minister was less well-known than his namesake, the Chelsea FC manager Antonio Conte.

Authorities have bungled, mismanaged, and ultimately failed in their most sacred duties; responsibilities that were largely self-appointed from the moment BNP’s money market funds suspended NAV calculations on August 9, 2007.

But the media isn’t allowed to write that, how it might upset or even obliterate the technocratic dream. Monetary policy in particular is to this day described as successful if not comprehensively so. Europe is booming, even when it isn’t even close.

A novice, populist politician in charge of Europe’s third largest economy isn’t some far-fetched dystopian nightmare. The nightmare has been the last decade under the thumb of the thoroughly and irredeemably conventional. Why not try something very different, something possibly less corrupted? 

What is happening in Italy is not unique nor is it really all that far in the extreme. That’s the point. You can dismiss the politics of it, but you can only do so by denying the clear economic reality. So long as this continues, and it doesn’t seem to be abating, rather intensifying in denial, it will (can?) only become more problematic.

end

DEUTSCHE BANK/GERMANY/GLOBE

Conditions must be good:  Deutsche bank is now set to fire 10,000 global employees.

(courtesy zerohedge)

Deutsche Bank To Fire 10,000 Employees: 1 In Every 10

Well that escalated fast: one month after Bloomberg reported that Deutsche Bank would cut 1,000 jobs in the US, roughly 10% of its total US labor force, as part of new CEO Christian Sewing’s restructuring process, the WSJ this morning writes that executives at the biggest German lender have “zeroed in” on plans to eliminate close to 10,000 jobs, about one in 10 employees, as part of the bank’s epic cost-cutting scramble.

The latest plan, part of a process that has divided senior executives and left investors unconvinced, “would extend into 2019, follows months of thorny debate over how fast and deep job losses should be at the beleaguered German lender.”

So far investors remain unconvinced the plan will work, and as a result the bank’s shares have fallen by nearly a third this year, making DB stock one of the worst performing European stocks, and at its lowest since a crisis of confidence hit the bank in late 2016.

Meanwhile, high-level clashes over staffing and budgets and conflicting opinions from outside investors and bank executives reveal the depth of Deutsche Bank’s continuing struggles.  As the WSJ adds, the bank’s supervisory board and senior executives will confront investors Thursday in Frankfurt at its annual shareholder meeting. They will face a proposal to break up the company and probing questions about last month’s chief executive handoff and the tough choices the lender has to make.

Separately, Bloomberg report that the bank is about to “retreat from a swathe of equities markets across the world, including some on its own doorstep in Europe.”

Germany’s biggest lender, which is expected to announce a range of restructuring measures to coincide with its annual shareholder meeting Thursday, will sharply reduce its presence in the U.S. market, and has also started cutting activity in the Central Europe, Middle East and Africa region, the people said, asking not to be identified discussing private information.

In case it wasn’t clear, it has been a messy year for Deutsche Bank. The April 8 ouster of CEO John Cryan in the middle of his management contract shook employees and appeared botched to some clients and investors.

Things could get messier on Thursday, when Deutsche Bank’s chairman, Paul Achleitner, will face a vote of no-confidence, which could thrust Germany’s biggest bank into outright crisis after years of underperformance and strategic flip-flops.

Paul Achleitner

The shareholder meeting will convene as Deutsche struggles to convince investors that it has a credible strategy, under the leadership of chairman Paul Achleitner and Christian Sewing, the new chief executive he appointed in chaotic circumstances last month.

Among the potential names to replace Achleitner is Philipp Hildebrand, the former chief of the Swiss central bank, who currently heads Blackrock’s business in Europe. He quit the SNB after his wife was embroiled in a major FX insider trading scandal. In other words, Hildebrand should fit right into the “culture” at Deutsche Bank.

8. EMERGING MARKET

SOUTH AFRICA

No wonder most of the white South African farmers are vacating their properties and heading to Australia

(courtesy zerohedge)

100s Of White South African Farmers Apply To

Australia For Humanitarian Rescue

Back in February, after literally years of scandal, abuse, and incompetence, South Africa’s president Jacob Zuma was finally forced to resign last week, and new President, Cyril Ramaphosa, was supposed to represent a positive, new chapter for South Africa.

However, as Simon Black wrote at the timeRamaphosa addressed the nation’s parliament in Cape Town and made clear that his priority is to heal the divisions and injustice of the past, going all the way back to the original European colonists in the 1600s taking land from the indigenous tribes.

Ramaphosa called this “original sin”, and stated that he wants to see “the return of the land to the people from whom it was taken… to heal the divisions of the past.”

How does he plan on doing that?

Confiscation. Specifically– confiscation without compensation.

The expropriation of land without compensation is envisaged as one of the measures that we will use to accelerate redistribution of land to black South Africans.

Ramaphosa minced no words: he’s talking about taking land from white farmers and giving it to black South Africans.

And as we noted at the timethe problem is – a 2017 government audit found white people owned 72 per cent of farmland in South Africa. According to the 2011 census, there are about 4.6 million white people in South Africa, accounting for 8.9 per cent of the population.

And as Australia’s News.com reportedthe racially charged issue of land rights and farm murders has been the subject of fierce debate in the country and internationally.

According to civil rights group Afriforum, which represents around 200,000 white farmers largely from the Afrikaner minority, 82 people were killed in a record 423 attacks on farms last year. In 2018 so far, there have already been 109 attacks and more than 15 murders.

Afriforum says it is forced to compile its own numbers because the South African government — which denies the attacks are racially motivated or that white farmers are killed in disproportionate numbers — stopped releasing farm murder statistics in 2008.

“Our rural areas are trapped in a crime war,” Afriforum head of safety Ian Cameron said in a statement, adding that torture with irons, blowtorches, melted plastic and boiling water often continued for hours during the attacks.

“Although the South African government denies that a violence crisis is staring rural areas in the face, the numbers prove that excessive violence plague these areas. Government cannot deny the facts — our people are being mowed down.”

Which is why, earlier this month, Australian Home Affairs Minister Peter Dutton floated the idea of fast-tracked humanitarian visas for white South African farmers, saying they faced “horrific circumstances” and needed help from a “civilised country.”

“We’re looking at ways we can help people to migrate to Australia if they’re finding themselves in that situation.”

And despite the facts of savage attacks on white farmers, this statement outraged South Africa’s government who claimed “the threat did not exist” and accused Mr Dutton of being an “out and out racist.”

This was followed just a few weeks later by perhaps the most Orwellian statement yet, as the head of South Africa’s radical Marxist opposition party – who declared his party was “cutting the throat of whiteness” – called Australia a “racist country” for offering fleeing white farmers a refuge.

Malema, who was convicted of hate speech in 2011 for singing the apartheid-era revolutionary song Shoot the Boer, Kill the Farmer and in 2016 told supporters he was “not calling for the slaughter of white people‚ at least for now”, said farmers should “leave quietly”.

“We’re too busy,” he said. “Don’t make noise, because you will irritate us. Go to Australia. It is only racists who went to Australia when Mandela got out of prison. It is only racists who went to Australia when 1994 came. It is the racists again who are going back to Australia.”

But he said they would be “poor in Australia”. “They are rich here because they are exploiting black people. There is no black person to be exploited in Australia, they are going to be poor.

“They will come back here with their tail between their legs. We will hire them because we will be the owners of their farms when they come back to South Africa. As to what we are going to do with the land, it’s our business, it’s none of your business.

“We want Africa back. Africa belongs to our people.

Last year, some 82 people were killed in a record 423 farm attacks, and there have been 109 attacks and more than 15 murders in 2018, Afriforum, a South African civil rights group reported in March.

And so, after those threats from Malema and Ramaphosa – and on the back of Australia’s offer, RT reports this week that more than 200 farmers from South Africa have applied for humanitarian visas in Australia after allegedly suffering attacks for being white, according to the Australian Home Affairs Ministry.

“The type of criteria they of course have to meet – or the key one – is evidence of persecution, so that’s exactly what we will be looking at,” Home Affairs Deputy Secretary Malisa Golightly said.

Home Affairs said 89 refugee visa applications relating to 213 people had been received, although they did not specify their ethnicity or any other details.

Finally, as a reminder, the actions that Malema and Ramaphosa are taking are exactly what Zimbabwe did.

Seeking to correct similar colonial and Apartheid-era injustices in his country, Zimbabwe’s president Robert Mugabe initiated a land redistribution program in 1999-2000.

Thousands of white-owned farms were confiscated by the government, and the farmers were forced out.

Bear in mind that Zimbabwe used to be known as the breadbasket of southern Africa. Zimbabwe’s world-class farmers were major food exporters to the rest of the region.

But within a few years of Mugabe’s land distribution, food production plummeted.

Without its professional, experienced farmers, the nation went from being an agricultural export powerhouse to having to rely on handouts from the United Nations’ World Food Programme.

Hyperinflation and a multi-decade depression followed.

If there’s an economic model in the world that you DON’T want to follow, it’s Zimbabwe.

And judging by the action in the Rand since this confiscation was announced, Zimbabwe is what they will get…

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 1.1710 DOWN .0078/ 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 GREEN

USA/JAPAN YEN 109.76   DOWN   0.972  (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 1.3344 DOWN  0.0096  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.2879 UP .0081 (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 FELL by 78 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1710; / Last night Shanghai composite CLOSED DOWN 45.39 POINTS OR 1.41%  /   Hang Sang CLOSED DOWN 568.71 POINTS OR 1.82% /AUSTRALIA CLOSED DOWN .16% / EUROPEAN BOURSES  ALL RED

The NIKKEI: this WEDNEDAY morning CLOSED DOWN 270.60 OR 1.38%

Trading from Europe and Asia

1/EUROPE OPENED ALL RED

2/ CHINESE BOURSES / : Hang Sang CLOSED DOWN 568.71 POINTS OR 1.82%   / SHANGHAI CLOSED DOWN 45.39 POINTS OR 1.41%  /

Australia BOURSE CLOSED DOWN .16%

Nikkei (Japan) CLOSED DOWN 270.60 POINTS OR 1.38%

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1296.55

silver:$16.53

Early WEDNESDAY morning USA 10 year bond yield: 3.01% !!! DOWN 5 IN POINTS from TUESDAY night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/ 

The 30 yr bond yield 3.17 DOWN 4  IN BASIS POINTS from TUESDAY night. (POLICY FED ERROR)/

USA dollar index early  TUESDAY morning: 93.92 UP 31  CENT(S) from YESTERDAY’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: 1.956% DOWN 1  in basis point(s) yield from TUESDAY/

JAPANESE BOND YIELD: +.0.46%  DOWN 9/10   in basis points yield from TUESDAY/JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 1.444% DOWN 1  IN basis point yield from TUESDAY/

ITALIAN 10 YR BOND YIELD: 2.408  UP 8  POINTS in basis point yield from TUESDAY/

the Italian 10 yr bond yield is trading 97 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS TO +.507%   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 1.1694 DOWN .0094(Euro DOWN 94 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/

USA/Japan: 110.05 DOWN 0.690 Yen UP 69 basis points/

Great Britain/USA 1.3339 DOWN .0102( POUND DOWN 102 BASIS POINTS)

USA/Canada 1.2884 UP  .0066 Canadian dollar DOWN 66 Basis points AS OIL FELL TO $71.78

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This afternoon, the Euro was DOWN 94 to trade at 1.1694

The Yen ROSE to 110.05 for a GAIN of 69 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 102 basis points, trading at 1.3339/

The Canadian dollar FELL by 66 basis points to 1.2884/ WITH WTI OIL FALLING TO : $71.88

The USA/Yuan closed AT 6.3886
the 10 yr Japanese bond yield closed at +.046%  DOWN 9/10  IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 6   IN basis points from TUESDAY at 3.012 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.165  DOWN 5      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, 94.02  UP 41 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 DOWN 89.01 POINTS OR 1.13%
German Dax :CLOSED DOWN 193.08 OR 1.47%
Paris Cac CLOSED DOWN 74.25 POINTS OR 1.32%
Spain IBEX CLOSED DOWN 113.80 POINTS OR 1.12%

Italian MIB: CLOSED DOWN 304.86 POINTS OR 1,31%

The Dow closed UP 52.19 POINTS OR 0.21%

NASDAQ closed UP 47.50  OR .64%  4.00 PM EST

WTI Oil price; 71.88  1:00 pm;

Brent Oil: 79.20 1:00 EST

USA /RUSSIAN ROUBLE CROSS: 61.57 UP 35/100 ROUBLES/DOLLAR (ROUBLE LOWER BY 35 BASIS PTS)

TODAY THE GERMAN YIELD FALLS TO +.507% 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:$71.77

BRENT: $79.69

USA 10 YR BOND YIELD: 2.99%   THIS RAPID RISE IN YIELD IS ALSO VERY DANGEROUS/RECESSION COMING/DERIVATIVES FRY!!

USA 30 YR BOND YIELD: 3.15%/DEADLY

EURO/USA DOLLAR CROSS: 1.1695 DOWN .0091  (DOWN 9 BASIS POINTS)

USA/JAPANESE YEN:110.02 DOWN .715 YEN UP 72 BASIS POINTS/ .

USA DOLLAR INDEX: 94.00 UP 39 cent(s)/dangerous as the lower the dollar the higher the inflation.

The British pound at 5 pm: Great Britain Pound/USA: 1.3349 down 0.0090  (FROM TUESDAY NIGHT down 90 POINTS)

Canadian dollar: 1.2840 DOWN 26 BASIS pts

German 10 yr bond yield at 5 pm: +0.507%


VOLATILITY INDEX:  12.58  CLOSED  DOWN 0.64   

LIBOR 3 MONTH DURATION: 2.330%  .

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

TRADING IN GRAPH FORM FOR THE DAY

Bond Bears Battered As Yields Tumble But Credit

& Cryptos Crushed

Well that escalated quickly…

Bond, Buy Bond…

Markets appear to have interpreted FOMC Minutes in a dovish manner, sending the dollar lower and bonds, stocks, and gold higher…

Overall, stocks managed to scramble back into the green for the day after the Fed…with growthy Nasdaq bid after the dovish Fed statement…

Growth >> Value…

The Dow scrambled back up to its 100DMA…

General Electric’s dead cat bounce died again today…

Credit risk was smashed wider today despite the dovish interpretation by stocks…

Buy all the things!!!!

Treasury yields tumbled as it looks more and more like last week’s chaos was indeed IG-issuance-based rate-locks…

10Y Yields fell back below the 3.00% Maginot Line…Today was 10Y Yield’s biggest drop in almost 2 months

Back to one-week lows…

But we do note that the yield curve is now back flatter than pre-FOMC…

And the 2Y and the recent economic data have entirely decoupled…

The dollar ended the day higher – stalling the two-day decline…

But was knocked lower after the “dovish” FOMC Minutes…

Mexican Peso ripped higher on the back of positive NAFTA headlines…

The Turkish Lira spiked as the central bank hiked rates by 300bps – the most since Feb 09…

Cryptocurrencies were clubbed like a baby seal, with Bitcoin back below $8k…

Commodities were all lower on the day, reconnecting to very marginally higher on the week…

And finally from commodity land, Lumber futures – after spiking to record highs – have now dropped $15 limit down for 4 straight sessions…

WTI/RBOB prices plunged on the inventory surprise but were manic bid back…

Smart Money continues to be aggressively pulling out of stocks…

END

MARKET DATA

Soft data and perennially biased to the upside shows a good mfg PMI report as well as a service PMI report.  This contrasts totally with Europe PMI.

(courtesy zerohedge)

‘Global Synchronous Recovery’ Narrative

Crushed As  US, EU PMIs Diverge

Following notably disappointing Eurozone PMIs (specifically France and Germany) hitting 18-month lows, US PMIs printed better than expected, sending the US Composite back near its highest since Nov 2015.

Both US Services (3-month high) and US Manufacturing (44-month high) increased – rising more than expected – in the May preliminary print…

The latest increase in average input prices was the fastest since July 2013. Anecdotal evidence cited higher prices for metals  and increased oil-related costs during the latest survey period.

Commenting on the flash PMI data, Chris Williamson, Chief Business Economist at IHS Markit said:

The flash May PMI surveys point to an encouragingly solid pace of economic growth of 2.5- 3%with monthly job gains running at just over 200,000, though the interesting action is coming on the prices front.

Input costs measured across both manufacturing and services are rising at the fastest rate for nearly five years, with the goods-producing sector seeing the steepest cost increases for seven years in recent months.

“Furthermore, supplier delivery delays, a key forward-indicator of inflationary pressures, have risen to the highest seen in the 11 year survey history. Rising demand has stretched supply chains to the extent that suppliers are increasingly able to demand higher prices. At the same time, higher oil and energy prices are pushing up firms’ costs.

Business optimism meanwhile remains at a threeyear high, with companies commonly expecting rising demand to help drive business growth, setting the scene for further strong survey results in coming months.”

So everything is awesome in ‘Murica… But, it appears the global synchronous recovery meme is done…

All of which leaves investors with a dilemma…Take your pick: higher inflation (rates higher) or margin pressure (lower PE multiple)

end
In a booming economy, one would expect new home sales to rise.  However it just did not happen as April reports a slide in new homes sales as well as an average price spiking to record highs
(courtesy zerohedge)

New Home Sales Slide In April As Average Price Spikes To Record High

After a two-month rebound from January’s plunge, new home sales disappointed in April, dropping 1.5% MoM to a SAAR of 662k (below the 680k expectation).

Is the rebound over?

While new home sales declined 1.5% MoM, they rose 11.6% YoY thanks to the insanely noisy time-series and various weather impacts.

One interesting anomaly was that while the median new home sales price tumbled to the lowest since April 2017, the average new home sales price jumped to an all time high.

Which suggests the high-end is seeing all the gains as 50% of homes sold at a price that was 7% below last month.

end

AFTERNOON TRADING: (AFTER FOMC)

Dollar Drops; Stocks, Bonds, Gold Pop As Market Sees “Dovish” Fed

While time will tell, for now, the market appears to have interpreted The FOMC minutes in a dovish tone – willing to allow an overshoot in inflation – as the dollar is weaker while stocks, bonds, and bullion are higher…

The 10Y Yield is testing the critical 3.00% level…

And the Dollar Index is limping lower…

END

Beleaguered Wells Fargo dismisses senior bankers in its struggling muni bond division.  They also have huge troubles in their mortgage division

(courtesy zerohedge)

Wells Fargo Dismisses Bankers In Struggling Muni-Bond Division

Four months after Vanguard shuttered three muni bond ETFs due to their “high level of volatility” which began in 2010 and continues today, Wells Fargo’s head of public finance announced Wednesday that the bank would be “shaking up the department” by dismissing several senior bankers who worked on the bank’s shrinking muni business.

Wells

All told, Wells has fired 15 employees from its public finance department, according to a person familiar with the matter. Meanwhile, the department’s new leader, Stratford Shields, has hired six bankers and may continue hiring, according to company spokeswoman AnneMarie McDonald. Shields is reportedly bringing in people from his former employer, Morgan Stanley, where he ran public finance for five yeas before he joined the Royal Bank of Canada in 2014. Wells has fallen in the muni bond deal rankings. It was the eighth largest municipal lender this year, down from seventh last year, according to Bloomberg.

The change comes after Wells Fargo’s share of the municipal-bond underwriting business has shrunk as some governments have cut ties with the bank following a series of scandals, including the infamous Wells Fargo cross-selling scandal. Competition for deals has also increased as the number of deals has fallen 20% this year after Congress got rid of a popular refinancing tactic.

While Bloomberg described the cuts as the result of shrinking business, less public finance lending could benefit Wells in the long run. When public pensions implode, triggering a full-blown public debt crisis, Wells might find itself with less exposure, and thus, less damage to its balance sheet. But in the near term, municipal bonds could take a hit as tax reform hurts property values in blue states. Though this same provision could make exposure to tax-free investment income even more valuable.

Wells

Of course, munis aren’t the only business where Wells is hurting. Wells’s mortgage lending business, once the company’s “bread and butter”,reported its worst residential mortgage applications number since the financial crisis last month.

end
FOMC minutes: slightly dovish

FOMC Minutes Show Fed Hiking “Soon” But Willing To Allow Dovish Inflation Overshoot

The big question after the May FOMC statement was “how symmetric is The Fed’s reaction function” to inflationary upside, i.e. how much will the Fed allow inflation to overshoot, and how much attention are they really paying to the collapsing yield curve? And as Bloomberg noted, a key focal point of the minutes will be to further distinguish the main thresholds separating the three- and four-hike camps in the 2018 dot plot.

Former fund manager Richard Breslow wrote in his Trader’s Notes column earlier:

I expect there is a decent chance that the FOMC minutes we’re going to see this afternoon read on the hawkish side. What a difference a few weeks make. Way back then Fed-speak was clearly trending to the upbeat side and they were getting even more hopeful on the inflation side of the dual-mandate.”

But it appears The Fed walked the tightrope on “symmetry” by showing a hawkish tilt:

  • *MOST FED OFFICIALS SAW NEXT RATE HIKE LIKELY APPROPRIATE `SOON’ – So June is a lock!
  • *SOME OFFICIALS SAW FORWARD-GUIDANCE REVISION APPROPRIATE SOON

Mixed with some dovishness.

  • *FED MINUTES NOTE MODEST INFLATION OVERSHOOT `COULD BE HELPFUL’

In other words, a schizophrenic Fed which will “hike soon”, but is willing to let inflation overshoot.

Here is the money quote for the hawks:

“Most participants judged that if incoming information broadly confirmed their economic outlook, it would likely soon be appropriate for the Committee to take another step in removing policy accommodation”

And for the doves:

It was also noted that a temporary period of inflation modestly above 2 percent would be consistent with the Committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations at a level consistent with that objective.

In other words – we’ll keep hiking slow and steady, while CPI hits 3% or more, until something breaks.

*  *  *

Below are selected excerpts from the FOMC meeting minutes that concluded on May 2 (via Bloomberg):

On the coming rate hike and removing accommodation:

“Most participants judged that if incoming information broadly confirmed their current economic outlook, it would likely soon be appropriate for the Committee to take another step in removing policy accommodation.”

“Overall, participants agreed that the current stance of monetary policy remained accommodative, supporting strong labor market conditions and a return to 2 percent inflation on a sustained basis.”

… BUT here is why CPI will overshoot 2% and may hit 3% or more:

“A few participants commented that recent news on inflation, against a background of continued prospects for a solid pace of economic growth, supported the view that inflation on a 12-month basis would likely move slightly above the Committee’s 2 percent objective for a time.”

“It was also noted that a temporary period of inflation modestly above 2 percent would be consistent with the Committee’s symmetric inflation objective and could be helpful in anchoring longer-run inflation expectations at a level consistent with that objective.”

“In their discussion of the outlook for inflation, a few participants also noted the risk that, if global oil prices remained high or moved higher, U.S. inflation would be boosted by the direct effects and pass- through of higher energy costs.”

Next, a discussion of the flatter yield curve, which many FOMC members have warned about recently:

“Participants pointed to a number of factors contributing to the flattening of the yield curve, including the expected gradual rise of the federal funds rate, the downward pressure on term premiums from the Federal Reserve’s still-large balance sheet as well as asset purchase programs by other central banks, and a reduction in investors’ estimates of the longer-run neutral real interest rate.”

“A few participants noted that such factors could make the slope of the yield curve a less reliable signal of future economic activity.”

“However, several participants thought that it would be important to continue to monitor the slope of the yield curve, emphasizing the historical regularity that an inverted yield curve has indicated an increased risk of recession.”

On a potential change to forward guidance:

“Participants commented on how the Committee’s communications in its postmeeting statement might need to be revised in coming meetings if the economy evolved broadly as expected.”

“Some participants noted it might soon be appropriate to revise the forward-guidance language in the statement indicating that the ‘federal funds rate is likely to remain, for some time, below levels that are expected to prevail in the longer run’ or to modify the language stating that ‘the stance of monetary policy remains accommodative.’”

On the threat of trade wars:

“With regard to trade policies, a number of participants viewed the range of possible outcomes for economic activity and inflation to be particularly wide, depending on what actions were taken by the United States and how U.S trading partners responded.”

“Some participants observed that while these policies were being debated and negotiations continued, the uncertainty surrounding trade issues could damp business sentiment and spending.”

“It was noted that the potential for higher Chinese tariffs on key agricultural products could, in the longer run, hurt U.S. competitiveness.”

On the change in the economy since the last meeting:

“All members viewed the recent data as indicating that the outlook for the economy had changed little since the previous meeting.”

Finally on elevated asset prices:

Asset valuations across a range of markets and leverage in the nonfinancial corporate sector remained elevated relative to historical norms, leaving some borrowers vulnerable to unexpected negative shocks

*  *  *

Since the May 2nd FOMC statement, while the dollar is flat, stocks have handily outperformed as bonds and bullion have been sold…

And while bond yields have risen across the curve, the yield curve has actually flattened since the last FOMC meeting…

The odds of four or more rate hikes in 2018 (meaning at least 3 more) is now above that of just 3 hikes in the year…

But a June hike is all but guaranteed…

*

*  *

end

SWAMP STORIES

This is getting worse by the minute:  Cohen’s business partner flips and now cooperates with the Feds and thus Cohen will now be a target.  He will probably flip on something and then the Feds will go over Trump

(courtesy zerohedge)

Cohen Business Partner Reportedly Flips, Cooperates

With Feds “To Avoid Jail Time”

In the latest sign that the FBI is closing in on former Trump personal attorney Michael Cohen, one of the Brooklyn lawyer’s business partners has reportedly agreed to cooperate with the Federal government to avoid jail time.

Evgeny Freidman, who was disbarred earlier this month, had been Cohen’s business partner for years, helping him manage an expansive taxi empire until he was banned by New York City regulators last year after he failed to pay more than $5 million in taxes.

Freidman instead pleaded guilty to one count of tax evasion this week.

Instead, he appeared in court in Albany on Tuesday and pleaded guilty to a single count of evading only $50,000 worth of taxes; he faces five years of probation if he fulfills the terms of his agreement, the judge, Patrick Lynch of Albany County court, said during the roughly 20-minute proceeding.

“Do you understand the nature of the benefit your attorneys have accomplished on your behalf?” the judge asked Mr. Freidman during the proceeding on Tuesday.

“I greatly understand that and appreciate it,” Mr. Freidman replied.

After Mr. Freidman’s guilty plea, his lawyer, Patrick J. Egan of Fox Rothschild, declined to comment. But earlier this year, he said his client “considers Michael a very good friend and a great client.”

Freidman had been facing four counts of criminal tax fraud and one of grand larceny – all class B felonies that carried maximum prison sentences of up to 25 years in prison.

Cohen

(Evgeny Freidman leaves court in Albany on Tuesday, courtesy of the New York Times)

Freidman will avoid jail time if he cooperates with state and federal prosecutors in their investigation of Cohen.

Thanks to Freidman’s cooperation, President Trump’s lawyers are growing increasingly worried that Cohen might also take a deal to cooperate with prosecutors against the president as he faces a potentially lengthy prison term. To be sure, Cohen has repeatedly denied speculation that he too might turn on the president, repeatedly saying in the press that he would do anything to protect Trump. 

While it’s unclear what, exactly, Freidman might be able to tell the Feds about his partner’s purportedly criminal activities, revelations earlier this month about Cohen’s shady consulting agreements with major US companies seeking to curry favor with Trump have raised questions about whether he might’ve used the president’s name to cash in on his connections. These revelations were made by Stormy Daniels Lawyer Michael Avenatti, who published details from leaked FinCEN suspicious activity reports.

END
THE PLOT: the real genesis of the phony Russian collusion tale
(courtesy George Neumayr/Spectator

John Brennan’s Plot To Infiltrate The Trump Campaign Exposed

Authored by George Neumayr via The Spectator,

It came out of his “inter-agency taskforce” at Langley…

As Trump won primary after primary in 2016, a rattled John Brennan started claiming to colleagues at the CIA that Estonia’s intelligence agency had alerted him to an intercepted phone call suggesting Putin was pouring money into the Trump campaign.

The tip was bogus, but Brennan bit on it with opportunistic relish.

Out of Brennan’s alarmist chatter about the bogus tip came an extraordinary leak to the BBC:

that Brennan had used it, along with later half-baked tips from British intelligence, as the justification to form a multi-agency spy operation (given the Orwellian designation of an “inter-agency taskforce”) on the Trump campaign, which he was running right out of CIA headquarters.

The CIA was furious about the leak, but never denied the BBC’s story. To Congress earlier this year, Brennan acknowledged the existence of the group, but cast his role in it as the mere conduit of tips about Trump-Russia collusion:

“It was well beyond my mandate as director of CIA to follow on any of those leads that involved U.S. persons. But I made sure that anything that was involving U.S. persons, including anything involving the individuals involved in the Trump campaign, was shared with the bureau.”

But if his role had truly been passive, the “inter-agency taskforce” wouldn’t have been meeting at CIA headquarters. By keeping its discussions at Langley, Brennan could keep his finger wedged in the pie. Both before and after the FBI’s official probe began in late July 2016, Brennan was bringing together into the same room at CIA headquarters a cast of Trump haters across the Obama administration whose activities he could direct – from Peter Strzok, the FBI liaison to Brennan, to the doltish Jim Clapper, Brennan’s errand boy, to an assortment of Brennan’s buddies at the Treasury Department, Justice Department, and White House.

The bogus tip from Estonia led the group into its first cock-upsending FBI agents to sniff around the computer server connected to Trump Tower. After that effort flopped, Brennan’s group had to go back to the drawing board (on the electronic intelligence front, it had already hatched plans for national security letters and FISA warrants).

Someone in the group must have proposed blasting a swampy old CIA source and Hillary supporter, Stefan Halper, into the Trump campaign orbit to see if he could catch a couple of minor campaign volunteers out in collusion.

Halper had entered the Deep State through a door opened by his father-in-law, Ray Cline, whose work for the CIA was legendary. Behind that door Halper found a treasure trove of jobs and government contracts, making his life as a transatlantic jet-setting academic possible. Brennan’s Langley group had access to Halper’s file and sized him up as the perfect embed: a Republican-oriented foreign policy scholar who could plausibly interact with Trump officials while serving as a nexus between the CIA and Brennan’s friends in British intelligence. Halper’s ties to Richard Dearlove, a former head of British intelligence, are well known, and Halper knows Alexander Downer, the pub-crawling Aussie diplomat, through a mutual association with Cambridge University.

That Halper came out of the brainstorming of Brennan’s group is clear from the fact that his first known meeting with Carter Page preceded the formal opening of the FBI’s probe. The Washington Post hinted at the role of Brennan’s group in hatching Halper:

Many questions about the informant’s role in the Russia investigation remain unanswered. It is unclear how he first became involved in the case, the extent of the information he provided and the actions he took to obtain intelligence for the FBI. It is also unknown whether his July 2016 interaction with [Carter] Page was brokered by the FBI or another intelligence agency [italics added].

The FBI commonly uses sources and informants to gather evidence and its regulations allow for use of informants even before a formal investigation has been opened. In many law enforcement investigations, the use of sources and informants precedes more invasive techniques such as electronic surveillance.

A veteran of the intelligence community tells TAS that Brennan’s CIA was full of Hillary supporters, some of whom decorated their desks with her campaign paraphernalia. Brennan, whom the press noted would walk the halls of the CIA in an LGBT rainbow lanyard, encouraged this open political atmosphere. While Brennan knew his spying operation on the Trump campaign was an “exceptionally, exceptionally sensitive” matter (as reported by journalists David Corn and Michael Isikoff), he assumed its machinations would never come to light.

The members of Brennan’s working group at Langley “were just a bunch of out-of-control idiots,” says a former high-ranking CIA official to TAS. He finds it flabbergasting that Brennan would bring CIA officials and FBI officials into the same room to cook up schemes to send a spy into the Trump campaign’s ranks. One of those schemes involved money (Halper paid George Papadopoulos $3,000 for a phony research paper as a way of luring him into a London meeting); another involved sex (Halper’s assistant, with a name out of a bad spy novel, Azra Turk, tried to coax information from Papadopoulos at flirty bar outings, according to the Daily Caller’s Chuck Ross).

Like Brennan, Halper didn’t bother to hide his support for Hillary even as he conducted this infiltration. He told the press that he feared a Trump presidency, as it could harm the “special relationship” between the United States and Great Britain. That rationale must have figured into Alexander Downer’s motivation for working with Brennan’s Langley group too. Downer traveled in the same elitist circles as Christopher Steele, Halper, and John Kerry. It appears he sent word of his boozy evening with Papadopoulos back to Brennan’s group through these circles — either through Hillary partisans at the State Department or through Clinton Foundation channels, for whom he had worked as a kind of bag man.

Halper had come up empty, so Brennan’s group at Langley went with Downer’s tale, as feeble as it was. But it at least had the advantage of coming from a “diplomat.”

Yet if Congressman Nunes is right and the originating document for the FBI probe doesn’t even contain a reference to an official intelligence product passed to Brennan from the Australian government, Downer’s hearsay must have been exceedingly flaky, so flaky no one would want to be on the record treating it as “evidence” for something as momentous as a probe into a presidential campaign.

According to press accounts, Downer’s bumptiousness caused a diplomatic row of sorts between the two countries.

Who resolved it? John Kerry? Susan Rice? Or was this another case of Obama leading from behind – behind a CIA director briefing him daily on “Russian interference” while running an anti-Trump spy ring out of Langley.

end
Four important points here:
1. Comey states that it is OK to spy on the Trump candidate for the good of the country.
2  However, with the use of this spy (informant) why did he not find evidence of Russian collusion in the election?
3  if the spy finds nothing, then what is Mueller investigating?
4  there seems to a link with the Steele dossier and CNN and the leak to this news organization through McCabe
(courtesy zerohedge)

Comey Responds To Trump Attack: “Our Country Is Led By Those Who Will Lie About Anything”

Former FBI Director James Comey won’t allow President Trump’s gloating from this morning to go unanswered.

In a tweet that appears to be a direct response to Trump, Comey attempted to justify the FBI’s use of a spy – or what Comey describes as a “Confidential Human Source” – to keep tabs on the Trump campaign. According to Comey, human sources are “tightly regulated and essential to protecting the country”.

Comey

Of course, Comey argues that the FBI was totally justified in using a human asset to spy on the Trump campaign, as it would any other target (though he completely ignores the notion that, if the spy didn’t find evidence of collusion, then what is Mueller investigating?). In an attempt to shame Trump’s backers, Comey declared that “attacks on the FBI and lying about work will do lasting damage to our country.”

“How will Republicans explain this to their grandchildren?” he asked.

James Comey

@Comey

Facts matter. The FBI’s use of Confidential Human Sources (the actual term) is tightly regulated and essential to protecting the country. Attacks on the FBI and lying about its work will do lasting damage to our country. How will Republicans explain this to their grandchildren?

Comey added that it was a “dangerous time when our country is led by those who will lie about anything, backed by those who will believe anything, based on information from media sources that will say anything.”

He then urged Americans to “break out of that bubble and seek truth.”

James Comey

@Comey

Dangerous time when our country is led by those who will lie about anything, backed by those who will believe anything, based on information from media sources that will say anything. Americans must break out of that bubble and seek truth.

Emails recently released by Sen. Ron Johnson provided new insight into how Comey briefed the president (and how certain information fell into the hands of CNN), and seemed to suggest at least some coordination between media organizations publishing anti-Trump exclusives and Comey, who recently published a book where he questioned Trump’s ethical fitness for his office.

end

big news:  the rank and file FBI agents are sickened by the actions of Comey and McCabe and others and want to come forward and testify but only by subpoena as they cannot be thrown under the bus.  If they go through the route of a whistleblower there is no protection

(courtesy zerohedge)

 

Rank And File FBI Agents “Sickened” By Comey And McCabe

Want To “Come Forward And Testify”

Several FBI agents would like Congress to subpoena them so that they can step forward and reveal dirt on former FBI Director James Comey and his Deputy Andrew McCabe, reports the Daily Caller, citing three active field agents and former federal prosecutor Joe DiGenova.

There are agents all over this country who love the bureau and are sickened by [James] Comey’s behavior and [Andrew] McCabe and [Eric] Holder and [Loretta] Lynch and the thugs like [John] Brennan–who despise the fact that the bureau was used as a tool of political intelligence by the Obama administration thugs,” former federal prosecutor Joe DiGenova told The Daily Caller Tuesday.

They are just waiting for a chance to come forward and testify.”

DiGenova – a veteran D.C. attorney who President Trump initially wanted to hire to represent him in the Mueller probe – only to have to step aside due to conflicts, has maintained contact with “rank and file” FBI agents as well as a counterintelligence consultant who interviewed an active special agent in the FBI’s Washington Field Office (WFO) – producing a transcript reviewed by The Caller.

These agents prefer to be subpoenaed to becoming an official government whistleblower, since they fear political and professional backlash, the former Trump administration official explained to TheDC.

The subpoena is preferred, said diGenova, “because when you are subpoenaed, Congress then pays…for your legal counsel and the subpoena protects [the agent] from any organizational retaliation…. they are on their own as whistleblowers, they get no legal protection and there will be organizational retaliation against them.”

DiGenova and his wife Victoria Toensing have long represented government whistleblowers. Most recently, Toensing became council for William D. Campbell, the former CIA and FBI operative that was deeply embedded in the Russian uranium industry – only to be smeared by the Obama administration when he gathered evidence of two related bribery schemes involving Russian nuclear officials, an American trucking company, and efforts to route money to the Clinton Global Initiative (CGI) through an American lobbying firm in order to overcome regulatory hurdles, according to reports by The Hill and Circa.

diGenova told the Daily Caller that asking for a Congressional subpoena is “an intelligent approach to the situation given the vindictive nature of the bureau under Comey and McCabe. I have no idea how to read Chris Wray who is not a leader and who has disappeared from the public eye during this entire crisis. You know he may be cleaning house but if he’s doing so, he’s doing it very quietly.”

“I don’t blame them,” added diGenova. “I don’t blame the agents one bit. I think that the FBI is in a freefall. James Comey has destroyed the institution he claims to love. And it is beyond a doubt that it is going to take a decade to restore public confidence because of Comey and Clapper and Brennan and Obama and Lynch.”

Meanwhile, the agent from the Washington field office says that rank and file FBI agents are “fed up” and desperately want the DOJ to take action, according to transcripts of the interview.

“Every special agent I have spoken to in the Washington Field Office wants to see McCabe prosecuted to the fullest extent of the law. They feel the same way about Comey,“ said the agent.

“The administrations are so politicized that any time a Special Agent comes forward as a whistleblower, they can expect to be thrown under the bus by leadership. Go against the Muslim Brotherhood, you’re crushed. Go against the Clintons, you’re crushed. The FBI has long been politicized to the detriment of national security and law enforcement.”

The special agent added, “Activity that Congress is investigating is being stonewalled by leadership and rank-and-file FBI employees in the periphery are just doing their jobs. All Congress needs to do is subpoena involved personnel and they will tell you what they know. These are honest people. Leadership cannot stop anyone from responding to a subpoena. Those subpoenaed also get legal counsel provided by the government to represent them.”

Meanwhile, the former Trump administration official who spoke with The Caller explained that the FBI’s problems go way beyond Comey and McCabe.

They know that it wasn’t just Comey and McCabe in this case. That’s too narrow a net to cast over these guys. There’s a much broader corruption that seeped into the seventh floor at the bureau.”

They ruined the credibility of the bureau and the technical ability of the bureau, so systemically, over the past several years, they’re worried about their organizational reputation and their professional careers.”

Subpoenas when?

END

FAKE NEWS?? Supposedly 400,000 dollars was secretly paid to Cohen for a meeting between Ukraine President Poroshenko and Trump. Everybody denies the story but it is out there.  Also there is a report that supposedly Trump asked Poroshenko to kill the Manafort investigation by the Ukrainian bureau.

(courtesy zerohedge)

Trump Lawyer Received $400,000 “Secret Payment” To Arrange Meeting Between Ukraine President And Trump

The BBC claimed on Wednesday that President Trump’s personal lawyer, Michael Cohen, was paid $400,000 by Ukraine to arrange a meeting between Trump and Ukraine’s billionaire oligarch President, Petro Poroshenko, an allegation Cohen and the Ukraine presidency denies.

The payment was arranged by intermediaries acting for Ukraine’s leader, Petro Poroshenko, the sources said, though Mr Cohen was not registered as a representative of Ukraine as required by US law. –BBC

The alleged payment occurred in advance of a White House meeting last June between Trump and Poroshenko, while the BBC notes that Ukraine’s anti-corruption agency halted an investigation into Trump’s former campaign manager, Paul Manafort “shortly after” the meeting.

A high-ranking Ukrainian intelligence officer in Mr Poroshenko’s administration described what happened before the visit to the White House.

Mr Cohen was brought in, he said, because Ukraine’s registered lobbyists and embassy in Washington DC could get Mr Poroshenko little more than a brief photo-op with Mr Trump. Mr Poroshenko needed something that could be portrayed as “talks”. –BBC

The report states that there is no indication that Trump knew about the alleged payment, while buried towards the end of the article the BBC admits: “None of our sources say that Mr Trump used the Oval Office meeting to ask Mr Poroshenko to kill the Manafort investigation.”

According to the senior official, Poroshenko tasked a former aide with establishing a backchannel – which occurred through a “loyal Ukrainian MP.”  The MP then allegedly used his contacts within a Jewish charity in New York state, Chabad of Port Washington, which eventually led to Micahel Cohen.

A second source in Kiev told the BBC a similar story, except that Cohen’s payment for arranging the meeting was $600,000.

Meanwhile, Stormy Daniels’ lawyer Michael Avenatti – whose law firm was just ordered to pay $10 million to a former partner over a legal feud, said that Suspicious Activity Reports (SARs) filed by Cohen’s bank with the U.S. Treasury show that he received money from “Ukrainian interests.”

The senior intelligence official in Kiev said Mr Cohen had been helped by Felix Sater, a convicted former mobster who was once Trump’s business partner. Mr Sater’s lawyer, too, denied the allegations.

The Ukrainian president’s office initially refused to comment but, asked by a local journalist to respond, a statement was issued calling the story a “blatant lie, slander and fake”.

As was widely reported last June, Mr Poroshenko was still guessing at how much time he would have with Mr Trump even as he flew to Washington.

The White House schedule said only that Mr Poroshenko would “drop in” to the Oval Office while Mr Trump was having staff meetings.

The BBC report claims that while Poroshenko’s visit was coordinated through official channels, Cohen’s alleged $400,000 fee was in exchange for “more than just an embarrassingly brief few minutes of small talk and a handshake.”

The Ukrainian side were angry, the official went on, because Mr Cohen had taken “hundreds of thousands” of dollars from them for something it seemed he could not deliver.

Right up until the last moment, the Ukrainian leader was uncertain if he would avoid humiliation. –BBC

Not surprisingly, when a Ukrainian journalist reached out to Poroshenko for comment, the office of the Ukraine president responded that the BBC allegations were a “blatant lie, slander and fake” only in this particular case there was no way for the Ukrainians to spin this as more “Russian propaganda fake news.” The Ukraine president also threatened to sue the BBC for its publication.

Christopher Miller

@ChristopherJM

Ukrainian President Poroshenko’s office just sent me this in response to report by BBC that Kyiv paid Cohen to fix White House visit with Trump:

Paul Manafort’s alleged relationship with the Ukrainian government – or rather when it was a pro-Russian government, before the US-organized presidential coup in 2014 which culminated with Crimea being subsumed by Russia – was exposed in August 2016, after a report from the New York Times revealed a “secret ledger” belonging to the Party of the Regions – a pro-Russia party that paid Manafort as a political consultant along with the Podesta Group.

Several Ukrainian sources say that Poroshenko authorized the leak of the secret ledger, thinking it would help Hillary Clinton win the 2016 U.S. election – and the BBC is implying that he paid Cohen the $400,000 in a scramble to fall under Trump’s good graces.

Ukraine was (and remains) at war with Russia and Russian-backed separatists and could not afford to make an enemy of the new US president.

So Mr Poroshenko appeared relieved as he beamed and paid tribute to Mr Trump in the Oval Office.

He boasted that he had seen the new president before Russia’s leader, Vladimir Putin. He called it a “substantial visit”. He held a triumphant news conference in front of the north portico of the White House.

A week after Mr Poroshenko returned home to Kiev, Ukraine’s National Anti Corruption Bureau announced that it was no longer investigating Mr Manafort.

At the time, an official there explained to me that Mr Manafort had not signed the “black ledger” acknowledging receipt of the money. And anyway, he went on, Mr Manafort was American and the law allowed the bureau only to investigate Ukrainians.

While Ukraine didn’t completely terminate their inquiry into Manafort, the case was moved from the Anti-Corruption Bureau to the state prosecutor’s office where it languished.  The prosecutor in charge of the case told the BBC: “There was never a direct order to stop the Manafort inquiry but from the way our investigation has progressed, it’s clear that our superiors are trying to create obstacles.”

And now we wonder if, with the “Russian collusion” narrative having failed, it is time for the deep state to pivot to the “Ukraine collusion” story…

I will  see you THURSDAY night

HARVEY

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