MARCH 5/GOLD DOWN $1.70 COMEX CLOSING TO $1283.70/SILVER UP ONE CENT TO $15.10//BOTH GOLD AND SILVER RISE IN ACCESS MARKET//QUEUE JUMPING AGAIN IN BOTH GOLD AND SILVER COMEX//BIG DOWNTURN IN CHINESE HOME PRICES//CHINESE AUTO DEALERS SLASH PRICES BY 10%//CHINESE TECH OPERATIONS IN CHINA FIRE THOUSANDS OF WORKERS//MORE EUROPEAN BANKS CAUGHT IN THE MONEY LAUNDERING SCANDAL//PAKISTAN INTERCEPTS INDIAN SUB ON ITS BORDER//GE PLUMMETS AFTER CEO STATES THAT ITS FREE CASH FLOW WILL BE NEGATIVE IN 2019//MORE SWAMP STORIES FOR YOU TONIGHT//

 

 

 

GOLD: $1283.70 DOWN $1.70 (COMEX TO COMEX CLOSING)

Silver:   $15.10 UP 1 CENT (COMEX TO COMEX CLOSING)

Closing access prices:

Gold :  $1287.90

 

silver: $15.14

 

GOLD/SILVER EQUITY SHARES HELD TODAY SO MAYBE WE HIT THE BOTTOM OF THIS CONTINUAL RAID CYCLE.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For comex gold and silver:

MARCH

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  MAR CONTRACT: 19 NOTICE(S) FOR 1900 OZ (0.0590 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  263 NOTICES FOR 26300 OZ  (.8180 TONNES)

 

 

SILVER

 

FOR MARCH

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

 

108 NOTICE(S) FILED TODAY FOR 540,000  OZ/

 

total number of notices filed so far this month: 4328 for 21,640,000

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE $3769:UP $40

 

Bitcoin: FINAL EVENING TRADE: $3858  UP 131

 

end

 

XXXX

JPMorgan or Goldman Sachs are taking a huge issuance (stopping) of gold at the comex.

today  0/19

EXCHANGE: COMEX
CONTRACT: MARCH 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,284.800000000 USD
INTENT DATE: 03/04/2019 DELIVERY DATE: 03/06/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
661 C JP MORGAN 6 12
685 C RJ OBRIEN 1
690 C ABN AMRO 1
737 C ADVANTAGE 9 4
800 C MAREX SPEC 3 2
____________________________________________________________________________________________

TOTAL: 19 19
MONTH TO DATE: 263

 

 

Let us have a look at the data for today

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In silver, the total OPEN INTEREST FELL BY A CONSIDERABLE SIZED 4940 CONTRACTS FROM 195,000 DOWN TO 190,060 WITH YESTERDAY’S 14 CENTS LOSS IN SILVER PRICING AT THE COMEX. TODAY WE ARRIVED FURTHER FROM  AUGUST’S 2018  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS. WE ALWAYS WITNESS A CONTRACTION IN TOTAL OI AS WE APPROACH FIRST DAY NOTICE AND IT SEEMS THE CULPRIT IS THE FORCED LIQUIDATION OF SPREADERS.

WE HAVE ALSO WITNESSED A LARGE AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S.  WE WERE  NOTIFIED  THAT WE HAD A VERY STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

0 EFP’S FOR MARCH,  0 FOR APRIL,  3843 FOR MAY, 0 FOR DECEMBER AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE: OF 3843 CONTRACTS. WITH THE TRANSFER OF 3843 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 3843 EFP CONTRACTS TRANSLATES INTO 19.215 MILLION OZ  ACCOMPANYING:

1.THE 14 CENT LOSS IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST NINE MONTHS:

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING  AND

21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

5.845 MILLION OZ STAND IN JANUARY.

2.955 MILLION OZ STANDING FOR FEBRUARY.

AND NOW: 25.325 MILLION OZ STANDING IN MARCH.

 

 

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

10,603 CONTRACTS (FOR 3 TRADING DAYS TOTAL 10,603 CONTRACTS) OR 53.015 MILLION OZ: (AVERAGE PER DAY: 3534 CONTRACTS OR 17.67 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF MAR:  53.015 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 7.57% OF ANNUAL GLOBAL PRODUCTION (EX CHINA EX RUSSIA)*  JUNE’S 345.43 MILLION OZ IS THE SECOND HIGHEST RECORDED ISSUANCE OF EFP’S AND IT FOLLOWED THE RECORD SET IN APRIL 2018 OF 385.75 MILLION OZ.

ACCUMULATION IN YEAR 2019 TO DATE SILVER EFP’S:          417.88    MILLION OZ.

JANUARY 2019 EFP TOTALS:                                                      217.455. MILLION OZ

FEB 2019 TOTALS:                                                                       147.4       MILLION OZ/

 

 

RESULT: WE HAD A CONSIDERABLE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 4940 WITH THE 14 CENT LOSS IN SILVER PRICING AT THE COMEX /YESTERDAY..THE CME NOTIFIED US THAT WE HAD  VERY STRONG SIZED EFP ISSUANCE OF 3843 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) .

TODAY WE LOST A CONSIDERABLE SIZED: 1097 TOTAL OI CONTRACTS ON THE TWO EXCHANGES:

i.e 3843 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 4940 OI COMEX CONTRACTS. AND ALL OF THIS  DEMAND HAPPENED WITH A 14 CENT LOSS IN PRICE OF SILVER  AND A CLOSING PRICE OF $15.09 WITH RESPECT TO YESTERDAY’S TRADING. YET WE HAD A GIGANTIC AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST UNDER 1 BILLION oz i.e. 0.975 BILLION OZ TO BE EXACT or 139% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT FEBRUARY MONTH/ THEY FILED AT THE COMEX: 108 NOTICE(S) FOR 540,000 OZ OF SILVER

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

AND NOW WE RECORD FOR POSTERITY ANOTHER ALL TIME RECORD OPEN INTEREST AT THE COMEX OF 244,196 CONTRACTS ON AUGUST 22/2018 AND AGAIN WHEN THIS RECORD WAS SET, THE PRICE OF SILVER WAS $14.78 AND LOWER IN PRICE THAN PREVIOUS RECORDS.

ON THE DEMAND SIDE WE HAVE THE FOLLOWING:

  1. HUGE AMOUNTS OF SILVER STANDING FOR DELIVERY  (MARCH/2018: 27 MILLION OZ , APRIL/2018 : 2.485 MILLION OZ  MAY: 36.285 MILLION OZ ; JUNE/2018  (5.420 MILLION OZ) , JULY 2018 FINAL AMOUNT STANDING: 30.370 MILLION OZ   )  FOR AUGUST 6.065 MILLION OZ. , SEPT:  A HUGE 39.505 MILLION OZ./ OCTOBER: 2,520,000 oz  NOV AT 7.440 MILLION OZ./ DEC. AT 21.925 MILLION OZ   JANUARY AT  5.825 MILLION OZ.AND FEB 2019:  2.955 MILLION OZ/AND NOW MARCH: 25.325 MILLION OZ/
  2. HUGE RECORD OPEN INTEREST IN SILVER 243,411 CONTRACTS (OR 1.217 BILLION OZ/ SET APRIL 9/2018) AND NOW AUGUST 22/2018:  244,196 CONTRACTS,  WITH A SILVER PRICE OF $14.78.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017
  4. RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

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).

 

IN GOLD, THE OPEN INTEREST FELL BY A STRONG SIZED 6823 CONTRACTS DOWN TO 468,335 WITH THE FALL IN THE COMEX GOLD PRICE/(A LOSS IN PRICE OF $12.50//YESTERDAY’S TRADING). HOWEVER…….

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A VERY  STRONG SIZED 10,670 CONTRACTS:

 

MARCH HAD AN ISSUANCE OF 0 CONTACTS  APRIL 10,670 CONTRACTS,JUNE: 0 CONTRACTS DECEMBER: 0 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 468,335. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE  A STRONG SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 3847 CONTRACTS: 6,823 OI CONTRACTS DECREASED AT THE COMEX AND 10,670 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 3847 CONTRACTS OR 3847,00= 11.96 TONNES. IT IS IMPORTANT TO NOTE THAT ALTHOUGH WE HAD A CONSIDERABLE DROP IN OPEN INTEREST AT THE COMEX, MANY DID NOT LEAVE THE GOLD ARENA..THEY JUST MORPHED INTO LONDON BASED FORWARDS. YESTERDAY WE HAD A LOSS IN THE PRICE OF GOLD TO THE TUNE OF $12.50.

 

 

 

 

 

YESTERDAY, WE HAD 11,397 EFP’S ISSUED.

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MARCH : 33,259 CONTRACTS OR 3,325,900 OZ  OR 103.44 TONNES (3 TRADING DAYS AND THUS AVERAGING: 11,086 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 3 TRADING DAYS IN  TONNES: 103.44 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 2555 TONNES

THUS EFP TRANSFERS REPRESENTS 103.44/2550 x 100% TONNES = 4.05% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     979.00  TONNES

JANUARY 2019 TOTAL EFP ISSUANCE;   531.20 TONNES

FEB 2019 TOTAL EFP ISSUANCE:             344.36 TONNES

 

 

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 DECREASE IN OI AT THE COMEX OF 6823 WITH THE LOSS IN PRICING ($12.50) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A CONSIDERABLE SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 10,670 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 10,670 EFP CONTRACTS ISSUED, WE  HAD A STRONG GAIN OF 5083 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

10,670 CONTRACTS MOVE TO LONDON AND 6823 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE STRONG GAIN IN TOTAL OI EQUATES TO 11.96 TONNES). ..AND ALL OF THIS  DEMAND OCCURRED WITH THE LOSS OF $12.50 IN YESTERDAY’S TRADING AT THE COMEX

 

 

 

we had:  19 notice(s) filed upon for 1900 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $1.70 TODAY 

 

THE CROOKS DID IT AGAIN: A WHOPPING 5.87 WITHDRAWAL WITH A TINY PRICE DROP?

GLD INVENTORY 766.59 TONES

 

INVENTORY RESTS AT 766.59 TONNES

 

 

TO ALL INVESTORS THINKING OF BUYING GOLD THROUGH THE GLD ROUTE: YOU ARE MAKING A TERRIBLE MISTAKE AS THE CROOKS ARE USING WHATEVER GOLD COMES IN TO ATTACK BY SELLING THAT GOLD.  IT SURE SEEMS TO ME THAT THE GOLD OBLIGATIONS AT THE GLD EXCEED THEIR INVENTORY

 

SLV/

WITH SILVER UP 1 CENT  IN PRICE  TODAY:

 

NO CHANGES IN SILVER INVENTORY AT THE SLV..///

 

 

 

 

 

/INVENTORY RESTS AT 308,503 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER FELL BY A HUGE SIZED 4940 CONTRACTS from 195,000 DOWN TO 190,060 AND FURTHER FROM THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..

 

.

OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS  AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:

 

0 CONTRACTS FOR MARCH. 0 CONTRACTS FOR APRIL., 3843 FOR MAY AND  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 3843 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 4940 CONTRACTS TO THE 3843 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE SURPRISINGLY OBTAIN ONLY A SMALL LOSS  OF 1097  OPEN INTEREST CONTRACTS.  THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 5.485 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 6.065 MILLION OZ FOR AUGUST..  A HUGE 39.505  MILLION OZ  STANDING FOR SILVER IN SEPTEMBER… OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.,  7.440 MILLION OZ FINALLY STANDING IN NOVEMBER.  21.925 MILLION OZ STANDING IN DECEMBER , 5.845 MILLION OZ STANDING IN JANUARY. 2.955 MILLION OZ STANDING IN FEBRUARY AND NOW 25.325 MILLION OZ FOR MARCH.

 

 

RESULT: A HUGE SIZED DECREASE IN SILVER OI AT THE COMEX WITH THE 14 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY.BUT WE ALSO HAD A STRONG SIZED 3843 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. THE LOSS IN OPEN INTEREST CONTRACTS IN SILVER WAS CAUSED BY THE FORCED LIQUIDATION OF SPREADERS…IT HAD NO EFFECT ON PRICE..TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR SEPTEMBER, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

BOTH THE SILVER COMEX AND THE GOLD COMEX ARE IN STRESS AS THE BANKERS SCOUR THE BOWELS OF THE EXCHANGE FOR METAL

 

 

(report Harvey)

.

2.a) The Shanghai and London gold fix report

(Harvey)

2 b) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED UP 26.67 POINTS OR 0.88% //Hang Sang CLOSED UP 2.84 POINTS OR 0.01%  /The Nikkei closed UP 96.76 POINTS OR 0.44%/ Australia’s all ordinaires CLOSED DOWN 0.34%

/Chinese yuan (ONSHORE) closed UP  at 6.7020 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 56.73 dollars per barrel for WTI and 65.85 for Brent. Stocks in Europe OPENED RED EXCEPT LONDON//.

ONSHORE YUAN CLOSED UP // LAST AT 6.7020 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7047: / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

 

 

 

 

 

 

3A/NORTH KOREA/SOUTH KOREA

 

 

i)North Korea//USA

 

 

 

b) REPORT ON JAPAN

 

 

 

3 C/  CHINA

 

 

 

i) CHINA/

 

Important:  Housing is where China keeps all of its wealth..a drop in home prices will no doubt cripple their economy.  China’s largest property developwer is now selling all homes with a 10% discount.

(zerohedge)

ii)In its latest National Party Congress report, China is now targeting 6 to 6.5% economic growth down from 6.5 to 7%.  They are also going to cut taxes as we are now witnessing what happens to China when they are experiencing problems with their economy.
(zerohedge)

iii)ChinaWith their downturn, we now witness many Chinese tech companies fire thousands of employees.

( zerohedge)

iv)Here is another sign of problems inside China:  Chinese car dealers are slashing prices

( zerohedge)

4/EUROPEAN AFFAIRS

 

 

EUROPE/RUSSIA

More European banks are being collared in this widening Russian money laundering scandal

(courtesy zerohedge)

 

 

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

 

6. GLOBAL ISSUES

INDIA/PAKISTAN

After Pakistan shoots down last week an Indian fighter jet, it now intercepts an Indian submarine as the border conflict continues to rage on.

( zerohedge)

 

7. OIL ISSUES

 

 

 

 

8 EMERGING MARKET ISSUES

 

 

i)VENEZUELA/

 

 

9. PHYSICAL MARKETS

i)No surprise here:  Newmont’s board rejects Barrick’s hostile offer:
( Bloomberg/GATA)
ii)Both Russia and Australia increased their gold production to 314 and 317 tonnes respectively.  They are the leaders in world production of gold
(courtesy Lawrie Williams)

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

 

 

MARKET TRADING

 

 

 

ii)Market data

a)We now have our “fake” ISM numbers.  Do not pay any attention to them.  They showed USA service surging while Manufacturing slumping.Garbage numbers in this soft data report

( zerohedge)

b)This data entry is far more important than the ISM numbers.  It is a hard data and again new home sales falter and this is the longest streak of lower numbers since 2011

(courtesy zerohedge)

iii)USA ECONOMIC/GENERAL STORIES

a)How the new left policies will be electoral suicide

a must read..

( Mish Shedlock/Mishtalk)

b)More evidence that there is something wrong:  GE (a Bellwether) shares plummet when CEO said free cash flow will be in negative territory this year:

(courtesy zerohedge)

c)Late this afternoon, the BIS warns the uSA markets that a market crash is upon us and it will start once the BBB downgrade on bonds begins..ie. the fallen angels that we have talking about

( zerohedge)
d)The Government had poor tax receipts for January as the deficit widens for months at $310 billion. According to the CBO the deficit will hit close to 900 billion dollar this year.  However it does not include the huge auto loans and student loans which will bring the true deficit to 1.2 trillion dollars.  Worrisome also is the huge interest expense, hitting 192 billion dollars for the first 4 months and will now doubt come in just under 600 billion dollars for the entire year.
The USA is now has financial troubles
(courtesy zerohedge)

iv)SWAMP STORIES

a)Funny! Steel cancels his appearance at a friendly forum as no doubt he was spooked by Cohen’s testimony which basically destroyed his dossier allegation

(courtesy zerohedge))

b)The Democrats are planning a resolution condemning this nut care Omar.

(courtesy zerohedge)

E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT

 

end

 

 

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN FELL BY A STRONG SIZED 6823 CONTRACTS DOWN TO A LEVEL OF 468,335 WITH THE LOSS IN THE PRICE OF GOLD ($12.50) IN YESTERDAY’S RAID// COMEX TRADING).

WE ARE NOW IN THE  NON ACTIVE DELIVERY MONTH OF MARCH..  THE CME REPORTS THAT THE BANKERS ISSUED A CONSIDERABLE SIZED COMEX TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 10,670 EFP CONTRACTS WERE ISSUED:

FOR MARCH:  0. FOR APRIL 10,670, FOR JUNE: 0 CONTRACTS AND FINALLY DECEMBER: 0 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  10,670 CONTRACTS.

THE OBLIGATION STILL RESTS WITH THE BANKERS ON THESE TRANSFERS. ALSO REMEMBER THAT THERE IS NO DOUBT A HUGE DELAY IN THE ISSUANCE OF EFP’S AND IT PROBABLY TAKES AT LEAST  48 HRS AFTER LONGS GIVE UP THEIR COMEX CONTRACTS FOR THEM TO RECEIVE THEIR EFP’S AS THEY ARE NEGOTIATING THIS CONTRACT WITH THE BANKS FOR A FIAT BONUS PLUS THEIR TRANSFER TO A LONDON BASED FORWARD.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: 3847 TOTAL CONTRACTS IN THAT 10,670 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A STRONG SIZED 6823 COMEX CONTRACTS.

NET GAIN ON THE TWO EXCHANGES ONLY::3847 contracts OR 384,700 OZ OR 11.96 TONNES.

 

We are now in the NON active contract month of MARCH and here the open interest stands at 141 contracts  for a loss of 42 contracts.We had 52 notices served upon yesterday so we GAINED 10 contracts or AN ADDITIONAL 1000 oz will  stand at the comex as these guys REFUSED TO  morph into London based forwards as well as negating a fiat bonus for their effort. This is quite early for gold to see queue jumping (AND 2ND DAY INA ROW) and a total increase in gold tonnage standing in this non active month of March.

 

 

 

The next non active delivery month after  March is the  active delivery month is April and here the OI FELL by 11,799 contracts down to 300,769 contracts. The non active month of May picked up 123 contracts for a total of 147 open interest.  After May, the next active delivery month is June and here the OI stands at 96,880 having gained 3546 contracts.

 

 

 

 

TODAY’S NOTICES FILED:

WE HAD 19 NOTICES FILED TODAY AT THE COMEX FOR 1900 OZ. (0.0590 tonnes)

 

 

 

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And now for the wild silver comex results.

Total COMEX silver OI FELL BY A HUGE SIZED 4940 CONTRACTS FROM 195,000 DOWN TO 190,060(AND FURTHER FROM  THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018.  (THE PREVIOUS RECORD WAS SET APRIL 9.2018/ 243,411 CONTRACTS) AND TODAY’S CONSIDERABLE OI COMEX LOSS  OCCURRED WITH A 14 CENT LOSS IN PRICING.//YESTERDAY 

 

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF MARCH AND THE  OPEN INTEREST IN THIS FRONT MONTH RESTS AT 845 HAVING LOST 279 CONTRACTS.

WE HAD 351 NOTICES FILED YESTERDAY SO WE GAINED 72 CONTRACTS OR 360,000 ADDITIONAL OZ WILL STAND AT THE SILVER COMEX AS THESE GUYS REFUSED TO MORPH INTO LONDON BASED FORWARDS AS WELL AS NEGATING A FIAT BONUS. WE HAVE BEEN WITNESSING QUEUE JUMPING IN SILVER FOR OVER 3 YEARS IN THAT THE TOTAL OZ STANDING INCREASES FROM FIRST DAY NOTICE STANDING.

AS I MENTIONED ABOVE BOTH THE GOLD AND SILVER COMEX ARE IN STRESS.!! WE HAVE FOR THE 3RD CONSECUTIVE DAY A HUGE QUEUE JUMPING AND THUS A HUGE INCREASE IN THE AMOUNT OF SILVER STANDING AT THE COMEX.

 

 

 

 

AFTER MARCH, WE HAVE THE NON ACTIVE DELIVERY MONTH OF APRIL.  HERE: APRIL RISES TO 796 CONTRACTS FOR A GAIN OF 24 CONTRACTS.  AFTER APRIL, THE NEXT BIG ACTIVE DELIVERY MONTH IS MAY AND HERE THE OI FELL BY 5193 CONTRACTS DOWN TO 139,986 CONTRACTS.

 

 

 

ON A NET BASIS WE LOST A SMALL 1097 SILVER OPEN INTEREST CONTRACTS AS WE OBTAINED A 4940CONTRACT LOSS AT THE COMEX COMBINING WITH THE ADDITION OF 3843 OI CONTRACTS NAVIGATING OVER TO LONDON.

NET GAIN ON THE TWO EXCHANGES:  1097 CONTRACTS...AND ALL OF THIS LOSS OF DEMAND OCCURRED WITH A 14 CENT LOSS IN PRICING// YESTERDAY

 

 

 

 

 

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 108 notice(s) filed for 540,000 OZ for the MARCH, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY:  264,768  CONTRACTS

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  383,052  contracts

 

 

 

 

 

 

 

 

 

Initial standings for  MAR/GOLD

MAR 5 /2019.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
10,375.529
oz
delaware
Deposits to the Dealer Inventory in oz nil

oz

 

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

 

 

 

nil

 

oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
19 notice(s)
 1900 OZ
(0.0590 TONNES)
No of oz to be served (notices)
122 con2racts
(12,400 oz)
Total monthly oz gold served (contracts) so far this month
263 notices
26,300 OZ
.8180 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entries:

 

 

total dealer deposits: nil oz

total dealer withdrawals: 0 oz

We had 0 kilobar entries

 

we had 0 deposit into the customer account

 

total gold deposits: nil oz

we had 1 gold withdrawals from the customer account:

i) out of Delaware: 10,375.529 oz

 

 

 

total gold withdrawing from the customer; 10,375.529  oz

we had 0  adjustments…

FOR THE MAR 2019 CONTRACT MONTH)

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 19 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
To calculate the INITIAL total number of gold ounces standing for the MARCH/2019. contract month, we take the total number of notices filed so far for the month (263) x 100 oz , to which we add the difference between the open interest for the front month of MAR. (141 contract) minus the number of notices served upon today (19 x 100 oz per contract) equals 38,500 OZ OR 1.198 TONNES) the number of ounces standing in this active month of MARCH

Thus the INITIAL standings for gold for the MAR/2019 contract month:

No of notices served (263 x 100 oz)  + {141)OI for the front month minus the number of notices served upon today (19 x 100 oz )which equals 38,50000 oz standing OR 1.198 TONNES in this active delivery month of MARCH.

We gained 10 contracts or an additional 1000 oz queue jumped as the bankers jumped ahead of investors looking for badly needed gold.

THE GOLD COMEX (AND SILVER COMEX) ARE NOW IN STRESS AS THE CROOKS ARE DESPERATE TO FIND PHYSICAL METAL.

SURPRISINGLY NO GOLD HAS BEEN ENTERING THE COMEX VAULTS AND WE HAVE WITNESSED THIS FOR THE PAST YEAR!!  WE HAVE ONLY 11.388 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE)

 

 

 

 

 

 

 

total registered or dealer gold:  366,127.915 oz or  11.388 tonnes
total registered and eligible (customer) gold;   8,107,168.555 oz 252.16 tonnes

FOR COMPARISON

MARCH 2018 VS MARCH 2019 CONTRACTS

 

 

 

 

ON FEB 27.2018 WE HAD 995 OPEN INTEREST CONTRACTS STANDING (2 DAYS BEFORE FIRST DAY NOTICE)  VS FEB 26.2019:  539 CONTRACTS.(2 DAYS BEFORE FDN)

ON FIRST DAY NOTICE MARCH 1/2018: TOTAL GOLD TONNAGE STANDING FOR DELIVERY: 2.1524 TONNES

THE FINAL AMOUNT OF GOLD TONNAGE: MARCH 31/2018:  1.6114 TONNES AS THE REST MORPHED INTO LONDON BASED FORWARDS.

IN THE LAST 29 MONTHS 103 NET TONNES HAS LEFT THE COMEX.

 

THE GOLD COMEX IS NOW IN STRESS AS
1. GOLD IS LEAVING THE COMEX
2. GOLD IS LEAVING THE REGISTERED CATEGORY OF THE COMEX.

end

And now for silver

AND NOW THE  DELIVERY MONTH

MAR INITIAL standings/SILVER

MAR 5 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
nil  oz

 

 

Deposits to the Dealer Inventory
nil oz
Deposits to the Customer Inventory
2069.249
oz
CNT
No of oz served today (contracts)
108
CONTRACT(S)
540,000 OZ)
No of oz to be served (notices)
737 contracts
3,685,000 oz)
Total monthly oz silver served (contracts) 4328 contracts

(21,640,000 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

total dealer withdrawals: 0 oz

we had  1 deposits into the customer account

 

i) Into JPMorgan: nil  oz

 

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

JPMorgan now has 147 million oz of  total silver inventory or 49.32% of all official comex silver. (147 million/298 million)

 

i) Into CNT:  2069.249 oz

 

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today: 2069.249   oz

 

we had 0 withdrawals out of the customer account:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

total withdrawals: nil     oz

 

we had 0 adjustment

 

 

 

total dealer silver:  94.043 million

total dealer + customer silver:  298.995 million oz

 

 

 

 

The total number of notices filed today for the MARCH 2019. contract month is represented by 108 contract(s) FOR  540,000  oz

To calculate the number of silver ounces that will stand for delivery in MAR, we take the total number of notices filed for the month so far at 4328 x 5,000 oz = 21,640,000 oz to which we add the difference between the open interest for the front month of MAR. (845) and the number of notices served upon today (108 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAR/2019 contract month: 4328(notices served so far)x 5000 oz + OI for front month of MAR( 845) -number of notices served upon today (108)x 5000 oz equals 25,325,000 oz of silver standing for the MAR contract month.  This is a strong number of oz standing for an off delivery month.

We gained a considerable 72 contracts or an additional 360,000 oz will stand as bankers queue jumped in order to receive badly needed physical metal. The silver comex is in deep stress as this is the second day in a row of a huge gain in silver oz standing.

 

 

 

 

 

ON MARCH 1.2018 WE HAD 24.670 MILLION OZ OF SILVER STAND FOR DELIVERY. BY THE CONCLUSION OF THE DELIVERY MONTH, 27.190 MILLION OZ STOOD AS QUEUE JUMPING IN THE SILVER COMEX ARENA HAD BEEN THE NORM FOR QUITE A WHILE.

 

 

 

 

 

 

 

 

 

 

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TODAY’S SILVER VOLUME:  88,425 CONTRACTS

 

 

CONFIRMED VOLUME FOR YESTERDAY: 109,442 CONTRACTS… 

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 109,442 CONTRACTS EQUATES to 547 million OZ  78.14% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

end

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -2.76% (MAR 5/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -1.16% to NAV (MAR 5/2019 )
Note: Sprott silver trust back into NEGATIVE territory at -2.76%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

3.SPROTT CEF.A FUND (FORMERLY CENTRAL FUND OF CANADA):

NAV 12.97/TRADING 12.59/DISCOUNT 2.91

END

And now the Gold inventory at the GLD/

MARCH 5/WITH GOLD DOWN ONLY $1.70: A HUGE WITHDRAWAL OF 5.87 TONNES FROM THE GLD INVENTORY AND THIS GOLD HAS BEEN USED IN THE WHACKING PROCESS YESTERDAY AND TODAY/INVENTORY RESTS AT 766.59 TONNES

MARCH 4/WITH GOLD ANOTHER $12.50 TODAY: A HUGE WITHDRAWAL OF 11.76 TONNES FROM THE GLD INVENTORY//INVENTORY RESTS AT 772.46 TONNES

MAR 1/WITH GOLD DOWN $16.90 TODAY; A HUGE WITHDRAWAL OF 4.11 TONNES FROM THE GLD INVENTORY//INVENTORY RESTS AT 784.22 TONNES

FEB 28/WITH GOLD DOWN $4.80: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 788.33

FEB 27/WITH GOLD DOWN $6.80: NO CHANGE IN GOLD INVENTORY//INVENTORY RESTS AT 788.33 TONNES

FEB 26  WITH GOLD DOWN $1.10: A WITHDRAWAL OF 1.18 TONNES FROM THE GLD INVENTORY/INVENTORY RESTS AT 788.33

FEB 25/WITH GOLD DOWN $3.10: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 789.51 TONNES

 

FEB 22/WITH GOLD UP $5.15 A HUGE WITHDRAWAL OF 4.99 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 789.51 TONNES

FEB 21/WITH GOLD DOWN $19.50/ A SURPRISE GAIN (DEPOSIT) OF 2.05 TONNES INTO THE GLD INVENTORY/INVENTORY RESTS AT 794.50 TONNES

FEB 20/WITH GOLD UP $3.10 TODAY: SURPRISINGLY NO CHANGE IN GOLD INVENTORY/GLD INVENTORY RESTS AT 792.45 TONNES

FEB 19/WITH GOLD UP $22.95/ TWO TRANSACTIONS: A HUGE 3.82 TONNES OF GOLD WITHDRAWAL FROM THE GLD THIS MORNING AND THEN  0.58 TONNES THIS AFTERNOON///INVENTORY RESTS AT 792,45 TONNES. FROM FEB 1/2019 UNTIL TODAY, GOLD IS UP $24.25 AND YET GOLD WITHDRAWALS ARE A HUGE 31.42 TONNES/THIS IS CRIMINAL!!

FEB 15/WITH GOLD UP $8.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 796.85 TONNES

FEB 14//WITH GOLD DOWN $1.10: WE HAD ANOTHER PAPER RAID (WITHDRAWAL) OF 2.04 TONNES/INVENTORY RESTS AT 796.85 TONNES/

FEB 13:/WITH GOLD UP $1.40 TODAY: ANOTHER PAPER RAID BY OUR CROOKED BANKERS AS THEY WITHDREW ANOTHER 2.23 TONNES OF GOLD FROM THE GLD. INVENTORY RESTS AT 798.89 TONNES

FEB 12: WITH GOLD UP $2.20 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 802.12 TONNES

FEB 11/WITH GOLD DOWN $6.25 TODAY: ANOTHER PAPER WITHDRAWAL OF 1.17 TONNES OF GOLD AND THIS GOLD WAS USED TO WHACK OUR PRECIOUS METAL TODAY/INVENTORY RESTS AT 802.12 TONNES

FEB 8/WITH GOLD UP $4.00/THE CROOKS WITHDREW ANOTHER HUGE 6.59 TONNES OF PAPER GOLD AND THIS GOLD WAS USED TO CONTAIN THE PRICE OF GOLD/INVENTORY RESTS AT 803.29 TONNES

FEB 7/WITH GOLD UP 35 CENTS/ANOTHER PAPER GOLD WITHDRAWAL OF 2.06 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 809.76 TONNES

FEB 6/WITH GOLD DOWN $4.85 TODAY: A STRONG PAPER WITHDRAWAL OF 1.37 TONNES FROM THE GLD/INVENTORY RESTS AT 811.82 TONNES

FEB 5/WITH GOLD UP $.30 TODAY: A HUGE PAPER WITHDRAWAL OF 4.11 TONNES/INVENTORY RESTS AT 813.29 TONNES

FEB 4/WITH GOLD DOWN $2.65: TWO TRANSACTIONS: i)A MASSIVE WITHDRAWAL OF 8.37 TONNES OF PAPER GOLD WAS REMOVED FROM THE GLD AND THEN ii) a A STRONG DEPOSIT OF 2.00 TONNES/INVENTORY RESTS AT 817.40 TONNES

FEB 1/WITH GOLD DOWN $3.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 823.87 TONNES

J

 

 

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MAR 4/2019/ Inventory rests tonight at 66.59 tonnes

*IN LAST 553 TRADING DAYS: 168.46 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 453 TRADING DAYS: A NET 1.64 TONNES HAVE NOW BEEN REMOVED INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

MARCH 5/WITH SILVER UP ONE CENT: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 308.503 MILLION OZ///

MARCH 4/WITH SILVER DOWN 14 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV; A WITHDRAWAL OF 871,000 OZ OF SILVER FROM THE SLV///INVENTORY RESTS AT 308.503 MILLION OZ/

MARCH 1/ WITH SILVER DOWN 38 CENTS/NO CHANGE IN SILVER INVENTORY

FEB 28/WITH SILVER DOWN 12 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.374

FEB 27/WITH SILVER DOWN 14 CENTS//A  SMALL CHANGE IN INVENTORY: A WITHDRAWAL OF 610,000 OZ//SLV INVENTORY RESTS AT 309.374 MILLION OZ/

FEB 26/WITH SILVER DOWN ONE CENT; NO CHANGE IN INVENTORY/RESTS AT 309.984

FEB 25./WITH SILVER DOWN 7 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.984 MILLION OZ/

FEB 22/WITH SILVER UP 7 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.984 MILLION OZ///

FEB 21/WITH SILVER DOWN 37 CENTS: SURPRISINGLY A DEPOSIT OF 1.688 MILLION OZ OF SILVER INVENTORY/ INTO THE SLV/INVENTORY RESTS AT 309.984 MILLION OZ///

FEB 20/WITH SILVER UP 19 CENTS AND ON A TEAR: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 308.296 MILLION OZ/

FEB 19/WITH SILVER UIP 25 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 938,000 OZ/INVENTORY RESTS AT 308.296 MILLION OZ/

FEB 15/WITH SILVER UP 19 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 307.358 MILLION OZ/

FEB 14/WITH SILVER DOWN 11 CENTS: A DEPOSIT OF 423,000 OZ/INVENTORY RESTS AT 307.358 MILLION OZ

FEB 13/WITH SILVER DOWN 4 CENTS TODAY: ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 938,000 OZ FROM THE SLV./INVENTORY RESTS AT 306.935 MILLION OZ/

FEB 12 WITH SILVER UP 3 CENTS TODAY:  NO CHANGE IN SILVER INVENTORY AT TH SLV/INVENTORY RESTS AT 307.873 MILLION OZ/

FEB 11/WITH SILVER DOWN 13 CENTS TODAY:A BIG CHANGE IN SILVER INVENTORY; A WITHDRAWAL OF 1.126 MILLION OZ FROM THE SLV INVENTORY/INVENTORY RESTS AT 307.873 MILLION OZ/

FEB 8/WITH SILVER UP 11 CENTS: ANOTHER WITHDRAWAL OF 657,000 OZ/INVENTORY RESTS AT 308.999  MILLION OZ/

FEB 7/WITH SILVER DOWN 1 CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.656 MILLION OZ/

FEB 6/WITH SILVER DOWN 13 CENTS TODAY; A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 938,000  OZ/INVENTORY RESTS AT 309.656 MILLION OZ/

FEB 5/WITH SILVER DOWN 3 CENTS; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 310.594 MILLION OZ.

FEB 4/WITH SILVER DOWN 4 CENTS: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 129,000 OZ TO PAY FOR FEES/.INVENTORY RESTS AT 310.594 MILLION OZ/

FEB 1/WITH SILVER DOWN 14 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY  RESTS AT 310.723 MILLION OZ/

 

MAR 5/2019:

 

Inventory 308.503 MILLION OZ

LIBOR SCHEDULE AND GOFO RATES:

 

 

THE RISE IN LIBOR IS CREATING A SCARCITY OF DOLLARS BECAUSE FOREIGN EXCHANGE SWAPS (COSTS) ARE SIMPLY PROHIBITIVE

YOUR DATA…..

6 Month MM GOFO 2.20/ and libor 6 month duration 2.68

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

G0LD LENDING RATE: + .48

 

 

XXXXXXXX

12 Month MM GOFO
+ 2.49%

LIBOR FOR 12 MONTH DURATION: 2.88

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.39

end

 

PHYSICAL GOLD/SILVER STORIES

end
i) GOLDCORE BLOG/Mark O’Byrne

 

Should 175 Million Lottery Winners Invest In Gold?

Money Doctor John Lowe: Invest In Gold In 2019

By John Lowe, The Money Doctor via RTE

Diamonds may have the edge when it comes to a girl’s best friend but as the world becomes more volatile year by year, investing in the yellow metal is de rigueur and a prudent strategy in a balanced portfolio.

They say 10% of your wealth should be in precious metals.

‘Dream come true’ – Family syndicate wins €175m EuroMillions jackpot

Wonder will this apply to the Euromillions 6 and their €30 million each? John Lowe the Money Doctor gives the background.

If the so-called ‘gold bugs’ – investors who believe passionately in the long-term value of buying gold – are right, then this could be a good time to add a little glitter to your portfolio. Over the last few years, we have seen massive swings in the price of gold from its all-time 1980 high then of US$850 per troy ounce – in today’s money, about $2,500 – to its current price of c. US$1305 ( c. €1,154.87) per troy ounce.

Bear in mind the gold price in 2011 stood at its highest ever at US$1913 per troy ounce – slightly heavier than avoirdupois ounces – and was expected at the time to go even higher. It didn’t but with such recent global uncertainty – gold is now a barometer of volatility in the world – and its effect on the financial markets plus a natural desire to stay solvent and have an asset that is easily bartered, gold could still be the very commodity to take off. Self administered pensions (SSAPs) are ideal for this investment, too.

There are three sound reasons to believe that prices will rise:

Firstly, the growing economies of Asia and the Middle East have resulted in a huge surge in demand – especially for gold jewellery. For proof one need look no further than global gold jewellery sales, which increased at a very steady pace over the last few years.

Secondly, a rising number of private investors all over the world have been putting some or all of their savings into gold as a hedge against economic or political instability and, as in maybe the case of Syria and ISIS war.

When investors feel the future is uncertain (as many appear to at the moment) demand for gold always surges. This is doubtless in no small part due to the fact that the price of gold tends to move in the opposite direction to virtually all other conventional asset classes – making it ideal when investors wish to diversify.

Thirdly, the mining industry can’t keep up with demand. Figures show that in excess of 4,000 tonnes of gold were purchased, but only 2,700 tonnes were mined in 2011 and 2,860 tonnes in 2014 – 260 tonnes more than the previous highest peak in 2001.

What’s more, production is falling by an average of 4% a year and it will take the industry anything up to ten years to increase supply by the required volume. In the past, when demand outstripped supply, the shortfall was met by many of the world’s central banks. No longer. Countries, which had been disposing of their gold reserves, have slowed down sales or even stopped selling altogether. Many central banks, notably those of Russia, Iran and China, are actually now buying bullion.

Although I believe that gold prices are likely to carry on moving upward after the recent drops, I would only suggest buying if you already have a range of other investments including shares, bonds and property.

I would recommend various ways of investing in gold:

Gold bullion

Gold bullion coins and bars weighing nearly 2,000 troy ounces (over 60 kilos) and worth more than €2m were recently transferred in recent weeks into the country from the UK. This is believed to be the largest legitimate movement of gold bullion into Ireland in decades.

Brexit, of course, is helping but the leading bullion dealer in Ireland, GoldCore, said it is seeing a growing preference amongst Irish investors to store their gold domestically here rather than Perth, Zurich, Singapore, Hong Kong, Singapore and especially London.

Gold held in the company’s Dublin vaults is a fraction of GoldCore’s client holdings in other jurisdictions, and has already surpassed Hong Kong as a favoured jurisdiction for storing gold with Goldcore clients. Zurich remains the favourite location with client bullion holdings there worth nearly €40 million. Zurich is followed by Singapore, then London, Dublin and Hong Kong.

Perth Mint Gold Certificate programme

The bullion is held in Perth Mint, the only mint in the world guaranteed by a AAA-rated government (the Western Australian government) The fee is 2% to 3.9% depending on the amount bought and 1.5% when you sell. Minimum investment is €7,000 but it is safe in every respect.

Pensions

Incidentally, if you are planning to invest in gold it is worth noting that it can be held in self-administered pension schemes (SSAPs or Self Directed Trusts for company owners, directors and senior executives), which could mean some tasty tax savings depending on your circumstances.

Conclusion

Chess grandmaster, Professor of Economics in Harvard and former IMF Chief Economist, Ken Rogoff advises that gold is an “extremely low risk asset” and “investing in and owning gold as a hedge will become more important as it will have enormous value in a cashless society.”

Courtesy of John Lowe, The Money Doctor and full article on RTE Lifestyle

 

News and Commentary

Why gold is down for the month, but still on a long-term track to reach $2,000 an ounce according to GoldCore (MarketWatch.com)

Gold hits two-week low as upbeat U.S. data lifts dollar (Reuters.com)

Romania Ruling Party Battles Bank Over Gold Reserves, Return 95% back (BalkanInsight.com)

Growing China downdraft chills Asia factory activity (Reuters.com)

Oil climbs amid OPEC-led supply cuts, but economic weakness drags (Reuters.com)

Stocks Post Year’s First 3-Day Slide; Dollar Gains: Markets Wrap (Bloomberg.com)

Gold’s Four-Month Winning Streak on the Line Today (GoldCore in Barrons) (Barrons.com)

Gold – here’s why it just might be different this time (MoneyWeek.com)

Trump Returns Home to Face the Mueller Music (Bloomberg.com)

Home Prices in Sydney & Melbourne Spiral Down, Bust Spreads (WolfStreet.com)

Murphy and Hemke on Silver and Palladium Manipulation (Youtube.com)

Stockman on Peak Trump, The Undrainable Swamp & the Fantasy of MAGA (Youtube.com)

Gold Prices (LBMA PM)

01 Mar: USD 1,309.95, GBP 989.27 & EUR 1,152.23 per ounce
28 Feb: USD 1,325.45, GBP 996.21 & EUR 1,162.82 per ounce
27 Feb: USD 1,326.45, GBP 998.02 & EUR 1,164.09 per ounce
26 Feb: USD 1,327.55, GBP 1005.79 & EUR 1,168.11 per ounce
25 Feb: USD 1,329.15, GBP 1016.80 & EUR 1,170.32 per ounce
22 Feb: USD 1,322.25, GBP 1016.15 & EUR 1,166.49 per ounce

Silver Prices (LBMA)

01 Mar: USD 15.56, GBP 11.75 & EUR 13.67 per ounce
28 Feb: USD 15.81, GBP 11.89 & EUR 13.85 per ounce
27 Feb: USD 15.86, GBP 11.91 & EUR 13.92 per ounce
26 Feb: USD 15.83, GBP 11.98 & EUR 13.93 per ounce
25 Feb: USD 15.95, GBP 12.19 & EUR 14.04 per ounce
22 Feb: USD 15.87, GBP 12.20 & EUR 14.00 per ounce

Recent Market Updates

– “Gold Is A Global Thermometer Of Risk” – CEO Q+A: Stephen Flood, GoldCore
– U.S. Mint Suspends Silver Bullion Coin Sales After Sales Double In February
– MMT: Modern Monetary Madness Will Lead To Higher Taxes and Inflation
– Gold Broker Has Good Sense and Prefers Gold To All That Glitters (The Times)
– The Utterly Unbelievable Scale of U.S. Debt Right Now
– The Best Time In History To Buy GOLD
– Jim Willie Interviews Mark O’Byrne – Prepare Now For Global Financial Crisis II
– 7 Major Flaws Of The Global Financial System – Excellent Infographic
– The Case for Gold In 2019 – The Economist
– Invest In Gold As a Hedge In Cashless Society – Ex IMF Rogoff

Mark O’Byrne
Executive Director
GATA STORIES AS IT RELATES TO PHYSICAL GOLD/SILVER
No surprise here:  Newmont’s board rejects Barrick’s hostile offer:
(courtesy Bloomberg/GATA)

Newmont’s board rejects Barrick’s hostile offer

 Section: 

By Danielle Bochove and Ed Hammond
Bloomberg News
Monday, March 4, 2019

Newmont Mining Corp. rejected Barrick Gold Corp.’s $17.8 billion unsolicited takeover bid, a deal that would’ve created the world’s largest gold producer.

The board unanimously rejected the proposal, saying it would not be better than Newmont’s previously announced takeover of Goldcorp Inc., the Colorado-based company said in a statement today. Instead, Newmont submitted a joint venture proposal to Barrick that would encompass the two companies’ Nevada operations.

… 

Newmont had raised serious doubts about Toronto-based Barrick’s proposal — a hostile all-share no-premium bid — from the day it was announced Feb. 25. Newmont said its previously announced agreement to take over Goldcorp offered better benefits, and Chief Executive Officer Gary Goldberg called Barrick’s takeover offer “desperate” and “bizarre.”

“The combination with Goldcorp is significantly more accretive to Newmont’s shareholders on all relevant metrics compared to Barrick’s proposal, even when factoring in Barrick’s own synergy estimates,” Goldberg said in the statement. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-03-04/newmont-is-said-to-re…

* * *

Help keep GATA going:

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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end



iii) Other Physical stories
Due to the criminal conviction of trader Edmonds, the USA prosecution is seeking to halt the civil lawsuit. I was misinformed: all discoveries in a civil suit are public and because of that, the prosecution gives the defendants the right to plead the 5th if their testimony incriminates them
(courtesy zerohedge/Chris Powell)

US seeks halt in civil lawsuit accusing JP Morgan of manipulating metals market, citing criminal case

  • The U.S. wants a federal judge to halt a civil lawsuit accusing J. P. Morgan of manipulating precious metals markets. The Justice Department cited an ongoing criminal case as its reason for the request.
  • A former J. P. Morgan trader pleaded guilty in Connecticut last month to manipulation charges.
  • In the guilty plea, the trader said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors.

A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

Amr Alfiky | Reuters
A sign of JP Morgan Chase Bank is seen in front of their headquarters tower in New York.

The Justice Department is asking a judge to put the brakes on a civil lawsuit against J. P. Morgan Chase, citing an ongoing probe into a “related criminal case” that involves alleged manipulation of precious metals markets.

The department wants a six-month postponement in the proceedings of the civil lawsuit, which was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders. The government also says it could ask for a longer delay in the case, according to a court filing on Monday.

The move comes days after Shak’s lawyer, David Kovel, sought permission to reopen questioning of two former J. P. Morgan traders and the bank’s current global head of base and precious metals trading.

Kovel, in making the request with the Manhattan federal judge in the civil case, cited last month’s guilty plea by one of those former traders, John Edmonds, in federal court in Connecticut.

Edmonds admitted making bogus bids on precious metals contracts while working at the bank from 2009 to 2015.

Neither J. P. Morgan Chase nor Kovel’s clients have opposed the Justice Department’s request.

In arguing for a delay, the Justice Department said Shak’s lawsuit is “related” to Edmonds’ criminal case and that Edmonds has “pleaded guilty and acknowledged his own participation in such conduct, as well as that of other traders.”

“Edmonds awaits sentencing, but the broader investigation is ongoing,” the Justice Department said. The U.S. wants to delay the civil case “to protect the integrity of its ongoing criminal investigation,” it said.

J. P. Morgan did not respond to a request for comment by CNBC. Kovel declined to comment.

Tuesday night, after this story first was published, Judge Paul Engelmayer ordered the federal prosecutors to explain in detail by Monday why postponing proceedings in the civil lawsuit would not harm those involved, and why reopening questioning “would be detrimental to the Government’s ongoing criminal investigation.”

Englemayer also wrote that he regards Edmonds’ guilty plea “as potentially highly consequential” to the civil case.

In his guilty plea, the 36-year-old Edmonds said he had learned to make bogus trade orders from senior traders at the bank and that he used the strategy hundreds of times with the knowledge and consent of his immediate supervisors. He admitted to working with “unnamed co-conspirators” at J. P. Morgan, according to the Justice Department.

Kovel wants to question Edmonds again as well as Michael Nowak, the bank’s global head of base and precious metal trading, and former J. P. Morgan Chase Managing Director Robert Gottlieb. The three had previously answered questions under oath in the civil case.

Kovel said in court filings that Nowak was the immediate supervisor of Edmonds, while Gottlieb was Edmonds’ mentor.

In his prior deposition, Edmonds said that Gottlieb sat only a “couple feet” away from him for about five years, and that he was “somebody [he] looked up to in the business,” who helped guide and train him.

Nowak is described by Edmonds as his direct supervisor, with whom he would sometimes discuss trading strategies. Nowak was also the person responsible for overseeing the performance and risk of Edmonds’ portfolio, according to the deposition.

Edmonds also stated in his prior deposition that he would enter precious metals trades for both Nowak and Gottlieb, among others.

The civil lawsuit claims Shak and his fellow plaintiffs lost tens of millions of dollars as a result of actions by J. P. Morgan’s traders.

A federal judge tells traders that they can combine cases (with the other 6 banks) as they accused JPMorgan of rigging the precious metals market
(courtesy CNBC)

Federal judge tells traders they can combine cases accusing JP Morgan of rigging metals market

  • Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.
  • Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.

71671201

Spencer Platt | Getty Images

A group of traders from across the U.S. who allege that J. P. Morgan Chase manipulated precious metals markets for years are one step closer to bringing a class action suit against the nation’s largest bank.

Earlier this month, a federal judge said five separate lawsuits making similar allegations against the bank could be combined, potentially including thousands of people who traded in the precious metals market from Jan. 2009 through Dec. 2015.

Litigation in a separate civil case has been put on hold until at least May at the behest of the Justice Department, which is investigating a “related criminal case” that involves alleged market manipulation by precious metals traders at J. P. Morgan.

J. P. Morgan declined to comment on this story.

Judge John Koeltl of the Southern District of New York appointed the White Plains, N.Y., law firm Lowey Dannenberg as interim lead counsel for the proposed class action.

Vincent Briganti, a partner at the firm, filed the first suit seeking class action status in November on behalf of Dominick Cognata, a trader who alleges he suffered losses due to J.P. Morgan’s illegal trading conduct in the silver and gold futures and options markets.

That was after the federal court in Connecticut unsealed a criminal plea agreement by John Edmonds, a former J.P. Morgan metals trader. In his guilty plea, Edmonds, who is 36-years old, admitted that he and other “unnamed co-conspirators” fraudulently manipulated the precious metals markets while they were employed at J. P. Morgan from 2009 to 2015.

Edmonds said he had learned the illegal trading tactics from senior traders, and then used them hundreds of times with the knowledge of and consent of his immediate supervisors.

Briganti’s lawsuit also names John Edmonds and a group of yet-to-be-identified precious metals traders and the bank as defendants.

On Wednesday, the lawyers sent a letter to Judge Koeltl saying they were having difficulty locating Edmonds to serve him legal papers and requested a 30-day extension to do so, which the judge granted on Thursday. Briganti noted that they have been in contact with Edmonds’ attorney in the criminal case. Edmonds’ attorney and Briganti could not be reached for comment.

“We are hopeful that this extension will result in completing service on Mr. Edmonds without formal motion practice and a request for alternative means of service,” Briganti said in the letter.

The next step in the civil case is for the plaintiffs to file an amended class action complaint and set a schedule for defendants to respond.

In addition to the proposed class action, J. P. Morgan also faces a separate civil suit which also accuses the bank of rigging precious metals markets.

end

March 4.2019

Parker City News

JP Morgan faces potential class action lawsuit after guilty pleas by a former metals trader

Traders from across the U.S. are banding together to accuse J. P. Morgan Chase of manipulating precious metals markets for years.

At least six lawsuits, all making similar allegations against the nation‘s largest bank, have been filed in New York federal court in the past month, since federal prosecutors in Connecticut with a former J. P. Morgan Chase metals trader.

The cases could potentially include thousands of people who traded in the precious metals market. The White Plains, N.Y., law firm Lowey Dannenberg is asking the court to combine the cases and name it as the lead.

The law firm‘s commodities group is led by Vincent Briganti, the attorney who filed the first lawsuit on behalf of Dominick Cognata, a New York resident who alleges he suffered losses due to J. P. Morgan‘s trading conduct in the silver and gold futures and options markets.

A combined case, seeking class action status, would include anyone who purchased or sold futures contracts or an option on NYMEX platinum or palladium or COMEX silver or gold between at least Jan. 1, 2009, and Dec. 31, 2015. The lawyers believe that “at least hundreds, if not thousands” of traders would be eligible to join the case.

Named as defendants in all of the lawsuits are John Edmonds, a 36-year old former metals trader at J. P. Morgan, a group of yet-to-be-identified precious metals traders and the bank.

Edmonds, a New York resident, pleaded guilty in October to one count of conspiracy to defraud the market and manipulate prices of precious metals futures contracts and one count of commodities fraud. In the criminal plea, Edmonds admitted that he and other “unnamed co- conspirators” at J. P. Morgan, fraudulently manipulated precious metals markets from 2009 to 2015, the same time frame covered in the class action suits.

Briganti filed the initial class action on Nov. 7, just one day after the Justice Department unsealed Edmonds‘ plea in the U.S. District Court of Connecticut.

Edmonds admitted in his guilty plea that he deployed the illegal trading scheme hundreds of times with the direct knowledge and consent of his immediate supervisors. Plaintiffs say they have suffered economic injury, including monetary losses, as a direct result of actions by Edmonds and the other unnamed J. P. Morgan metals traders in the futures and options contracts.

One of the suits alleges that “the number of unlawful trades that JP Morgan traders executed in precious metals futures markets is at least in the thousands.”

J. P. Morgan declined to comment. Lowey Dannenberg did not respond to a request for comment by CNBC.

The Justice Department‘s criminal investigation is still ongoing and recently caused a separate related civil case to be put on hold for at least six months while the government continues its investigation. That civil lawsuit, which also accuses J. P. Morgan of rigging the precious metals market, was filed in 2015 by hedge fund manager Daniel Shak and two commodity traders.

After reviewing the details of the plea agreement, David Kovel, the attorney for Shak‘s suit, sought to re- interview Edmonds, along with two other current and former senior traders at the bank. However, the government argued that reopening questioning would be detrimental to the ongoing criminal investigation. The federal judge overseeing the proceedings ordered a six-month stay in the civil case.

Kovel declined to comment.

Edmonds was originally scheduled to be sentenced in Hartford, Conn., on Wednesday, Dec. 19, but a court filing on Nov. 27 shows the sentencing has been postponed until June. A spokesman for the U.S. Attorney for Connecticut could not elaborate on why the sentencing was postponed since the court filing is under seal.

-END-

Good morning Bill/Harvey, (from Africa),

Consistency is a very valuable quality in these days of so much change. Let us give an accolade to the LBMA and BOE. The total London vault gold holdings represent consistency personified. The public dissemination of loco London LBMA vault gold holdings started as at 31st July 2016 .The total was 234 million ounces and the BOE holding included in this figure was 68% at 159 million ounces. Fast forward to 30th November 2018 (the LBMA considers it prudent to disclose data 90 days in arrears) and the total is disclosed at 239 million ounces (being 7,434, tonnes) and the BOE portion is again 68% at 162 million ounces. I have not looked at the exchange for physical volumes for a while, but I looked just now and the YTD 2019 figure is 945 tonnes to be added to the total for 2018 of 7,310 tonnes (combined total 8,255 tonnes). The figures are an insanity and only two explanations seem feasible. The EFP mechanism is merely an opaque netting- off of collusive criminal manipulation between collaborating counter parties whereby short and long contracts disappear from sight to prevent the open interest figure going stratospheric, or else China is the counter party receiving a handsome reward by way of unrecorded fees in order to be persuaded to delay the introduction of physical gold into the monetary system.

China is apparently happy to concentrate for the time being on the roll out of the One Belt, One Road series of projects and I read that the payment mechanism for much of this capital development is achieved via the release of its USA Bonds, which still retain value with the USD index circa 96-97. Additionally I am sure that some of these bonds are utilized in settling the cost of the importation of the reported figures for West to East physical gold exports. John Bolton desperately needs another war so why would the Sino/Russo alliance do anything provocative? The cancer within the USA is metastasizing at a visible rate on a daily basis as society atrophies into complete oblivion. I can understand why the Democrats are so opposed to border security since they need to enlist the support of the influx of refugees in order to gain back control and start the distribution of free stuff; whilst the constituency for this free stuff will expand to (say) four hundred million, that is not really a cost at all-you must understand that free stuff has no cost-that is why it is such a good idea. I do not, however, understand why ‘’abortion after birth’’ has been elevated to a principal war cry-maybe stevequale.com provides the answer as the role out of pure evil is chronicled scores of times every day. What are the odds of USA stumbling in a reasonably orderly fashion towards free and credible elections next year?  China, Russia and Iran and others need merely to accumulate the last dribblings of physical gold available and just wait. But then, according to Dane Wigington, it is game set and match against humanity within the next decade so things will get more than interesting in the coming days.

Regards

-END-
Both Russia and Australia increased their gold production to 314 and 317 tonnes respectively.  They are the leaders in world production of gold
(courtesy Lawrie Williams)
GOLD/SILVERLAWRIE WILLIAMS: Whither peak gold? Australian 2018 output at new record

Predictions of the timing of peak gold (when global annual gold output starts to come down) keep on falling by the wayside and the latest nail in its coffin may well prove to be the apparent rise in last year’s gold output from Australia – currently the world’s No. 2 producer of new mined gold. There seems to be an ongoing battle for the No. 2 spot between Australia and Russia and figures emanating from both countries suggest that their outputs of gold last year are both still on the upwards path.

We reported here that the Russian Finance Ministry put that nation’s 2018 output at around 314 tonnes (See: Russia closing gap on China as World No.1 gold miner?) and now Australian consultancy, Surbiton Associates, has come up with a report estimating the down-under 2018 figure for gold output was a new annual record of 317 tonnes, keeping it in the No. 2 spot (still just ahead of Russia). Now the Russian Finance Ministry and Surbiton Associates figures will probably both be a little above the year-end estimates from the two big UK-based precious metals consultancies, Metals Focus and GFMS when they publish their assessments in around a month’s time, as we believe they both include categories of gold output not taken into account by the big UK consultancies, but regardless new mined output in both nations continues to rise and may carry on doing so for the next couple of years at least.

In Russia both the the country’s largest gold miners (Polyus Gold and Polymetal) are on the expansion trail while Australia’s future output growth also looks to be positive. Indeed Dr Sandra Close, a director of Surbiton Assoiciates, comments “It took 21 years to break the old calendar year record and the outlook for the near term looks positive but of course there can always be surprises,” she said.

“Following a fall to just 220 tonnes in calendar 2008, the industry has bounced back, helped in part by the weakening of the Australian dollar against the US dollar, as it has fallen from around parity to near US 70 cents in the last decade.”

The writer considers the Surbiton figures to be very accurate, given the consultancy concentrates 100% on the Australian gold sector – and is local rather than being located 17,000 km away!

“The last few months have been a time for records,” Dr Close said. “Not only did we have record gold production for the 2018 year and near record quarterly production but the gold price in Australian dollars also hit an all-time record of A$1,876 per ounce on 20 February this year.” The high Australian dollar gold price has provided a great stimulus to gold exploration which has led to the delineation of new gold belts, particularly in the prolific Kalgoorlie area of Western Australia.

Surbiton notes the planned Gold Fields/Gold Road’s big new Gruyere gold mine is due to come on stream this year and is scheduled to to ramp up to around 300,000 ounces a year (or some 10 tonnes) annually at full capacity. Newcrerst’ Cadia mine in New South Wales, the country’s biggest gold producer, has been recovering from technical issues and in the December quarter was producing at a rate of around 950,000 ounces a year (nearly 30 tonnes) as compared with only 752,000 ounces (23.3 tonnes) for the whole of 2018, and Kirkland Lake’s Fosterville mine in central Victoria had already been in production for around 20 years when its present owners, Canada’s Kirkland Lake Gold Ltd, began discovering zones of high grade gold ore building its output tobecome the country’s fifth largest producer in the December quarter. “Fosterville will become a significant producer in 2019, as Kirkland Lake has just announced its output should rise from around 350,000 ounces (10.9 tonnes) in 2018 to some 600,000 ounces (18.7 tonnes)in 2019,” Dr Close said. “Its average grade was an extraordinary 40 grams per tonne in the December 2018 quarter.”

Indeed Australia’s 2018 gold production would have been even higher had it not been for a severe pit wall collapse at the Newmont/Barrick owned Kalgoorlie Super Pit in May 2018 which reduced output to 628,000 ounces (19.5 tonnes) for the whole of 2018, down from 738,000 ounces (23 tonnes) in 2017. Remeial action is under way but whether the mine will ever get back to its earlier production levels is unknown. It was still the country’s third largest gold miner in 2017, but had dropped out of the top five during the December quarter “for the first time since Surbiton began its quarterly gold survey over 25 years ago”noted Dr. Close.

She also had a fair amount to say on the return of gold hedging by the country’s miners which she obviously views as a positive development.. “According to quarterly reports submitted to the Australian Securities Exchange (ASX) for the December 2018 quarter, more than one million ounces, (around 31 tonnes) of future production, was hedged by ASX-listed gold producers,” Dr Close said. “To that must be added the gold hedged by foreign- owned gold producers in respect of their Australian operations.” This is in marked contrast to the attitude of producers for many years when hedging was considered a dirty word and was shunned, not only by overseas companies but also by many Australian gold miners. In many cases, the companies boasted of their unhedged status and publicised the fact accordingly.

“Hedging and price protection methods of selling, such as forward sales and the use of options, are sensible and legitimate methods of risk management,” Dr Close said.

“Many people used to regard hedging as “speculation”, when in fact it is precisely the opposite – it is risk reduction.”

Australia’s largest individual gold producers for the 2018 calendar year according to Surbiton’s figures were

Operation Ounces Produced Ownership
Cadia 751,965 Newcrest Mining
Boddington 709,000 Newmont Mining
Super Pit jv 628,000 Newmont Mining 50%, Barrick Gold 50%
Tanami 496,000 Newmont Mining
Tropicana jv 477,908 AngloGold 70%, Independence Group 30%

03 Mar 2019

-END-

Your early TUESDAY 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/ LAST AT: 6.7020/

 

//OFFSHORE YUAN:  6.7047   /shanghai bourse CLOSED UP 26.67 POINTS OR 0.88% /

 

HANG SANG CLOSED UP 2.84 POINTS OR 0.01%

 

 

2. Nikkei closed DOWN 96.76 POINTS OR 0.44%

 

 

 

 

 

 

3. Europe stocks OPENED RED

 

 

 

 

 

 

 

 

/USA dollar index RISES TO 96.68/Euro FALLS TO 1.1331

3b Japan 10 year bond yield: RISES TO. +.01/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 111.96/ THIS IS TROUBLESOME AS BANK OF JAPAN IS RUNNING OUT OF BONDS TO BUY./JAPAN 10 YR YIELD IS NOW TARGETED AT .11%/JAPAN LOSING CONTROL OF THEIR BOND MARKET

 

3c Nikkei now JUST BELOW 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e WTI:: 56.73 and Brent: 65.83

3f Gold DOWN/JAPANESE Yen DOWN CHINESE YUAN:   ON -SHORE  UP  /OFF- SHORE: UP

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO +.18%/Italian 10 yr bond yield UP to 2.71% /SPAIN 10 YR BOND YIELD UP TO 1.16%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.53: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 3.70

3k Gold at $1285.35 silver at:15.09   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 7/100 in roubles/dollar) 65.83

3m oil into the 56 dollar handle for WTI and 66 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 111.96 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning 1.0013 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1343 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

3p BRITAIN VOTES AFFIRMATIVE BREXIT/LOWER PARLIAMENT APPROVES BREXIT COMMENCEMENT/ARTICLE 50 COMMENCES MARCH 29/2017

3r the 10 Year German bund now POSITIVE territory with the 10 year FALLING to +0.17%

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 2.74% early this morning. Thirty year rate at 3.10%

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

6.  TURKISH LIRA:  UP  TO 5.3804

 

Global Rally Fizzles, S&P Futures Capped At 2,800

European stocks and US futures were higher on Tuesday following a mixed session in Asia, although traders faded earlier euphoria and the Stoxx 600 was little changed, erasing a gain of as much as 0.3% as traders awaited more details on a potential US-China trade deal, after earlier in the day China pledged more stimulus to stabilize slowing growth when it predicted its 2019 GDP would shrink to “6-6.5%.”

Europe’s Stoxx 600 Index inched fractionally higher, led by gains in telecommunications shares, pushing the broader index deeper into overbought territory…

… with traders pleasantly surprised for once by stronger European Services PMIs across the board, suggesting Europe’s economic slowdown may have found the reverse gear:

  • EU Markit Services Final PMI (Feb) 52.8 vs. Exp. 52.3 (Prev. 52.3)
  • Italian Markit/IHS Services PMI (Feb) 50.4 vs. Exp. 49.4 (Prev. 49.7)
  • French Markit Services PMI (Feb) 50.2 vs. Exp. 49.8 (Prev. 49.8)
  • UK Markit/CIPS Services PMI (Feb) 51.3 vs. Exp. 49.9 (Prev. 50.1)

Tobacco, healthcare, consumer staples, and other safe havens led the gains amid broader gloom about the global economy. British American Tobacco, Anheuser Busch and Unilever were up between 1.2% and 2.1%. Among individual movers, Evonik shares were close to four-month highs after the German chemicals group reported a slight rise in profits thanks to its coating additives and engineering plastics division. Vodafone added 2.3 percent after announcing plans to issue 4 billion euros ($4.5 billion) worth of convertible bonds to help finance its takeover of some Liberty assets. Elsewhere in the UK, British product testing company Intertek was the biggest faller in London, with a dealer attributing the drop to profit taking after largely in line full-year results. Luxury goods companies Richemont and Moncler were each down more than 3 percent after downgrades.

Meanwhile, in the US. S&P index futures traded higher following a lackluster start, although off their highs as the critical resistance at 2,800 is once again proving a solid barrier for the bulls.

Futures rebounded after yesterday’s surprising selloff, which took place despite the latest bout of “trade talk optimism”, and after stocks in Europe and Asia were buoyed on Monday by news that the world’s two-largest economies were close to a trade deal, investors are now hungry for concrete details before they push a global equities rally further. Meanwhile, trade and slowing growth are on the agenda as China’s most powerful officials gather in Beijing, while investors will get the latest read on the U.S. economy with the monthly jobs report Friday.

Earlier, during the Asian session shares declined in Japan, Korea and Australia and posted modest gains; the Shanghai Comp. nursed some opening losses following the release of the NPC work report which pledged to expand infrastructure investments and cut manufacturing VAT to 13% from 16%, whilst transport and construction VAT is to be reduced to 9% from 10%. Although the release of a dismal Caixin services PMI briefly dented the index, Chinese stocks closed at session highs,  up 0.8%.  The unchanged Hang Seng conformed to the overall risk-averse tone with its heavy-weight financial sector as the marked underperformer.

As part of the annual work report to the National People’s Congress, China lowered its 2019 GDP growth target to the range of 6.0-6.5% from “around 6.5%” and maintained CPI target at 3.0%, both as expected. Budget deficit for 2019 was set at 2.8% vs. 2.6% in 2018. China stated that fiscal policy to be proactive and monetary policy to be prudent will not resort to flood-like stimulus, whilst also saying it will keep the Yuan basically stable at reasonable equilibrium and is to increase the flexibility of the Yuan exchange rate while keeping liquidity reasonably ample. China will expand infrastructure investments in 2019 and plans to cut manufacturing VAT to 13% from 16%, as touted, VAT for transport and construction sectors to be reduced to 9% from prior 10%. China will make economic policy for forward-looking, targeted and effective whilst maintaining pace and strength in risk prevention, and higher budget deficit ration will leave more policy room for resolving potential risks. China will also step up targeted RRR cuts for smaller and medium-sized banks to support private and smaller firms. Growth in M2 Money Supply and social financial to be in-line with nominal GDP growth and basically the same as in 2018. China is to implement consensus reached between US and Chinese leaders in Argentina, but said it needs to brace for a tough economic battle.

While China’s GDP cut underlined the strain that has slowed growth and roiled global markets, stimulus steps reassured investors that Beijing was serious about steadying the economy. “I think we all saw it coming. The growth trend was going to be cut and they’re saying the right things about stimulus. They have plenty of policy levers to pull if needed,” said Peel Hunt economics and strategy research analyst Ian Williams.

Still, European autos and suppliers, which rely on Chinese demand, were under pressure, with Continental and Daimler among the biggest fallers in Frankfurt.

In FX, the Bloomberg Dollar Spot Index headed for a fifth day of gains, with the greenback trading stronger versus most G-10 peers. China cutting its growth target kept high-beta currencies under pressure, while the euro failed to gain momentum after PMI data from the currency bloc beat expectations. Loonie drops to its lowest since Jan. 25 amid a deepening crisis in Justin Trudeau’s government. The yen dipped while the Australian dollar recovered somewhat after falling earlier to a three-week low, after the central bank left its benchmark interest rate unchanged.

In other overnight news, President Trump plans to terminate India and Turkey as Generalised System of Preferences beneficiaries. The move comes as India has not assured the US that it will provide “equitable and reasonable” market access and Turkey is now “sufficiently economically developed”; according to US Trade officials. Indian Trade Ministry Official, in response, said US and India were able to work out an extensive and reasonable package which covered almost all US concerns, although the advantages under the US GSP are “minimal and moderate”.

In the latest Brexit tragicomedy news, UK PM May has been warned that she must whip her MPs to keep a no-deal Brexit on the table, whilst Senior Eurosceptics are convinced PM May will lose the vote on her Brexit deal and they do not expect Attorney General Cox to win concessions on the Northern Irish backstop. May is also reportedly considering a parliamentary vote on the UK’s future relationship with the EU, as per demands from Labour MPs. A source close to a cabinet minister also stated that there seemed to be “no chance” that her deal would pass next week. Meanwhile, the FT reported that UK Trade Secretary Fox’s department has cancelled its regular meetings with business after the details of a prior meeting were leaked to the media.

In other news, Treasury Secretary Mnuchin has urged Congress to lift the debt limit as soon as possible and added that the new debt issuance suspension will be from March 4th to June 5th, although the Treasury can easily extend debt suspension measures into September and perhaps October

Elsewhere, West Texas Intermediate crude oil ticked lower though remained above the $56 a barrel level. Brent (+0.2%) and WTI (+0.1%) prices are firmer although they were initially weighed on by the deteriorating risk tone, and Chinese Caixin Services PMI coming in below expectations at 51.1 vs. Exp. 53.5; with the complex also affected by dollar strength. Elsewhere, the El Sharara oil field has reopened at a current output of 30k BPD, far below the field’s capacity of around 300k BPD; although NOC has stated that a return to regular output is expected in the next few days. Looking ahead we have API Weekly release later in the session, which last week saw crude stocks fall by -4.2mln.

Gold (-0.1%) is relatively unchanged with the metal affected by both the stronger dollar and the deterioration in the risk tone seen overnight; Gold futures slid for a seventh straight session, the longest slump since March 2017.

Market Snapshot

  • S&P 500 futures up 0.2% to 2,796.50
  • STOXX Europe 600 up 0.2% to 375.70
  • MXAP down 0.3% to 159.41
  • MXAPJ down 0.06% to 525.58
  • Nikkei down 0.4% to 21,726.28
  • Topix down 0.5% to 1,619.23
  • Hang Seng Index up 0.01% to 28,961.60
  • Shanghai Composite up 0.9% to 3,054.25
  • Sensex up 1% to 36,410.29
  • Australia S&P/ASX 200 down 0.3% to 6,199.29
  • Kospi down 0.5% to 2,179.23
  • German 10Y yield rose 2.0 bps to 0.178%
  • Euro down 0.1% to $1.1329
  • Brent Futures down 0.6% to $65.30/bbl
  • Italian 10Y yield rose 0.5 bps to 2.38%
  • Spanish 10Y yield fell 0.3 bps to 1.169%
  • Brent Futures down 0.6% to $65.30/bbl
  • Gold spot down 0.2% to $1,284.73
  • U.S. Dollar Index up 0.04% to 96.72

Top Overnight News

  • China’s GDP growth target in Premier Li Keqiang’s annual work report to the National People’s Congress was set at a range of 6-6.5% for 2019, compared with last year’s “about” 6.5% goal
  • Services expanded across the 19-nation euro area, bolstered by gains in Germany, Ireland and Spain, according to IHS Markit. That pushed a composite Purchasing Managers’ Index to 51.9, the highest in three months. An initial reading was for an increase to 51.4
  • The BOE is launching a new liquidity facility in euros in the final few weeks before the scheduled date for Britain to leave the European Union
  • Bank of Japan board members are likely to discuss a possible downgrade of their assessments of industrial production, exports and overseas economies when they meet to set policy next week, according to people familiar with the matter
  • The U.S. is giving American exporters a sizable tax break on the goods and services they sell overseas. But the benefit might not be enough to convince Corporate America to expand its U.S. operations beyond what it was already planning
  • Australia is no stranger to heated debate about the direction of its housing market. This week, that spread to mortgage debt too. Suncorp Group Ltd. said Monday that arrears on one parcel of securities are creeping past the level that triggers a change in how principal repayments are carved up

Asian stocks traded lacklustre following a disappointing lead from Wall Street after the Dow slipped 0.8%, weighed on by Boeing and Goldman Sachs shares, whilst the S&P shed 0.4% amid underperformance in healthcare names. Both indices marked their worst turnaround since early February. ASX 200 (-0.3%) extended losses from the open amid underperformance in the Consumer Discretionary and Material sectors, whilst Nikkei 225 (-0.4%) was weighed on by commodity exposed stocks. Elsewhere, Shanghai Comp. (+0.8%) nursed some opening losses following the release of the NPC work report which pledged to expand infrastructure investments and cut manufacturing VAT to 13% from 16%, whilst transport and construction VAT is to be reduced to 9% from 10%, although the release of dismal Caixin services PMI briefly dented the index. Finally, Hang Seng (U/C) conformed to the overall risk-averse tone with its heavy-weight financial sector as the marked underperformer.

Top Asian News

  • BOJ Is Said to Discuss Downgrading Its Views of Output, Exports
  • What Analysts Are Saying About New Philippine Central Bank Head
  • Mandiri Said to Eye Deal for $2 Billion StanChart- Backed Rival
  • Tencent Jumps to 6-Month High on Optimism Over Key Game

Major European indices are moving towards negative territory, after starting the session somewhat firmer [Euro Stoxx 50 U/C] moving more in-line with the relatively poor performance seen overnight in Asia which was dictated largely by a disappointing lead from Wall Street. Sectors are mixed, with some slight underperformance in consumer discretionaries; the sector is weighed on by poor performance in Daimler (-0.8%), which represents around 7% of the sectors weighting, who are in the red after executives at the Co. stated they may have to lift prices to pass on potential US tariffs. Other notable movers include, Evonik (+3.8%) who are at the top of the Stoxx 600 after earnings where they beat on Q4 revenue. At the other end of the Stoxx 600, and weighed on by broker moves, are Altice (-9.1%) as are Richemont (-3.2%), who were both downgraded at Barclays and BOFA Merrill Lynch respectively. Elsewhere, Vodafone (+1.9%) are higher after after the Co. state they intend to raise around EUR 4bln through sterling denominated MCBS and there is the potential for a share buyback as part of this. Separately, British American Tobacco (+1.0%) are higher as the Co. state there will be no impact from the Quebec charge to their ratio of adj. net debt to adj. EBITDA.

Top European News

  • Euro Area’s Resilient Services Sector Puts Mild Gloss on Economy
  • BOE Starts Euro Lending Facility to Cushion Brexit Risks
  • Italy’s State Lender May Back Elliott at Tel Italia Vote: Stampa

In FX, the DXY is off best levels, but the index continues to edge higher and just surpassed another chart resistance level (96.784) ahead of the next big figure on its way to a 96.815 high. The Greenback is still benefiting from weakness in rival currencies to an extent if not large part, or by default as a combination of negative/bearish factors inflict damage elsewhere (ranging from weaker macro fundamentals relative to the US, geopolitical instability/uncertainty and Central Bank policies aligning to Fed patience or even turning more dovish in certain cases, to name just a few). The DXY is now holding around 96.750 and well above Monday’s 96.331 low.

  • NZD/CAD – The 2 biggest G10 losers, with the Kiwi slipping below 0.6800 amidst a broader fall-out in risk currencies following a considerably weaker than forecast Chinese Caixin services PMI and confirmation that the NPC has downgraded its GDP sights to 6-6.5% from 6.5% previously. Meanwhile, the Loonie has extended recent losses to fresh multi-month lows circa 1.3350 vs its US counterpart with the added weight of heightened strains between Canada and China, plus another downturn in crude prices.
  • EUR/AUD/JPY/CHF – Also weaker vs Usd, as the single currency fails to derive much/any real support from surprise beats and upward tweaks to the Eurozone services PMIs, including the Italian headline that rebounded over 50.0 and was supplemented by an unexpected Q4 GDP revision to -0.1% q/q from -0.2%. Eur/Usd is hovering just above yesterday’s 1.1309 base and Fib support at 1.1305, but looks technically weak after breaching 1.1350 and key chart levels not far above. Similarly, the Aussie is struggling to mount a concerted recovery from recent lows towards 0.7100 after a dovish RBA policy statement on balance and yet more poor data overnight (Q4 net exports), and Aud/Usd could become increasingly drawn to a hefty option expiry down at 0.7050 as a result (1.6 bn). Meanwhile, the Yen and Franc continue to trade defensively on constructive US-China trade deal vibes, with Usd/Jpy edging back up to 112.00 and Usd/Chf straddling parity. Note also, decent option expiries in Usd/Jpy may impact into the NY cut, with 1 bn running off between 111.80-90 and 1.9 bn at the 112.00 strike.
  • GBP/SEK – Relative outperformers on better than expected UK and Swedish services PMIs vs other more downbeat economic indicators. However, Cable remains capped ahead of 1.3200 and the 100 WMA (1.3207), with the 10 DMA (1.3161) and a Fib (1.3130) now flanking the pair as it pivots 1.3150 awaiting any further Brexit developments. Eur/Sek has retreated through 10.6000 again and retesting bids around 10.5500.
  • EM – More angst for the Try and Inr after the US pulled the GSP plug from both nations, with the Lira attempting to pare losses and stay above 5.4000, but the Rupee staging a firmer recovery from almost 71.0000 at one stage as India’s Trade Ministry downplayed the impact of the trade pact being terminated.

In commodities, Brent (+0.2%) and WTI (+0.1%) prices are firmer although they were initially weighed on by the deteriorating risk tone, and Chinese Caixin Services PMI coming in below expectations at 51.1 vs. Exp. 53.5; with the complex also affected by dollar strength. Elsewhere, the El Sharara oil field has reopened at a current output of 30k BPD, far below the field’s capacity of around 300k BPD; although NOC has stated that a return to regular output is expected in the next few days. Looking ahead we have API Weekly release later in the session, which last week saw crude stocks fall by -4.2mln. Gold (-0.1%) is relatively unchanged with the metal affected by both the stronger dollar and the deterioration in the risk tone seen overnight. Elsewhere, metals were weighed on by China lowering its GDP growth target to 6.0-6.5% from the prior of around 6.5%. Separately, the amount of copper available in LME system, fell to the lowest level since 2005 of 21.6k tonnes.

Looking at the day ahead, we’ll get the final PMIs as well as the February ISM non-manufacturing (+0.6pts to 57.3 expected) and December new home sales (-8.7% mom expected). Away from that we’re due to hear from Italy’s finance minister Tria this morning, before the BoE’s Carney speaks this afternoon before the House of Lord’s Economic Affairs Committee. The Fed’s Rosengren is also set to speak today.

US Event Calendar

  • 9:45am: Markit US Services PMI, est. 56.2, prior 56.2; Markit US Composite PMI, prior 55.8
  • 10am: ISM Non-Manufacturing Index, est. 57.4, prior 56.7
  • 10am: New Home Sales, est. 600,000, prior 657,000; New Home Sales MoM, est. -8.68%, prior 16.9%
  • 2pm: Monthly Budget Statement, est. $12.0b, prior $13.5b deficit

Central Banks

  • 8am: Fed’s Rosengren Speaks on Current Economic Outlook
  • 9:30am: Fed’s Kashkari Testifies Before Minnesota Senate Finance Panel
  • 11:30am: Fed’s Barkin Speaks at the Rural Economy

DB’s Jim Reid concludes the overnight wrap

The flu-inspired daze continues. I can’t remember a four day period where I’ve slept as much as this one, albeit punctuated at regular intervals with choking coughing fits. If I make it into the city today please give me a wide berth for the sake of you and your family.

Markets seemed like they were suddenly struck down by a nasty ailment yesterday as the early optimism sparked by Asia this time yesterday reversed spectacularly by US lunchtime. Despite opening +0.47% higher, the S&P 500 ended up closing -0.39% lower, albeit well off the intraday lows of -1.29%. The DOW (-0.79%) and NASDAQ (-0.23%) had similar trajectories. There was not a clear macro catalyst, but it seemed like political tensions played a prominent role in the selloff, as headlines (per Bloomberg) surfaced about House Democrats deepening and broadening their investigations of the President. The House Judiciary Committee sent requests for documents to 81 entities, including the President’s son, his former CFO, and his lawyer. The VIX index mirrored the move in cash equities, rising as much as +3.1pts and on track for its sharpest rise since Christmas Eve before moderating in the afternoon to end end +1.06pts higher at 14.63.

Further weighing on sentiment was negative news in the healthcare sector, with the S&P 500 healthcare index dropping -1.34%. Despite making up only 14% of the S&P 500 by market cap, it drove over half of yesterday’s declines. Drugmaker Eli Lilly (-1.07%) announced that it would offer its insulin product at half price, possibly in response to political pressure over high pharmaceutical prices. The managed care sector (-4.41%) had its worst day since 2015, partially on worries over political risks and partially due to a positioning unwind. Data showed that the largest US-traded healthcare ETF saw outflows of -$855million last week, its most since 2015 as well.

This morning the focus has quickly turned to China’s National People’s Congress where the early headlines (per Bloomberg) are suggesting that China will resort to moderate fiscal stimuli to support slowing growth as China announced a fiscal deficit target of 2.8% of GDP in 2019 versus 2.6% in 2018 while pledging a “noticeable decrease” in the tax burdens for major industries. Premier Li Keqiang’s annual work report announced total tax and social security fees cuts of CNY 2tn ($ 298bn). China is now targeting GDP growth in the range of 6%-6.5% in 2019 (vs. last year’s goal of c. 6.5%), marking a shift from previous practice of using a point figure. The work report also indicated that further cuts to the required reserves ratio for smaller banks are planned. At first glance much of the above has been expected so no major surprises here. Chinese equity markets are seeing small gains this morning though with the Shanghai Comp (+0.11%) and Shenzhen Comp (+0.75%) both up following the news on tax breaks and also on the story yesterday that China is planning a three percentage point cut to the top VAT bracket – news that was also anticipated. We should note that we’ve had the remaining February Caixin PMIs in China too this morning with the composite reading at 50.7 (vs. 50.9 last month) and services PMI decelerating to 51.1 (vs. 53.5 expected). So a bit disappointing.

Sentiment is not as rosy across the remainder of Asia with markets largely following Wall Street’s lead from yesterday. The Nikkei (-0.46%), Hang Seng (-0.03%) and Kospi (-0.55%) are all down. Not helping sentiment overnight was news from China’s Commerce Minister Zhong Shan that it will take more efforts by China and the US to reach an agreement on trade. He suggested talks were difficult due to differences in culture and stages of development and that both sides need to meet each other half way to get a deal. So a slightly more cautious view than that seen of late. Elsewhere, futures on the S&P 500 are largely trading flat (-0.03%) while all G-10 currencies are trading weak (down in the range of -0.1% to -0.4%) this morning. In terms of other data releases, Japan’s February composite PMI came at 50.7 (vs. 50.9 last month) with the services PMI reading at 52.3 (vs. 51.6 last month).

Back to markets yesterday and early weakness for the Greenback post the Trump comments over the weekend quickly reversed after Europe walked in and then later once the US session kicked off. The Dollar index eventually ended +0.09% while EM FX was flat. Meanwhile the one laggard in the rates’ market yesterday was Greek bonds where 10y yields rose +3.0bps to 3.65% after the news that Greece had mandated six banks for a new 10y bond. The nation did do a 10y deal in 2017 albeit as part of a bond exchange. However prior to that the last syndicated deal was in 2010. It’s amazing that just 3 years ago Greek 10y bonds were trading around 10%.

Italian yields also underperformed a touch, with 10-year BTP yields up +0.5bps while bunds rallied -2.6bps. Attention focused on Bank of Italy Governor Visco’s comments ahead of this Thursday’s ECB meeting, in which he said that the “ECB’s money cannot be used to buy government bonds.” This suggests that any new TLTRO facilities could come with additional strings attached, to discourage banks from using cheap lending to finance carry trades, and to instead encourage lending to the corporate sector. Italian bank stocks ended the session flat.

In other central banks speak, Bank of Japan Governor Kuroda said that it will be difficult to reach the 2% inflation target in the current outlook period, but that factors slowing an acceleration in inflation will fade moving forward. This was interpreted as a signal that additional easing is not imminent, despite a deterioration in economic data, and Japanese government yields rose above 0.0% for the first time since January. This helped the yen appreciate +0.13% versus the dollar.

As for Brexit, there wasn’t a great deal of new news to report yesterday. Reuters did report that the Irish Prime Minister was supposedly willing to offer clarifications and reassurances to get a deal over the line. Today the UK’s Cox and Barclay are due to travel to Brussels so we may well get further headlines as the day progresses. While we’re on the UK it’s worth flagging a report from our UK economists yesterday on the domestic housing market. The headline conclusion is that underlying fundamentals remain strong, but Brexit, tighter macro prudential policy and tax changes have weighed on prices lately. That being said, they expect the housing market to start to recover from later this year – assuming ratification of a Brexit deal – so it’s not all doom and gloom. More in their report here .

On the data front, US construction spending fell -0.6% mom in December versus expectations for a 0.1% improvement and down from a 0.8% expansion previously. Our economists viewed the data as distorted by California wildfires, and they still expect a rebound in housing sector activity over the next few months as lower interest rates feed through to mortgage activity. An index of US homebuilder stocks rallied +2.43% yesterday. In the UK, the construction PMI printed at 49.5 from 50.6, dipping into contractionary territory for the first time in a year as the Brexit uncertainty weighs on activity.

Looking at the day ahead, this morning it’s all eyes on the remaining February services and composite PMIs in Europe including a first look at the data for the non-core and UK. We’ll also get the final Q4 GDP revisions for Italy where, as a reminder, the advanced reading (-0.2% qoq) confirmed a technical recession, and January retail sales data for the Euro Area. In the US we’ll also get the final PMIs as well as the February ISM non-manufacturing (+0.6pts to 57.3 expected) and December new home sales (-8.7% mom expected). Away from that we’re due to hear from Italy’s finance minister Tria this morning, before the BoE’s Carney speaks this afternoon before the House of Lord’s Economic Affairs Committee. The Fed’s Rosengren is also set to speak today.

 

3. ASIAN AFFAIRS

i)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED UP 26.67 POINTS OR 0.88% //Hang Sang CLOSED UP 2.84 POINTS OR 0.01%  /The Nikkei closed UP 96.76 POINTS OR 0.44%/ Australia’s all ordinaires CLOSED DOWN 0.34%

/Chinese yuan (ONSHORE) closed UP  at 6.7020 AS TRUCE DECLARED FOR 3 MONTHS /Oil DOWN to 56.73 dollars per barrel for WTI and 65.85 for Brent. Stocks in Europe OPENED RED EXCEPT LONDON//.

ONSHORE YUAN CLOSED UP // LAST AT 6.7020 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.7047: / TRADE TALKS NOW ON/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /CHINA RETALIATES WITH TARIFFS/ TRUMP RESPONDS TO NEW TARIFFS AND IT NOW A FULL TRADE WAR COMMENCED

 

3 a NORTH KOREA/USA

 

 

 

i)North Korea/

3 b JAPAN AFFAIRS

3 C CHINA

i) CHINA/

Important:  Housing is where China keeps all of its wealth..a drop in home prices will no doubt cripple their economy.  China’s largest property developwer is now selling all homes with a 10% discount.

(zerohedge)

It Begins: China’s Largest Property Developer Will Sell All Homes At A 10% Discount

Back in 2017, we explained why the “fate of the world economy is in the hands of China’s housing bubble.” The answer was simple: for the Chinese population, and growing middle class, to keep spending vibrant and borrowing elevated, it had to feel comfortable and confident that its wealth would keep rising. However, unlike the US where the stock market is the ultimate barometer of the confidence boosting “wealth effect”, in China it has always been about housing as three quarters of Chinese household assets are parked in real estate, compared to only 28% in the US, with the remainder invested in financial assets.

Source: Xinhua

Beijing knows this, of course, which is why China periodically and consistently reflates its housing bubble any time it feels the broader economy is slowing, hoping that any subsequent popping of the bubble, which happened in late 2011 and again in 2014, will be a controlled, “smooth landing” process. For now, Beijing has been successful in maintaining price stability at least according to official data, allowing the air out of the “Tier 1” home price bubble which peaked in early 2016, while preserving modest home price appreciation in secondary markets.

How long China will be able to avoid a sharp price decline remains to be seen, but in the meantime another problem faces China’s housing market: in addition to being the primary source of household net worth – and therefore stable and growing consumption – it has also been a key driver behind China’s economic growth, with infrastructure spending and capital investment long among the biggest components of the country’s goalseeked GDP. One result has been China’s infamous ghost cities, built only for the sake of Keynesian spending to hit a predetermined GDP number that would make Beijing happy.

Meanwhile, in the process of reflating the latest housing bubble, another dangerous byproduct of this artificial housing “market” has emerged: tens of millions of apartments and houses standing empty across the country. As we reported recently, according to recent research, roughly 22% of China’s urban housing stock is unoccupied, according to Professor Gan Li, who runs the main nationwide study. That amounts to more than 50 million empty homes.

The reason for the massive empty inventory glut: to keep supply low and prices artificially elevated by taking out as much inventory off the market as possible. This, however, works both ways, and while it helps boost prices on the way up as the economy grow and speculators flood the housing market with easy money, the moment the trend flips the spike in supply as empty units are offloaded will lead to a panic liquidation of homes, resulting in what may be the biggest housing market crash ever observed, and putting the US home bubble of 2006 to shame.

Indeed, as Bloomberg noted, the “nightmare scenario” for Chinese authorities is that owners of unoccupied dwellings rush to sell when cracks start appearing in the property market, causing a self-reinforcing downward price spiral.

Which is why preserving the narrative (or rather myth) of constantly rising prices is so critical for China: any cracks in the facade of the price appreciation story could have a dire consequence first for the housing market, and then, the broader economy whose growth is already the slowest in modern Chinese history, as any scramble to liquidate inventory could promptly result in a bidless market as the tens of millions of empty units are suddenly exposed for both buyers and sellers to see.

* * *

While the key role of China’s housing market in the country’s economy, and thus the world’s, has long been known, a recent troubling development is that despite what Beijing deems stable home prices, the foundations behind the housing market are starting to crack. As the WSJ recently reported, in early December, a group of homeowners stormed the sales office of their Shanghai complex, “Central Washington”, whose developer, Shanghai Zhaoping Real Estate Development, was advertising new apartments at a fraction of the prices of the ones sold earlier in the year. One apartment owner said the new prices suggested the value of the apartment she bought from the developer in March had dropped by about 17.5%.

“There are people who bought multiple homes who are now trying to sell one to pay off the mortgage on another,” said Ran Yunjie, a property agent. One of his clients bought an apartment last year for about $230,000. To find a buyer now, the client would have to drop the price by 60%, according to Ran.

Meanwhile, in a truly concerning demonstration of what will happen when the bubble finally bursts, in October we reported that angry homeowners who paid full price for units at the Xinzhou Mansion residential project in Shangrao attacked the Country Garden sales office in eastern Jiangxi province last week, after finding out it had offered discounts to new buyers of up to 30%.

Embedded video

Hao Hong 洪灝, CFA@HAOHONG_CFA

Country Garden cut the selling price at one of its residential developments by 1/3. Those who paid full price smashed the sales office. Similar incidents had happened before, and will again. It’s impossible to remove “the guarantee of principal”(刚性兑付)in China.

“Property accounts for roughly 70 per cent of urban Chinese families’ total assets – a home is both wealth and status. People don’t want prices to increase too fast, but they don’t want them to fall too quickly either,” said Shao Yu, chief economist at Oriental Securities. “People are so used to rising prices that it never occurred to them that they can fall too. We shouldn’t add to this illusion,” Shao added, echoing Ben Bernanke circa 2005.

The bottom line is that just like true price discovery for US capital markets is prohibited (and sees Fed intervention any time there is an even modest, 10-20% drop in asset prices) or else the risk of an all out panic is all too real, in China true price discovery is also not permitted, however when it comes to the country’s all important, and wealth effect boosting, real estate.

Which is a problem, because whereas China suddenly appears to be suffering from all the conventional signs of deflation in the auto retail sector, where as we noted previously, neither lower prices nor easier loans have managed to put a dent the ongoing demand plunge…

… the same ominous price cuts – which are clearly meant to boost flagging demand – are starting to emerge in China’s housing sector.

Case in point, according to China’s Paper, Hui Ka Yan, the Chairman of Evergrande, China’s biggest property developer, and China’s second richest person announced it must ramp up home sales and to do that it would sell all its properties at a 10% discount after its home sales tumbled in January amid a cooling market.

Evergrande Chairman Hui Ka Yan

The fact that Evergrande has had financial difficulties for the past year is not new. In November, Evergrande, which carries the industry’s largest debt pile of any Chinese housing developer, was caught in a vicious funding squeeze and raised eyebrows with a $1.8BN, 5-year bond deal, which it had to pay a whopping 13.75% coupon, prompting analysts to say the move “carried a whiff of desperation.” The fact that chairman Hui Ka Yan, China’s second-richest person, bought $1bn of it himself, added to a sense that outside investors were shunning the company.

In many ways, Evergrande had no choice: after the property market boomed for the past three years, helping to power the economy through Xi Jinping’s crucial political transition year of 2017, in 2018 the market slowed sharply, after local governments shifted focus to controlling frothy prices and China Development Bank, the policy lender, phased out a $1 trillion subsidy program for homebuyers in smaller cities, where Evergrande’s projects are concentrated, the FT reported.

Even the official China News Service, usually a cheerleader for the economy, acknowledged recently that the property market “was a bit chilly”. Nomura chief China economist Ting Lu put it more starkly, forecasting a “frigid winter”.

The bigger problem for Evergrande, which had $208 billion in total liabilities at the end of June 2018 — the most of any Chinese developer — including $43bn maturing in 2019, is that should China’s housing market suffer a steep downturn, it will likely be the company to suffer the most, if for no other reason than its massive leverage which stood at a net debt to equity ratio of 400%.

Commenting on the bond sale, a high-yield debt underwriter at a western bank in Hong Kong told the FT that “Evergrande is very levered, so, yes, they do need cash,” said “That said, they are not a name we see as having a near-term liquidity crisis. That cannot be said about other smaller players.”

That was in November; and while there are no signs that the funding situation at Evergrande has deteriorated sharply since then – especially since the company is widely seen as systematically important and Beijing would never let it fail (although the same was said about Kaisa, another Chinese property developer that did default not too long ago), it now appears that the company has decided to start liquidating properties in an unexpected scramble to either gain market share, or to obtain much needed funding.

In any case, the fact that China’ largest property developer is now slashing prices across the board by as much as 10%, means that a deflationary hurricane is about to blow across what most see as the most important sector in China’s economy, and worse, should other property developers follow in slashing prices launching a race to the bottom, nobody knows how far prices could truly fall should a liquidation domino effect ensue.

What is most troubling however, is that as recently as November, the property slowdown was seen to be in large part due to efforts by city governments to restrain runaway price increases, which has included draconian interventions such as price controls and sales bans.

However, now that Evergrande is rushing to slash prices, it appears that runaway home prices are no longer a concern for Beijing, and in fact, a far greater concern is how Beijing may intervene to prevent what could soon be a price plunge spiral; many have already speculated that Beijing will have no choice but to bar Evergrande’s sales. If it doesn’t, or if homeowners have already figured out that their home prices are floating in the sky on a bubbly foundation that has now burst, the knock on effect could be devastating as instead of an asset, China’s most popular and aspirational “wealth effect” product could turn into a liability overnight.

If that happens, no amount of intervention by Beijing could stop the avalanche of selling that would ensue, not to mention the deflationary shockwave that a hard landing – i.e. crash – in China’s housing market would launch across the entire world.

end
In its latest National Party Congress report, China is now targeting 6 to 6.5% economic growth down from 6.5 to 7%.  They are also going to cut taxes as we are now witnessing what happens to China when they are experiencing problems with their economy.
(zerohedge)

China Cuts Taxes, GDP Target To 6-6.5%: Key Highlights From The People’s Congress

On Tuesday, as part of its National Party Congress, China cut its economic growth target for 2019 once again, this time to 6.0-6.5%, down from last year’s target of “about 6.5 per cent.” The figure was revealed in the government work report to be delivered by Premier Li Keqiang as the National People’s Congress opens.

According to Bloomberg, the shift to a band from the previous practice of using a point figure gives policy makers room for maneuver and compares with last year’s “about” 6.5 percent goal. The lower bound of the GDP target would be the slowest pace of economic growth in almost three decades, a consequence of China’s long deceleration as policy makers prioritize reining in debt risks, fixing up the environment and alleviating poverty. Economist consensus sees output growth slowing to 6.2% this year from 6.6% in 2018, before easing further in 2020 and 2021.

This annual gathering of China’s political elite – which we discussed earlier – comes a year after President Xi Jinping amended the constitution to remove a presidential term limit and ahead of the 70th anniversary of Communist Party rule later this year.

Xi

China also announced a cut of 3% to the top bracket of value added tax in a move aimed at benefiting the manufacturing sector: such a cut could deliver a boost worth up to 600 billion yuan ($90 billion) or 0.6% of GDP, according to Morgan Stanley.

The target budget deficit for 2019 was set at 2.8% of GDP, higher compared to last year’s goal of 2.6%. The more modest growth target paired with further targeted stimulus measures typifies the government’s attempt to steady the economy after a bruising 2018 and marks a shift from last year’s edition, when the emphasis was on reining in financial risks and trimming budget outlays.

Below are the key highlights of what has been revealed so far:

On economic outlook

  • GDP target 6%-6.5%
  • Budget deficit 2.8%
  • Consumer inflation at about 3.0%
  • Aims to cut tax, social security fees by 2t yuan this year
  • 3% cut to the top bracket of VAT
  • Faces more challenges, risks
  • Needs to brace for “tough” battle (doesn’t sound like a trade deal is imminent)
  • Seeks stable trade while improving quality
  • To further cut RRR for smaller banks to support private sector
  • Will reduce population living in poverty by at least 10 million
  • Fiscal policy will be proactive, stronger and more effective
  • China plans to sell 2.15 trillion yuan in special local government bonds

On monetary policy

  • Money supply growth, aggregate financing will keep pace with nominal GDP growth and be roughly in line with the 2018 actual growth rates
  • Monetary policy will be prudent, paying attention to balance between tightening and loosening

On military:

  • The defense budget growth target came in at 7.5% lower than 2018

On financial risks

  • To keep macro leverage level “basically stable” (doesn’t sound like January’s record credit injection will be repeated)
  • Will stick to structural deleveraging, pay attention to its strength and pace
  • To prevent abnormal fluctuations in financial market
  • To include more financial activities, markets, institutions and infrastructure in macro-prudential policy framework

On trade talks

  • To continue pushing forward trade talks with U.S.

On opening up

  • Steadily promote financial sector opening, attract more long-term capital inflows
  • To improve opening measures for bond market
  • To expedite making rules for outbound investment
  • Enhance supervision of capital flows, risks in financial markets
  • To deepen SOE reform in power, oil, rail sectors
  • To increase imports of advanced technology equipment, energy and agriculture products

On economic development:

  • To build a national oil and natural gas pipeline corporation
  • Will create at least 11 million new urban jobs
  • Will keep the urban jobless rate at about 5.5%
  • Will keep the registered jobless rate at about 4.5%
  • Premier Li warns tax cuts will create a “huge burden” for governments at all levels, which will now need to tighten their belts, and state-owned enterprises will have to hand in more profits

On property market:

  • Decisively prevent and resolve property market risks; stabilize land and home prices and property expectations

On consumption:

  • To consider policies to boost consumption of autos and home appliances

On FX:

  • To increase flexibility of yuan FX rate, keep the rate ‘basically stable’ at a reasonable equilibrium level
  • To keep FX reserves at a reasonable size

On market stability

  • Encourage banks to lend mid and long-term to private companies, reduce funding difficulties for manufacturers, expand bond issuance by quality companies
  • To keep stock, bond and FX markets steady; tackle abnormal markets in a timely manner

end

China

With their downturn, we now witness many Chinese tech companies fire thousands of employees.

(courtesy zerohedge)

 

Thousands Fired By Chinese Tech Companies Amid Sudden Breakout In Austerity

It’s not just Silicon Valley which is suddenly scrambling to monetize its VC investments after years of harvesting private company gains in hopes of top-ticking the market ahead of a broader crash: so is China’s tech scene.

After years of buoyant excess reminiscent of the craziest west coast startups, thousands of Chinese tech employees are suddenly finding themselves without a job, while those who remain find that perks like free snacks and travel, gym memberships, new year bonuses, and yes, even fruit bowls, are now gone as the new mood across China’s tech heartland, from Shenzhen to Hangzhou, is one of painful austerity.

The math is simple: as the FT reports, with the Chinese economy slowing and foreign capital flows shrinking, start-ups are cutting costs. “For an internet start-up you need people, capital and customers. And they are going to see erosion in every one of these categories,” says one disappointed Chinese tech investor.

Whether or not it is tied to Trump’s trade war with Beijing is debatable, but China’s pain clearly started in the second half of 2018 when capital began drying up resulting in tumbling valuations of formerly flying tech companies. Not helping are local consumers who have become more thrifty, as seen in China’s plunging car sales, resulting in advertisers rethinking budgets. But it’s the workers who are bearing the brunt of cutbacks.

Tao Jiali, a recent casualty of what gaming group NetEase euphemistically dubbed “structural optimisation”, sums up the mood. “Everyone is jittery,” she said. The latest blow came on Friday, with reports that Dianrong, a peer-to-peer lender, would shed 2,000 staff.

To get a sense of the worker unease and in some cases, desperation, Zhaoping.com, an online recruitment site that boasts 180m registered users, said that record numbers of resumes are doing the rounds. “Changes in the market environment have brought the development of the internet industry back to a rational state,” said Li Qiang, executive vice-president. He cited two other issues: after years of growth, internet user numbers have reached a plateau, escalating competition and hurting margins. And regulatory clampdowns are hurting everything from gaming to ecommerce to social media.

To be sure, China’s economic slowdown is also hitting the broader economy, and as we reported last night, for the first time ever, China’s working population shrank in 2018.

But nowhere is the pain more acute than in the highest paying tech jobs; for proof look no further than China’s private valuation titan Didi, which despite successfully chasing Uber out of China in 2016, has more recently faced fierce government pressure after two women were murdered using its carpooling service, and is now laying off 2,000 employees, or 15% of the workforce. For the remaining employees, year-end bonuses were cut in half in December and perks such as free snacks and subsidised gym membership have gone.

“We recently made adjustments to these [workplace] benefits, however we have no plans to make any major cuts,” said a spokesman for the company.

Another formerly high-flying Chinese tech giant is JD.com, whose recent problems have been compounded by internal issues — its founder and chief executive Richard Liu was arrested in the US last year on suspicion of rape, although no charges were brought. Even so, the company is suddenly laser focused on maximizing profits and is trumming its ranks of middle management, planning to cut about 10% of those at vice-president level and above.

Yet while both companies vow to hire enough workers to offset those who were laid off, a more ominous shift in the industry is taking place: advertising budgets – the bread and butter of most tech names not only in China but around the globe – will grow just 17% this year, just a bit more than half the rate of the past two years, according to Jefferies estimates.

Even this, the FT writes, may be optimistic. Industry players point to “a big step down” in actual ad budgets compared with expectations that were set a the start of last year, when advertisers’ revenues were still surging ahead. That, said analysts, will hurt the likes of fast-growing ByteDance, which scrimped on the money it stuffed in workers’ hongbao, the red money packets traditionally given out at Chinese new year.

Then, in typical Chinese fashion, CEO Zhang Yiming sent out a memo urging staff to temper their disappointment, blaming the smaller bonuses on the “external environment, industry competition and our own errors and deficiencies in management, decision making and implementation”.

While the group, which includes the massively popular short video app Douyin, has grown to a value of $75BN in seven years and started hiring across the world, its best years appear to be behind it: the group’s woes suggest growing pains are starting to bite. Like its peers, it has chafed with regulators over content, both at home, and in the US — and its reliance on ads make it vulnerable to the weaker economy, the FT notes.

The punchline: as periods of austerity go, this one is unlikely to be short.

“It’s just the beginning of the lay-offs we are going to see for the next two or three years,” one tech investor told the FT, while Wang Xing, whose food delivery app Meituan Dianping has so far resisted talk of job cuts, took to social media with an even more blatant example of gallows humor: “I heard a joke that 2019 may be the worst in the past 10 years, but it may be the best in the next 10 years.

One thing is clear: China’s domestic workers know their economy best, and it certainly does not appear that the world’s second biggest economy is set for a sharp rebound. In fact, if Trump were to delay rushing a trade deal with Beijing, it certainly appears that any incremental leverage and negotiating advantage would be solely in his favor as Beijing scrambles to keep its economy from disintegrating any more.

end

Here is another sign of problems inside China:  Chinese car dealers are slashing prices

(courtesy zerohedge)

Deflationary Red Alert: Chinese Car Dealers Are Slashing Prices, And It’s Not Helping

A new deflationary tide is rising amid the battleground that is China’s auto industry, where manufacturers and dealers are scrambling to try and find a solution to tumbling demand, and while many have resorted to generous incentives and loan offers for consumers to regain market shares, Bloomberg reports  that so far none of the measures have succeeded in stimulating the moribund local car markets.

Incentives and reductions totaling more than 10% of the sticker price are now common, while interest free loans are also being offered to try and lure car buyers to showrooms, especially outside of China’s major cities. For now, however, buyers still aren’t taking the bait and car sales continue to decline this year in China, after their first annual drop in more than two decades.

Making matters worse, amid the slowdown of the world’s second largest economy consumers are starting to do away with big purchases in general. There’s also an argument surfacing that heavy incentivizing could wind up doing more harm than good to automakers’ finances, possibly setting up for more layoffs, restructurings and mergers in the industry.  Shi Jianhua, a deputy secretary general of China Association of Automobile Manufacturers, said: “2019 should be a year of the survival of the fittest and we may see more merger and reorganization cases in the auto industry.” 

The changes may negatively affect smaller Chinese manufacturers more than larger ones, who can offset poor Chinese sales with sales from other countries. But customers of cheaper brands in China tend to live in smaller cities and are often more easily affected by the slowing economy.

Cui Dongshu, secretary general of China Passenger Car Association told Bloomberg that “the sales slump is adding more pressure on Chinese brands. The speed of the industry reshuffle will be accelerated.” By reshuffle he also means a potential wave of mass corporate defaults.

Smaller companies like Chongqing Changan Automobile., Brilliance China Automotive Holdings and BAIC Motor have seen their stock prices get cut in half or more over the past year. But that doesn’t mean global brands aren’t facing headwinds as well. Companies like Hyundai Motor Co. and Jaguar Land Rover parent Tata Motors Ltd. blamed China for slipping to quarterly losses last year while Suzuki Motor Corp. pulled out of China altogether.

Meanwhile, desperate to put a price floor below the rapidly deflating Chinese auto market, in late January Beijing urged authorities to roll out measures to help boost vehicle sales in rural areas, noting that a similar effort about a decade ago helped revive demand. While local governments have yet to make any announcements, automakers are moving ahead with offers their own.

For instance, BAIC cut about $1000 off the price of its Senova Zhidao sedan. Buyers also have the option of choosing a $149 down payment or 0% interest for three years. Volkswagen said this month that it will offer an incentive package valued as much as $1800 for rural consumers that need to replace their aged models with new ones. Chongqing Changan said it would provide up to $3300 worth of incentives, as well.

Translation: sharply lower prices, which for those not versed in macroeconomics has a very ominous synonym: deflation, something China simply can not allow.

A BAIC motor dealership employee, Tom Feng, said he and his colleagues are doing everything they can to reach out to rural customers, including handing out flyers at shopping malls and supermarkets. They are also driving around in new vehicles to spur interest. Confirming the worst case scenarion, Xu Haidong, an assistant secretary general at CAAM, said that “there is no easy solution to revive car demand. Car consumption hinges on the overall economic development.”

And that “development”, as we know, isn’t going well.

end

4.EUROPEAN AFFAIRS

EUROPE/RUSSIA

More European banks are being collared in this widening Russian money laundering scandal

(courtesy zerohedge)

More European Banks Ensnared In Widening Russian Money Laundering Scandal

Are there any banks in Europe that haven’t been tainted by the burgeoning Russian money laundering scandal?

To wit, European banking shares tumbled on Tuesday as reports suggested several banks from Austria to the Netherlands to – of course – the Baltics – had been accused of turning a blind eye (or at least failing to detect) money laundering by a group nicknamed “the Troika Laundromat”.

The scandal first began to take shape roughly a year ago when the Treasury forced ABLV, the third-largest bank in Latvia, into liquidation over allegations that it laundered money for North Korea’s ballistics missile program. A few months later, reports started circulating in Estonian media that the local branch of Dutch lending giant Danske Bank had turned a blind eye to hundreds of billions of euros in suspicious transactions involving customers from the former Soviet Union. The bank eventually acknowledged that it had cleared some $234 billion in suspicious funds, including for companies that purportedly had ties to Russian President Vladimir Putin, prompting a slew of investigations by Estonian, Dutch, European and US authorities. The bank’s chairman and CEO were soon forced out, and regulators in Estonia have shuttered the offending branch.

Kremlin

Shortly after, Deutsche Bank was exposed for its role in clearing nearly all of these transactions through its correspondent banking unit. And in recent weeks, several Scandinavian banks, including Nordea, Swedbank and DNB ASA have been linked to the Danske scandal as well.

On Tuesday, the scandal expanded to Central Europe, as Raiffeisen Bank International shares fell s much as 11% after Bill Browder’s Hermitage Fund told Austrian prosecutors that the bank had helped launder money from Russian criminal activity, including the Troika Laundromat, a group that had also moved money through the three largest Dutch banks. Raiffeisen responded to the allegations by vowing to launch an internal investigation.

Accounts at the three largest Dutch banks were used by the Troika Laundromat to move cash from Russia, according to Dutch magazine De Groene Amsterdammer, which is part of the OCCRP journalist group. About 43 million euros were paid to the Rabobank account of Dutch yacht builder Heesen for construction of two boats, the newspaper said, while approximately 190 million euros went through bank accounts at an ABN Amro unit that later became part of Royal Bank of Scotland. The banks declined to comment.

ABN Amro fell as much as 5 percent before paring losses. ING Groep NV declined as much as 2.8 percent.

But they weren’t the only European banks to launder money for the Troika.

Raiffeisen Bank International’s predecessor RZB helped launder money linked to Russian tax fraud, according to a report Hermitage Fund filed to Austrian white-collar prosecutors. Browder, an investor who has spent the past decade building cases against banks for laundering following the death in a Russian jail of Magnitsky, said more allegations will unfold.

More than $889 million went from accounts at Deutsche Bank to accounts of the “Troika Laundromat” between 2003 and 2017, German daily Süddeutsche Zeitung – also part of the OCCRP group – also reported. Deutsche Bank, in written comments, said it always cooperates with authorities and regulators worldwide and said that as a correspondent bank it only has limited access to information about the customers of the respondent bank.

BBG noted with alacrity that new revelations about the extent of what appears to  have been a systemic failure in AML controls have surfaced.

Almost daily revelations are exposing the breadth of suspicious activity that has enmeshed banks across the continent. With investigations under way in Baltic members of the European Union that once were Soviet states, the Nordic countries, the U.S., the U.K. and elsewhere, it may be months before the full extent is uncovered.

With European bank shares already underperforming in 2019, as growths lows, interest rates are mired in near-zero territory, and new regulations hamper their ability to compete with their American peers, this is the last thing the sector needed.

And with each new report, the anxiety of Russian tax evaders and money launderers grows, as a wide ranging AML crackdown becomes more of a priority for EU regulators.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

end

6. GLOBAL ISSUES

INDIA/PAKISTAN

After Pakistan shoots down last week an Indian fighter jet, it now intercepts an Indian submarine as the border conflict continues to rage on.

(courtesy zerohedge)

Pakistan Intercepts Indian Submarine As Border Conflict Rages

Skirmishes across the heavily militarized line of control, which separates Indian-controlled Kashmir from Pakistani Kashmir, have continued this week with casualties reported on both sides. But while the spat hasn’t boiled over into an all-out armed conflict between the two nuclear armed powers, that remains a distinct and unsettling possibility.

Sub

In the latest headlines emanating from the border, Pakistan claimed on Tuesday that it had intercepted an Indian submarine attempting to cross into Pakistani-controlled waters, according to RT.

“The Pakistan Navy used its specialised skills to ward off the submarine, successfully keeping it from entering Pakistani waters,” a Pakistani spokesman said.

“The Indian submarine was not targeted keeping in view Pakistan’s policy of peace.”

It added that it didn’t engage the submarine, and followed this up by releasing a video of the submarine, which shows the mast of the vessel poking above the water.

However, Indian officials denied any knowledge of the incident, and said they are working on “verifying” the provenance of the video. One Indian spokesman suggested that the footage might be a “propaganda stunt” by Pakistan. One source told India Today that the footage appeared to have been shot in 2016.

Pakistan, meanwhile, said this was the second time it had intercepted an Indian submarine since 2016.

Here’s a timeline of the latest incident between India and Pakistan, which is the most severe flareup between the two sides since the end of the last India-Pakistan war in 1971.

Text courtesy of India Today:

  • On February 14, a Jaish-e-Mohammad suicide bomber rammed into a bus that was part of a Central Reserve Police Force convoy. 40 jawans were martyred in the attack, which took place in Jammu and Kashmir’s Pulwama. India vowed a befitting response to the attack.
  • On February 26, the Indian Air Force entered Pakistani airspace and bombed a terrorist camp in Balakot. The camp was Jaish-e-Mohammad’s largest. A large number of terrorists, trainers and commanders were killed in the attack, which India officially called an “intelligence-led, non-military, pre-emptive action.”
  • A day later, Pakistani fighter jets attempted hitting military installations in Jamm and Kashmir. Indian MiG-21 jets scrambled to intercepted the Pakistani fighters and engaged them in a dogfight. Indian jets managed to shoot down an F-16.
  • In the February 27 dogfight, an Indian MiG-21 jet was shot down by the Pakistani fighters. The MiG’s pilot, Wing Commander Abhinandan Varthaman, fell in Pakistan-occupied Kashmir and was taken into the custody of the Pakistani army.
  • Wing Commander Abhinandan Varthaman was released two days later by Pakistan in what PM Imran Khan said was a “peace gesture”. Varthaman’s release was seen as a development that would cool things down between India and Pakistan.
  • Skirmishes between Indian and Pakistani forces have continued. There have been multiple ceasefire violations across the Line of Control in Jammu and Kashmir. There have been reports of shelling and heavy arms fire.

In keeping with its vast conventional arms superiority over its neighbor, the Indian Navy has 16 submarines, compared with Pakistan’s 5

Pak

7  OIL ISSUES

 

8. EMERGING MARKETS

 

Venezuela

end

Your early morning currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings TUESDAY morning 7:00 AM….

Euro/USA 1.1327 DOWN .0008 REACTING TO MERKEL’S FAILED COALITION/ 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 RED EXCEPT LONDON 

 

 

 

 

 

 

USA/JAPAN YEN 111.96  UP .181 (Abe’s new negative interest rate (NIRP), a total DISASTER/NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…

GBP/USA 1.3138    DOWN   0.0039  (Brexit March 29/ 2017/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED

USA/CAN 1.3345 UP .0033 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS MONDAY morning in Europe, the Euro FELL by 8 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1327 Last night Shanghai composite closed UP 26.67 POINTS OR 0.88%/

 

 

 

//Hang Sang CLOSED UP 2.84   POINTS OR 0.01% 

 

/AUSTRALIA CLOSED DOWN .34%/EUROPEAN BOURSES REDEXCEPT LONDON

 

 

 

 

 

 

 

 

The NIKKEI: this TUESDAY morning CLOSED DOWN 96.76 POINTS OR 0.44% 

 

 

 

 

 

 

 

 

Trading from Europe and Asia

1/EUROPE OPENED  RED (EXCEPT LONDON)

 

 

 

 

 

 

 

 

 

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 2.84 POINTS OR 0.01%

 

 

 

/SHANGHAI CLOSED UP 26.67 POINTS OR 0.88% 

 

 

 

 

 

 

Australia BOURSE CLOSED DOWN .34%

 

Nikkei (Japan) CLOSED DOWN 96.76 POINTS OR 0.44%

 

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1285.10

silver:$15.10

Early TUESDAY morning USA 10 year bond yield: 2.74% !!! UP 2 IN POINTS from MONDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%. (POLICY FED ERROR)/

 

The 30 yr bond yield 3.10 DOWN 0  IN BASIS POINTS from MONDAY night. (POLICY FED ERROR)/

USA dollar index early TUESDAY morning: 96.72 UP 4 CENT(S) from  MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing TUESDAY NUMBERS \12: 00 PM

 

Portuguese 10 year bond yield: 1.46% DOWN 1   in basis point(s) yield from MONDAY/

JAPANESE BOND YIELD: -.00%  UP 1   BASIS POINTS from MONDAYDAY/JAPAN losing control of its yield curve/

 

 

SPANISH 10 YR BOND YIELD: 1.17% DOWN 0   IN basis point yield from MONDAY

ITALIAN 10 YR BOND YIELD: 2.71 DOWN 3    POINTS in basis point yield from MONDAY/

 

 

the Italian 10 yr bond yield is trading 154 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: RISES  TO +.17%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.54% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A MASSIVE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR TUESDAY

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

Euro/USA 1.1295 DOWN   .0041 or 41 basis points

 

 

USA/Japan: 111.92 UP .139 OR YEN DOWN 14 basis points/

Great Britain/USA 1.3141 DOWN.0037( POUND DOWN 37  BASIS POINTS)

Canadian dollar DOWN 40 basis points to 1.3352

 

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The USA/Yuan,CNY closed AT 6.7076    0N SHORE  (DOWN)

 

THE USA/YUAN OFFSHORE:  6.7098(  YUAN DOWN)

TURKISH LIRA:  5.3977

the 10 yr Japanese bond yield closed at -.01%

 

 

 

Your closing 10 yr USA bond yield UP 0 IN basis points from MONDAY at 2.74 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 3.10 UP 1  in basis points on the day /

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

Your closing USA dollar index, 96.96 UP 27 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 TUESDAY: 12:00 PM 

London: CLOSED UP  49.04 OR 0.69%

German Dax : UP 28.08 POINTS OR .24%

Paris Cac CLOSED UP 10.95 POINTS OR  0.21%

Spain IBEX CLOSED DOWN 1.60 POINTS OR  0.02%

Italian MIB: CLOSED DOWN 2.33 POINTS OR 0.01%

 

 

 

 

WTI Oil price; 56.62 1:00 pm;

Brent Oil: 65.73 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    65.77  THE CROSS HIGHER BY 0.04 ROUBLES/DOLLAR (ROUBLE LOWER BY 4 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO +.17 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, 4:00 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM :  56.59

 

 

BRENT :  65.84

USA 10 YR BOND YIELD: … 2.72. bond market..

 

 

 

 

 

USA 30 YR BOND YIELD: 3.08..

 

 

 

EURO/USA DOLLAR CROSS:  1.1306 ( DOWN 29   BASIS POINTS)

USA/JAPANESE YEN:111.87 UP .091 (YEN DOWN 9   BASIS POINTS/..

 

.

 

USA DOLLAR INDEX: 96.84 UP  16 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA:1.3176  DOWN 0 POINTS FROM YESTERDAY

the Turkish lira close: 5.3977

the Russian rouble 65.79   DOWN .06 Roubles against the uSA dollar.( DOWN 06 BASIS POINTS)

 

Canadian dollar:  1.3349 DOWN 36 BASIS pts

USA/CHINESE YUAN (CNY) :  6.7076  (ONSHORE)/CLOSED FOR THE WEEK

USA/CHINESE YUAN(CNH): 6.7064  (OFFSHORE)

German 10 yr bond yield at 5 pm: ,0.17%

 

The Dow closed DOWN 12.55 POINTS OR 0.05%

 

NASDAQ closed DOWN 1.21 POINTS OR 0.02%

 


VOLATILITY INDEX:  14.38 CLOSED DOWN 0.25 

 

LIBOR 3 MONTH DURATION: 2.607%//

 

 

 

FROM 2.598

 

 

 

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

TRADING IN GRAPH FORM FOR THE DAY/WEEKLY SUMMARY/FOLLOWED BY TODAY

not provided today by zerohedge

Stocks S

 

END

MARKET TRADING

 

ii)Market data/

We now have our “fake” ISM numbers.  Do not pay any attention to them.  They showed USA service surging while Manufacturing slumping.Garbage numbers in this soft data report

(courtesy zerohedge)

US Services Economy Surges In Feb As Manufacturing Slumps

While Manufacturing surveys (ISM and PMI) plummeted in February – tracking the plunge in ‘hard’ data – Services PMI just rebounded from 54.2 to 56.0 (admittedly very marginally below the preliminary print of 56.2).

The upper pane below shows the dramatic divergence between Markit’s Manufacturing (plunge) and Services (surge) surveys. The lower pane shows the same for ISM’s data (Services ISM printed 59.7 vs 57.4 exp – the biggest jump in a year)…

The ISM increase, driven by 13-year highs in gauges of new orders and business activity, topped all but one estimate in a Bloomberg survey calling for a rise to 57.4.

ISM Respondents were mixed however:

“Confidence is returning in the marketplace, but tariff surcharges are still in place.” (Retail Trade)

“Tariffs continue to have an impact on our business. The contractor labor shortage continues to be the biggest supply challenge for our company and others in our region and industry.” (Utilities)

The report also indicates that continuing trade tensions and a dimming global-growth outlook aren’t weighing so much on service providers. An index of export orders rebounded from a two-year low while a gauge of imports fell to the lowest since 2017.

However, the employment gauge fell to an eight-month low, though remained at a historically elevated level.

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

“The US PMI surveys tell a tale of two economies in February, with any slowdown story confined to the goods-producing sector. While manufacturing struggled, with the surveys consistent with a near stalling of factory output and order books, the service sector remained encouragingly resilient, enjoying its strongest burst of activity for seven months.

In addition to signalling stronger economic growth, the surveys suggest hiring also remained encouragingly solid in February with a 250,000 non-farm payroll rise indicated, albeit predominantly driven by the service sector.

The worry is that the manufacturing slowdown will spill over to the service sector, damping economic growth in coming months. Companies themselves certainly appear to have become more circumspect, with business optimism cooling in February amid worries over the impact of tariffs, trade wars, higher prices and rising interest rates.”

Finally, Williamson signals US economic growth is set to rebound:

“With the size of the vast service sector overshadowing the manufacturing sector, the two surveys suggest the overall pace of economic growth accelerated in February. Having correctly indicated that the economy grew at a slower but still solid pace in the fourth quarter (our model from the survey indicated 2.5% growth against an initial official estimate of 2.6%), the data for the first two months of 2019 point to a similar 2.6% annualised rate of expansion.

For now, US seems to be the cleanest dirty shirt (55.5 final for Feb, though down from the 55.8 prelim print), but do not forget that this is a lead-lag relationship, not a decoupling…

end

This data entry is far more important than the ISM numbers.  It is a hard data and again new home sales falter and this is the longest streak of lower numbers since 2011

(courtesy zerohedge)

New Home Sales Falter For Longest Streak Since 2011

Profile picture for user Tyler Durden

After rebounding in November, December new home sales (delayed by the government shutdown) were expected to tumble, but thanks to a dramatic downward revision in November’s data, December’s print was +3.7% (against expectations of -8.7%)

November’s initial 16.9% surge (the most since 1992) was revised down to just +9.1% MoM, which enabled December’s surprise rise…

Note that new home sales remains a month lagged to the pending and existing sales data.

The last 3 months were all revised lower…

Even with the revisions, the combined Nov/Dec data is better than expected.

New home sales down year over year for 4 straight months: longest stretch since 2011

Median home price rebounded from 2 year lows, rising to $318.6K from $303.5K

Sales probably got a lift from improved affordability, with the median sales price down 7.2 percent from a year earlier. The number of homes for sale where construction hadn’t started rose to the highest since 2007, indicating more supply that could hold down prices or push them even lower.

 

end

iii)USA ECONOMIC/GENERAL STORIES

How the new left policies will be electoral suicide

a must read..

(courtesy Mish Shedlock/Mishtalk)

Electoral Suicide: Beware The Radical Left

Authored by Mike Shedlock via MishTalk,

6 months ago I figured a recession would kill Trump’s chances in the next election. But Radical socialism could save him

Wirepoints founder Mark Glennon says Radicals Positioning To Destroy Illinois If Its Fiscal Crisis Doesn’t.

Socialists win big in Chicago” was The Nation’s headline on last week’s [Chicago Mayoral] elections. Jacobin, a leading socialist publication, proclaimed that the “left’s victories in Tuesday’s Chicago elections are tangible and undeniable. Few could have imagined such an unquestionably positive night for leftist candidates.” The Chicago Teacher’s Union is headed by socialist Jesse Sharkey. Their influence on elections is huge, and their longstanding efforts in schools are now showing up in election results. “CTU knows how to put a mayor in place,” said one of its vice president’s recently.

Nationally, some Democrats are beginning to question the party’s leftward shift. Even a liberal columnist in the Washington Post askedlast week if the party is committing electoral suicide.

Illinois Plans

  • Progressive real estate transfer tax. It’s best seen as an exit tax on wealthier homeowners fleeing. It’s supported by both Chicago mayoral candidates who won a place in the runoff election, Toni Preckwinkle and Lori Lightfoot. The heavily Democratic City of Evanston is already implementing it.
  • Rent control. Illinois politicians should be setting the rent, we’re told. A bill authorizing rent control is pending in the General Assembly and Governor Pritzker has indicated approval in concept. Preckwinkle supports rent control; Lightfoot hasn’t indicated her position.
  • Universal basic income in Chicago. Just give at least $500 to every family in Chicago, no strings attached. Mayor Rahm Emanuel evidently saw enough force behind the idea that he authorized a task force to look into a pilot program. It’s leading proponent, Alderman Ameya Pawar, may well become Chicago’s new treasurer, having just won his way into the runoff election. Its cost to the city if fully implemented would be about $12.6 billion annually. Chicago’s annual budget for fiscal 2018 was $8.6 billion.
  • 100% renewable energy. Both Governor Pritzker and a many Illinois lawmakers (including at least one Republican) want Illinois to commit to reaching that goal by 2050. It’s the core feature of Alexandria Ocasio Cortez’s Green New Deal for the nation, albeit with a longer deadline – 30 years instead of 10. But a Greenpeace co-founder recently wrote, “You are delusional if you think fossil fuels will end any time soon, maybe in 500 years,” and said the Cortez plan would “bring about mass death.” The Green New Deal’s price tag has been estimated as high as $93 trillion, or $600,000 per household. Illinois supporters haven’t bothered to place a price tag on meeting the goal over their longer time period. That’s a common aspect of the new left’s policy agenda – numbers mean nothing.
  • Statewide $15 per hour minimum wage. Governor Pritzker made this a top priority and already signed the new law raising the minimum to $15 by 2025, statewide. That might seem reasonable around Chicago, but opposition came largely from lower income communities across the state. The Rockford Park District, for example, gives hundreds of teenagers and young adults get their first jobs at a lower wage, and the new law will open a $2 million per year hole in its budget.

Socialist Idiocy Abounds

For sure, socialist idiocy abounds in Illinois. But Glennon has the cure:

Margaret Thatcher’s famous quote needs amendment when it comes to Illinois. “The trouble with socialism is that eventually you run out of other people’s money,” she said. But in Illinois, the trouble is you run out of other people. If the fiscal crisis doesn’t ensure that Illinois’ population loss accelerates, the new left will.

Numbers Mean Nothing

Glennon accurately states “[fiscal] numbers mean nothing”.

That was the subject of a post I wrote yesterday: Ben Bernanke – The Father of Extreme US Socialism

The radical Left wants to hijack the Democratic party and perhaps they have already succeeded.

Although such actions may prevail at the state level until states like Illinois blow sky high.

However, at the national level the nomination of someone like Elizabeth Warren or Kamala Harris may very well mean four more years of Trump.

END

The Democrats are planning a resolution condemning this nut care Omar.

(courtesy zerohedge)

Dems Plan Resolution Condemning Anti-Semitism After 2nd Ilhan Omar Outburst

Following yet another reportedly “anti-semitic” remark by Minnesota Congresswoman Ilhan Omar, one of two Muslim women elected to Congress last fall, Democrats in the House are reportedly planning a resolution to officially condemn anti-semitism (which these days seems to be any form of Israel bashing), and could vote on the measure as soon as Wednesday, according to Bloomberg.

Omar

The resolution was written over the weekend in a collaboration between staffers from the offices of Nancy Pelosi, Steny Hoyer Eliot Engel and Jerry Nadler, though one aid said the text hadn’t been finalized, and another aid no final decisions about the measure had been made.

Omar was first accused of using an anti-semitic trope in a now-deleted tweet about pro-Israel money in US politics. During the fallout from that tweet, Omar was widely condemned by Republicans and Democrats, and President Trump even demanded that she resign. In a second incident, Omar tweeted on Sunday about needing to “pledge allegiance” to Israel to serve in Congress.

Ilhan Omar

@IlhanMN

Our democracy is built on debate, Congresswoman! I should not be expected to have allegiance/pledge support to a foreign country in order to serve my country in Congress or serve on committee. The people of the 5th elected me to serve their interest. I am sure we agree on that!

Nita Lowey

@NitaLowey

Replying to @NitaLowey

Lawmakers must be able to debate w/o prejudice or bigotry. I am saddened that Rep. Omar continues to mischaracterize support for Israel. I urge her to retract this statement and engage in further dialogue with the Jewish community on why these comments are so hurtful.

15.1K people are talking about this

While her tweets have drawn widespread condemnation from most of the American political establishment, the anti-Israel faction of the American left has embraced her, arguing that her tweets weren’t anti-semetic and that she was simply criticizing the foreign policy of Netanyahu-led Israel, as well as the US-Israel relationship.

As staffers finish work on the resolution, there has been intense debate about whether to specifically castigate Omar. Earlier this year, the House passed a similar resolution condemning “white nationalism” following controversial remarks by Iowa Republican Steve King.

END
More evidence that there is something wrong:  GE shares plummet when CEO said free cash flow will be in negative territory this year:
(courtesy zerohedge)

GE Shares Plummet After CEO Comments

GE shares have suddenly over 7%, erasing the big short-squeeze spike from last week after CEO Larry Culp discussed the power unit’s future and said free cash flow will be “in negative territory” this year.

Speaking at the J.P. Morgan Aviation, Transportation & Industrials conference in New York, Culp said the company was beginning to “embrace our reality,” noting the power unity was slow to adjust its cost structure amid a slump in prices, adding that “this is a multi-year turnaround” and blaming the error in Alstom (one almost remember when companies engaged in due diligence before they pursued multi billion deals).

  • GENERAL ELECTRIC CEO SAYS POWER BUSINESS WILL FACE HEADWINDS FOR “A COUPLE OF YEARS”, MANY INHERITED FROM ALSTOM
  • GENERAL ELECTRIC CEO SAYS WILL SEE EVEN GREATER NEGATIVE FREE CASH FLOW IN POWER THIS YEAR

Culp also said margins in GE healthcare would be similar to those recorded in 2018, with organic revenue in the low to mid-single digit range.

However, the big headline was when Culp admitted that free cash flow from the conglomerate’s industrial division is likely to remain negative this year but insisted the troubled group would accelerate its ongoing restructuring plan.

But, but, but, Cramer said GE was fixed?

END
Late this afternoon, the BIS warns the uSA markets that a market crash is upon us and it will start once the BBB downgrade on bonds begins..ie. the fallen angels that we have talking about
Robert H to me on the above subject:
“This will be the great unwinding.
Capital is scarce and will be more so as people will not buy bonds that will be declining in value. As it is buying any bond is now risky as to exist value after purchase. The time is coming when capital simply will not be available. “
( zerohedge)

BIS Warns Of Market Crash Risk, Looming Firesales Once BBB Downgrade Avalanche Begins

Over the past year, one of the key concerns to emerge in the $6.4 trillion investment grade corporate bond market is when and how will BBB-rated bonds, which now comprise 60% of all outstanding IG names in the US, be downgraded and whether a new financial crisis will follow

We addressed this issue most recently in “The $6.4 Trillion Question: How Many BBB Bonds Are About To Be Downgraded” while the broader question of the “next bond crisis” was address in “Over $1 Trillion In Bonds Risk Cut To Junk Once Cycle Turns.” It wasn’t just us, however, with financial luminaries, regulators and investors such as the Fed, the BOE, the IMF, Oaktree’s Howard Marks, Doubleline’s Jeff Gundlach, JPMorgan, and Guggenheim all warning that the “fallen angel” threat is arguably the most serious challenge facing the US corporate bond market during the next recession.

And now, it’s the turn of the central banks’ central bank, the Bank of International Settlements, to join the bandwagon, warning that the surging supply of corporate debt in the riskiest, BBB investment-grade category has left markets vulnerable to a crash once economic weakness triggers a bout of rating downgrades, and sends over $1 trillion in IG bonds, or fallen angels, right into junk bond purgatory.

Highlighting numbers which have been discussed previously, the BIS notes that in 2018, BBB-rated bonds accounted for about 45% of U.S. and European mutual fund portfolios, up from only 20% in 2010, according to the BIS, and cautions that due to rating trigger limitations, many investors may have to sell those bonds if they fall out of the investment-grade scale.

And, once an economic downturn prompts credit-rating cuts, this could trigger a market crash as investors dump newly ineligible debt from their portfolios, according to the BIS, precisely what we warned about last October warning that over $1 trillion in bonds could be downgraded during the next downturn, effectively doubling the size of the entire US junk bond market.

The BIS’ warning boils down to this: a wave of downgrade would result in a liquidation firesale as all those who held on to hundreds of billions in IG debt are suddenly forced to liquidate, potentially resulting in a bidless market:

“If, on the heels of economic weakness, enough issuers were abruptly downgraded from BBB to junk status, mutual funds and, more broadly, other market participants with investment grade mandates could be forced to offload large amounts of bonds quickly,” wrote analysts at the the Basel-based institution in a quarterly report.

“While attractive to investors that seek a targeted risk exposure, rating-based investment mandates can lead to fire sales.”

This isn’t the first time the BIS has cautioned about the risk of a firesale: BIS previously warned about excesses in lending to leveraged companies.  Still, the premium for holding risky corporate debt has narrowed in 2019 with an “exceptionally strong” performance entirely erasing a selloff in European credit in the fourth quarter of 2018, according to JPMorgan Chase & Co.

Ironically, while much of the financial press was obsessing over the risk of “fallen angels” in late 2018 – about a year after we first highlighted said risk – as bond prices were tumbling, and threatened to create a self-fulfilling prophecy of lower prices, translating into ratings downgrades, and thus, even lower prices, ever since the late December dovish reversal by the Fed, the BBB space has been one of the best performing subsectors in the broader corporate bond market.

In fact, as Bank of America noted last week, when it highlighted Verizon’s comments from a securities analyst meeting in New York noting that this company, the third largest BBB-rated name in our index, is clearly aware that its footprint in the debt world is so large they are forced to be super focused on deleveraging, should Verizon follow through with their plans that could lead to positive ratings outlooks, which would make the company a candidate to return to the A-rated bucket.

That means that contrary to the BIS’ warning, rising angel risk is suddenly more relevant than the fallen angel risk markets – and now the BIS – are so focused on. This, as BofA admitted, is one reason the bank prefer BBBs – especially large ones.

It’s not just Verizon: as BofA noted, the recent struggles for Kraft Heinz – the 20th largest BBB issuers – demonstrate that IG ratings matter for this BBB rated name as they rely on acquisitions to buy growth, and thus need access to the IG primary market. Whether they ultimately are able to successfully defend their IG rating is anyone’s guess, but the 36% dividend cut implies a meaningful transfer of value from shareholders to bond holders. Hence, while the stock tanked 27% two weeks ago, credit spreads actually widened just a modest 13bps.

This means that instead of “fallen angel” risk, the biggest BBB names in the US are actually subject to “Rising angel” risk, i.e., the possibility of being upgraded to the A bucket as companies – worried about their balance sheet prospects – start to aggressively pursue debt deleveraging. The full list of the biggest BBB names is shown below.

Of course, once the current “everyone loves bonds” euphoria passes, and investors once again turn their focus on fundamentals, the party will be over, and the wholesale selling of BBBs will resume because whether in 2020 or later, a recession is coming, and the companies that will be most impacted will be the names in the list above. The only question is when will the market again start discounting that.

end
The Government had poor tax receipts for January as the deficit widens for months at $310 billion. According to the CBO the deficit will hit close to 900 billion dollar this year.  However it does not include the huge auto loans and student loans which will bring the true deficit to 1.2 trillion dollars.  Worrisome also is the huge interest expense, hitting 192 billion dollars for the first 4 months and will now doubt come in just under 600 billion dollars for the entire year.
The USA is now has financial troubles
(courtesy zerohedge)

US Budget Deficit Soars 77% As Federal Interest Expense Hits Record High

Another month, another frightening jump in the US budget deficit.

According to the latest Treasury data, the US budget surplus in January – traditionally one of the few surplus months of the year due to its tax receipts timing – was only $9 billion, badly missing the $25 billion surplus expected, and far below the $49 billion surplus recorded last January; it was the smallest January gain since 2015.

As a result, the budget deficit for the first four months of the fiscal year, widened to $310 billion, a whopping 77% higher than the $175.7 billion reported for the same period last year, largely the result of the revenue hit from Trump’s tax cuts and the increase in government spending. The deficit was the result of a 2% drop in fiscal YTD receipts to $1.1 trillion, while spending jumped 9% to $1.4 trillion.

The jump in the deficit was despite the bump in customs duties, which almost doubled to about $24.5 billion this fiscal year from $12.6 billion a year ago, reflecting the Trump administration’s tariffs on Chinese imports.

What was more concerning perhaps is that rolling 12 month receipts declined 1.5% Y/Y, after posting a 0.4% drop last month which marked the first decline since March 2017. Worse, the absolute drop in tax receipts, which declined for both corporations and individuals, was the biggest since the financial crisis; and, as shown in the chart below, every time that receipts have posted an annual decline, a recession either followed shortly or had already arrived.

Unfortunately, since receipts are set to decline even more in the coming months, the overall budget deficit is set to widen further in the coming years as the Republican tax cut package and increased spending for defense and other priorities boost government outlays. Some policy makers and economists are flagging concern about the growing debt burden, saying it risks America’s credit quality among borrowers, while other economists see more room to run.

According to the CBO, the budget deficit in fiscal 2019 will widen to $897 billion, up by $118 billion from a year earlier; any economic recession will result in a far greater number.

Finally, and perhaps most concerning, is that for the first four months of this fiscal year, interest payments on the U.S. national debt hit $192 billion, $17 billion, or 10% more than in the same four-month period last year and the most interest ever paid in the first third of the fiscal year. As Reuters’ Jeoff Hall points out, annualizing the $192BN interest expense means that the interest on U.S. public debt is on track to reach a record $575 billion this fiscal year, more than the entire budget deficit in FY 2014 ($483 BN) or FY 2015 ($439 BN), and equates to 2.7% of estimated GDP, the highest percentage since 2011.

And since total debt, which recently surpassed $22 trillion is only set to keep rising – once the latest pesky debt ceiling issue is resolved in a few months – expect interest on the debt to keep rising, especially if the Fed reverts to its tightening trajectory, and hit $1 trillion per year in a few years, making it one of the biggest spending categories, and on pace to surpass total US defense spending (roughly $950BN per year) in dollar terms in just a few years.

 

SWAMP STORIES

Funny! Steel cancels his appearance at a friendly forum as no doubt he was spooked by Cohen’s testimony which basically destroyed his dossier allegation

(courtesy zerohedge))

Spooked? Christopher Steele Cancels Appearance After Cohen Testimony Destroys Dossier Allegation

Former MI6 spy Christopher Steele has suddenly backed out of a planned video appearance at a pro-democracy gathering in Baltimore next week for a group founded by Trump-hating chess champ Garry Kasparov, according to Politico.

The author of the largely unverified Trump-Russia dossier had been scheduled to discuss disinformation on a panel moderated by Washington Post columnist Anne Applebaum, which is set to include Atlantic Council fellow Evelyn Farkas – a former deputy assistant secretary of defense who notably slipped up on live TV and admitted in March 2017 that the Obama administration had been spying on the Trump campaign.

Applebaum said that Steele had gotten “cold feet” last week and canceled on the advice of his legal counsel. As the Daily Caller‘s Chuck Ross notes, this would have been Steele’s first public remarks in the nearly two years since BuzzFeed published his dossier.

Perhaps Steele was ‘spooked’ by testimony last week from former Trump attorney Michael Cohen, who debunked a key claim in the dossier that he traveled to Prague in August 2016 to meet with Kremlin officials in order to arrange clandestine payments to hackers who stole emails from the Clinton campaign and the DNC.

Cohen only denied the Prague allegation during his open testimony, but GOP California Rep. Devin Nunes suggested on Monday that the former Trump fixer disputed all of the dossier’s allegations during a closed-door hearing before the House Permanent Select Committee on Intelligence last Thursday. –Daily Caller

Steele’s dossier was commissioned by Hillary Clinton’s campaign through law firm Perkins Coie, which paid opposition research firm Fusion GPS, which in turn commissioned Steele to assemble the collection of reports which relied heavily on Kremlin officials. 

The dossier was used by the US intelligence community to obtain a FISA surveillance warrant on Trump campaign aide Carter Page – along with anyone he was in communication with. Steele’s report claimed that there was a “well-developed conspiracy of co-operation” between the Trump campaign and the Kremlin.

The reports, which circulated among U.S. intelligence officials beginning in the summer of 2016 and were later published by BuzzFeed, helped set off a chain of events that led to the appointment of special counsel Robert Mueller. In the years since Steele authored his reports, evidence has emerged of extensive contacts between Trump’s aides and various Russian state-aligned actors, while many of the most salacious allegations in Steele’s reports remain unconfirmed or at least partially debunked. –Politico

The conference Steele backed out of will continue without him – and “will examine and wrestle with the underlying threats to liberal democracy and propose strategies to reinvigorate it,” according to promotional materials.

Also in attendance will be Sen. Ben Cardin (D-Md.), former Sen. Heidi Heitkamp (D-N.D.), former Republican House majority leader Eric Cantor (R-Va.) and former undersecretary of defense for George W. Bush Paul Wolfowitz, per Politico. It is being organized by the Renew Democracy Initiative chaired by chess grandmaster Garry Kasparov.

end

Trump Blasts “Stone Cold Crazy” Dem’s Latest “Fishing Expedition” As Presidential Harassment

A day after the House Judiciary Committee fired off 81 document requests in their sweeping investigation of the President and his inner circle, Trump has responded with an angry tweet accusing the Committee chairman of attempting to “harass” his associates in a wide-ranging probe into Trump’s administration, campaign and businesses.

Trump initialy said:

“It’s all a hoax,” said President Trump on Monday when asked if he would cooperate with the investigation led by Committee Chairman Jerrold Nadler (D-NY).

“I cooperate all the time with everybody. You know, the beautiful thing, no collusion,” said Trump – who has also referred to the ongoing investigations a “witch hunt.” 

Overnight he retweeted some comments from Fox’s Sean Hannity:

We the people will now be subjected to the biggest display of modern day McCathyism….which is the widest fishing net expedition….every aspect of the presidents life….all in order to get power back so they can institute Socialism.”

And this morning, he has come out swinging: “Nadler, Schiff and the Dem heads of the Committees have gone stone cold CRAZY. 81 letter sent to innocent people to harass them. They won’t get ANYTHING done for our Country!

 

Donald J. Trump

@realDonaldTrump

Now that they realize the only Collusion with Russia was done by Crooked Hillary Clinton & the Democrats, Nadler, Schiff and the Dem heads of the Committees have gone stone cold CRAZY. 81 letter sent to innocent people to harass them. They won’t get ANYTHING done for our Country!

But, Trump was not done:

 

Donald J. Trump

@realDonaldTrump

The greatest overreach in the history of our Country. The Dems are obstructing justice and will not get anything done. A big, fat, fishing expedition desperately in search of a crime, when in fact the real crime is what the Dems are doing, and have done!

And summed it all up in two words:

 

Donald J. Trump

@realDonaldTrump

PRESIDENTIAL HARASSMENT!

Ironically, during all the tempests of the last few weeks, a Wall Street Journal–NBC News poll in recent days indicated that Trump’s job performance wins the approval of 46 percent of adults – up 3 points.

SWAMP STORIES/MAJOR STORIES//THE KING REPORT
and special thanks to Chris Powell of GATA for sending this down for us:

From Monday’s King Report: As we write, ESHs are +12.00 on the WSJ story, probably a leak from Team Mnuchin, declaring that a US-China trade deal is at hand.  This is the umpteenth trade hype & hope story about a US-China trade deal.  Each time, the trained seals, or someone with an agenda, have juiced ESHs.

    Monday’s stock market will be about holding or expanding the Sunday night gains.  If ESHs and U.S. stocks do not hold the gains from Sunday night, it is a big negative.

    If the S&P 500 Index closes below 2800, it would be a very big negative for stocks.

The traders, algos and wise guys that bought the WSJ story about a US-China trade deal being at hand got hammered unless they sold before or near the NYSE open.

The first hour of trading had four wicked swings as traders that swallowed the WSJ’s latest trade hype story tried to keep stocks buoyant.  They were trumped by what appears to be real sellers or better informed sellers or traders that bought early on Sunday night and were trying to feed suckers.

Whatever the case, stocks tanked on Monday despite the WSJ story that many operators believe was another leak from Team Mnuchin.  Perhaps, enough is enough with the US-China trade deal hope & hype stories.  They not only appear regularly, but seem to be released quite often on Sunday night near the time when the equity futures begin trading.

We also warned in yesterday’s missive that if the stocks couldn’t attain escape velocity after the same old/same old trade deal hype story on Sunday night it would be a negative for stocks.  We further opined that an S&P 500 Index close below 2800 would be a very big negative for stocks.

ESHs tumbled 52 handles from the early Sunday night high to their midday low of 2767.60.  The cavalry arrived in the afternoon to force ESHs 27 handles higher.

Please note that over the past few weeks, when stocks are down sharply in the morning, someone appeared at midday or the early afternoon and forced ESHs higher.

House Democrats send requests for documents to president’s sons, Trump Organization CFO, dozens of others as part of investigation

     Judiciary Committee staff argue there is a constitutional question about whether the party can hold the president accountable for any illicit or morally questionable activities Trump may have committed before he became president…

https://www.washingtonpost.com/powerpost/house-democrats-demand-documents-from-more-than-80-people-and-institutions-affiliated-with-trump/2019/03/04/51c249ec-3e87-11e9-922c-64d6b7840b82_story.html

 

@ByronYork: Clear from Nadler that impeachment decision has been made. This is prep work–along with devising communication strategy–to move forward.

US Construction Spending declined 0.6% for December.  +0.1% was expected.  Some pundits believe this was a factor in Monday’s equity tumble.  Shouldn’t the masters of the universe have made a better forecast given the ugly December retail sales and other disappointing economic data for December?

At the National People’s Congress in Beijing, China Premier Li Keqiang announced an official economic growth target of 6% to 6.5%, a 3 percentage point cut in the top VAT bracket and a budget deficit target of 2.8% of GDP (2.6% goal last year).  The assembly runs through March 15.  The Chinese People’s Political Consultative Conference runs concurrently.

Today – The S&P 500 Index had an Outside Day on Monday.  Traders will be sensitive to the high (2816.88) and the low (2767.66).

MACD for the S&P 500 Index has turned negative for the first time since December.  This suggests that the momentum top for the post-Christmas Eve rally has occurred.  A close below 2754.60 will generate a Trender sell signal for the S&P 500 Index for the first time since December.

Will the three Fed District Presidents that are scheduled to speak issue some verbal intervention to save stocks?  Kashkari is the most dovish of the bunch.

Is the House Democrats’ apparent intent to impeach Trump, whether they have solid evidence or not, a factor in the equity collapse on Monday?  Will alarmed foreign investors upset the equity charade?

As of now, we’d guess that the market doesn’t believe Trump will be impeached because the dollar and US bonds were firm while gold declined almost 1%.

Traders and investors will be extremely sensitive to any trade talk by Chinese officials at their soirees.

After vacillating between modest losses and slight gains for the first two hours of Monday night trading, ESHs are -5.50 as we write.  Disappointment in China’s economic agenda might be the cause.

The S&P 500 Index 50-day MA: 2648; 100-day MA: 2682; 150-day MA: 2747; 200-day MA: 2750

The DJIA 50-day MA: 24,570; 100-day MA: 24,841; 150-day MA: 25,210; 200-day MA: 25,112

S&P 500 Index support: 2781, 2775, 2764-67, 2758, 2750, 2731, 2724, 2718, 2724, 2700, 2687, 2681

Resistance: 2795, 2803-05, 2815-17, 2832, 2850, 2860, 2874, 2894

Expected economic data: Feb Markit US Services PMI 56.2; ISM Non-Manf Index 57.4; Dec New Home Sales 600k; January Budget Statement $12B; Boston Fed Prez Rosengren at 8 ET; Minny Fed Prez Kashkari at 9:30 ET; Richmond Fed Prez Barkin at 11:30 ET.

 

-END-

I WILL SEE YOU WEDNESDAY NIGHT

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