GOLD: $1304.80 UP $7.10 (COMEX TO COMEX CLOSINGS)
Silver: $17.25 UP 30 CENTS (COMEX TO COMEX CLOSINGS)
Closing access prices:
Gold $1302.70
silver: $17.19
For comex gold:
JUNE/
NUMBER OF NOTICES FILED TODAY FOR JUNE CONTRACT:36 NOTICE(S) FOR 3600 OZ
TOTAL NOTICES SO FAR 6710 FOR 671000 OZ (20.8709 tonnes)
For silver:
JUNE
3 NOTICE(S) FILED TODAY FOR
15,000 OZ/
Total number of notices filed so far this month: 926 for 4,630,000 oz
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Bitcoin: BID $6427/OFFER $6537: UP $190(morning)
Bitcoin: BID/ $6581/offer $6681: UP $333 (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: 1304.13
NY price at the same time: 1298.10
PREMIUM TO NY SPOT: $6.03
Second gold fix early this morning: 1308.29
USA gold at the exact same time:1300.90
PREMIUM TO NY SPOT: $7.39
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 1377 CONTRACTS FROM 230,163 DOWN TO 228,786 DESPITE YESTERDAY’S GOOD 11 CENT GAIN IN SILVER PRICING. WE ARE NOW WITNESSING OUR USUAL AND CUSTOMARY COMEX LONG LIQUIDATION AS WE ENTERED INTO THE NON ACTIVE DELIVERY MONTH OF JUNE 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: 2910 EFP’S FOR JULY, 0 EFP’S FOR SEPT. AND ZERO FOR ALL OTHER MONTHS AND THEREFORE TOTAL ISSUANCE: OF 2910 CONTRACTS. WITH THE TRANSFER OF 2910 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 2910 EFP CONTRACTS TRANSLATES INTO 14.55 MILLION OZ ACCOMPANYING:
1.THE 11 CENT GAIN IN SILVER PRICE AT THE COMEX AND
2. THE STRONG AMOUNT OF SILVER OUNCES STANDING FOR JUNE COMEX DELIVERY. (4.655 MILLION OZ) DESPITE IT BEING A NON ACTIVE DELIVERY MONTH.
ACCUMULATION FOR EFP’S/SILVER/J.P.MORGAN’S HOUSE OF BRIBES, / STARTING FROM FIRST DAY NOTICE/FOR MONTH OF JUNE:
25,075 CONTRACTS (FOR 10 TRADING DAYS TOTAL 25,075 CONTRACTS) OR 125.375 MILLION OZ: (AVERAGE PER DAY: 2508 CONTRACTS OR 12.540 MILLION OZ/DAY)
TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER: SO FAR THIS MONTH: 125.375 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 16.1% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)
ACCUMULATION IN YEAR 2018 TO DATE SILVER EFP’S: 1,441.46 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
ACCUMULATION FOR MAY 2018: 210.05 MILLION OZ
RESULT: WE HAD AN STRONG SIZED DECREASE IN COMEX OI SILVER COMEX OF 1377 DESPITE THE GOOD 11 CENT RISE IN SILVER PRICE. WE HAVE NOW ENTERED THE NEW NON ACTIVE MONTH OF JUNE. THE CME NOTIFIED US THAT IN FACT WE HAD A VERY STRONG SIZED EFP ISSUANCE OF 2910 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: 2910 EFP CONTRACTS FOR JULY, 232 EFP’S FOR SEPT. AND ZERO FOR ALL OVER MONTHS FOR A DELIVERABLE FORWARD CONTRACT OVER IN LONDON WITH A FIAT BONUS (TOTAL: 2910). TODAY WE GAINED A GOOD: 1553 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: i.e.2910 OPEN INTEREST CONTRACTS HEADED FOR LONDON (EFP’s) TOGETHER WITH AN DECREASE OF 1377 OI COMEX CONTRACTS. AND ALL OF THIS HAPPENED WITH THE 11 CENT FALL IN PRICE OF SILVER AND A CLOSING PRICE OF $16.97 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY IN THIS NON ACTIVE JUNE DELIVERY MONTH. IT SURE LOOKS LIKE A FAILED BANKER SHORT COVERING EXERCISE!!
In ounces AT THE COMEX, the OI is still represented by OVER 1 BILLION oz i.e. 1.144 MILLION OZ TO BE EXACT or 163% of annual global silver production (ex Russia & ex China).
FOR THE NEW FRONT JUNE MONTH/ THEY FILED AT THE COMEX: 3 NOTICE(S) FOR 15000 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. (AND IN LOOKS LIKE WE ARE GOING TO SEE ANOTHER RECORD HIT THIS MONTH)
ON THE DEMAND SIDE WE HAVE THE FOLLOWING:
- HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ AND MAY: 36.285 MILLION OZ /AND JUNE/2018 (4.655 MILLION OZ SO FAR)
- HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018
- HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
- RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/ (FINAL)
AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND. TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT). IT ALSO LOOKS LIKE BANKER CAPITULATION IN SILVER AS THEY STRUGGLE TO REMOVE SOME OF THEIR HUGE OBLIGATIONS.
In gold, the open interest ROSE BY A STRONG 6942 CONTRACTS UP TO 454,229 WITH THE RISE IN THE GOLD PRICE/YESTERDAY’S TRADING (GAIN OF $2.20). WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF JUNE. NO DOUBT THE BOYS ARE CASHING IN THEIR COMEX LONGS TO BEGIN THE PROCESS TO MOVE INTO LONDON FORWARDS. THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A STRONG SIZED 8023 CONTRACTS : JUNE SAW THE ISSUANCE OF 0 CONTRACTS , AND AUGUST SAW THE ISSUANCE OF: 8023 CONTRACTS WITH ALL OTHER MONTHS ZERO. The new OI for the gold complex rests at 454,229. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S. THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY. THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.
IN ESSENCE WE HAVE A FAIR SIZED OI GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES: 5534 OI CONTRACTS INCREASED AT THE COMEX AND A STRONG SIZED 8023 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN: 13,557 CONTRACTS OR 1,355,700 OZ = 42.67 TONNES. AND STRANGELY ALL OF THIS DEMAND OCCURRED WITH A RISE OF $2.20.
YESTERDAY, WE HAD 8742 EFP’S ISSUED.
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY : 92,554 CONTRACTS OR 9,255,400 OZ OR 287.88 TONNES (10 TRADING DAYS AND THUS AVERAGING: 9255 EFP CONTRACTS PER TRADING DAY OR 925,500 OZ/ TRADING DAY),,
TO GIVE YOU AN IDEA AS TO THE HUGE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 10 TRADING DAYS IN TONNES: 287.88 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2017, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES
THUS EFP TRANSFERS REPRESENTS 287.88/2550 x 100% TONNES = 11.28% OF GLOBAL ANNUAL PRODUCTION SO FAR IN APRIL ALONE.***
ACCUMULATION OF GOLD EFP’S YEAR 2018 TO DATE: 3,739.70* 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)
ACCUMULATION OF GOLD EFP’S FOR MAY 2018: 693.80 TONNES ( 22 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 STRONG SIZED INCREASE IN OI AT THE COMEX OF 5534 WITH THE $2.20 GAIN IN PRICE // GOLD TRADING YESTERDAY ($2.20 RISE). WE ALSO HAD AN STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 8023 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 8023 EFP CONTRACTS ISSUED, WE HAD AN NET GAIN OF 13,557 CONTRACTS IN TOTAL OPEN INTEREST ON THE TWO EXCHANGES:
8023 CONTRACTS MOVE TO LONDON AND 5534 CONTRACTS INCREASED AT THE COMEX. (in tonnes, the GAIN in total oi equates to 46.54 TONNES). ..AND BELIEVE IT OR NOT BUT ALL OF THIS DEMAND OCCURRED AT THE COMEX WITH A SMALL GAIN OF $2.20 IN TRADING!!!.
we had: 36 notice(s) filed upon for 3600 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 UP $7.10 TODAY: / NO CHANGES IN GOLD INVENTORY AT THE GLD/ /GLD INVENTORY 828.76 TONNES
Inventory rests tonight: 828.76 tonnes.
SLV/
THIS MAKES A LOT OF SENSE;!!!WITH SILVER UP 30 CENTS TODAY /A HUGE CHANGE IN THE SILVER/ A HUGE WITHDRAWAL OF 1.412 MILLION OZ FROM THE SLV INVENTORY/ INVENTORY AT THE SLV/)
/INVENTORY RESTS AT 315.878 MILLION OZ/
WE ARE SO THANKFUL THAT WE HAVE ATTENTIVE REGULATORS WATCHING THIS VEHICLE FOR POTENTIAL FRAUD.
end
First, here is an outline of what will be discussed tonight:
1. Today, we had the open interest in SILVER FELL BY AN CONSIDERABLE SIZED 1377CONTRACTS from 230,163 DOWN TO 228,786 (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: (WE DO NOT GET A LOOK AT THESE CONTRACTS AS IT IS PRIVATE BUT THE CFTC DOES AUDIT THEM), 2910 EFP’S FOR JULY, 0 EFP CONTRACTS FOR SEPT. AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2910 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 1377 CONTRACTS TO THE 2910 OI TRANSFERRED TO LONDON THROUGH EFP’S, WE OBTAIN A GAIN OF 1553 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 7.665 MILLION OZ!!! AND THIS STRONG SIZED DEMAND OCCURRED WITH A 11 CENT RISE 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 APRIL AT 385.75 MILLION OZ AND THE CONTINUAL OI GAIN ON THE TWO EXCHANGES, THE CONSTANT RAIDS, (THAT 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 FROM YESTERDAYS ACTION, THEY HAVE NOT BEEN AT ALL SUCCESSFUL.
RESULT: A STRONG SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 11 CENT RISE IN SILVER PRICING YESTERDAY. BUT WE ALSO HAD ANOTHER STRONG SIZED 2910 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG SIZED AMOUNT OF SILVER OUNCES STANDING FOR JUNE, 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
)THURSDAY MORNING/WEDNESDAY NIGHT: Shanghai closed DOWN 5.64 points or 0.18% /Hang Sang CLOSED DOWN 284.98 points or 0.93% / The Nikkei closed DOWN 227,77 POINTS OR 0.99% /Australia’s all ordinaires CLOSED DOWN .06% /Chinese yuan (ONSHORE) closed UP at 6.3906/Oil UP to 66.86 dollars per barrel for WTI and 76.58 for Brent. Stocks in Europe OPENED ALL IN THE RED//. ONSHORE YUAN CLOSED UP AT 6.3906 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3851/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING MUCH STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/
/NORTH KOREA/SOUTH KOREA
i)North Korea/South Korea/USA
North Korea as he explained to you yesterday lied about Trump making concessions on sanctions according to Pompeo
( ZEROHEDGE)
b) REPORT ON JAPAN
3 c CHINA
i)Yesterday we highlighted to you the collapse in Chinese shadow banking and that was a good indicator that growth will not be forthcoming from China and that will have a pretty nasty effect on global growth.
Today, China decided not the follow on the heals of the uSA and not raise rates as a trio of economic numbers completely disappointed:
- Industrial production
- Retail sales
- Fixed asset investment
( zerohedge)
ii)Trump to slap tariffs on a huge number (about 900 products) and that sends the dollar skyrocketing
4. EUROPEAN AFFAIRS
i)the big news of the morning: the ECB as projected and as highlighted by us, will end QE officially by December. It will keep rates unchanged until the summer of 2019. In the following months watch Italian bonds and Spanish climbs climb to probably 8 to 10% as nobody will purchases these flawed instruments.
( zerohedge)
ii)MARKET REACTION TO ECB DECISION
Normally one would have expected the Euro to climb. Instead the Euro plummeted. However Italian yields did climb but the German bund yield dropped
( zerohedge)
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
TURKEY
Erdogan threatens Moody’s again with a potential downgrade from its already junk status of Ba2
The lira tumbles on news that Erdogan is threatening with an”operation” whatever that means.
Zero hedge has offered advise to any Moody’s representative in the country to quickly get out of town
(courtesy zerohedge)
6 .GLOBAL ISSUES
Supposedly Canadians are furious with the uSA boycott. However we still love our Coca Cola, iphones and Nikes. If Canada wanted to strike a blow to the USA it would halt all fresh water sales to the USA and then the uSA would be in a bind.
( zerohedge)
7. OIL ISSUES
8. EMERGING MARKET
ARGENTINA
i)Argentina has a huge current account deficit of 4.6% of GDP and it external debt denominated in dollars is killing the currency, in a similar fashion to other emerging nations such as Turkey, Iran, Brazil, etc. Argentina within a year will have to default on its external debt
(courtesy zerohedge)
ii)And today the Peso is plunging again despite a 7.5 billion dollar intervention. It will not stop the bleeding because there is a total scarcity of dollars out there.
9. PHYSICAL MARKETS
i)Seems that Tether has been used to manipulate the bitcoin price
( Bloomberg/GATA)
ii)My goodness: London gold miners will have to show green credentials in order to sell gold on London markets
(courtesy Sanderson/London’s Financial times)
iii)This is a no brainer; the USA paper gold suppression scheme has allowed Russia and China to buy real gold at a huge discount
(Russia Today/GATA)
iv)To all you coin collectors out there:
( Reuters/GATA)
v)A must read …
Hugo discusses the triffin dilemma which basically states that for the uSA to be the reserve currency of the world, foreign central banks must undersell USA producers in order to take in the necessary dollars needed. Thus, the USA must have a current account deficit at all times, in order to fund its status as reserve currency.
(courtesy Hugo Salinas Price)
10. USA stories which will influence the price of gold/silveri)
The all important retail sales surge to .8% month/month on expectations of a .4% m/m climb.
( zerohedge)
ii)
Mish Shedlock perfectly describes how the Fed pays the banks 36.93 billion dollars of taxpayer money as interest on excess reserves.
( Mish Shedlock)
iii)SWAMP STORIES
a)Interesting; McCabe sues the FBI, the Dept of Justice and Inspector General Horowitz. Grab your popcorn on this one>who is telling the truth McCabe or Comey
( zerohedge)
b)The OIG report will be out today. Here is what to expect, and then following will be what we got
( zerohedge)
d)11 am: Leaked from the OIG report shows that Comey was subordinate but showed no political bias as well as Strozok and Page. An absolute joke( zerohedge)
Lisa Page text to Peter Strzok: “(Trump’s) not ever going to become president, right? Right?!”
Strzok: “No. No he’s not. We’ll stop it.”
f)And now the report/released by Horowitz as he faults Comey and notes FBI agent hostility towards Trump
( zero hedge)
g)Another joke: Comey’s response:
Trading Volumes on the COMEX
PRELIMINARY COMEX VOLUME FOR TODAY: 327,065 contracts
CONFIRMED COMEX VOL. FOR YESTERDAY: 276,217 contracts
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And now for the wild silver comex results.
Total silver OI FELL BY A CONSIDERABLE SIZED 1377 CONTRACTS FROM 230,163 DOWN TO 228,786 (AND A LITTLE FURTHER FROM THE NEW RECORD OI FOR SILVER SET APRIL 9.2018/ 243,411 CONTRACTS) DESPITE THE 11 CENT RISE IN SILVER PRICING/ YESTERDAY. SINCE WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JUNE, WE WERE INFORMED THAT WE HAD A STRONG SIZED 2910 EFP CONTRACT ISSUANCE FOR JULY, 0 EFP CONTRACTS FOR SEPT. 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: 2910. ON A NET BASIS WE GAINED 1553 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 1377 CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 2910 OI CONTRACTS NAVIGATING OVER TO LONDON.
NET GAIN ON THE TWO EXCHANGES: 1553 CONTRACTS
AMOUNT STANDING FOR SILVER AT THE COMEX
We are now in the NON active delivery month of JUNE and here the front month ROSE BY 5 contracts RISING TO 8 contracts. We had 0 notices filed upon yesterday so we gained 5 contracts or an additional 25,000 oz will stand in this non active delivery month of June TODAY SOMEBODY WAS IN URGENT NEED OF PHYSICAL ON THIS SIDE OF THE POND
The next big active delivery month for silver is July and here the OI LOST 5551 contracts DOWN to 123,588. The next delivery month is August and here we GAINED 21 contracts to stand at 88. The next active delivery month after August for silver is September and here the OI ROSE by 2810 contracts UP to 68,030
FOR COMPARISON AT THIS TIME IN THE DELIVERY CYCLE, JUNE 14.2017, FOR SILVER, WE HAD 100,539 OPEN INTEREST CONTACTS STILL STANDING.
We had 3 notice(s) filed for 15,000 OZ for the JUNE 2018 COMEX contract for silver
INITIAL standings for JUNE/GOLD
JUNE 14/2018.
Gold | Ounces |
Withdrawals from Dealers Inventory in oz | nil oz |
Withdrawals from Customer Inventory in oz |
1607.500 OZ
50 kilobars
|
Deposits to the Dealer Inventory in oz | NIL oz |
Deposits to the Customer Inventory, in oz | nil
oz |
No of oz served (contracts) today |
36 notice(s)
3600 OZ
|
No of oz to be served (notices) |
552 contracts
(55,200 oz)
|
Total monthly oz gold served (contracts) so far this month |
6710 notices
671,000 OZ
20.8709 TONNES
|
Total accumulative withdrawals of gold from the Dealers inventory this month | NIL oz |
Total accumulative withdrawal of gold from the Customer inventory this month | xxx oz |
For JUNE:
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 36 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 11 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account.
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To calculate the INITIAL total number of gold ounces standing for the JUNE. contract month, we take the total number of notices filed so far for the month (6710) x 100 oz or 671,000 oz, to which we add the difference between the open interest for the front month of JUNE. (588 contracts) minus the number of notices served upon today (36 x 100 oz per contract) equals 726,200 oz, the number of ounces standing in this active month of JUNE (22.587 tonnes)
Thus the INITIAL standings for gold for the JUNE contract month:
No of notices served (6710 x 100 oz) + {(588)OI for the front month minus the number of notices served upon today (36 x 100 oz )which equals 726,200 oz standing in this active delivery month of JUNE .
WE LOST A TINY 9 CONTRACTS OR AN ADDITIONAL 900 OZ WILL NOT STAND FOR DELIVERY AS THESE GUYS MORPHED INTO LONDON BASED FORWARDS.
“THERE ARE ONLY 15.783 TONNES OF REGISTERED GOLD AVAILABLE FOR DELIVERY AGAINST 22.587 TONNES STANDING WHICH IS MAKING THIS JUNE CONTRACT MONTH AN EXTREMELY INTERESTING ONE TO WATCH
IN THE LAST 18 MONTHS 74 NET TONNES HAS LEFT THE COMEX.
end
And now for silver
AND NOW THE APRIL DELIVERY MONTH
JUNE INITIAL standings/SILVER
Silver | Ounces |
Withdrawals from Dealers Inventory | nil oz |
Withdrawals from Customer Inventory |
551,773.905 oz
CNT
BRINKS
|
Deposits to the Dealer Inventory |
nil;
oz
|
Deposits to the Customer Inventory |
747,318.432
oz
jpmorgan
Delaware
|
No of oz served today (contracts) |
3
CONTRACT(S)
(15,000 OZ)
|
No of oz to be served (notices) |
5 contracts
(25,000 oz)
|
Total monthly oz silver served (contracts) | 926 contracts
(4,630,000 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
total dealer deposits: nil oz
we had 2 deposits into the customer account
i) Into JPMorgan: 543,722.170 oz
*** JPMorgan for most of 2017 and in 2018 has adding to its inventory almost every single day.
JPMorgan now has 141 million oz of total silver inventory or 52.0% of all official comex silver. (141 million/270 million)
ii) Into Delaware: 203,596.262
total customer deposits today: 747,318.432 oz
we had 2 withdrawals from the customer account;
i) Out of CNT: 542,483,725 oz
ii) Out of Brinks: 9280.78
total withdrawals; 551,773.905 oz
we had 0 adjustment/
total dealer silver: 66.073 million
total dealer + customer silver: 270.544 million oz
The total number of notices filed today for the JUNE. contract month is represented by 3 contract(s) FOR 15,000 oz. To calculate the number of silver ounces that will stand for delivery in JUNE., we take the total number of notices filed for the month so far at 926 x 5,000 oz = 4,630,000 oz to which we add the difference between the open interest for the front month of JUNE. (8) and the number of notices served upon today (3 x 5000 oz) equals the number of ounces standing.
.
Thus the INITIAL standings for silver for the JUNE contract month: 926(notices served so far)x 5000 oz + OI for front month of JUNE(8) -number of notices served upon today (3)x 5000 oz equals 4,655,000 oz of silver standing for the JUNE contract month
PLEASE NOTE THE FOLLOWING FOR COMPARISON PURPOSES:
ON MAY 31.2017 WE INITIALLY HAD 396 OPEN INTEREST STAND OR A LARGE 1.98 MILLION OZ
STOOD FOR METAL.
AT THE CONCLUSION OF JUNE 2017: 4.92 MILLION OZ FINALLY STOOD AS QUEUE JUMPING STARTED IN EARNEST AND IN THE ENSUING YEAR, IT CONTINUED WITH RECKLESS ABANDON INCLUDING WHAT YOU ARE WITNESSING TODAY
We gained 5 contracts or an additional 25,000 oz will stand in this non active delivery month of June as somebody was in urgent need of silver today. IN SILVER QUEUE JUMPING HAS BEEN THE NORM FOR OVER A YEAR. IT LOOKS LIKE GOLD IS JOINING ITS WEAKER SISTER IN THIS SAME PHENOMENON… ALTHOUGH TODAY 900 OZ MORPHED INTO LONDON FORWARDS IN GOLD
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
ESTIMATED VOLUME FOR TODAY: 148,310 CONTRACTS
CONFIRMED VOLUME FOR YESTERDAY:140,635 CONTRACTS
YESTERDAY’S CONFIRMED VOLUME OF 140,635 CONTRACTS EQUATES TO 703 MILLION OZ OR 100.04% OF ANNUAL GLOBAL PRODUCTION OF SILVER
COMMODITY LAW SUGGESTS THAT OPEN INTEREST SHOULD NOT BE MORE THAN 3% OF ANNUAL GLOBAL PRODUCTION. THE CROOKS ARE SUPPLYING MASSIVE PAPER TRYING TO KEEP SILVER IN CHECK.
The record level of silver open interest is 234,787 contracts set on April 21./2017 with the price at that day at $18.42
The previous record was 224,540 contracts with the price at that time of $20.44
end
NPV for Sprott
1. Sprott silver fund (PSLV): NAV FALLS TO -3.72% (JUNE 12/2018)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -0.56% to NAV (JUNE 12/2018 )
Note: Sprott silver trust back into NEGATIVE territory at -3.72%-/Sprott physical gold trust is back into NEGATIVE/ territory at -0.56%/Central fund of Canada’s is still in jail but being rescued by Sprott.
Sprott WINS hostile 3.1 billion bid to take over Central Fund of Canada
(courtesy Sprott/GATA)
3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA): NAV FALLS TO -2.65%: NAV 13.71/TRADING 13.35//DISCOUNT 2.65.
END
And now the Gold inventory at the GLD/
JUNE 14/WITH GOLD UP $7.10/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES/
JUNE 13/WITH GOLD UP $2.20/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES
JUNE 12/WITH GOLD DOWN $4.75:NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 828.76 TONNES
JUNE 11/WITH GOLD UP 65 CENTS/THE CROOKS RAIDED THE COOKIE JAR FOR 3.83 TONNES/INVENTORY RESTS AT 828.76 TONNES
JUNE 8/WITH GOLD DOWN 10 CENTS/NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY REMAINS AT 832.59 TONNES./
JUNE 7/WITH GOLD UP $1.45, THE CROOKS DECIDED TO RAID AGAIN THE GLD GOLD COOKIE JAR TO THE TUNE OF 3.54 TONNES/GOLD INVENTORY LOWERS TO 832.59 TONNES
JUNE 6/WITH GOLD UP $1.30 TODAY, WE HAD NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 836.13 TONNES
JUNE 5/WITH GOLD UP $5.30 TODAY, WE HAD A TINY WITHDRAWAL OF .29 TONNES AND THAT NO DOUBT WAS TO PAY FOR FEES/836.13 TONNES
JUNE 4/WITH GOLD DOWN ONLY $2.50, THE CROOKS UNLEASHED A MASSIVE WITHDRAWAL OF 10.61 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 836.42 TONNES
JUNE 1/WITH GOLD DOWN $5.10 TODAY, A HUGE 4.42 TONNES OF GOLD WAS WITHDRAWN FROM THE GLD AND THIS WAS USED IN THE RAID TODAY/INVENTORY RESTS AT 847.03 TONNES
MAY 31/WITH GOLD DOWN 1.60/NO CHANGE IN GOLD INVENTORY/INVENTORY REMAINS AT 851.45 TONNES
MAY 30/WITH GOLD UP $2.70: A HUGE DEPOSIT OF 2.95 TONNES INTO THE GLD/INVENTORY REMAINS AT 851.45 TONNES
MAY 29/2018/WITH GOLD DOWN $4.50/ NO CHANGES IN GLD INVENTORY/INVENTORY REMAINS AT 848.50 TONNES
May 25/WITH GOLD UP ON THE WEEK BUT DOWN 80 CENTS TODAY: WE HAD A HUGE 3.54 TONNES OF GOLD WITHDRAWAL FROM THE CROOKED GLD/
MAY 24/WITH GOLD UP $12.40/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS 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.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
JUNE 14/2018/ Inventory rests tonight at 828,76 tonnes
*IN LAST 397 TRADING DAYS: 97.83 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 347 TRADING DAYS: A NET 58.47 TONNES HAVE NOW BEEN ADDED INTO GLD INVENTORY.
end
Now the SLV Inventory/
JUNE 14/WITH SILVER UP 30 CENTS, THE CROOKS DECIDED THAT THEY NEEDED SILVER INVENTORY BADLY SO THEY RAID THE SLV OF 1.412 MILLION OZ/INVENTORY RESTS AT 315.878 MILLION OZ/
JUNE 13/WITH SILVER UP 11 CENTS TODAY/NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 317.290 MILLION OZ/
JUNE 12/WITH SILVER DOWN 5 CENTS/A HUGE CHANGES IN SILVER INVENTORY AT THE SLV/ THE CROOKS RAID THE SILVER COOKIE JAR BY 1.976 MILLION OZ/INVENTORY LOWERS TO 317.290 MILLION OZ/
jUNE 11/NO CHANGE IN SILVER INVENTORY/319.266 MILLION OZ
JUNE 8/WITH SILVER DOWN 5 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.412 MILLION OZ//INVENTORY LOWERS TO 319.266 MILLION OZ/
JUNE 7/WITH SILVER UP ANOTHER 12 CENTS/A HUGE CHANGE IN SILVER INVENTORY AT THE SL: A WITHDRAWAL OF 1.883 MILLION OZ WITH ALL OF THAT SILVER DEMAND//INVENTORY RESTS AT 320.678 MILLION OZ/
JUNE 6/WITH SILVER UP 14 CENTS TODAY/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 322.561 MILLION OZ/
JUNE 5/WITH SILVER UP 10 CENTS NO CHANGE IN SILVER INVENTORY/INVENTORY RESTS AT 322.561 MILLION OZ
JUNE 4/WITH SILVER DOWN 1 CENTA SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 522,000 OZ INTO THE SLV/.INVENTORY RISES AT 322.561 MILLION OZ/
JUNE 1/WITH SILVER DOWN 3 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 322.039 MILLION OZ/
MAY 31/WITH SILVER DOWN 7 CENTS/NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY REMAINS AT 322.039 MILLION OZ/
MAY 30/WITH SILVER UP 16 CENTS: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV/ A DEPOSIT OF 2.071 MILLION OZ/INVENTORY RESTS AT 322.039 MILLION OZ/
MAY 29.2018/ NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 319.968 OZ
May 25/INVENTORY LOWERS TO 319.968 AS WE HAD A WITHDRAWAL OF 1.035 MILLION OZ
MAY 24/WITH SILVER UP 27 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/
JUNE 12/2018:
Inventory 315.878 million oz
end
6 Month MM GOFO 2.19/ and libor 6 month duration 2.50
Indicative gold forward offer rate for a 6 month duration/calculation:
G0FO+ 2.19%
libor 2.50 FOR 6 MONTHS/
GOLD LENDING RATE: .31%
XXXXXXXX
12 Month MM GOFO
+ 2.77%
LIBOR FOR 12 MONTH DURATION: 2.61
GOFO = LIBOR – GOLD LENDING RATE
GOLD LENDING RATE = +.16
end
end
Major gold/silver trading /commentaries for THURSDAY
GOLDCORE/BLOG/MARK O’BYRNE.
GOLD/SILVER
ANDREW MAGUIRE’S KINESIS WHICH IS A”BITCOIN’ BACKED 100% BY ALLOCATED GOLD AND SILVER
Andrew Maguire’s Kinesis money which is a “bitcoin” but backed 100% by allocated gold and silver is set to go.
it think it would be a great idea to look at this!
please read at: https://kinesis.money/#/
(Andrew Maguire)
|
Dear Harvey Organ,
Thank you for your participation in our webinar on June 7th with our host and CEO of Kinesis, Thomas Coughlin.
The response we received has been incredible, we appreciate you taking the time to join us and hope you found it to be beneficial.
Due to such a high influx of questions we received we were unable to have them all answered. Nevertheless, if there was anything which requires more clarification, or you have a query which needs to be rectified, we invite you to join our telegram group:
We apologize for the technical issues we incurred during the webinar which resulted in it running a little over schedule, we hope that the next one we host will run seamlessly.
A video has been put together and uploaded onto our YouTube channel which can be found here:
Please share and subscribe to our YouTube channel to be notified of all the latest videos as they become available.
The rapid growth that we are currently experiencing has been incredible and with your support, is only going to get better.
We are working behind the scenes very hard to create a better experience for everyone involved! Stay tuned in as we have many more announcements to be released in the upcoming days.
Kind Regards,
![]() |
Kinesis Money
a:C/O ILS Fiduciaries (IOM) Limited, First Floor,Millennium House, Victoria Road, Douglas, Isle of Man IM2 4RW
|
The following is self explanatory
(courtesy GATA/Chris Powell and Harvey Organ)
GATA asks bank regulator to check risks of gold
futures maneuver
Submitted by cpowell on Sun, 2018-06-10 16:17. Section: Daily Dispatches
12:21p ET Sunday, June 10, 2018
Dear Friend of GATA and Gold:
GATA has appealed to the U.S. comptroller of the currency, who has regulatory authority over banks, to review financial risks certain banks may have incurred through derivatives in the monetary metals markets, particularly through the recent heavy use of the “exchange for physicals” mechanism of settling gold and silver futures contracts on the New York Commodities Exchange.
The appeal was made in a letter sent May 5 to the comptroller, Joseph M. Otting, whose office is part of the U.S. Treasury Department, by your secretary/treasurer and GATA futures market consultant Harvey Organ.
“Exchange for physical” settlements of futures contracts long were considered emergency procedures when a seller was not able to deliver metal from an exchange-approved warehouse and wanted to settle with delivery elsewhere. But now such settlements appear to constitute most gold and silver futures settlements on the Comex. It is a strange development that appears to have been necessitated by the increasing difficulties of central banking’s gold and silver price suppression policy.
GATA has received no acknowledgment of the letter. Its text is below and a PDF copy of it is here:
http://www.gata.org/files/ComptrollerOfCurrencyLetter.pdf
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
CPowell@GATA.org
* * *
May 5, 2018
Joseph M. Otting, Comptroller of the Currency
U.S. Treasury Department
400 7th Street, SW
Washington DC 20219
Dear Comptroller Otting:
Please let us bring to your attention financial risks to major banks involving their possibly unreported exposure to derivatives in the monetary metals markets.
In recent months gold and silver future contracts issued by U.S. banks on the New York Commodities Exchange have been moved off-exchange for delivery through a mechanism known as “exchange for physical” (EFP) contracts. Until recently use of this mechanism was considered an emergency procedure when a seller did not have access to metal for delivery through Comex warehouses. Now the mechanism seems to be in use for a large share of front-month contracts for which delivery is sought.
Here is an example that is happening at the Comex in the front active month of April for gold and the inactive delivery month of April for silver.
In gold, there were 229,436 EFP contracts for 713.64 tonnes, an average of 10,925 contracts and 1,092,500 ounces per trading day.
In silver, there were 77,150 EFP contracts for 385,750,000 ounces, an average of 3,673 contracts and 18,369,000 ounces per trading day.
London Bullion Market Association rules suggest that these contracts may not be reported to regulators. The LBMA’s bylaws say:
“Figures above exclude any contracts not subject to risk-based capital requirements, such as FX contracts with an original maturity of 14 days or less, futures contracts, written options, and basis swaps. Therefore, the total notional amount of derivatives by maturity will not add to the total derivatives figure in this table.”
We are told that these EFP contracts are transferred from the Comex to London as what are called “serial forwards” and their duration is always less than 14 days, which exempts them from being reported.
It is our understanding that in each quarter your office prepares a report detailing risk undertaken by the banks under the comptroller’s supervision.
These risks include derivatives undertaken by U.S. banks and other obligations that may cause a bank to fail. Our concern is that your office may not be aware of large unreported derivative exposure by banks.
Could you review this matter and let us know your conclusions?
Sincerely,
CHRIS POWELL
Secretary/Treasurer
HARVEY ORGAN
Consultant
Gold Anti-Trust Action Committee Inc.
7 Villa Louisa Road
Manchester, Connecticut 06043-7541
END
end
Seems that Tether has been used to manipulate the bitcoin price
(courtesy Bloomberg/GATA)
Questions about Tether and Bitfinex have dogged the cryptocurrency world since last year, when Bitfinex lost banking relationships yet continued to operate. The U.S. Commodity Futures Trading Commission subpoenaed both firms in December, seeking proof that Tether is backed by a reserve of U.S. dollars, as it claims. Tether and Bitfinex haven’t been accused of wrongdoing. …
… For the remainder of the report:
https://www.bloomberg.com/news/articles/2018-06-13/professor-who-rang-vi
END
My goodness: London gold miners will have to show green credentials in order to sell gold on London markets
(courtesy Sanderson/London’s Financial times)
London’s gold market demands green credentials for producers
Submitted by cpowell on Wed, 2018-06-13 15:44. Section: Daily Dispatches
How hypocritical! For the LBMA is the agent of central bank price suppression policy, which induces miners to skimp on environmental protection and remediation — to take the metal and run, leaving polluted gashes in the land.
* * *
By Henry Sanderson
Financial Times, London
Tuesday, June 12, 2018
The world’s biggest producers of gold will have to prove their green credentials if they want their metal to be traded on London’s $5.5 trillion-a-year bullion market.
Under the new standards being introduced by London Bullion Market Association, refiners and miners will have to provide data on a range of environmental benchmarks including energy usage, pollution, water usage, carbon emissions, as well as health and safety.
If miners or refiners do not meet the new guidelines that will begin next January, they face the prospect of being removed from the LBMA’s good-delivery list, effectively shutting them out of the London market. The list of 70 approved refiners accounts for 90 percent of annual global gold production.
…
… For the remainder of the report:
https://www.ft.com/content/fa802a08-6d91-11e8-852d-d8b934ff5ffa
END
This is a no brainer; the USA paper gold suppression scheme has allowed Russia and China to buy real gold at a huge discount
(Russia Today/GATA)
U.S. paper gold suppression allows Russia and China to buy real gold at discount
Submitted by cpowell on Wed, 2018-06-13 16:10. Section: Daily Dispatches
Russia Today is operated by the Russian government and this report shows again that Russia knows what is happening in the currency markets and is acting on its knowledge.
* * *
From Russia Today, Moscow
Wednesday, June 13, 2018
Efforts by the United States to suppress gold prices in order to prop up the dollar are allowing Russia and China to build up huge reserves of physical gold by purchasing large quantities of the precious metal at significantly lower prices.
Net central bank purchases in the first quarter of the current year surged by 42 percent compared to the same period a year ago, totaling 116.5 tons, according to data compiled by the World Gold Council. The number reportedly represents the highest quarterly total since 2014
Over the past two decades, Russia has been ramping up the purchases of physical gold. In May the country’s gold reserves surged to 1,909 tons, Russia’s Finance Ministry reported. Since 2000 the country’s gold reserves have surged by 500 percent. …
… For the remainder of the report:
https://www.rt.com/business/429573-us-china-russia-physical-gold/
END
To all you coin collectors out there:
(courtesy Reuters/GATA)
Unique George Washington gold coin in first auction since 1890
Submitted by cpowell on Thu, 2018-06-14 00:38. Section: Daily Dispatches
By Jill Serjeant
Reuters
Wednesday, June 13, 2018
LOS ANGELES — A one-of-a-kind 18th-century gold coin bearing the likeness of the first U.S. President, George Washington, is expected to fetch more than $1 million when it goes up for auction in August, auctioneers said today.
The 1792 Washington President gold eagle coin was never circulated as money, but is instead thought to have been presented to Washington when post Revolutionary War plans were being drawn up for the first U.S. Mint.
Washington refused to have himself depicted on coins, considering the notion “monarchical.”
Currency researchers believe that the Washington President coin, which has his head on the front and an eagle on the back, was given to him as part of a sales promotion in a bid to obtain a contract to strike U.S coinage, and that Washington carried it as a personal memento. …
… For the remainder of the report, and photos of the coin:
https://www.reuters.com/article/us-auction-washingtoncoin/unique-george-…
end
A must read …
Hugo discusses the triffin dilemma which basically states that for the uSA to be the reserve currency of the world, foreign central banks must undersell USA producers in order to take in the necessary dollars needed. Thus, the USA must have a current account deficit at all times, in order to fund its status as reserve currency.
(courtesy Hugo Salinas Price)
June 13, 2018.
Donald Trump’s ‘Madness’
By Hugo Salinas Price
Source: http://plata.com.mx/enUS/More/353? idioma=2
Way back in 1995, when Mexico was in the throes of another financial crisis, I figured out the problem of the existing world’s monetary system, based on the paper dollar as the fundamental currency of the world.
In my ignorance, I did not know that a man named Triffin had already pointed out that problem, which became known as “Triffin’s Dilemma”.
The problem is really very simple:
If the dollar – such as it is – is going to be the basis of the world’s monetary system, and therefore required by all Central Banks as Reserves, there is only one way that these CBs can obtain those Reserves: their countries are forced to undersell all US producers, in order to be able to sell more to the US, than they buy from the US. The difference between the dollars they get from sales, is more, than the dollars they spend to buy from the US. That difference – known as the US Trade Deficit – flows to the CBs of the world and swells their Reserves.
So if Mr. Trump wants to cut down, or even ideally abolish the Trade Deficit, that would mean that foreign CBs would have to find it much harder to obtain dollars for their Reserves. Mr. Trump apparently does not want to have foreign CBs use dollars as Reserves, by making it very difficult to obtain those dollars – which they can only get if the US runs a Trade Deficit.
What that great world monetary system based on the paper dollar has done to the US, was quite unexpected: it consists in obtaining foreign goods by tendering paper money in payment, something that is fundamentally fraudulent. And that fraud has come back to haunt the US, quite unexpectedly.
The unexpected result of Triffin’s (or “Hugo’s”) Dilemma, has been the de-industrialization of the US, as the world geared up to undersell all US producers wherever they could do so, in order to obtain the indispensable US Dollars.
Mr. Trump is wildly alienating all the rest of the world, with the threat of Tariffs in order to reduce the Trade Deficit. What he does not understand, is that the Trade Deficit is built-in to the US economy, because the world´s CBs need Dollars for their Reserves: that is the System.
There is one way, and only one way, to do away with the Trade Deficit and renew the productivity of the US: abandon the present International Monetary System (derived from the original Bretton Woods Agreements of 1944) and return to the gold standard.
There are no “Trade Deficits” under the Gold Standard, because all countries have to pay Cash Gold for their imports, and collect Cash Gold for their exports. Result: Balanced Trade. No Trade Deficits.
A question in the back of my mind: Is Mr. Trump’s “madness” really leading to the Gold Standard? Is that what he really wants? Because if he continues to undermine the present US Dollar as the World’s Reserve Currency, by making it impossible for CBs to obtain Dollars through the US Trade Deficit, that would appear to be the likely final outcome.
-END-
Your early THURSDAY morning currency, Asian stock market results, important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/9 AM EST
i) Chinese yuan vs USA dollar/CLOSED UP TO 6.3906 /shanghai bourse CLOSED DOWN 5.64 POINTS OR 0.18% HANG SANG CLOSED DOWN 284.98 POINTS OR 0.93%
2. Nikkei closed UP 227.77 POINTS OR 0.99% / /USA: YEN FALLS TO 109.99/
3. Europe stocks OPENED ALL RED / /USA dollar index FALLS TO 93.30/Euro RISES TO 1.1826
3b Japan 10 year bond yield: FALLS TO . +.04/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.99/ 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:: 65.99 and Brent: 75.69
3f Gold DOWN/Yen DOWN
3g Japan is to buy the equivalent of 108 billion uSA dollars worth of bond per month or $1.3 trillion. Japan’s GDP equals 5 trillion usa./“HELICOPTER MONEY” OFF THE TABLE FOR NOW /REVERSE OPERATION TWIST ON THE BONDS: PURCHASE OF LONG BONDS AND SELLING THE SHORT END
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil UP for WTI and UP FOR Brent this morning
3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.50%/Italian 10 yr bond yield UP to 2.90% /SPAIN 10 YR BOND YIELD DOWN TO 1.42%
3j Greek 10 year bond yield RISES TO : 4.66
3k Gold at $1305.60 silver at:17.15 7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50
3l USA vs Russian rouble; (Russian rouble UP 29/100 in roubles/dollar) 62.22
3m oil into the 64 dollar handle for WTI and 75 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 109.99 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 0.9836 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1632 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 +0.50%
The bank withdrawals were causing massive hardship to the Greek bank. the Greek referendum voted overwhelming “NO”. Next step for Greece will be the recapitalization of the banks and that will be difficult.
4. USA 10 year treasury bond at 2.95% early this morning (THIS IS DEADLY TO ALL MARKETS). Thirty year rate at 3.06%
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
(courtesy Jim Reid/Bloomberg/Deutsche bank/zero hedge)
Exhausted Traders Prepare For This Week’s Final
Surprise From Mario Draghi
Bulletin Headline Summary from Ransquawk
- Defensive trading as traders look ahead to the ECB’s monetary policy meeting
- Significant beats on UK retail sales lifts the GBP
- Looking ahead, highlights include, ECB rate decision conference and press conference, US weekly jobs, retail sales
US futures are flat after a torrid 24 hours, which saw European and Asian stocks decline led by China, HK and South Korea, as weak economic data, a Fed rate hike and U.S. tariff threats spooked emerging markets and sucked the life out of a rally spurred by the Chinese central bank unexpectedly deciding not to follow the Fed in raising interest rates amid what Rabobank said was “shockingly weak” Chinese data as the global economy is now on its last legs. Of course, the looming ECB rate decision, in which Draghi may announce the beginning of the end of QE, is adding another layer of uncertainty (full ECB preview here).
This is the amusing preview of today’s main ECB event from UBS economist Paul Donovan
Now it is the turn of the ECB. ECB President Draghi’s extensive rehabilitation to overcome an addiction to easing seems to have paid off. There are hopes of either 1) an announcement of the timetable to end bond buying, or 2) an announcement of an announcement of the timetable to end bond buying.
Whatever Draghi says, the market is confident that it will be hawkish and is bidding up the Euro this morning. As a result, the most likely outcome is that the Euro will tumble especially with the Fed on pace to hike 2 more times in 2018 blowing out rate differentials out of the water.
Going back to the Fed, it is only appropriate that most benchmark stock gauges retreated after Powell unveiled a picture of sterling health for the US economy, suggesting that despite the actual data, the Fed expects the economy to overheat (for a while), with Powell talking up the U.S. growth as the Fed raised rates and hinted at a total of four hikes in 2018, while China’s central bank unexpectedly failed to follow the increase.
Asian shares taking their cue from Wednesday’s weak U.S. session and deepening recent losses. As previously noted, abysmal Chinese economic data which saw industrial production, retail sales, and fixed investment miss across the board, did not help. sentiment. In a whiplash session, the Shanghai Composite Index down 0.2%, after first rising as much as 0.5% following the PBOC decision not to hike rates in line with the Fed, and then fell as much as 0.6% in wake of the disappointing Chinese economic data. Adding to the Chinese gloom, President Trump threatened to “strongly” confront China on trade with new tariffs expected as soon as Friday.
In Asia, Australia’s ASX 200 (-0.1%) and Nikkei 225 (-1.0%) opened lower although were off lows with strength in telecoms helping Australia to briefly return flat, while KOSPI (-1.3%) was the worst performer as it also took into account the weakness during the prior day’s market holiday. Elsewhere, Hang Seng (-0.9%) was downbeat after the HKMA hiked rates in lockstep with the Fed and the Shanghai Comp. (-0.2%) traded choppy with early support seen after the PBoC refrained from increasing its repo rates. However, upside in the mainland was later pared amid prospects of looming US tariffs on China and following disappointing Industrial Production and Retail Sales data, in which the latter grew at its slowest pace since 2003.
Europe’s Stoxx 600 Index followed Asia’s example and slumped pressured by the stronger euro, while American equity futures erased a drop to trade little changed. European equities declined as traders are tentative ahead of the ECB’s monetary policy decision, with moves dictated by equity specific stories. Rolls Royce (+3.0%) is leading the gains in the Stoxx 600, after the announcement that 4,600 jobs will be cut from the company in order to save GBP 400mln.
Amid a market divided on whether President Draghi will announce an end date for asset purchases, euro-area bonds slipped. Emerging-market currencies attempted to form a short-term bottom, while Treasuries advanced and oil consolidated recent gains. The 10Y TSY yield declined one basis point to 2.95 percent, the first retreat in a week. Germany 10-year gilts rose 2bps to 0.50 percent, the highest in more than three weeks, while Britain’s 10-year yield increased 1bp to 1.369 percent. Finally, Italy’s 10-year yield climbed four basis points to 2.85 percent.
In FX trading, the dollar came under pressure against most major peers, while haven assets such as the yen, Treasuries and gold advanced; the greenback weakened versus all Group-of-10 peers apart from the Aussie, with the BBDXY index sinking 0.2%, the largest decrease in more than two weeks; the euro rose 0.3% to a one- week high as traders positioned for the ECB meeting and are all on the same side of the boat now (which obviously means that after the ECB, the euro will be lower). In other FX trading:
- The pound jumped as much as 0.5% after annual retail-sales growth exceeded all analyst forecasts
- Sweden’s krona resumed declines briefly rising around the time of the inflation report earlier in the day, which was in line with estimates
- The Australian dollar decline accelerated in early European dealings as leveraged funds sold it against the yen and New Zealand’s currency on concerns over escalating U.S.-China trade tensions; the Aussie was already on the backfoot after data disappointing employment data
- South Africa’s rand jumped.
In commodities, brent dropped 0.2% on the day, with WTI +0.1% on a softer USD. Traders are also looking ahead to developments that may come from the Saudi-Russia meeting on the sidelines of the World Cup which kicks off today. In the metals scope, gold is up on the day hitting 2 week highs as investors flock to safe havens ahead of the ECB’s rate decision, as well as having support offered by a softer USD and trade concerns. The yellow metal is up 0.2% on the day. Copper has fallen to a near one week low after weak Chinese industrial data. Steel is in the green for the 3rd straight session after China has said it will introduce a new capacity limit in certain areas.
Looking ahead, highlights include, ECB rate decision conference and press conference, US weekly jobs, retail sales
Market Snapshot
- S&P 500 futures down 0.1% to 2,771.50
- STOXX Europe 600 down 0.6% to 386.12
- MXAP down 0.9% to 173.14
- MXAPJ down 1.1% to 564.62
- Nikkei down 1% to 22,738.61
- Topix down 0.9% to 1,783.89
- Hang Seng Index down 0.9% to 30,440.17
- Shanghai Composite down 0.2% to 3,044.16
- Sensex down 0.4% to 35,588.51
- Australia S&P/ASX 200 down 0.1% to 6,016.64
- Kospi down 1.8% to 2,423.48
- German 10Y yield rose 2.0 bps to 0.502%
- Euro up 0.2% to $1.1819
- Italian 10Y yield fell 5.6 bps to 2.537%
- Spanish 10Y yield fell 0.5 bps to 1.406%
- Brent futures down 0.2% to $76.59/bbl
- Gold spot up 0.2% to $1,302.31
- U.S. Dollar Index down 0.2% to 93.34
Top Overnight News from Bloomberg
- China’s economy fell short of expectations and its central bank chose not to follow the Fed in raising borrowing costs, adding fresh caution on the outlook for global growth as trade tensions with the U.S. escalate
- Mario Draghi and his European Central Bank colleagues will hold their first formal talks on Thursday on when to end their asset purchase program, though it’s less clear whether they’ll make a decision or wait until July
- President Donald Trump said he’ll confront China “very strongly” over trade in the coming weeks, as his administration plans to announce on Friday a final list of tariff targets, which will be imposed shortly thereafter
- Federal Reserve Chairman Jerome Powell signaled growing optimism on the U.S. economy while trying to reassure investors that the central bank would not derail the country’s second-longest expansion by aggressively tightening monetary policy. Fed officials on Wednesday raised interest rates by a quarter point for the second time this year and upgraded their median forecast to four total increases in 2018
- Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman will discuss how to boost oil production while maintaining their petro-alliance when they meet in Moscow tomorrow to watch the soccer World Cup’s opening match between the two countries
- The U.K. housing market stayed stuck in a rut in May as activity and prices remained broadly flat, according to the Royal Institution of Chartered Surveyors
- China’s central bank held off from immediately raising borrowing costs following the U.S. Federal Reserve, a decision that came just as economic data for May showed that the economy is losing steam
- U.S. Secretary of State Mike Pompeo emphasized that Kim Jong Un wouldn’t receive sanctions relief until after his complete disarmament, pushing back against North Korean suggestions that penalties would soon start being relaxed
- U.K. Brexit Secretary David Davis says the compromise amendment that the government is negotiating with rebels in the ruling Conservative Party on the so-called meaningful vote will be published on Thursday. Asked if it will give Parliament control in the event lawmakers reject the final Brexit deal, he says “wait and see”
Asia stocks traded softer as the region reacted to the FOMC which hiked rates by 25bps to 1.75%-2.00% as expected and forecast a total of 4 hikes this year vs. Prev. forecast of just 3 increases, while the statement also contained a more hawkish undertone regarding growth and rates. As such, ASX 200 (-0.1%) and Nikkei 225 (-1.0%) opened lower although were off lows with strength in telecoms helping Australia to briefly return flat, while KOSPI (-1.3%) was the worst performer as it also took into account the weakness during the prior day’s market closure. Elsewhere, Hang Seng (-0.9%) was downbeat after the HKMA hiked rates in lockstep with the Fed and the Shanghai Comp. (-0.2%) traded choppy with early support seen after the PBoC refrained from increasing its repo rates. However, upside in the mainland was later pared amid prospects of looming US tariffs on China and following disappointing Industrial Production and Retail Sales data, in which the latter grew at its slowest pace since 2003. Finally, 10yr JGBs saw mild gains amid the risk averse tone although upside was contained following the BoJ Rinban announcement in which the central bank reduced its purchase amounts in the belly. PBoC injected CNY 70bln via 7-day reverse repos, CNY 50bln via 14-day reverse repos and CNY 30bln via 28-day reverse repos, for a net daily injection of CNY 70bln, while the PBoC kept its reverse repo rates unchanged despite the Fed hike.
Top Asian News
- BOJ Cuts Purchases of Three-to-Five Year Bonds by 30 Billion Yen
- Erdogan: Turkey to Conduct an Operation Against Moody’s
- China Signals Confidence in Yuan With Surprising Rate Decision
- Anta Leads China Sportswear Stocks Decline After Critical Report
European equities are lower as traders are tentative ahead of the ECB’s monetary policy decision, with moves dictated by equity specific stories. Rolls Royce (+3.0%) is leading the gains in the Stoxx 600, after the announcement that 4,600 jobs will be cut from the company in order to save GBP 400mln. Volkswagen (-0.5%) is pressuring the DAX (-0.3%) as the company was handed a EUR 1bln fine over the emissions scandal. GlaxoSmithKline (+0.7%) is propping up the FTSE 100 as the co. reported positive top-line results for its Gemini 1&2 studies, as well as competitor Mylan failing in a generic competitor for its blockbuster asthma treatment. This however is negated by the effect of a rising GBP following retail sales beats, with the FTSE 100 the underperforming bourse (-0.7%).
Top European News
- U.K. Retail Sales Climb as Weather, Royal Wedding Boost Spending
- Aveva Soars After Strong Full-Year Earnings Top Expectations
- Rolls-Royce to Slash Thousands of Jobs in Latest Overhaul
- Talk of June Hike Flags Hawkish Shift for Czech Rate Setters
- Moscow Financier Goes AWOL as Global Clients Hunt for Millions
In FX, the DXY index and Dollar overall has settled lower after some volatile moves in wake of the FOMC and despite an upgrade to dot plot rate projections from 1 more hike this year to 2, with some market observers pointing to the more dovish elements of the latest policy pronouncements, like the marginally smaller than forecast OIER tweak and ongoing symmetry around the inflation target, along with the various trade/tariff rifts between the US and other nations of course. Whatever the rationale, the DXY has retreated further from recent peaks just shy of 94.000 to sub-93.500 and remains on the back foot ahead of the ECB and US retail sales data later today. GBP: Exceptionally strong UK retail sales data has boosted the Pound with Cable up to 1.3445 and Eur/Gbp back under 0.8800 as flagging BoE rate hike prospects get a partial reprieve. However, macro developments over the weak as a whole have been somewhat mixed and do not really change the near term outlook materially. JPY: From zero to hero, or at least one of the main G10 beneficiaries of the Greenback’s post-Fed about turn, as the headline pair retreats sharply from Wednesday’s circa 110.70 highs to sub-110.00 and from a chart perspective back down below a key fib level (110.62 – 76.4% retracement of 111.39-108.12 decline). Tech bears are now eyeing another fib at 109.62 (50% of the rally from 108.12 to 110.85), but the next fundamental driver for the Jpy could come via the BoJ on Friday and there are also mega option expiries to consider around the big figure (3bln from 109.90-110.05).
In commodities, in energy markets, Brent is down 0.2% on the day, and its US counterpart +0.1% on a softer USD. Traders are also looking ahead to developments that may come from the Saudi-Russia meeting on the sidelines of the World Cup which kicks off today. In the metals scope, gold is up on the day hitting 2 week highs as investors flock to safe havens ahead of the ECB’s rate decision, as well as having support offered by a softer USD and trade concerns. The yellow metal is up 0.2% on the day. Copper has fallen to a near one week low after weak Chinese industrial data. Steel is in the green for the 3rd straight session after China has said it will introduce a new capacity limit in certain areas.
US Event calendar
- 8:30am: Retail Sales Advance MoM, est. 0.4%, prior 0.3%; Retail Sales Ex Auto MoM, est. 0.5%, prior 0.3%
- Retail Sales Ex Auto and Gas, est. 0.4%, prior 0.3%; Retail Sales Control Group, est. 0.4%, prior 0.4%
- 8:30am: Import Price Index MoM, est. 0.5%, prior 0.3%; Import Price Index ex Petroleum MoM, est. 0.2%, prior 0.1%
- Export Price Index MoM, est. 0.3%, prior 0.6%; Export Price Index YoY, prior 3.8%
- 8:30am: Initial Jobless Claims, est. 223,000, prior 222,000; Continuing Claims, est. 1.73m, prior 1.74m
- 9:45am: Bloomberg Consumer Comfort, prior 54.8
- 10am: Business Inventories, est. 0.3%, prior 0.0%
DB’s Jim Reid concludes the overnight wrap
As an Englishman working for a German bank there can only be one team that I can predict to win the World Cup that starts today…..
….. Yes Brazil.
I think they’ll beat Germany in the final and France will finish 3rd and Spain 4th. England (who have actually only won 1 of their last 8 World Cup matches!) will likely lose on penalties in the quarter final and lots of people will cry. Actually I haven’t worked out if my top 4 ordering is possible or realistic given the groups but that’s never stopped me making research predictions in the past. Please feel free to send in who you think will win and we’ll do a bar chart of the distribution of answers in tomorrow’s EMR. One word answers are fine unless of course you expect Costa Rica, South Korea or Saudi Arabia to win and then you’ll need two. The event officially kicks off this afternoon with hosts Russia taking on Saudi Arabia at the Luzhniki Stadium in Moscow. It’s not exactly a heavyweight opening tie given that these are the two lowest ranked sides in the tournament with a combined FIFA ranking of 137 but at least they were kind enough to schedule it after the ECB press conference finishes.
I’m actually writing this coming home from a late dinner so I’ll leave you in the capable hands of Craig and Jeff for the rest of the EMR today. See you tomorrow. Over to them.
As Jim discussed above the highlight today is the supposed ‘live’ ECB meeting. We’ll preview that shortly but firstly to the Fed where last night as expected the FOMC raised rates by 25bps but the bigger story was the overall fairly hawkish message. Indeed the median dot for this year nudged up to 4 from 3 while the 2019 dot also moved up to 3 hikes which is a bit more of a surprise. Forward guidance was changed to omit language saying that the fed funds rate would remain “for some time” below longer-run levels while inflation language was also upgraded to remove “carefully monitoring”. One interesting point was that the Fed also marked down unemployment rate forecasts but didn’t lower NAIRU which is making for an interesting debate amongst economists.
As for Fed Chair Powell, well he confirmed that there will now be a press conference after every meeting beginning next year. He rightly downplayed any policy read-through but it could provide greater flexibility for a faster pace of rate hikes next year if inflation begins to respond to the tightening labour market. The tone of the rest of his conference felt like one where by the Chair was seeking to downplay the hawkish signal despite the dots moving. Indeed he said that the Fed is “not ready to declare victory on inflation” and shortly after when questioned on the neutral rate, answered in a way which kept the Fed’s options sufficiently open without committing at all. DB’s Peter Hooper also believed the meeting and Fed forecasts were more hawkish than expected. He added that Mr Powell didn’t seem to be too concerned about downside risks associated with trade policy or Italy. Overall, Peter and his team believes four rate hikes (2 more) this year seem pretty well baked in and continue to expect four more rate hikes next year. Refer to his note for details.
As for markets, well despite the hawkish bias moves were hardly exaggerated. Perhaps this reflects the fact that the hurdle to an even more hawkish Fed is a lot higher now than the one just passed. Looking across the yield curve the biggest move was at the short end with 2y yields finishing 2.9bps higher at 2.569% although a small rally for this morning has pared much of that. 10y yields by comparison finished just 0.6bps higher at 2.967% after passing but failing to hold above 3%. The 2s10s spread fell below 40bps for the first time since September 2007 while at the long end 30y yields actually fell slightly (-0.8bp to 3.087%). The 5s10s spread is also at a miniscule 14bps. It’s worth noting that Powell again acknowledged the yield curve but merely said that it’s something people are talking about a lot”. Meanwhile, equities suffered from a bit of a late collapse which might have more to do with the Trump interview headlines which came out post the Fed suggesting that he’ll confront China “very strongly” over trade in the coming weeks and that China “could be a little bit upset”. The WSJ also reported that the US plans to announce a final list of tariffs targeting $50bn of Chinese goods as early as Friday, with implementation subject to Trump’s approval. The S&P 500 fell for only the second time in 9 sessions (-0.40%), with only consumer discretionary stocks in the black. The Dow (-0.47%) and Nasdaq (-0.11%) also closed lower.
In other markets EM FX was weaker although we will likely have to wait for today to see the full extent. Overnight in Asia the tone is a bit more negative with the Kospi (-1.63%) playing a bit of catch up as trading resumed today, while the Nikkei (-0.49%), Hang Seng (-0.62%) and ASX 200 (-0.14%) are all down. The Shanghai Comp (-0.28%) has swung about a bit after the PBOC refrained from immediately lifting the cost of reverse repo agreements following last night’s Fed rate hike but then China’s May activity indicators disappointed across the board. More details on that data further down. In a busy overnight session, the BoJ has also announced that it is lowering purchases of 3-5y JGBs. The Yen is slightly stronger at the margin although JGBs haven’t moved much.
Moving on. As a side note, last night’s Fed hike means that we’ve now seen a total of 15 rate hikes in 2018 from the 23 biggest central banks around the world for which we have data for. This compares to just 7 rate cuts. So the ratio of hikes to cuts is now 2.1x which is the highest since 2011, when it was also 2.1x. Despite being less than 50% of the way through 2018 the 15 hikes are only 5 less than the total in 2017 and more than 2016 (14 hikes) and 2015 (10 hikes), in line with 2014 (15) and more than 2013 (9) and 2012 (1). In fairness a lot of the 2018 story has to do with EM central banks tightening to help combat various currency crises. If we look at developed market central banks only which we count as 9 of them, then we’ve only had 3 hikes (2 from the Fed and 1 from the BoC). Still, that compares to 0 cuts but there’s still a way to go to match the 2017 ratio of 7 hikes to 0 cuts from developed market central banks.
Coming back to the ECB then, as DB’s Mark Wall noted in his preview of the meeting, Peter Praet’s speech last week means that no one will be able to claim surprise if the ECB announce the end of QE today. Mark adds that it is difficult to dispute the signal in Praet’s comments but the question is not whether an exit decision is close but what could stall the decision temporarily. His note which you can find here (link) runs through two dovish scenarios. In the first scenario the ECB judges the exit criteria to be met but stalls the exit decision for a couple of months to confirm the criteria are being met sustainably. In the second the ECB stalls for input from the internal committees on the post-QEpolicy stance. Mark notes that the ECB has tended to smooth exit decisions with dovish counterbalances and in his speech Praet underlined again the importance of reinvestments and a recalibration of forward guidance post-QE. For choice Mark thinks the QE exit decision will be made in July but caveats that it’s a very close call. Irrespective, he still believes that QE will end in December after a taper in Q4 followed by a first policy rate hike in June 2019. Anyway we’ll know more this afternoon with the meeting due at 12.45pm BST followed shortly after by Mario Draghi’s press conference.
With regards to other markets yesterday, well it was very quiet in Europe which isn’t a great surprise given most investors were sitting on the sidelines pre-Fed. The Stoxx 600, DAX and CAC finished +0.19%, +0.38% and -0.01% respectively. The FTSE MIB (+0.44%) outperformed and closed higher for the third consecutive day – the first time in a month that has happened. Sovereign bonds were a bit stronger at the margin. 10y Bunds finished 0.9bps lower at 0.478% while BTPs finished 4.7bps lower at 2.795%, in part as Italy’s new EU Affairs Minister Paolo Savona said the Euro was “indispensable”. It’s also worth noting that BTPs passed a heavy supply day with reasonable ease yesterday.
Elsewhere EM FX was again fairly calm pre-Fed, certainly at least relative to recent weeks, although the exception continues to be Turkey where the Lira weakened another -1.09%. It’s now weakened -3.89% in the 3 days this week while 10y yields also rose 8.4bps. Keep in mind that Turkey’s central bank has jacked up rates by 500bps recently. As we’ve said in recent weeks the EM issues haven’t yet spread to other asset classes but it’s certainly bubbling below the surface.
Meanwhile the Oil complex was slightly stronger yesterday with WTI up +0.80% from the intraday lows and it’s worth noting that Oil could be back in the spotlight today with Russia President Vladimir Putin due to meet Saudi Crown Prince Mohammed bin Salman with the pair planning to discuss the OPEC accord and Oil markets. So worth watching out for any headlines. The OPEC-Russia oil exporting group is then scheduled to meet next Friday.
Away from markets, the most significant data print yesterday was the May PPI report in the US which was mostly a mixed bag. Headline PPI surprised to the upside at +0.5% mom (vs. +0.3% expected) however the ex food, energy and trade services reading was softer than expected (+0.1% mom vs. +0.2% expected). Notably, healthcare PPI (which is used by the BEA to construct the health care services series in the core PCE deflator) was even softer at -0.26% mom – the biggest fall since October 2014.
In contrast, the inflation data in the UK yesterday was pretty much bang on expectations. The May headline and core CPI were both in line and steady on month on month, at +0.4% mom and +2.1% yoy, respectively. Meanwhile, the May RPI edged down 0.1ppt from April to an in line print of +0.4% mom while the core PPI was also in line at +0.2% mom, although prior downward revisions led to a lower than expected annual growth of +2.1% yoy (vs. +2.5% expected). Elsewhere, the Euro zone’s April IP was weaker than expected at -0.9% mom (vs. -0.7% exoected), leading to annual growth of +1.7% yoy, down from +3.2% previously.
Finally in China this morning, as noted at the top the activity data was pretty much softer everywhere you look. May retail sales expanded at a slower than expected rate of +8.5% yoy (vs. +9.6%) and fell from +9.4% in the month prior. Meanwhile, industrial production was also below market (+6.8% yoy vs. 7.0% expected) and down two-tenths from the month prior, and fixed asset investments posted the slowest increase since 1999 (+6.1% yoy vs. +7.0% expected and in the previous month), weighed down by investments in the public sector.
Looking at the day ahead now, the focus is obviously on the ECB with their latest monetary policy meeting due in the early afternoon, followed by President Draghi’s press conference. Prior to that though we are due to get final May CPI revisions in Germany and France. In the UK May retail sales data is due while in the US the main data release is also the May retail sales report. The May import price index reading is due too in the US along with weekly initial jobless claims and April business inventories data.
And for supporters of Russia and Saudi Arabia, good luck tonight!
3. ASIAN AFFAIRS
i)THURSDAY MORNING/WEDNESDAY NIGHT: Shanghai closed DOWN 5.64 points or 0.18% /Hang Sang CLOSED DOWN 284.98 points or 0.93% / The Nikkei closed DOWN 227,77 POINTS OR 0.99% /Australia’s all ordinaires CLOSED DOWN .06% /Chinese yuan (ONSHORE) closed UP at 6.3906/Oil UP to 66.86 dollars per barrel for WTI and 76.58 for Brent. Stocks in Europe OPENED ALL IN THE RED//. ONSHORE YUAN CLOSED UP AT 6.3906 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.3851/ONSHORE YUAN TRADING WEAKER AGAINST OFFSHORE YUAN/ONSHORE YUAN TRADING MUCH STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING MUCH STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW LOOKS LIKE A FULL TRADE WAR IS BEGINNING/
3 a NORTH KOREA/USA
North Korea/South Korea/usa
North Korea as he explained to you yesterday lied about Trump making concessions on sanctions according to Pompeo
(COURTESY ZEROHEDGE)
3 b JAPAN AFFAIRS
end
c) REPORT ON CHINA/HONG KONG
Yesterday we highlighted to you the collapse in Chinese shadow banking and that was a good indicator that growth will not be forthcoming from China and that will have a pretty nasty effect on global growth.
Today, China decided not the follow on the heals of the uSA and not raise rates as a trio of economic numbers completely disappointed:
- Industrial production
- Retail sales
- Fixed asset investment
(courtesy zerohedge)
4. EUROPEAN AFFAIRS
the big news of the morning: the ECB as projected and as highlighted by us, will end QE officially by December. It will keep rates unchanged until the summer of 2019. In the following months watch Italian bonds and Spanish climbs climb to probably 8 to 10% as nobody will purchases these flawed instruments.
(courtesy zerohedge)
ECB Unveils End Of QE: Will Halt Bond Purchases
By End Of 2019; Keep Rates Unchanged Until
Summer 2019
The beginning of the end of Europe’s QE is here.
As extensively previewed, jawboned and leaked, the ECB – which kept all of its rates unchanged as expected and as the ECB detailed, remain unchanged until the summer of 2019 – ended the drama over the end of its QE, and moments ago announced that while “the Governing Council will continue to make net purchases under the asset purchase programme (APP) at the current monthly pace of €30 billion until the end of September 2018, after September 2018 the monthly pace of the net asset purchases will be reduced to €15 billion until the end of December 2018 and that net purchases will then end, all of which of course is “subject to incoming data confirming the Governing Council’s medium-term inflation outlook.”
Second, the Governing Council announced it intends to maintain its policy of reinvesting the principal payments from maturing securities purchased under the APP for an extended period of time after the end of the net asset purchases, “and in any case for as long as necessary to maintain favourable liquidity conditions and an ample degree of monetary accommodation.” This was known from before so it is not news.
Finally, the Governing Council surprised with a little bit of forward guidance, and announced that while its kept rates unchanged (i.e., the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively, as expected), the surprise in the statement was that the ECB will keep rates at their present levels at least through the summer of 2019 “and in any case for as long as necessary to ensure that the evolution of inflation remains aligned with the current expectations of a sustained adjustment path.”
So a hawkish QE end with some modest dovish overtones.
After a knee-jerk move higher, yields and the euro starting to subside on the announcement of a taper and strengthened forward guidance, or as we previewed moments ago, “with everyone confident that one thing will happen, i.e. the EUR will spike, don’t be surprised to see the EUR tumble.”
Finally, here is a redline comparison of the April vs June ECB statements:
end
MARKET REACTION TO ECB DECISION
Normally one would have expected the Euro to climb. Instead the Euro plummeted. However Italian yields did climb but the German bund yield dropped
(courtesy zerohedge)
EUR, Bund Yields Tumble After Draghi Signals
End Of QE
Well, that wasn’t supposed to happen…
Following the ECB’s statement confirming further tapering of its QE program and and end to net buying by December, Bund yields and the Euro briefly spiked higher… however, just as we noted in the preview ” That said, when everyone is confident that one thing will happen, don’t be surprised to see the EUR tumble…” it appears the positioning is backfiring and investors are selling the news in Euro…
and buying it in Bunds…
Of course, the machines in ‘Murica could not resist using this ‘event’ as an excuse to ignite some momo…
END
ITALY/FRANCE
France is not too happy with Italy’s decision not to let that stranded boat enter Italy. No wonder France is mad as more migrants will be coming their way. If you missed the story yesterday, the ship was escorted to Spain whose new government accepted them and we now wish them lucking dealing with all the consequences
(courtesy zerohedge)
Turkish Lira Tumbles As Erdogan Threatens Moody’s With An “Operation”
While S&P faced being ‘black-balled’ after daring to downgrade US sovereign rating in 2011, Moody’s decision to (rightfully) downgrade Turkey to ‘junk’ (and warn on its banking system) has prompted a direct threat from the country’s strongman leader.
In September 2016, rating agency Moody’s cut Turkey’s sovereign credit rating to Ba1 or “junk” from Baa3, citing worries about the rule of law after an attempted coup and risks from a slowing economy, in a move that could deter billions of dollars of investment. “The drivers of the downgrade are … the increase in the risks related to the country’s sizeable external funding requirements (and) the weakening in previously supportive credit fundamentals, particularly growth and institutional strength,” Moody’s said in an e-mailed statement. “The government’s response to the unsuccessful coup attempt raises further concerns regarding the predictability and effectiveness of government policy and the rule of law.”
The cut is Turkey’s second since a failed (or as some claim orchestrated) coup in July threatened to destabilize national security.
And since then the capital flight has been significant and the currency has collapsed, not helped by Moody’s decision in to put Turkey’s Ba2 rating on review for downgrade…
Which has pissed Erdogan off and today he lashed out in the most aggressive manner yet.
“God willing, we will conduct an operation against Moody’s after June 24. Moody’s is making unnecessary statements despite the fact that we are not a member of it. What a shame,” state-run Anadolu Agency cites President Recep Tayyip Erdogan as saying.
“Moody’s is taking steps to defame Turkey, to put it in a difficult situation…It will not succeed”
The response in the market was quick – selling of the Lira – erasing much of the spike from the big rate hike…
We would stroingly suggest any local Moody’s reps leave the country – Erdogan seems to have no problem arresting and detaining anyone for anything.
6 .GLOBAL ISSUES
Emerging market bloodbath: Mexican peso 20.82 to the dollar/all time low/Brazilian real at 3.76 to the dollars getting awfully close to the magic 4. to one. The Turkish lira hits 4.72 to the dollar/an all time low and the Rand:13.42 to the dollar/an all time low
in the words of Hugh Hendry: “I would recommend you panic”
“I Would Recommend You Panic” – Peso Pounded, Lira Lashed, & Rand Routed As EM Crashes
The big headline maker of the day so far is not stocks but the FX markets as the dollar index exploded to 8-month highs (second biggest daily gain of the year) after a dovish Draghi sent EURUSD tumbling…
This is actually the highest close for the dollar since July 2017…
And despite numerous interventions, promises of intervention, and threats – Emerging Market FX was a bloodbath…
Falling to its weakest since Feb 2016…
Mexico was mashed…
3 additional swap auctions failed to hold the Real…
Erdogan threats failed to hold the Lira…
TheRand was routed after Eskom announced the first power outages since 2015…
And IMF bullshit and promises of billions in interventions did nothing for the Argentine Peso which was clubbed like a baby seal…
The peso has lost 96.5% of its value relative to the dollar since 2001.
And as the peso plunged so Argentine Century bond yields spiked to 9%… (price is now below 80c on the dollar)
And before we leave the carnage…
Hugh Hendry has some advice…
* * *
Time for Jay Powell to save the world?
end
Supposedly Canadians are furious with the uSA boycott. However we still love our Coca Cola, iphones and Nikes. If Canada wanted to strike a blow to the USA it would halt all fresh water sales to the USA and then the uSA would be in a bind.
(courtesy zerohedge)
8. EMERGING MARKET
ARGENTINA
Argentina has a huge current account deficit of 4.6% of GDP and it external debt denominated in dollars is killing the currency, in a similar fashion to other emerging nations such as Turkey, Iran, Brazil, etc. Argentina within a year will have to default on its external debt
(courtesy zerohedge)
“The Only One Selling Dollars Is The Central Bank”: Argentine Peso Crashes To New Record Low
Despite the US dollar’s demise today (after spiking on the Fed rate-hike), and the rebound in the broad Emerging Market FX markets, the Argentine Peso plummeted – after a hopeful start – to fresh record lows as The IMF’s biggest bailout ever appears to be not enough to quell investor capital flight.
Early in the day, Argentina’s Finance Ministry announced that the Central Bank plans to sell $7.5 billion in the foreign exchange market to help stabilize the peso and support its budget. That failed miserably as Bloomberg reports, analysts said the measure was unlikely to provide enough support for Argentina’s economy in the face of high inflation, a widening budget deficit and higher global borrowing costs.
“The gap between inflows and the current account deficit is still huge,” said Ezequiel Zambaglione, head of research at Buenos Aires broker Max Valores. “But the sense is that inflows aren’t guaranteed this year. We need either foreign investors to return, or the current account deficit to drop.”
But, as one local FX trader noted, commentary from a major market-maker was ominous:
“Like we mentioned previous days, there is no USD supply in the market. The only one selling dollars is the Central Bank. On the supply side the Agriculture exporters are selling dollars but not enough and the Foreign investors are mainly buyers.“
All of which is very evident judging by the waterfall-like collapse the currency has suffered in the last few days…
You know it’s bad when they wheel out the IMF Director to reassure those nasty speculators (well it must be speculators right?) to stop selling their pesos.
Argentina’s economic plan “creates a solid basis for the $50 billion stand-by arrangement,” IMF Managing Director Christine Lagarde said in a statement. “The plan will also help reinforce Argentina’s institutional framework. For example, it has measures to improve the medium-term budget process and to ensure central bank independence.”
And even with the IMF bailout, things are not about to get better anytime soon. As the JPM chart below shows, the country’s total budget deficit, which includes interest payments on debt, was 6.5% of GDP last year, much of reflecting a debt binge of about $100 billion over the last two and a half years. The primary fiscal deficit in 2017 was 3.9%.
The IMF loan will have a minimum interest rate of 1.96% rising as high as 4.96%.
“We are convinced that we’re on the right path, that we’ve avoided a crisis,” Finance Minister Nicolás Dujovne said at a press conference in Buenos Aires. “This is aimed at building a normal economy.”
Judging by the market’s behavior – Dujovne is alone in his “convinced” state.
As Martin Guzman and Joe Stiglitz wrote (via The Institute for New Economic Thinking) yesterday, the roots of Argentina’s crisis run deep…
A change in macroeconomic policies will not be sufficient to set Argentina on a path of inclusive and sustained economic development. But, as last month’s currency scare showed, abandoning the approach adopted by President Mauricio Macri’s administration at the end of 2015 is a necessary step.
The currency scare that Argentina suffered last month caught many by surprise. In fact, a set of risky bets that Argentina’s government undertook starting in December 2015 increased the country’s vulnerability. What was not clear was when Argentina’s economy would be put to the test. When the test came, Argentina failed.
Argentina had to address a number of macroeconomic imbalances when President Mauricio Macri took office at the end of 2015. Early measures included the removal of exchange-rate and capital controls and the reduction of taxes on commodity exports. Argentina also recovered access to international credit markets following a settlement with so-called vulture funds over a debt dispute that had lasted more than a decade.
The government undertook a new macroeconomic approach based on two pillars: gradual reduction of the primary fiscal deficit, and an ambitious inflation-targeting regime that was supposed to bring annual price growth down to a single-digit rate in just three years.
Markets cheered. The prevailing view, eagerly promoted by Argentina’s government, was that the country had done what was necessary to achieve sustainably faster economic growth. Presumably, foreign direct investment would flow in. But it did not.
Instead, Argentina suffered stagflation in 2016, followed by a debt-based recovery in 2017. That led to a surge in imports that was not accompanied by a proportional increase in exports, widening the current-account deficit to 4.6% of GDP and sowing doubt about the virtues of the new approach.
Then, a few weeks ago, markets stopped cheering, expectations soured, and capital fled. The peso depreciated 19% against the US dollar in just the first three weeks of May.
Contrary to Macri’s hopes, his reforms attracted mainly short-term portfolio capital and financing in the form of bonds, both in foreign and domestic currency, rather than foreign direct investment. Argentina’s central bank bears a significant share of the responsibility; while its approach proved largely ineffective in reducing inflation to the target level (the annual rate is still at about 25%), high interest rates encouraged inflows of speculative capital, which worsened the external imbalances and heightened Argentina’s vulnerability to external shocks.
As part of their inflation-targeting approach, the central bank has been sterilizing a large share of the increases in the monetary base through the sale of central banks bonds (LEBACS). This means that the public sector has been effectively financing through short-run central bank debt issuance the largest part of the sizable primary fiscal deficit (4.2% and 3.83% of GDP in 2016 and 2017, respectively). The issuance of LEBACS has been massive, soaring by 345% since December 2015. This might have been sustainable had early expectations of Argentina’s prospects been validated.
There were obviously trade-offs. Less aggressive sterilization would have contained the growth in central bank debt that has now proven to be so risky, and it would have prevented upward pressure on the exchange rate; but it would have led to higher inflation. Nonetheless, attempting to reduce inflation and the fiscal deficit at similar speeds would have been a more prudent approach. After all, macroeconomic policy decisions should not be made on the basis of the most optimistic scenario when the cost of missed expectations is large.
The currency crisis finally revealed Argentina’s vulnerabilities. Looking ahead, the country will be exposed to several different sources of risk. First, there is still a large stock of LEBACS. And every time a significant portion of that debt falls due, Argentina will be a hostage of financial markets’ mood. This will increase the expected exchange-rate volatility, which may create opportunities for speculative financial investments, but will discourage investments in the real economy. Second, because the public sector’s foreign-currency-denominated debt is much higher than it was two years ago, the increase in exchange-rate risk will also call into question the sustainability of public-sector debt.
To assess where Argentina is heading after the crisis requires highlighting several salient elements of how the episode was managed. First, the central bank lost 10% of its total stock of foreign-exchange reserves in just a month. Second, the annual nominal interest rate on the LEBACS was raised to 40% – the highest in the world, and a move that risks creating a snowball of central-bank debt. Third, and most shocking for Argentines, Macri announced that the country would seek a stand-by agreement with the International Monetary Fund.
Thus, if Argentina’s public sector falls into a state of debt distress in the coming years, it will have to submit to the tutelage of the IMF – a creditor in itself, but also an institution that is dominated by international creditors. At that point, the conditionality that the IMF typically imposes in exchange for financing could cause severe damage.
Most worrisome is that the inflation-targeting approach that has exacerbated Argentina’s external imbalances has been reaffirmed. It would thus not be surprising if a new cycle of real exchange-rate appreciation starts in 2019. With a presidential election next year, that would be good news for Macri; but it would not bode well for Argentina’s future.
Ultimately, because Macri’s approach to putting Argentina’s economy on a sustained growth path has so far failed, and has increased the country’s dependence on international creditors, his administration still faces the challenge of avoiding a debt crisis. To protect economic activity and redress vulnerabilities, the strategy of gradually reducing the primary fiscal deficit should be maintained. But, to save Argentina from an increase in external imbalances affecting the sustainability of external public debt, monetary policy must change. That means finally recognizing that attempting to reduce inflation at a much faster rate than the fiscal deficit entails costly risks. The prudent path also requires a gradual reduction in the stock of LEBACS, recognizing that greater inflationary pressure in the short term is the price of minimizing the risk of higher external imbalances and larger exchange-rate depreciations down the road.
And it would certainly be a mistake to continue reducing the tax on soybean exports, as Macri’s administration has announced it will do. Further tax cuts would increase the deficit, while benefiting a sector that already enjoys rents.
A change in macroeconomic policies is not sufficient to set Argentina on a path of inclusive and sustained economic development; but it is necessary. At the outset of Macri’s administration, there were warnings that he had chosen a high-risk approach. Unfortunately, those warnings were ignored. The strategy we are recommending is not without its own risks. But we are convinced that it offers a viable and sounder path forward.
The Argentine Peso Is Plunging… Again
As Argentine truckers begin a one-day national strike, demanding wage increases to compensate for an unexpected surge in inflation and protesting President Macri’s economic policies, the peso is in freefall, extending yesterday’s “only the central bank is selling dollars” collapse.
It seems the promise of $7.5 billion in dollar sales to support the peso is just not enough as the currency collapses to a new record low…
Of course, the blame for this collapse will now be placed at the feet of Fed Chair Powell, but as we detailed overnight, the roots of Argentina’s crisis run very deep and they only have themselves to blame.
Since 2001, the peso has lost 96.3% of its value against the USDollar…
Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings THURSDAY morning 7:00 am
Euro/USA 1.1826 UP .0023/ 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:///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES ALL RED /
USA/JAPAN YEN 109.99 DOWN 0.238 (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 1.3430 UP 0.0049 (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED
USA/CAN 1.2963 DOWN .00011 (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 THURSDAY morning in Europe, the Euro ROSE by 23 basis points, trading now ABOVE the important 1.08 level RISING to 1.1762; / Last night Shanghai composite CLOSED DOWN 5.64 POINTS OR 0.18% /Hang Sang CLOSED DOWN 284.98 POINTS OR 0.93% /AUSTRALIA CLOSED DOWN .06% / EUROPEAN BOURSES ALL RED /
The NIKKEI: this THURSDAY morning CLOSED DOWN 227.27 OR 0.99%
Trading from Europe and Asia
1/EUROPE OPENED DEEPLY IN THE RED
2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 284.98 POINTS OR 0.93% / SHANGHAI CLOSED DOWN 5.64 POINTS OR 0.18% /
Australia BOURSE CLOSED DOWN .06%
Nikkei (Japan) CLOSED DOWN 227.27 POINTS OR 0.99%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1305.40
silver:$17.16
Early THURSDAY morning USA 10 year bond yield: 2.95% !!! DOWN 2 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 3.06 DOWN 3 IN BASIS POINTS from WEDNESDAY night. (POLICY FED ERROR)/
USA dollar index early THURSDAY morning: 93.30 DOWN 25 CENT(S) from WEDNESDAY’s close.
This ends early morning numbers THURSDAY MORNING
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And now your closing THURSDAY NUMBERS \1: 00 PM
Portuguese 10 year bond yield: 1.915% DOWN 3 in basis point(s) yield from WEDNESDAY/
JAPANESE BOND YIELD: +.043% DOWN 11/10 in basis points yield from WEDNESDAY/JAPAN losing control of its yield curve/
SPANISH 10 YR BOND YIELD: 1.349% DOWN 7 IN basis point yield from WEDNESDAY/
ITALIAN 10 YR BOND YIELD: 2.737 DOWN 7 POINTS in basis point yield from WEDNESDAY/
the Italian 10 yr bond yield is trading 140 points HIGHER than Spain.
GERMAN 10 YR BOND YIELD: FALLS TO +.426% IN BASIS POINTS ON THE DAY
END
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IMPORTANT CURRENCY CLOSES FOR THURSDAY
Closing currency crosses for THURSDAY night/USA DOLLAR INDEX/USA 10 YR BOND YIELD/1:00 PM
Euro/USA 1.1622 DOWN .0181(Euro UP 181 Basis points/ represents to DRAGHI A COMPLETE POLICY FAILURE/
USA/Japan: 110,46 UP 0.218 Yen DOWN 22 basis points/
Great Britain/USA 1.3298 DOWN .0086( POUND DOWN 86 BASIS POINTS)
USA/Canada 1.3076 UP .0103 Canadian dollar DOWN 103 Basis points AS OIL ROSE TO $66.65
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This afternoon, the Euro was DOWN 181 to trade at 1.1622
The Yen FELL to 110.46 for a LOSS of 22 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 LOST 86 basis points, trading at 1.3298/
The Canadian dollar LOST 102 basis points to 1.3076/ WITH WTI OIL RISING TO : $66.65
The USA/Yuan closed AT 6.4020
the 10 yr Japanese bond yield closed at +.043% DOWN 11/10 IN BASIS POINTS / yield/
Your closing 10 yr USA bond yield DOWN 1 IN basis points from WEDNESDAY at 2.944 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.066 DOWN 1 in basis points on the day /
THE RISE IN BOTH THE 10 YR AND THE 30 YR ARE VERY PROBLEMATIC FOR VALUATIONS
Your closing USA dollar index, 94.53 DOWN 98 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 THURSDAY: 1:00 PM PM
London: CLOSED UP 62.08 POINTS OR 0.81%
German Dax :CLOSED UP 216.52 OR 1.68%
Paris Cac CLOSED UP 75.73 POINTS OR 1.39%
Spain IBEX CLOSED UP 58.60 POINTS OR 0.59%
Italian MIB: CLOSED UP 270.14 POINTS OR 1.22%
The Dow closed DOWN 25.89 POINTS OR 0.10%
NASDAQ closed UP 65.34 OR .85 % 4.00 PM EST
WTI Oil price; 66.65 1:00 pm;
Brent Oil: 76.02 1:00 EST
USA /RUSSIAN ROUBLE CROSS: 62.23 DOWN 28/100 ROUBLES/DOLLAR (ROUBLE HIGHER BY 28 BASIS PTS)
TODAY THE GERMAN YIELD RISES TO +.426% 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:$66.98
BRENT: $75.92
USA 10 YR BOND YIELD: 2.93% the dropping yields signify markets are in turmoil
USA 30 YR BOND YIELD: 3.05%/
EURO/USA DOLLAR CROSS: 1.1581 DOWN .02217 (DOWN 221 BASIS POINTS)
USA/JAPANESE YEN:110.66 UP 0.422 (YEN DOWN 42 BASIS POINTS/ .
USA DOLLAR INDEX: 94.83 DOWN 129 cent(s)/dangerous as the HIGHER dollar IS DESTROYING THE EMERGING MARKETS.
The British pound at 5 pm: Great Britain Pound/USA: 1.3269 DOWN 0.011122 (FROM YESTERDAY NIGHT DOWN 111 POINTS)
Canadian dollar: 1.3098 DOWN 125 BASIS pts
German 10 yr bond yield at 5 pm: +426%
VOLATILITY INDEX: 12.12 CLOSED DOWN 0.82
LIBOR 3 MONTH DURATION: 2.340% .
And now your more important USA stories which will influence the price of gold/silver
TRADING IN GRAPH FORM FOR THE DAY
Emerging Markets Massacred As Dovish Draghi
Sends Dollar Soaring
EM Bloodbath, bond yields tumble, yield curve collapsing…but Nasdaq surging – “tread lightly” my friend
The big headline maker of the day was not stocks but the FX markets as the dollar index exploded to 8-month highs (second biggest daily gain of the year) after a dovish Draghi sent EURUSD tumbling…
This is actually the highest close for the dollar since July 2017…
And despite numerous interventions, promises of intervention, and threats – Emerging Market FX was a bloodbath…
Falling to its weakest since Feb 2016…
The Mexican peso was mashed lower…
3 additional swap auctions failed to hold the Real…
Erdogan threats failed to hold the Lira…
And IMF bullshit and promises of billions in interventions did nothing for the Argentine Peso which was clubbed like a baby seal…
The peso has lost 96.5% of its value relative to the dollar since 2001.
And as the peso plunged so Argentine Century bond yields spiked to 9%… (price is now below 80c on the dollar)
And before we leave the carnage…
Hugh Hendry has some advice…
* * *
Small Caps and Nasdaq managed to get back to green post-FOMC but the rest of the major indices are lower…
Futures show the big divergence between Dow and Nasdaq as everything ramped into the open…
Big banks underperformed Small banks post-FOMC…
Tech stocks outperformed financials once again but stalled at previous resistance…
Growth continues to top Value…
Bonds rallied as stocks rallied today…
Treasuries yields were mixed today with the long-end bid and short-end offered…
Which crashed the yield curve to new cycle lows (flattest since Oct 2007)…
10Y Yield pushed lower non-stop since topping 3.00% after The Fed yesterday…
We covered the FX markets above but it’s worth a glance at the EUR today… which collapsed from 1.1850 to 1.1590… the biggest daily drop since the Brexit vote…
Because the world and his pet rabbit was long EUR…
Cryptocurrencies saw a big rally today after SEC ruled that Ether was not a security and CBOE opened the door for Ether futures…
But despite the best day in 3 months, cryptos remain ugly on the week…
Sending Ethereum back above $500…
Commodities were confused today with a soaring dollar accompanying big gains in crude and silver and gold pushing back above $1300 (as copper tumbled on weak china data)…
Silver continues to accelerate relative to gold with Gold/Silver at its lowest since Thanksgiving…
To summarize: US stocks are higher, because European stocks are higher, because Draghi crushed the Euro, because he sees growth ending…
end
MARKET DATA
The all important retail sales surge to .8% month/month on expectations of a .4% m/m climb.
(courtesy zerohedge)
Retail Sales Surge In May – Biggest Jump In 8
Months
After retail sales growth slowed in April, expectations were for a rebound in May and rebound it did with May headline retail sales surging 0.8% MoM (double the +0.4% expectation) – the biggest jump since Sept 2017.
Absent the storm-driven spike in Sept, this is the biggest MoM spike in retail sales since Jan 2017.
Headline retail sales ran slightly slower than ex-auto sales, based on weakness in unit motor vehicle sales reported at the start of the month, at +0.9% MoM, the best since Nov 2017.
Core Retail Sales surged 0.8% MoM (the most since Nov 2017). Gasoline prices are the highest since 2014, but the price profile year-to-date (up 17%) is not particularly unusual relative to history.
Only 2 of the 13 segments (furniture and sporting goods) saw declines in May…
The only slight negative in the whole report was the slowing growth of the ‘Control Group’ which rose 0.5% MoM versus a revised +0.6% MoM in April.
END
Mish Shedlock perfectly describes how the Fed pays the banks 36.93 billion dollars of taxpayer money as interest on excess reserves.
(courtesy Mish Shedlock)
Free Money? The Fed Is About To Give $36.93
Billion Of Taxpayer Money To Banks
Authored by Mike Shedlock via MishTalk,
The Fed upped the interest it pays on excess reserves to 1.95% today. This is free money (taxpayer funded) to banks.
The Fed bumped up the interest it pays on excess reserves today to 1.95%. Currently, excess reserves sit at $1.894 trillion.
The math is simple enough. At the current rate, the Fed will hand over approximately $36.93 billion of taxpayer money to banks.
That assumes the status quo, but things will change.
Factors
- The Fed is shrinking its balance sheet slowly. That reduces excess reserves the Fed pays interest rates on.
- When the Fed hikes interest rates, it also increases the interest it pays on excess reserves.
The first point acts to reduce free money, the second acts to increase free money.
Note to ECB
If you want to recapitalize Italian banks, just give them free money instead of your profit-reducing policy of holding rates negative.
Taxpayer money?
Yes! Otherwise the Fed would return this money to the US Treasury.
Some claim free money is paying banks to not lend. The claim is fallacious. Banks do not lend from excess reserves.
For discussion, please see Free Money! Banks Paid $22 Billion to Not Lend?
That was the amount I calculated on April 17, 2017. Interest then was 1.0%.
Even though the Fed’s balance sheet is lower, the increased rate bumped up the free money calculation to $36.93 billion.
No Outrage!
Why isn’t $36.93 billion in free money to banks an outrage?
SWAMP STORIES
Interesting; McCabe sues the FBI, the Dept of Justice and Inspector General Horowitz. Grab your popcorn on this one>who is telling the truth McCabe or Comey
(courtesy zerohedge)
McCabe Sues FBI, DOJ And Inspector General
Horowitz
Andrew McCabe has filed a lawsuit against the Justice Department, the FBI and DOJ Inspector General Michael Horowitz Tuesday alleging the Trump administration violated procedures when it fired him in March, and that the Justice Department has denied access to documents which outline those procedures.
“We don’t create or adjudicate under secret law or procedure,” David Snyder, a lawyer representing McCabe, told The Associated Press.
McCabe’s attorneys argue that the DOJ is refusing to hand over their policies and procedures documents out of fears that it will lead to further litigation.
McCabe was fired in March by Attorney General Jeff Sessions after DOJ Inspector General Michael Horowitz issued a criminal referral. His ouster followed a months-long internal investigation which concluded that the former acting FBI Director leaked a self-serving story to the press and then lied about it four times, including twice while under oath.
Horowitz said McCabe “had made an unauthorized disclosure to the news media and lacked candor – including under oath – on multiple occasions.”
Specifically, McCabe was fired for lying about authorizing an F.B.I. spokesman and attorney to tell Devlin Barrett of the Wall St. Journal – just days before the 2016 election, that the FBI had not put the brakes on a separate investigation into the Clinton Foundation, at a time in which McCabe was coming under fire for his wife taking a $467,500 campaign contribution from Clinton proxy pal, Terry McAuliffe.
In short, McCabe was found to have leaked information to the WSJ in order to combat rumors that Clinton had indirectly bribed him to back off the Clinton Foundation investigation, and then lied about it four times.
According to McCabe’s new lawsuit, his firing followed “proceedings that violated federal law and departed from applicable administrative rules, standards, policies and procedures” and that “It is incongruous with Defendants’ public, and repeated, representations to the effect that Mr. McCabe was dismissed from the FBI following an ‘extensive and fair investigation’ which was carried out ‘according to Department of Justice procedure.”
McCabe’s attorneys say they want “immediate” access to the internal documents, including an Inspector General manual which outlines the guidelines governing FBI policy on how disciplinary matters are to be handled.
The lawyers say they “seek to vindicate Mr. McCabe’s rights and restore his good name,” and were weighing further legal action.
END
The OIG report will be out today. Here is what to expect, and then following will be what we got
(courtesy zerohedge)
The OIG Report Drops Tomorrow On Trump’s
Birthday; Here’s What To Expect
The highly anticipated OIG report from the Justice Department’s internal watchdog will hit tomorrow at 3pm EST, on President Trump’s 72nd birthday. The 400-500 page document, prepared by Inspector General Michael Horowitz, will specifically address the DOJ/FBI’s conduct surrounding the Hillary Clinton email investigation. It will not cover any of the FISA abuse / surveillance on the Trump campaign – for which a separate OIG investigation was launched in late March.
Here’s what to look for:
Hillary Clinton’s exoneration letter
In December, Congressional investigators discovered that edits made to former FBI Director James Comey’s statement exonerating Hillary Clinton for transmitting classified info over an unsecured, private email server went far beyond what was previously known.
While Comey’s original draft criminalized Clinton’s behavior by using the term “gross negligence” and other language supportive of criminal charges, the FBI’s top brass passed the draft around and neutered it. Instead of “grossly negligent,” Clinton’s conduct was reclassified as “extremely careless” – a term which carries no legal significance.
According to an Attorney briefed on the matter, “extremely careless” is in fact a defense to “gross negligence”: “What my client did was ‘careless’, maybe even ‘extremely careless,’ but it was not ‘gross negligence’ your honor.” The FBI would have no option but to recommend prosecution if the phrase “gross negligence” had been left in.
18 U.S. Code § 793 “Gathering, transmitting or losing defense information” specifically uses the phrase “gross negligence.” Had Comey used the phrase, he would have essentially declared that Hillary had broken the law.
Involved in the edits were Andrew McCabe, Peter Strzok, E.W. “Bill” Priestap, Jonathan Moffa and DOJ Deputy General Counsel Trisha Anderson.
Immunity agreements
The FBI granted immunity in June 2016 to top Obama advisor Cheryl Mills and aide Heather Samuelson – who helped decide which Clinton emails were destroyed before turning over the remaining 30,000 records to the State Department. Of note, the FBI agreed to destroy evidence on devices owned by Mills and Samuelson which were turned over in the investigation.
The FBI also granted immunity to the guy who wiped Hillary’s server with “BleachBit”, Paul Combetta.
For those who “do not recall” the specific timeline leading up to Combetta wiping Hillary’s server, here is a breif recap:
December 2014 / January 2015 – “Undisclosed Clinton staff member” instructs Combetta to remove archives of Clinton emails from PRN server but he forgets.
March 4, 2015 – Hillary receives subpoena from House Select Committee on Benghazi instructing her to preserve and deliver all emails from her personal servers.
March 25, 2015 – Combetta has a conference call with “President Clinton’s Staff.”
March 25 – 31, 2015 – Combetta has “oh shit” moment and realizes he forgot to wipe Hillary’s email archive from the PRN server back in December…which he promptly does using BleachBit.
February 18, 2016 – Combetta meets with FBI and denies knowing about the existense of the subpoena from the House Select Committee on Benghazi at the time he wiped Hillary’s server.
May 3, 2016 – Combetta has follow-up meeting with the FBI and admits that he “was aware of the existence of the preservation request and the fact that it meant he should not disturb Clinton’s e-mail data on the PRN server.”
McCabe’s conflicts of interest
While an earlier IG report which led to former Deputy Director Andrew McCabe’s firing focused on McCabe leaking self-serving information to the press and then lying about it (four times), this portion of the IG report will focus on “[a]llegations that the FBI Deputy Director should have been recused from participating in certain investigative matters,” after his, Jill McCabe, accepted $675,000 from “groups aligned with Clinton and McAuliffe” during her unsuccessful Senate bid – which constituted nearly 40% of the campaign’s total funds.
In addition to discussing whether McCabe should have recused from the investigation, Horowitz’s report will likely discuss the FBI’s ethics office decision that recusal was not required, and the FBI’s creation of “talking points” to counter complaints about McCabe’s participation in the Clinton probe. –The Federalist
Comey’s higher loyalties
The report will also focus on Comey’s conduct during the investigation – as IG Horowitz outlined “Allegations that Department or FBI policies or procedures were not followed in connection with, or in actions leading up to or related to, the FBI Director’s public announcement on July 5, 2016, and the Director’s letters to Congress on October 28 and November 6, 2016, and that certain underlying investigative decisions were based on improper considerations.”
Also under investigation will be the FBI’s decision to reopen the Clinton email investigation on October 28, 2016 after additional emails were found on the laptop of Clinton’s top aide, Anthony Weiner – who is currently in prison for sex crimes involving a minor. After a very fast review, Comey told Congress on November 6, 2016 that the FBI’s assessment that Clinton should not be charged had not changed.
“I think the report of Horowitz, the [inspector general], and the Justice Department will confirm that Comey acted improperly with regard to the Hillary Clinton investigation,” Trump’s lawyer Rudy Giuliani recently told New York radio host John Catsimatidis.
“Comey, really, has a chance of being prosecuted as a result of [this report], but we’ll see,” Giuliani said.
Criminal prosecution?
While the IG has already issued a criminal referral for Andrew McCabe based on the earlier report, tomorrow’s release will similarly shed light on others who may receive (or have already received) criminal referrals.
Anyone within the senior ranks of the FBI who was involved with the Clinton email investigation is at risk – including James Comey, Peter Strzok, Lisa Page, Bill Priestap, Jonathan Moffa, Peter Kadzik and DOJ Deputy General Counsel Trisha Anderson.
A tipoff?
The OIG investigation will also cover “[a]llegations that the Department’s Assistant Attorney General for Legislative Affairs improperly disclosed non-public information to the Clinton campaign and/or should have been recused from participating in certain matters.”
In particular, the report will look at former Assistant Attorney General Peter Kadzik‘s role in the investigation and whether he “tipped off Clinton presidential campaign chairman John Podesta about two issues: an upcoming hearing where a Justice Department official would be asked about the Clinton emails, and the timing of the release of some Clinton emails”
Notably, Kadzik “previously worked for Podesta as an attorney.”
That weird FBI twitter account
The OIG will also look at “[a]llegations that decisions regarding the timing of the FBI’s release of certain Freedom of Information Act (FOIA) documents on October 30 and November 1, 2016, and the use of a Twitter account to publicize same, were influenced by improper considerations.”
This is related to a series of tweets issued by the largely dormant @FBIRecordsVault account which began one day after Comey reopened the Clinton email investigation. On October 30 at 4 a.m., the account released a series of documents – including information on the Clinton Foundation, and President Clinton’s controversial pardon of Marc Rich, along with several other notable files.
Two days before the Clinton Foundation tweet, the @FBIRecordsVault account tweeted records of Donald Trump’s father, Fred Trump, which referred to him as a philanthropist.
At the time, the FBI said that the timing reflected “standard procedure for FOIA” in which records that requested three or more times are released publicly and processed on a “first in, first out” basis.
We’re gonna need a bigger popcorn box…
Lisa Page text to Peter Strzok: “(Trump’s) not ever going to become president, right? Right?!”
Strzok: “No. No he’s not. We’ll stop it.”
“Unbiased” FBI Agent Strzok Texted “We’ll Stop” Trump From Becoming President: OIG Report
A previously unreleased text message exchange between disgraced FBI agents Peter Strzok and Lisa Page, who were removed from special counsel Robert Mueller’s probe for bias, reveals perhaps the most direct evidence of both their feelings for Donald Trump and their intent to make sure he didn’t make it to the White House.
Note that the leaked conclusion from the IG report reads “We did not find documentary or testimonial evidence that improper considerations, including political bias, directly affected the specific investigative actions we reviewed,” thanks to policies designed “protect the institutions from allegations of abuse, political interference, and biased enforcement of the law.”
Now read the exchange between Strzok and Page:
“Now let’s totally put on our FBI badges and be Boyscouts about the whole thing” we’re sure came next.
The conclusions from the long-anticipated report from the DOJ’s Inspector General (OIG) were leaked to Bloomberg Thursday morning, which says that despite any personal animus the FBI employees had against Trump, that bias did not creep into their conduct. Even, apparently, when they changed the language of her “exoneration” letter through extensive edits which effectively decriminalized her behavior.
Needless to say, the IG report – what we know of it, is starting to seem a lot like Comey laying out all of Hillary Clinton’s alleged crimes in great detail, only to exonerate her by saying that “no reasonable prosecutor” would bring a case against the former Secretary of State.
And now, Inspector General Horowitz – who has been deified by many on the right as a servant of justice beyond reproach, may soon come under suspicion for bias of his own:
And now the report/released by Horowitz as he faults Comey and notes FBI agent hostility towards Trump
(courtesy zero hedge)
DOJ Releases IG Report On Clinton Email Probe: Faults Comey, Notes FBI Agent “Hostility” Against Trump
After various leaks, first to Bloomberg then to Fox News and other outlets, finally the DOJ released to the public the Inspector General report of the Clinton email probe, which while hammering James Comey for being “insubordinate” and showing poor judgment during the 2016 election, it found no evidence to show his key decisions in the Clinton email investigation were improperly influenced by political bias; paradoxically, the same report also raised swirling questions about the role of FBI counterintelligence agent Peter Strzok, whose texts with FBI lawyer Lisa Page the IG found suggested he “might be willing” to take official action to impact Trump’s electoral prospects, or as one might put it, “clear bias” against Trump.
And while the IG does not fault the FBI for not charging Clinton, it did find that, not surprisingly, Comey used personal email for official business
The report also found that five FBI officials expressed hostility toward Donald Trump before his election and says in report to Congress that their actions have been referred to bureau for possible disciplinary action.
Furthermore, and this is where Andrew McCabe may want to get concerned, the DOJ inspector general also has opened additional probes into leaks.
But as we reported earlier, in perhaps the most explosive new revelation from the report, Strzok told Page “We’ll stop it” when asked, “[Trump’s] not ever going to become president, right? Right?!”
That text, the report said, was “indicative of a biased state of mind”—and suggested that Strzok may have intentionally slow-rolled the review of emails connected to the Clinton investigation discovered after the probe was closed, on a laptop belonging to former congressman Anthony Weiner. Strzok, as the number-two official in the Clinton investigation, was one of several individual figures who was made aware of the existence of the emails when they were initially uncovered.
In other words, the second email prove into Clinton was only opened days before the election because, as some had suggested, one or more FBI agents had threatened to leak that the FBI was sitting on a potential trove of documents which incriminated Hillary, while both Strzok and McCabe tried to keep it all under wraps.
According to the IG, the so-called “Midyear” team—the investigative unit that had handled the Clinton investigation—did not move to review the emails them until just days before the end of the election, almost a month after FBI officials in New York found them.
Strzok told investigators that at the time, he was prioritizing the investigation into then-candidate Donald Trump’s campaign’s ties to Russia.
Ah yes, Russia, Russia, Russia.
“Under these circumstances, we did not have confidence that Strzok’s decision to prioritize the Russia investigation over following up on Midyear-related investigative lead discovered on the Weiner laptop was free from bias,” the inspector general said.
Horowitz’s report did not find any evidence that political bias or improper influence impacted any decisions made in the Clinton case prior to Comey’s announcement that he was closing the case—including the decision not to recommend charges against Clinton.
The full report is below:
Comey Responds To OIG Report: “My Team Faced An Extraordinary Situation”
Former FBI Director James Comey has responded to the DOJ Inspector General’s report which concluded that he was “insubordinate,” used personal email for official business, and “deviated” from FBI norms.
Highlights:
- “the inspector general’s team went through the F.B.I.’s work with a microscope and found no evidence that bias or improper motivation affected the investigation“
- “But even in hindsight I think we chose the course most consistent with institutional values.”
- “The report also resoundingly demonstrates that there was no prosecutable case against Mrs. Clinton“
- “We knew that reasonable people might choose to do things differently and that a future independent reviewer might not see things the way we did.“
- “I never imagined the F.B.I. would face a choice in late October 2016 either to tell Congress we had restarted the email investigation in a significant way or to conceal that fact.“
Comey’s carefully crafted response to the report can be read below via the New York Times:
* * *
James Comey: This Report Says I Was Wrong. But That’s Good for the F.B.I.
The Department of Justice’s independent watchdog, the inspector general, has released a report that is critical of my decisions as F.B.I. director during the investigation of Hillary Clinton’s email account. The report concludes that I was wrong to announce the F.B.I.’s completion of the investigation without coordinating with the attorney general and that I was wrong to inform Congress in late October that we had reopened the investigation.
In both situations, the inspector general’s team concludes, I should have adhered to established norms, which they see as mandating both deference to the attorney general on the public announcement and silence about an investigation so close to an election.
I do not agree with all of the inspector general’s conclusions, but I respect the work of his office and salute its professionalism. All of our leaders need to understand that accountability and transparency are essential to the functioning of our democracy, even when it involves criticism. This is how the process is supposed to work.
This report is important for two reasons.
First, the inspector general’s team went through the F.B.I.’s work with a microscope and found no evidence that bias or improper motivation affected the investigation, which I know was done competently, honestly and independently.
The report also resoundingly demonstrates that there was no prosecutable case against Mrs. Clinton, as we had concluded. Although that probably will not stop some from continuing to claim the opposite is true, this independent assessment will be useful to thoughtful people and an important contribution to the historical record.
Second, this report is vital in shedding light for future leaders on the nature and quality of our investigation and the decisions we made.
In 2016, my team faced an extraordinary situation — something I thought of as a 500-year flood — offering no good choices and presenting some of the hardest decisions I ever had to make. We knew that reasonable people might choose to do things differently and that a future independent reviewer might not see things the way we did. Yet I always believed that an inspector general report would be crucial to understanding and evaluating our actions.
After Attorney General Loretta Lynch announced she would not recuse herself from the Clinton email investigation and would instead rely primarily on my recommendation, I chose to do something unprecedented: In July 2016, I separately and transparently announced to the American people what we had done, what we had found and our view that Mrs. Clinton should not be prosecuted. Before 2016, I could never have imagined doing such a thing, because the normal practice was always for the F.B.I. director to coordinate statements with the attorney general and for leaders of the Justice Department to report the details of the completed investigation.
But even in hindsight I think we chose the course most consistent with institutional values. An announcement at that point by the attorney general, especially one without the transparency our traditions permitted, would have done corrosive damage to public faith in the investigation and the institutions of justice. As painful as the whole experience has been, I still believe that. And nothing in the inspector general’s report makes me think we did the wrong thing.
Similarly, I never imagined the F.B.I. would face a choice in late October 2016 either to tell Congress we had restarted the email investigation in a significant way or to conceal that fact. But to have concealed it would have meant to hide vital information: That what I and others had said publicly and under oath to Congress was no longer true. I chose to speak and tell the truth.
I was not certain I was right about those things at the time. That’s the nature of hard decisions; they don’t allow for certainty. With the added benefit of hindsight, the inspector general sees some things differently. My team believed the damage of concealing the reopening of our investigation would have been catastrophic to the institution. The inspector general weighs it differently, and that’s O.K., even though I respectfully disagree.
I encouraged this intensive review when I was F.B.I. director and continued to support its work after I was fired. The inspector general’s conclusions are important. But the real, historical value of the report is its collection of facts, which, as John Adams said, “are stubborn things.” If a future F.B.I. leadership team ever faces a similar situation — something I pray never happens — it will have the benefit of this important document.
This is what institutions devoted to the rule of law and accountability look like. They look back at their hardest decisions and collect the facts, and are transparent with the world about those facts and decisions. The leaders of those institutions are best served by welcoming that oversight and that process of second-guessing. That’s why I urged the investigation in the first place.
As F.B.I. director, I wanted a second set of eyes on the agonizing decisions we made during the 2016 election, knowing full well the inspector general’s office could draw different conclusions. I also was confident that even if it disagreed with our decisions, it would find the F.B.I. team made them without regard for political favor or partisanship.
The inspector general’s office has now reached that very conclusion. Its detailed report should serve to both protect and build the reservoir of trust and credibility necessary for the Department of Justice and the F.B.I. to remain strong and independent and to continue their good work for our country.
Our nation’s institutions of justice are up to the task of protecting the rule of law and defending truth and transparency. All of us should stand up and support them.
* * *
Trump Facing Renewed Pressure To Sit For Mueller Interview After Kim Summit
Now that President Donald Trump’s historic meeting with North Korean leader Kim Jong Un has come and gone, his legal team’s focus is shifting back toward Special Counsel Robert Mueller. And as Bloomberg reports, Mueller – who is pushing to wrap up the investigation as quickly as possible – is mounting one last push to convince Trump and his legal team to voluntarily sit for an interview. While Mueller has suffered the slings and arrows of Trump’s wrath – Trump’s allies have hurled vitriol at the special counsel on both twitter and cable news – his determination to interview the president remains unshaken.
So, now the two sides must either find common ground – or gear up for a legal battle that would likely need to be resolved by the Supreme Court.
Now, Mueller is intent on quickly resolving a central issue with Trump’s legal team: whether the president will sit voluntarily for an interview in the probe of Russian election meddling, according to current and former U.S. officials. After months of negotiations, the two sides must find common ground or gear up for an unprecedented legal fight likely to go all the way to the Supreme Court.
“It’s a little bit of a game,” said Harry Sandick, a former federal prosecutor who’s now a partner with law firm Patterson Belknap Webb & Tyler. “Mueller could subpoena the president but probably doesn’t want to. He faces some litigation risk. Trump could fight the subpoena, but he also faces a political risk.”
During their push to turn public opinion against Mueller, Trump’s lawyers, led by Jay Sekulow and Rudy Giuliani, have engaged in selective leaking, including back in early May when they leaked a list of 49 questionspurportedly turned. As one lawyer who spoke with Bloomberg pointed out, the ongoing negotiations have turned into “a bit of a game.” Others have claimed that the leak was intended to pressure Mueller into killing the interview (of course, we all know how that turned out).
“It’s a little bit of a game,” said Harry Sandick, a former federal prosecutor who’s now a partner with law firm Patterson Belknap Webb & Tyler. “Mueller could subpoena the president but probably doesn’t want to. He faces some litigation risk. Trump could fight the subpoena, but he also faces a political risk.”
The interview is key to Mueller’s investigation into whether Trump or any of his associates helped Russia interfere in the 2016 U.S. election and whether Trump acted to obstruct the probe, one official said.
Meanwhile, Giuliani claimed late last month that he and Trump have already been rehearsing for an in-person interview with Mueller after the special counsel summarily rejected the Trump legal team’s request to conduct some of the interview in a written format.
However, since FBI agents raided Trump attorney Michael Cohen’s home, office and hotel room and are reportedly preparing to charge him with a crime, the president has grown increasingly wary of an interview.
One problem for Trump, though, is that if Mueller wins at the Supreme Court, he could compel Trump to sit for a Grand Jury for as long as he wants, and subject Trump to questions on a range of topics without providing any advanced warning.
“I think the Supreme Court will rule in Mueller’s favor, but we don’t really know,” Sandick said. “If Mueller wins, he can actually put Trump in the grand jury without his lawyer for as long as he wants and ask about any subject he wants.”
Furthermore, if Trump chooses the court battle route, Mueller’s probe would encounter further delays, as the ruling likely wouldn’t arrive until October at the earliest, after the Court returns from its summer recess. That would mean the investigation likely wouldn’t wrap up until late this year – or early next year – at the very earliest. It also would open the Republican Party up to a high degree of political risk, because the Court’s final ruling could arrive just before the midterms.
But since the beginning of the probe, the biggest obstacle to a direct interview is Trump. The president’s legal team came within a hair’s breadth of an agreement back in January. But as Trump got cold feet, his team sent Mueller a 20-page letter arguing that Trump isn’t entitled to answer Mueller’s questions as they invoked Trump’s executive privilege.
Regardless of whether the interview happens, Mueller has told Trump’s team that he will prepare a report summarizing his findings that will be turned over to the DOJ and, eventually, Congress. Then it will be up to Congress whether to release the report.
That will ultimately depend on the outcome of the midterm vote
end
11 am: Leaked from the OIG report shows that Comey was subordinate but showed no political bias as well as Strozok and Page. An absolute joke
(courtesy zerohedge)
Comey “Deviated” From FBI Norms In Clinton Probe, But “No Political Bias”, OIG Finds
In what is likely to disappoint many on the right, Bloomberg reports that the Justice Department’s watchdog has reportedly found that while former FBI Director James Comey “chose to deviate from” the agency’s norms in his investigation into Hillary Clinton’s emails, he wasn’t motivated by political bias.
“While we did not find that these decisions were the result of political bias on Comey’s part, we nevertheless concluded that by departing so clearly and dramatically from FBI and department norms, the decisions negatively impacted the perception of the FBI and the department as fair administrators of justice,” Inspector General Michael Horowitz said in the report’s conclusions, which were obtained Thursday by Bloomberg News.
Eight days ago, ABC reported that Comey “defied authority” several times while he was director of the FBI, citing sources familiar with the draft of a highly anticipated OIG report on the FBI’s conduct during the Clinton email investigation.
The draft of Horowitz’s wide-ranging report specifically called out Comey for ignoring objections from the Justice Department when he disclosed in a letter to Congress just days before the 2016 presidential election that FBI agents had reopened the Clinton probe, according to sources. Clinton has said that letter doomed her campaign.
Before Comey sent the letter to Congress, at least one senior Justice Department official told the FBI that publicizing the bombshell move so close to an election would violate longstanding department policy, and it would ignore federal guidelines prohibiting the disclosure of information related to an ongoing investigation, ABC News was told. –ABC
One source told ABC News that the draft report explicitly used the word “insubordinate” to describe Comey’s behavior. Another source agreed with that characterization but could not confirm the use of the term.
Former Attorney General Loretta Lynch was rebuked by Horowitz over the investigation, noted in the ABC:
In the draft report, Inspector General Michael Horowitz also rebuked former Attorney General Loretta Lynch for her handling of the federal investigation into Hillary Clinton’s personal email server, the sources said. –ABC
That said, today’s leaked conclusion says that the IG found a “troubling lack of any direct, substantive communication” between Comey and AG Lynch ahead of July press conference and Comey’s October letter to Congress. “Extraordinary that, in advance of two such consequential decisions” Comey didn’t speak directly with Lynch.
The report also concludes that FBI officials Peter Strzok and Lisa Page were not politically biased in their conduct:
“We did not find documentary or testimonial evidence that improper considerations, including political bias, directly affected the specific investigative actions we reviewed,” Horowitz said in the report to be issued Thursday.
“The conduct by these employees cast a cloud over the entire FBI investigation.”
While the report set to be released at 3pmET, it does not deal with the origins of the probe into allegations of Russian meddling in the 2016 U.S. election and possible collusion with the Trump campaign.
President Trump has complained of “numerous delays” in the release of the Inspector General’s report, which some have accused of being slow walked or altered to minimize its impact on the FBI and DOJ.
“What is taking so long with the Inspector General’s Report on Crooked Hillary and Slippery James Comey,” Trump said on Twitter. “Hope report is not being changed and made weaker!”
“It’s been almost a year and a half and it is time that Congress receives the IG report,” said Congressman Ron DeSantis (R-FL), who has been on the front lines of the battle against the DOJ and FBI’s stonewalling of lawmakers requesting documentation. “This has gone on long enough and the American people’s patience is wearing thin. We need accountability,” said DeSantis.
Another congressional official, who’s been fighting to obtain documents from the DOJ and FBI, said it is no surprise that they are putting pressure on Horowitz. According to the official, “They continue to slow roll documents, fail to adhere to congressional oversight and concern is growing that they will wait until summer and then turn over documents that are heavily redacted.”
ABC also noted in their report from eight days ago that Inspector General Horowitz could revise the draft report now that current and former officials have offered their responses to the report’s conclusions, according to the sources.
end
the circus continues as Trump and his family and foundation are being sued by new acting NY Attorney General Underwood for self dealing
(courtesy zerohedge)
NY Attorney Sues Trump, Family And Foundation For Charity Self-Dealing
Disgraced former NY Attorney General may have been a sexual deviant which cost him his job, but his replacement, acting NY AG Barbara Underwood has been busy, and moments ago confirmed that in just a few weeks she collected enough allegations to launch what the NYT called a “scathingly-worded” lawsuit against president Trump, his family and the Trump foundation, accusing the charity and the Trump family of sweeping violations of New York campaign finance laws, self-dealing and illegal coordination with the presidential campaign.

The lawsuit also accuses defendants of making expenditures to influence the outcome of an election Attorney general accuses defendants of self-dealing, wasting charitable assets, or violating US Tax law. It seeks restitution of $2.8 million, penalties against the president, a ban on donald trump serving as an officer of a charity, and a declaration that the foundation conducted business in a ‘persistently illegal manner’ Lawsuit filed in the new york state supreme court in Manhattan.
The lawsuit, which seeks to dissolve the foundation and bar President Trump and three of his children from serving on nonprofit organizations, was an unprecedented rebuke of a sitting president. The attorney general also sent referral letters to the Internal Revenue Service and the Federal Election Commission for possible further action, adding to Mr. Trump’s extensive legal problems.
* * *
As the petition further alleges, Trump used the Trump Foundation’s charitable assets to pay off his legal obligations, to promote Trump hotels and other businesses, and to purchase personal items. In addition, at Mr. Trump’s behest, the Trump Foundation illegally provided extensive support to his 2016 presidential campaign by using the Trump Foundation’s name and funds it raised from the public to promote his campaign for presidency, including in the days before the Iowa nominating caucuses.
“As our investigation reveals, the Trump Foundation was little more than a checkbook for payments from Mr. Trump or his businesses to nonprofits, regardless of their purpose or legality,” said Attorney General Underwood. “This is not how private foundations should function and my office intends to hold the Foundation and its directors accountable for its misuse of charitable assets.”
The Attorney General’s investigation allegedly found that Trump Foundation raised in excess of $2.8 million in a manner designed to influence the 2016 presidential election at the direction and under the control of senior leadership of the Trump presidential campaign. The Foundation raised the funds from the public at the nationally televised fundraiser Mr. Trump held in lieu of participating in the presidential primary debate in Des Moines, Iowa, on January 28, 2016. In violation of state and federal law, senior Trump campaign staff, including Campaign Manager Corey Lewandowski, dictated the timing, amounts, and recipients of grants by the Foundation to non-profits, as evidenced by communications between Campaign staff and Foundation representatives:
At least five $100,000 grants were made to groups in Iowa in the days immediately before the February 1, 2016 Iowa caucuses.
The Trump Foundation also entered into at least five self-dealing transactions that were unlawful because they benefitted Mr. Trump or businesses he controls. These include a $100,000 payment to settle legal claims against Mr. Trump’s Mar-A-Lago resort; a $158,000 payment to settle legal claims against his Trump National Golf Club in 2008 from a hole-in-one tournament; and a $10,000 payment at a charity auction to purchase a painting of Mr. Trump that was displayed at the Trump National Doral in Miami. Following commencement of the Attorney General’s investigation, the Foundation paid excise taxes on three of the transactions and Mr. Trump restored funds for the transactions to the Foundation, but the Foundation has not paid excise taxes on the Mar-A-Lago or Trump National Golf Club transactions.
As described in the Attorney General’s petition, none of the Foundation’s expenditures or activities were approved by its Board of Directors. The investigation found that the Board existed in name only: it did not meet after 1999; it did not set policy or criteria for choosing grant recipients; and it did not approve of any grants. Mr. Trump alone made all decisions related to the Foundation.
The Attorney General’s lawsuit seeks an order finding that the Foundation’s directors breached their fiduciary duties requiring them to make restitution for the harm that resulted, requiring Mr. Trump to reimburse the Foundation for its self-dealing transactions and to pay penalties in an amount up to double the benefit he obtained from the use of Foundation funds for his campaign, enjoining Mr. Trump from service for a period of ten years as a director, officer, or trustee of a not-for-profit organization incorporated in or authorized to conduct business in the State of New York, and enjoining the other directors from such service for one year (or, in the case of the other directors, until he or she receives proper training on fiduciary service). To ensure that the Foundation’s remaining assets are disbursed in accordance with state and federal law, the lawsuit seeks a court order directing the dissolution of the Foundation under the oversight of the Attorney General’s Charities Bureau.
In addition to filing its dissolution petition, the Office of the Attorney General sent referral letters to the Federal Election Commission and the Internal Revenue Service. These letters set forth in specific detail the underlying facts that have led the Attorney General to conclude that additional investigation and potential further legal action by these federal authorities are warranted.
* * *
This case is being handled by Matthew Colangelo, Executive Deputy Attorney General, James Sheehan, Chief of the Charities Bureau, Laura Wood, Senior Advisor and Special Counsel, Assistant Attorney General Yael Fuchs, Co-Chief of the Enforcement Section of the Charities Bureau, and Assistant Attorneys General Steven Shiffman and Peggy Farber of the Charities Bureau. This matter is being overseen by Chief Deputy Alvin Bragg and Chief of Staff and Deputy Attorney General Brian Mahanna.
The full lawsuit can be found at the following link.
end
HARVEY