MAY 17/GOLD DOWN $9.70 TO $1276.25//SILVER DOWN ANOTHER 13 CENTS ON THIS COMEX EXPIRY DAY: MORE MANIPULATION//CHINA STATES THAT THERE ARE NO MORE TALKS WITH THE USA CONCERNING THE TRADE WAR AND THIS WAS VERIFIED BY THE USA//THE TURKISH LIRA FALTERS AGAIN WITH TRUMP REMOVING THE “DEVELOPING NATION” STATUS ON THE COUNTRY AND THEN THE USA IMPOSES A 25% TARIFF ON STEEL AND ALUMINUM ON TURKEY//BARR IS GOING AFTER THE DEMOCRATS FOR THEIR CRIMES/MAY BE TREASON//MORE SWAMP STORIES FOR YOU TONIGHT//

 

 

 

 

 

 

 

GOLD: $1276.25  DOWN $9.70 (COMEX TO COMEX CLOSING)

Silver:  $14.41 DOWN 13 CENTS  (COMEX TO COMEX CLOSING)

Closing access prices:

Gold : 1277.70

 

 

 

silver:  $14.42

 

OPTIONS EXPIRY FOR THE STOCK MARKET AND GLD/SLV WAS TODAY

COMEX EXPIRY FOR GOLD/SILVER:  TUES MAY 28/2019

 

LBMA/OTC EXPIRY: MAY 31.2019

 

 

 

JPMorgan has been receiving gold with reckless abandon and sometimes supplying (stopping)

today RECEIVING 2/2

EXCHANGE: COMEX
CONTRACT: MAY 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,285.000000000 USD
INTENT DATE: 05/16/2019 DELIVERY DATE: 05/20/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
661 C JP MORGAN 2
737 C ADVANTAGE 2
____________________________________________________________________________________________

TOTAL: 2 2
MONTH TO DATE: 290

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT: 2 NOTICE(S) FOR 200 OZ (0.0062 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  290 NOTICES FOR 28000 OZ  (.9020 TONNES)

 

 

SILVER

 

FOR MAY

 

 

15 NOTICE(S) FILED TODAY FOR 75,000  OZ/

 

total number of notices filed so far this month: 3392 for 16,960,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :$7255  DOWN $632

 

 

Bitcoin: FINAL EVENING TRADE: $7104 DOWN $766

 

 

end

 

XXXX

 

 

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI ROSE BY A MONSTROUS SIZED 5190 CONTRACTS FROM 204,318 UP TO 209,508 DESPITE YESTERDAY’S  26 CENT LOSS IN SILVER PRICING AT THE COMEX. LIQUIDATION OF THE SPREADERS HAVE STOPPED FOR SILVER BUT IT NOW IN FULL FORCE FOR GOLD. TODAY WE ARRIVED CLOSER TO AUGUST’S 2018  RECORD SETTING OPEN INTEREST OF 244,196 CONTRACTS.

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 STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

 0 FOR MAY, 0 FOR JUNE, 1368 FOR JULY AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  1368 CONTRACTS. WITH THE TRANSFER OF 1368 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 1368 EFP CONTRACTS TRANSLATES INTO 6.84 MILLION OZ  ACCOMPANYING:

1.THE 26 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.:

27.120 MILLION OZ STANDING IN MARCH.

3.875 MILLION OZ STANDING FOR SILVER IN APRIL.

AND NOW 18.650 MILLION OZ STANDING FOR SILVER IN MAY.

 

 

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

14,934 CONTRACTS (FOR 13 TRADING DAYS TOTAL 14,934 CONTRACTS) OR 74,67 MILLION OZ: (AVERAGE PER DAY: 1148 CONTRACTS OR 5.743 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF MAY:  74.67 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 10.66% 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:          815,77    MILLION OZ.

JANUARY 2019 EFP TOTALS:                                                      217.455. MILLION OZ

FEB 2019 TOTALS:                                                                       147.4     MILLION OZ/

MARCH 2019 TOTAL EFP ISSUANCE:                                          207.835 MILLION OZ

APRIL 2019 TOTAL EFP ISSUANCE:                                              182.87  MILLION OZ.

RESULT: WE HAD A HUGE SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 5190 DESPITE THE LARGE 26 CENT LOSS IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE OF 1368 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) . OUR BANKERS RESUMED THEIR LIQUIDATION OF THE SPREAD TRADES TODAY.

 

TODAY WE GAINED A GIGANTIC SIZED: 6558 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 1368 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 5190  OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 26 CENT LOSS IN PRICE OF SILVER AND A CLOSING PRICE OF $14.55 WITH RESPECT TO YESTERDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY!! 

 

 

In ounces AT THE COMEX, the OI is still represented by JUST OVER 1 BILLION oz i.e. 1.022 BILLION OZ TO BE EXACT or 145% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 15 NOTICE(S) FOR  75,000 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/ MARCH: 27.120 MILLION OZ/  APRIL AT 3.875 MILLION OZ/ AND NOW MAY:  18.650 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 CONSIDERABLE SIZED 3112 CONTRACTS, TO 521,243 DESPITE THE CONSIDERABLE FALL IN THE COMEX GOLD PRICE/(A LOSS IN PRICE OF $11.10//YESTERDAY’S TRADING).

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A VERY STRONG SIZED 14,239 CONTRACTS:

APRIL 0 CONTRACTS,JUNE: 14,239 CONTRACTS DECEMBER: 0 CONTRACTS, JUNE 2020  0 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 521,243.  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 VERY STRONG SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 11,127 CONTRACTS: 3112 OI CONTRACTS DECREASED AT THE COMEX  AND 14,239 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 11,127 CONTRACTS OR 1,112,700 OZ OR 34.60 TONNES.  YESTERDAY WE HAD A LOSS IN THE PRICE OF GOLD TO THE TUNE OF  $11.10.AND WITH LARGE LOSS, WE  HAD A HUGE GAIN OF 34.60  TONNES!!!!!!.?????? 

WITH RESPECT TO SPREADING:  WE MAY HAVE HAD SOME ACTIVITY WITH TODAY’S FALL IN PRICE

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES:

“AS YOU WILL SEE, THE CROOKS HAVE NOW SWITCHED TO GOLD AS THEY INCREASE THE OPEN INTEREST FOR THE SPREADERS. THE TOTAL COMEX GOLD OPEN INTEREST WILL RISE FROM NOW ON UNTIL ONE WEEK PRIOR TO FIRST DAY NOTICE AND THAT IS WHEN THEY START THEIR CRIMINAL LIQUIDATION.

HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NO INTO THE NON ACTIVE DELIVERY MONTH OF MAY HEADING TOWARDS THE VERY ACTIVE DELIVERY MONTH OF JUNE.

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES, HERE IS THE BANKERS MODUS OPERANDI:

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST IS STARTING TO RISE IN THIS NON ACTIVE MONTH OF MAY BUT SO IS THE OPEN INTEREST OF  SPREADERS. THE OPEN INTEREST IN GOLD WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING ACTIVE DELIVERY MONTH (JUNE), AND THAT IS WHEN THE CROOKS SELL THEIR SPREAD POSITIONS BUT NOT AT THE SAME TIME OF THE DAY.  THEY WILL USE THE SELL SIDE OF THE EQUATION TO CREATE THE CASCADE (ALONG WITH THEIR COLLUSIVE FRIENDS) AND THEN COVER ON THE BUY SIDE OF THE SPREAD SITUATION AT THE END  OF THE DAY. THEY DO THIS TO AVOID POSITION LIMIT DETECTION. THE LIQUIDATION OF THE SPREADING FORMATION CONTINUES FOR EXACTLY ONE WEEK AND ENDS ON FIRST DAY NOTICE.” 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY : 85,098 CONTRACTS OR 8,509,800 OR 264.69 TONNES (13 TRADING DAYS AND THUS AVERAGING: 6546 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 13 TRADING DAYS IN  TONNES: 264.69 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2018, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES

THUS EFP TRANSFERS REPRESENTS 264.69/3550 x 100% TONNES =7.43% OF GLOBAL ANNUAL PRODUCTION SO FAR IN DECEMBER ALONE.***

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     2080.23 TONNES

JANUARY 2019 TOTAL EFP ISSUANCE;   531.20 TONNES

FEB 2019 TOTAL EFP ISSUANCE:             344.36 TONNES

MARCH 2019 TOTAL EFP ISSUANCE:       497.16 TONNES

APRIL 2019 TOTAL ISSUANCE:                 456.10 TONNES

 

 

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

 

 

Result: A CONSIDERABLE SIZED DECREASE IN OI AT THE COMEX OF 3112 DESPITE THE LARGE FALL IN PRICING ($11.10) THAT GOLD UNDERTOOK YESTERDAY) //.WE ALSO HAD A  MONSTROUS SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 14,239 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 14,239 EFP CONTRACTS ISSUED, WE  HAD A STRONG SIZED GAIN OF 11,127 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

14,239 CONTRACTS MOVE TO LONDON AND 3112 CONTRACTS DECREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 34.60 TONNES). ..AND THIS HUMONGOUS DEMAND OCCURRED DESPITE THE FALL IN PRICE OF $11.10 IN YESTERDAY’S TRADING AT THE COMEX.WE MAY HAVE HAD A STRONG PRESENCE OF SPREADING TODAY IN THE RAID ORCHESTRATED BY THE CROOKS.

 

 

 

we had:  2 notice(s) filed upon for 200 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD DOWN $9.70  TODAY

NO CHANGE IN GOLD INVENTORY AT THE GLD/

 

 

 

 

 

 

INVENTORY RESTS AT 733.23 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 DOWN 13 CENTS TODAY:

A HUGE 3.186 MILLION OZ WITHDRAWAL OF PAPER SILVER FORM THE SLV.

THIS PAPER SILVER WAS USED IN THE ATTACK TODAY.

 

 

 

 

 

 

 

/INVENTORY RESTS AT 312.366 MILLION OZ.

 

 

end

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

1. Today, we had the open interest in SILVER ROSE BY A HUMONGOUS SIZED 5284 CONTRACTS from 204,318 UPTO 209,602 AND CLOSER TO 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…..THE SPREADERS HAVE STOPPED THEIR LIQUIDATION IN SILVER BUT HAVE NOW MORPHED INTO GOLD..

 

 

 

 

EFP ISSUANCE:

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

 

0 CONTRACTS FOR APRIL., 0 FOR MAY, FOR JUNE 0 CONTRACTS AND JULY: 1368 CONTRACTS  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1368 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI GAIN AT THE COMEX OF 5190 CONTRACTS TO THE 1368 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A HUGE GAIN OF 6558 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 32.79 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 7.475 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,  27.120 MILLION OZ FOR MARCH., 3.875 MILLION OZ FOR APRIL AND NOW 18.650 MILLION OZ FOR MAY

 

 

RESULT: A HUGE SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE  26 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A STRONG SIZED 1368 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR THIS MONTH, 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

)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED DOWN 73.42 POINTS OR 2.48%  //Hang Sang CLOSED DOWN 328.61 POINTS OR 1.16%   /The Nikkei closed UP 187.11 POINTS OR 0.89%//Australia’s all ordinaires CLOSED UP .69%

/Chinese yuan (ONSHORE) closed DOWN  at 6.9145 /Oil UP to 61.64 dollars per barrel for WTI and 71.08 for Brent. Stocks in Europe OPENED GREEN//  ONSHORE YUAN CLOSED DOWN // LAST AT 6.9145 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.9468 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

 

 

3A//NORTH KOREA/ SOUTH KOREA

i)NORTH KOREA

 

 

 

b) REPORT ON JAPAN

 

3 China/Chinese affairs

i)China/

 

 

Trade optimism fizzles as China states it has no more plans for talks. Obviously they are quite concerned with the Huawei situation

(courtesy zerohedge)

ii)Huawei bonds tumble the most on record after the new prohibition of sales of components from uSA sources to it

( zerohedge)

iii)Very problematic as Beijing faces China and Russia who have their back as they both firmly oppose unilateral USA sanctions

( zerohedge)

iv)An excellent commentary from James Rickards as he discusses the problems China faces with the trade war

a must read

( James Rickards)

v)Your weekly economic lesson from Alasdair Macleod as he discusses the end game.  The trade wars will not help the USA because they do not safe and as such their budget deficit will still blow out.  This will lead to a hyperinflationary depression in the USA as dollars leave the globe and circulate in great quantities in the USA
(courtesy Alasdair Macleod)

4/EUROPEAN AFFAIRS

i)UK

Corbyn is a fool: the opposition leader wants to nationalize the UK national energy grid.  They just handed the election to Farage as both the conservatives and labour disintegrate

( Mish Shedlock/Mishtalk)

ii)UK

The pound hits a 4 month low as stalks with labour collapse

( zerohedge)

 

 

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

a)TURKEY

Early last night, the Turkish lira tumbles to 6.0840 after Trump terminates its preferential trade agreement with Turkey stating that Turkey is no longer in need of help as a developing nation and thus all goods will have the normal tariffs assigned to those goods. However as a kind gesture, he has initiated a 25% tariff on Turkish steel instead of the 50% that everybody else pays.

( zerohedge)

b)IRAN

There is fear that Iranian operatives have moved missiles in Iraq and are planning to attack USA interests there.  We do not know how many missiles have been mobilized

( zerohedge)

c)IRAN/USA
two more warships travel through the Straits of Hormuz without incident.  They are joining the USS Abraham Lincoln as well as a strike force including B 52 bombers as the uSA builds up its forces in the Gulf
( zerohedge)

6. GLOBAL ISSUES

 

Canada/Mexico/USA

Canada and Mexico reach a deal with the USA as they both lift tariffs against each other

(courtesy zerohedge

7. OIL ISSUES

 

 

 

8 EMERGING MARKET ISSUES

VENEZUELA

 

 

 

 

9. PHYSICAL MARKETS

i)My goodness, I guess that there is inflation

(Bloomberg/GATA)

ii)For the first time Kitco is allowed to mention gold manipulation.  The interview is with Max Keiser and the interviewer is Daniela Cambone

( Kitco/GATA)

iii)Another Cdn miner going into the dust bin: Iamgold explores its sale amid gold sector consolidation

(Bloomberg/GATA)

iv)This is going to help a little in our manipulation of the precious metals as the futures exchange are introducing a speed bump to stop front running by our HFT traders.
(zerohedge)

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

 

 

MARKET TRADING//

Late trading today.

 

 

 

ii)Market data

The generally more accurate gauge of consumer confidence is the Bank of America survey as compared to the U. of Michigan report.  Yesterday the U. of Michigan was bullish on confidence.  Today’s B of America report was bearish.

(courtesy zerohedge)

ii)USA ECONOMIC/GENERAL STORIES

a)Baltimore is now crippled by the cryptocurrency ransomware attack.

(courtesy zerohedge)

b)auto loan delinquencies are now spiking levels not seen since 3rd quarter of 2009

(courtesy WolfRichter)

SWAMP STORIES

a)Barr’s first interview with Bill Hammer:  Government power was used to spy on American citizens states Barr.

(courtesy Fox news/Bill Hammer/Bill Barr)

b)This is good:  Nellie Ohr deleted emails on Bruce Ohr’s computer while she was doing her research digging up dirt on Trump. So we have a non government employee destroy evidence on a government employee’s computer..  Sounds like obstruction of justice to me

( zerohedge)

c)Maxine Waters is one nutjob: here she calls Trump’s very immigration plan racist because it is not important for new immigrants to learn English and have a job

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

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN INTEREST FELL BY A CONSIDERABLE SIZED 3112 CONTRACTS TO A LEVEL OF 521,243 DESPITE THE CONSIDERABLE FALL IN THE PRICE OF GOLD ($11.10) IN YESTERDAY’S // COMEX TRADING)

WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF MAY..  THE CME REPORTS THAT THE BANKERS ISSUED A HUMONGOUS SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 14,239 EFP CONTRACTS WERE ISSUED:

0 FOR JUNE ’19: 14,239 CONTRACTS , DEC; 0 CONTRACTS: 0 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  14,239 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: 11,127 TOTAL CONTRACTS IN THAT 14,239 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A CONSIDERABLE  SIZED 3112 COMEX CONTRACTS.

 

NET GAIN ON THE TWO EXCHANGES : 11,127 contracts OR 1,112,700 OZ OR 34.60 TONNES.

 

We are now in the NON active contract month of MAY and here the open interest stands at 69 contracts, having LOST 54 contracts. We had 55 notices served yesterday so we gained 1 contracts or an additional 100  oz will stand as they guys refused to morph into a London based forward as well as negating a fiat bonus

The next contract month after May is June and here the open interest FELL by 15,934 contracts DOWN to 263,678.  July LOST 300 contracts to stand at 370.  After July the next active month is August and here the OI rose by 3636 contracts up to 162,923 contracts.

 

 

 

TODAY’S NOTICES FILED:

WE HAD 2 NOTICE FILED TODAY AT THE COMEX FOR  200  OZ. (0.0062 TONNES)

 

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And now for the wild silver comex results.

Total COMEX silver OI ROSE BY A HUGE SIZED 5190 CONTRACTS FROM 204,318 UP TO 209,508 (AND CLOSER TO 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 HUGE OI COMEX GAIN OCCURRED WITH A  26 CENT LOSS IN PRICING.//YESTERDAY.

 

 

WE ARE NOW INTO THE  ACTIVE DELIVERY MONTH OF MAY.  HERE WE HAVE 353 OPEN INTEREST STAND SO FAR FOR A GAIN OF 55 CONTRACTS.  WE HAD 4 NOTICES SERVED UPON YESTERDAY SO IN ESSENCE WE GAINED ANOTHER  59 CONTRACT OR AN ADDITIONAL 295,000 OZ WILL STAND FOR DELIVERY AS THESE GUYS REFUSED TO MORPH INTO LONDON BASED FORWARDS AND AS WELL THEY NEGATING A FIAT BONUS. SILVER MUST BE SCARCE AT THE COMEX. QUEUE JUMPING RETURNS WITH A VENGEANCE. WE HAVE NOW SURPASSED THE INITIAL AMOUNT STANDING WHICH OCCURRED ON APRIL 30.2019

 

 

 

THE NEXT MONTH AFTER MAY IS THE NON ACTIVE MONTH OF  JUNE.  HERE THIS MONTH GAINED 6 CONTRACTS DOWN TO 723. AFTER JUNE IS THE ACTIVE MONTH OF JULY, (THE SECOND LARGEST DELIVERY MONTH OF THE YEAR FOR SILVER) AND HERE THIS MONTH GAINED 4280 CONTRACTS UP TO 158,330 CONTRACTS. THE NEXT ACTIVE MONTH AFTER JULY FOR SILVER IS SEPTEMBER AND HERE THE OI ROSE BY 207 UP TO 19,323 CONTRACTS.

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 15 notice(s) filed for 75,000 OZ for the MARCH, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY: 267,386  CONTRACTS 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  320,233  contracts

 

 

 

 

 

 

 

INITIAL standings for  MAY/GOLD

MAY 17 /2019.

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
nil
oz
Deposits to the Dealer Inventory in oz nil

oz

 

 

 

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

 

 

nil oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
2 notice(s)
 200 OZ
(0.0060 TONNES)
No of oz to be served (notices)
67 contracts
(6700 oz)
0.2083 TONNES
Total monthly oz gold served (contracts) so far this month
290 notices
29000 OZ
.9020 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: nil oz

We had 0 kilobar entries

 

we had 0 deposit into the customer account

i) Into JPMorgan:  nil oz

 

ii) Into everybody else: 0

 

 

total gold deposits: 0  oz

 

 very little gold arrives from outside/ nothing arrived   today

we had 0 gold withdrawals from the customer account:

 

 

Gold withdrawals;

i)  We had 0 withdrawal:

 

.

total gold withdrawals;    nil oz

 

 

i) we had 0 adjustments today

FOR THE MAY 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 2 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 2 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 MAY /2019. contract month, we take the total number of notices filed so far for the month (290) x 100 oz , to which we add the difference between the open interest for the front month of MAY. (69 contract) minus the number of notices served upon today (2 x 100 oz per contract) equals 35,700 OZ OR 1.110 TONNES) the number of ounces standing in this NON active month of MAY

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

No of notices served (290 x 100 oz)  + (69)OI for the front month minus the number of notices served upon today (2 x 100 oz )which equals 35,700 oz standing OR 1.110 TONNES in this NON active delivery month of MAY.

We gained 1 contract or an additional 100 oz will stand for delivery as they refused to morph into a London based forwards. Queue jumping continues where we left off last month in gold and for that matter in silver.  We now have two precious metals undergoing queue jumping as the bankers scramble to obtain physical metal.

 

 

 

 

 

SURPRISINGLY LITTLE TO NO  GOLD HAS BEEN ENTERING THE COMEX VAULTS AND WE HAVE WITNESSED THIS FOR THE PAST YEAR!!  WE HAVE ONLY 6.632 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 1.110 TONNES OF GOLD STANDING// THEY SEEM TO BE USING CONSIDERABLE GOLD VAPOUR TO SETTLE UPON UNSUSPECTING LONGS.

IF THIS IS GOING ON IN MAY, I JUST CANNOT WAIT TO SEE WHAT WILL HAPPEN IN JUNE WHICH IS A HUGE DELIVERY MONTH.

 

 

 

 

 

total registered or dealer gold:  213,219.982 oz or  6.632tonnes
total registered and eligible (customer) gold;   7,701,987.623 oz 239.56 tonnes

 

 

FOR COMPARISON FIRST DAY NOTICE FOR MAY 2018 AND FINAL STANDING MAY 31 2018

 

 

AT FIRST DAY NOTICE MAY 1 2018: WE HAD 1.284 TONNES OF GOLD STAND.  BY MONTH’S END:  2.27 TONNES AS WE HAD ONE QUEUE JUMPING IN THE MIDDLE OF THE MONTH.

IN THE LAST 32 MONTHS 116 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 OF APRIL

INITIAL  standings/SILVER

IN TOTAL CONTRAST TO GOLD, HUGE ACTIVITY IN SILVER TODAY.
MAY 17 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
600,006.27 oz
DELAWARE
CNT

 

 

 

 

 

 

 

Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory
11,134.53 oz
BRINKS
No of oz served today (contracts)
15
CONTRACT(S)
(75,000 OZ)
No of oz to be served (notices)
338 contracts
1,690,000 oz)
Total monthly oz silver served (contracts) 3392 contracts

16,960,000 oz)

Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month

**

 

we had 0 inventory movement at the dealer side of things

 

total dealer deposits: NIL  oz

total dealer withdrawals: nil oz

we had  1 deposits into the customer account

into JPMorgan:  nil

 

 

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

JPMorgan now has 149.469 million oz of  total silver inventory or 48.80% of all official comex silver. (149 million/307 million)

 

into Brinks:  11,134.53 OZ

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today:  11,134.53  oz

 

we had 2 withdrawals out of the customer account:

 

i) Out of Delaware:  2923.7000 oz

ii) Out of CNT; 597,082.573 oz

 

 

 

 

total withdrawals:  600,006.27 oz

 

we had 1 adjustment :

out of Brinks:  24,783.160 oz was adjusted out of the dealer and this landed into the customer account of Brinks

 

total dealer silver:  92.203 million

total dealer + customer silver:  305.264 million oz

 

The total number of notices filed today for the MAY 2019. contract month is represented by 15 contract(s) FOR  75,000  oz

To calculate the number of silver ounces that will stand for delivery in MAY, we take the total number of notices filed for the month so far at 3392 x 5,000 oz = 16,960,000 oz to which we add the difference between the open interest for the front month of MAY. (353) and the number of notices served upon today (15 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAY/2019 contract month: 3392(notices served so far)x 5000 oz + OI for front month of MAY( 353) -number of notices served upon today (15)x 5000 oz equals 18,650,000 oz of silver standing for the MAY contract month.

We GAINED A HUGE 59 contracts or an additional 295,000 oz will stand as these guys refused to morph into London based forwards as well as negating a fiat bonus for their efforts. AND YET THEY WHACKED SILVER YESTERDAY BY 26 CENTS??? MAKES NO SENSE!!

 

 

 

FOR COMPARISON VS LAST YEAR:

 

 

 

 

ON FIRST DAY NOTICE APRIL 30/2018 (FOR THE MAY 2018 CONTRACT MONTH) WE HAD 24.11 MILLION OZ STAND FOR DELIVERY.  BY MONTH END WE HAD HUGE QUEUE JUMPING AND THUS 36.285 MILLION OZ EVENTUALLY STOOD FOR DELIVERY.

 

 

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TODAY’S ESTIMATED SILVER VOLUME:  61,602 CONTRACTS

 

 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 74,519 CONTRACTS..

 

..

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 74,519 CONTRACTS EQUATES to 372 million  OZ 53.2% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

 

end

 

 

 

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NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -4.42% (MAY 17/2019)
2. Sprott gold fund (PHYS): premium to NAV FALLS TO -2.05% to NAV (MAY 17/2019 )
Note: Sprott silver trust back into NEGATIVE territory at -4.42%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 12.91 TRADING 12.36/DISCOUNT 4.22

END

And now the Gold inventory at the GLD/

MAY 17/WITH GOLD DOWN $9.70 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 733.23 TONNES

MAY 16/WITH GOLD DOWN $11.50: A WITHDRAWAL OF 3.23 TONNES FROM THE GLD//INVENTORY RESTS AT 733.23 TONNES

MAY 15/WITH GOLD UP $1.50 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 736.46 TONNES

MAY 14//WITH GOLD DOWN $5.45 TODAY: STRANGE!! THE CROOKS DECIDED TO DEPOSIT A HUGE 3.23 TONNES INTO THE GLD INVENTORY//INVENTORY RESTS AT 736.46 TONNES

MAY 13/ WITH GOLD UP ANOTHER $15.40 TODAY: STRANGE! A MASSIVE WITHDRAWAL OF 6.41 TONNES OF GOLD (TO TAME GOLD’S RISE TODAY)/INVENTORY RESTS AT 733.23 TONNES

MAY 10 WITH GOLD UP $2.15 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 9//WITH GOLD UP $4.00 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 8/WITH GOLD DOWN $3.70 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 739.64 TONNES

MAY 7/ WITH GOLD UP $1.80: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 6/WITH GOLD UP $2.35: ANOTHER WITHDRAWAL OF 5.88 TONNES OF GOLD FROM THE GLD/INVENTORY RESTS AT 739.64 TONNES

MAY 3/WITH GOLD UP $9.35 TODAY: A WITHDRAWAL  OF 1.17 TONNES OF GOLD FROM THE GLD INVENTORY/INVENTORY RESTS AT 745.52

MAY 2/WITH GOLD DOWN $12.30 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 746.69 TONNES

MAY 1/WITH GOLD DOWN $1.20 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 746.69 TONNES

APRIL 30/WITH GOLD UP $4.30 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 746.69 TONNES//

APRIL 29/WITH GOLD DOWN $7.00: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 746.69 TONNES

APRIL 26/WITH GOLD UP $9.2//ANOTHER BIG CHANGE IN GOLD INVENTORY AT THE GLD; A WITHDRAWAL OF 1.18 TONNES OF GOLD FROM THE GLD.//INVENTORY LOWERS TO 746.69 TONNES TONNES

APRIL 25//WITH GOLD UP $.05 TODAY  (BASICALLY FLAT) NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 747.87 TONNES

 

APRIL 24 WITH GOLD UP  $6.00 TODAY// TWO TRANSACTIONS: 1)A HUGE WITHDRAWAL OF 2.05 TONNES FROM THE GLD AND THEN II) ANOTHER WITHDRAWAL OF 1.76 TONNES//INVENTORY RESTS AT 747.87 TONNES

APRIL 23./WITH GOLD DOWN $4.45 TODAY: NO CHANGES AT THE GLD/INVENTORY RESTS AT 751.68 TONNES//

APRIL 22/WITH GOLD UP $1.75//A SMALL WITHDRAWAL OF .59 TONNES OF GOLD FROM THE GLD INVENTORY//INVENTORY RESTS AT 751.68 TONNES

APRIL 18/WITH GOLD DOWN $.45 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT752.27 TONNES

APRIL 17/WITH GOLD DOWN $0.10 TODAY: ANOTHER HUGE WITHDRAWAL OF 1.76 TONNES AT THE GLD WHICH WAS USED IN YESTERDAY’S RAID/INVENTORY RESTS AT 752.27 TONNES

APRIL 16/WITH GOLD DOWN $13.60 TODAY: A HUGE WITHDRAWAL OF 3.82 TONNES AT THE GLD/INVENTORY RESTS AT 754.03

APRIL 15/WITH GOLD DOWN $3.70 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.85 TONNES

APRIL 12/WITH GOLD UP $2.10 TODAY:NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757..85 TONNES

APRIL 11/WITH GOLD DOWN $19.85 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.85 TONNES

APRIL 10/WITH GOLD UP $5.45 AGAIN TODAY, THE CROOKS AGAIN RAIDED THE COOKE JAR BY 2.64 TONNES/INVENTORY RESTS AT 757.85 TONNES

APRIL 9/WITH GOLD UP AGAIN BY $6.40/THE CROOKS RAIDED THE COOKIE JAR AGAIN BY 1.18 TONNES/INVENTORY RESTS AT 760.49 TONNES

APRIL 8/WITH GOLD UP AGAIN BY $6.40: THE CROOKS RAIDED THE COOKIE JAR AGAIN BY .88 TONNES//INVENTORY RESTS TONIGHT AT 761.67 TONNES.

APRIL 5/WITH GOLD UP$1.35: ANOTHER WITHDRAWAL OF 1.74 TONNES OF PHYSICAL GOLD FROM THE GLD INVENTORY: INVENTORY RESTS AT 762.55 TONNES

APRIL 4/WITH GOLD DOWN 90 CENTS TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.29 TONNES

APRIL 3:WITH GOLD DOWN 20 CENTS: ANOTHER WHOPPER OF A WITHDRAWAL: 3.81 TONNES FROM THE GLD//INVENTORY RESTS AT  764.29 TONNES

APRIL 2//WOW! WE LOST A WHOPPING 16.16 TONNES OF GOLD WITH A RISE IN PRICE OF $1.80//INVENTORY RESTS AT 768.10

 

 

 

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MAY 17/2019/ Inventory rests tonight at 736.46 tonnes

*IN LAST 594 TRADING DAYS: 200.74NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 494 TRADING DAYS: A NET 34.90 TONNES HAVE NOW BEEN LOST INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

MAY 17/WITH SILVER DOWN 13 CENTS TODAY: A BIG CHANGES IN SLV: A WITHDRAWAL OF 3.185 MILLION OZ FROM THE SLV INVENTORY VAULTS:/INVENTORY RESTS AT 312.366 MILLION OZ//

MAY 16/WITH SILVER DOWN 26 CENTS: NO CHANGES IN THE SLV INVENTORY//INVENTORY RESTS AT 315.551 MILLION OZ//

MAY 15/WITH SILVER UP 2 CENTS TODAY: A BIG CHANGE IN SLV  INVENTORY: A WITHDRAWAL OF 1.031 MILLION OZ//  THE SLV/INVENTORY RESTS AT 315.551 MILLION OZ.

MAY 14/WITH SILVER UP 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV. INVENTORY RESTS AT 316.582 MILLION OZ/

MAY 13//WITH SILVE5 DOWN 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ…

MAY 10/WITH SILVER UP 2 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 316.582 MILLION OZ///

MAY 9/WITH SILVER DOWN 9 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 316.582 MILLION OZ//

MAY 8/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ///

MAY 7/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ//

MAY 6/WITH SILVER DOWN 3 CENTS WE HAD ANOTHER DEPOSIT OF 891,000 OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 316.582 MILLION OZ/

MAY 3//WITH SILVER UP 34 CENTS TODAY: A DEPOSIT OF 843,000 OZ INTO THE SLV/TOTAL INVENTORY RESTS AT 315.691 MILLION OZ//

MAY 2/WITH SILVER DOWN ANOTHER 13 CENTS, MIRACUOUSLY THE AUTHORITIES ADD 2.869 MILLION OZ OF SILVER BACK INTO THE SLV/INVENTORY RESTS AT 314.848 MILLION OZ//

MAY 1/WITH SILVER DOWN 23 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ////

APRIL 30/WITH SILVER UP 5 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ/

APRIL 29/ WITH SILVER DOWN 13 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ.

APRIL 26//WITH SILVER UP 12 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ//

APRIL 25/WITH SILVER DOWN 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ///

APRIL 24/WITH SILVER UP 15 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ//

APRIL 23./WITH SILVER DOWN 21 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ///

APRIL 22/WITH SILVER UP 4 CENTS TODAY; NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.979 MILLION OZ///

APRIL 18/WITH SILVER FLAT TODAY: A SHOCKING 2.8122 MILLION PAPER OZ WERE ADDED INTO SLV INVENTORY: INVENTORY RESTS AT 311.979 MILLION OZ/

APRIL 17/WITH SILVER UP ONE CENT TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ///

APRIL 16/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ//

APRIL 15: WITH SILVER DOWN ONE CENT TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 750,000 OZ//INVENTORY RESTS AT 309.167 MILLION OZ.

APRIL 12 WITH SILVER UP 11 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.917 MILLION OZ.

APRIL 11/WITH SILVER DOWN 37 CENTS TODAY: A DEPOSIT OF 750,000 OZ INTO THE SLV/INVENTORY RESTS AT 309.917 MILLION OZ//

April 10/WITH SILVER UP 4 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ.

APRIL 9/WITH SILVER DOWN ONE CENT: NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 309.167 MILLION OZ///

APRIL 8/WITH SILVER UP 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV.INVENTORY RESTS AT 309.167 MILLION OZ///

APRIL 5/WITH SILVER DOWN 2 CENTS: NO CHANGES IN SILVER INVENTORY:  THE CROOKS CANNOT RAID ANY SILVER BECAUSE THERE IS NONE: INVENTORY RETS AT 309.167 MILLION OZ//

APRIL 4/WITH SILVER FLAT TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ/

APRIL 3/WITH SILVER UP TWO CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 309.167 MILLION OZ/

APRIL 2/ WITH SILVER DOWN ONE CENT TODAY: A SMALL WITHDRAWAL OF 134,000 OZ FROM THE SLV TO PAY FOR FEES/INVENTORY RESTS AT 309.167

 

 

 

MAY 17/2019:

 

Inventory 312.366 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 2.12/ and libor 6 month duration 2.55

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

G0LD LENDING RATE: + .43

 

XXXXXXXX

12 Month MM GOFO
+ 2.33%

LIBOR FOR 12 MONTH DURATION: 2.63

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.30

end

 

PHYSICAL GOLD/SILVER STORIES

 

end
i) GOLDCORE BLOG/Mark O’Byrne

OFF TODAY

 

 
end

GATA STORIES WITH RESPECT TO GOLD/PRECIOUS METALS.

My goodness, I guess that there is inflation

(Bloomberg/GATA)

Koons’ silver Rabbit sets living artist record

 Section: 

Thank God there’s no inflation.

* * *

By Katya Kazakina and Allison McCartney
Bloomberg News
Thursday, May 16, 2019

It was another heady auction night in New York.

Minutes after Robert Rauschenberg’s painting Buffalo II fetched $88.8 million at Christie’s — almost five times the late artist’s previous auction record — Jeff Koons’s sculpture of an inflatable silver bunny topped that at $91.1 million, the most ever paid for a work by a living artist at auction.

The Koons led Christie’s postwar and contemporary art sale today, which totalled $539 million, up 36 percent from a year ago. The evening saw seven new artist records, with a $32.1 million spider sculpture by Louise Bourgeois joining Koons and Rauschenberg.

… 

The 1986 Rabbit was bought by art dealer Bob Mnuchin, U.S. Treasury Secretary Steven Mnuchin’s father, who was in the midtown Manhattan salesroom and said he made the purchase on behalf of a client. Estimated at $50 million to $70 million, it was part of a group of works consigned by the family of late media mogul Si Newhouse. …

… For the remainder of the report:

https://www.bloomberg.com/graphics/2019-may-art-auctions/

END

For the first time Kitco is allowed to mention gold manipulation.  The interview is with Max Keiser and the interviewer is Daniela Cambone

(courtesy Kitco/GATA)

Kitco lets Max Keiser mention gold market manipulation

 Section: 

11:19a ET Thursday, May 16, 2019

Dear Friend of GATA and Gold:

Gold market manipulation makes a surprising appearance at Kitco today as Daniela Cambone interviews financial market commentator Max Keiser about the monetary metal’s underperformance. The interview is 11 minutes long and can be viewed at Kitco News here:

https://www.kitco.com/news/2019-05-16/Fair-Value-For-Gold-Price-2-900-Bi…

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

END

Another Cdn miner going into the dust bin: Iamgold explores its sale amid gold sector consolidation

(Bloomberg/GATA)

Iamgold explores sale amid gold-sector consolidation

 Section: 

By Scott Deveau and Dinesh Nair
Bloomberg News
Thursday, May 16, 2019

Canadian miner Iamgold Corp. is exploring a possible sale of all or part of the company amid a wave of consolidation in the gold sector, according to people familiar with the matter.

The Toronto-based miner is working with advisers and has spoken to several potential buyers, said the people, who asked not to be identified because the matter is private.

Iamgold’s plans could still change and there’s no guarantee it would succeed in selling itself, the people said.

A representative for Iamgold declined to comment. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-05-16/iamgold-is-said-to-ex…



iii) Other Physical stories
This is going to help a little in our manipulation of the precious metals as the futures exchange are introducing a speed bump to stop front running by our HFT traders.
(zerohedge)

Futures Exchange To Introduce Gold, Silver “Speed Bump” To End HFT Manipulation

No sooner had we covered the battle of high frequency traders physically moving infrastructure and microwave towers to gain nanosecond advantages, that we learned that Intercontinental Exchange (ICE) has planned on launching the first ever “speed bump” for the US futures market that would negate some of these advantages. Despite two of the CFTC’s five commissioners disagreeing with the decision, the exchange still looks set to impose a split second delay on some trades, according to the Wall Street Journal.

Those not in favor of the decision claim that the “speed bump” would unfairly punish firms that rely on their speed advantage. Those in favor, say that it’s about time someone did something to stop the HFTs from frontrunning everyone in the futures market. Which is also why some of the largest high frequency trading firms are vocally opposed to the plan.

As part of the proposed speed bump, the ICE is looking to introduce a 3 millisecond pause before executing some trades in its gold and silver futures contracts. Trading in those contracts is relatively tiny, as most gold and silver futures trades take place at the CME Group. However, traders have been watching this decision because of the precedent it could set.

The CFTC had a chance to block the proposal within 90 days, but that period ended on Tuesday. Now, ICE is free to do as it pleases. The CFTC’s Division of Market Oversight said it’s going to watch carefully to analyze the impact of the new “speed bump” saying it “does not view the certification of the ICE Rule as establishing a precedent with respect to the legal and policy merits of speed bump functionalities generally.”

Other attempts to create similar “speed bumps” at other exchanges will be assessed on individual merits, according to the Division. Both a Democratic and Republican commissioner issued objections to the decision. The Republican cited Kurt Vonnegut’s short story “Harrison Bergeron”, where the government forces handicaps on talented people to create a level playing field, in his dissent.

Republican Brian Quintenz said: “Those that invent, and invest in, faster information transmission technologies to capitalize on market dislocations reap the profits of their advantage. That process enhances market efficiency.”

ICE hasn’t given a timeline for when they are going to implement the “speed bump”. The exchange commented: “We are very pleased with the CFTC’s decision to allow our rule amendment for passive order protection—or what is commonly referred to as a speed bump—in futures markets to become effective.”

HFT giants like Citadel Securities LLC and DRW Holdings LLC, which make the bulk of their revenue from frontrunning slower retail and “dumb money whale” orders, were opposed to the idea, along with trade group Managed Funds Association, which represents hedge funds. Stephen Berger, global head of government and regulatory policy for Citadel Securities said: “We appreciate the commission’s confirmation that today’s rule change is limited in scope to two specific contracts and that any future expansion will require a new rule filing and legal analysis.”

The best hot take on the speed bump belonged to Tom McClellan, who said that “high-frequency algo traders spent all that money, locating their offices closer to ICE server farms and buying high-speed fiber connections to get an edge on trading, and now ICE is introducing a 3-millisecond delay trying to level the playing field.”

Tom McClellan@McClellanOsc

High-frequency algo traders spent all that money, locating their offices closer to ICE server farms and buying high-speed fiber connections to get an edge on trading, and now ICE is introducing a 3-millisecond delay trying to level the playing field. https://www.wsj.com/articles/first-speed-bump-coming-to-u-s-futures-markets-11557924822 

The ICE futures exchange is set to blunt the advantages of ultrafast traders by imposing a split-second delay on some trades

First ‘Speed Bump’ Coming to U.S. Futures Markets

The ICE futures exchange is set to blunt the advantages of ultrafast traders by imposing a split-second delay on some trades.

wsj.com

95 people are talking about this

Which also explains why they are all so furious.

Several smaller firms welcomed the idea, however, claiming it would allow greater competition. HFT firms now have to spend significant amounts of capital to shave millionths of a second off their trades. Large firms have built out microwave infrastructure and have jostled to get close to exchanges to find minuscule advantages, as we have profiled in the past.

The “bump” is set to apply to incoming orders seeking to hit unexecuted buy or sell orders already posted on ICE, while traders posting new orders to be displayed on the exchange won’t be affected. Eric Swanson, head of the Americas unit of XTX Markets said: “By negating costly HFT speed advantages at millisecond time frames, ICE’s speed bump will reduce the indirect operational tax on end users.”

Still, some critics claim that the delay could actually cause more volatility in periods of market turmoil.

DRW founder and Chief Executive Donald Wilson Jr. said: “During episodes of volatility, there would be essentially fake liquidity on the screen. I think that’s a very dangerous thing.”

 
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-

Justice Department stalls another class action in gold market rigging, this one against JPM

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

Proceedings in the federal class-action anti-trust lawsuit against JPMorganChase charging the investment bank with manipulating the gold and silver futures markets —

http://www.gata.org/node/18844

— have been suspended for three months at the request of the U.S. Justice Department, just as the department has arranged suspension of proceedings in the class-action anti-trust lawsuit against Deutsche Bank charging similar market manipulation.

… 

In both cases the Justice Department has told U.S. District Court for the Southern District of New York that proceedings would jeopardize its criminal investigation into market rigging, which has been admitted by a former JPMorganChase trader, John Edmonds, who awaits sentencing.

According to court filings, the White Plains, New York, law firm representing the plaintiffs against JPMorganChase, Lowey Dannenberg, concurred in the government’s request to suspend proceedings. The stay is to continue for three months and may be extended.

The Justice Department’s motion, granted by the court on February 26 —

http://www.gata.org/files/JPMorganChaseClassActionStay.pdf

— said “the government is not seeking an open-ended stay that could indefinitely postpone this matter and thus jeopardize the parties’ interests in a timely resolution.” The motion added, “Any developments in the criminal case during the period the consolidated action is stayed may reduce or completely resolve the need to litigate certain issues in the consolidated action.”

Much of the Justice Department’s motion is redacted to conceal from the public evidence still under investigation. Edmonds has said he and other traders manipulated the gold and silver markets for years with the knowledge of their supervisors at JPMorganChase. In its motion to conceal that evidence, also granted by the court on February 26, the Justice Department said disclosure “could lead to destruction of evidence, flight from prosecution, and otherwise interfere with the government’s ability to conduct its investigation”:

http://www.gata.org/files/JPMorganChaseClassActionStaySeal.pdf

Monetary metals investors may be skeptical of the Justice Department’s stalling the Deutsche Bank and JPMorganChase cases, since the department and the U.S. Commodity Futures Trading Commission do not seem ever to have responded conscientiously to complaints of gold and silver market rigging until the class actions commenced.

How much time will the court give the Justice Department to delay getting to the bottom of the issue? The court might hasten matters if enough monetary metals mining companies protested the harm done to them and their shareholders by market rigging, but of course most monetary metals mining companies don’t mind at all.

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

* * *

 

end

* * *

Your early FRIDAY 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: 6.9145/ GETTING VERY DANGEROUSLY CLOSE TO 7:1

//OFFSHORE YUAN:  6.9468   /shanghai bourse CLOSED DOWN 73.42 POINTS OR 2/48%

HANG SANG CLOSED DOWN 328.61 POINTS OR 1.16%

 

2. Nikkei closed  UP 187.11 POINTS OR 0.89%

 

 

 

 

3. Europe stocks OPENED RED /

 

 

 

USA dollar index RISES TO 97.89/Euro FALLS TO 1.1168

3b Japan 10 year bond yield: RISES TO. –.05/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 109.64/ 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//CARRY TRADERS GETTING KILLED

 

3c Nikkei now JUST BELOW 17,000

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

3e WTI:: 63.52 and Brent: 73.05

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO -.11%/Italian 10 yr bond yield DOWN to 2.62% /SPAIN 10 YR BOND YIELD DOWN TO 0.87%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.73: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 3.42

3k Gold at $1286.00 silver at: 14.49   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 1/100 in roubles/dollar) 64.43

3m oil into the 63 dollar handle for WTI and 73 handle for Brent/

3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/

JAPAN ON JAN 29.2016 INITIATES NIRP. THIS MORNING THEY SIGNAL THEY MAY END NIRP. TODAY THE USA/YEN TRADES TO 109.64 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 1.0104 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1285 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 NEGATIVE territory with the 10 year FALLING to 0.11%

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 2.38% early this morning. Thirty year rate at 2.82%

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

6.  TURKISH LIRA:  UP  TO 6.0615..they are toast

Global Markets, Yuan Tumble As China Crushes Trade Hopes

After yesterday’s bizarre, gamma-chasing rally, the week was set to close in a sea of red as world markets suffered a fresh bout of risk aversion on Friday after China doused hopes for a quick deal when its state media signaled a lack of interest in resuming trade talks with the U.S. under the current threat to escalate tariffs, while the government said stimulus will be stepped up to buttress the domestic economy. Meanwhile bets on a new pro-Brexit leader in Britain whipped the pound towards its worst week since October.

After an initial advance, Asian stocks erased most gains for the day with the MSCI index of Asia-Pacific shares outside Japan sliding to 15-week lows and down 2.6% for the week at the end of trading.  An advance in Japanese stocks failed to offset falling Chinese shares. The Topix Index rose 1.1%, led by electric appliances, while China’s Shanghai Composite Index fell 2.5% after a front page commentary in the Communist Party’s People’s Daily evoked the patriotic spirit of past wars, saying the trade war would never bring China down.

“The China state media commentaries fueled concerns that the U.S.-China trade disputes will prolong, deterring risk-taking,” said Koji Fukaya, CEO of Japan’s FPG Securities. “This issue will probably be one of the major market drivers for a while as U.S.-China trade war influences global economic conditions.”

In terms of how the trade conflict plays out, “the next fortnight will be very, very important,” UniCredit strategist Kiran Kowshik said. “Chinese counter-tariffs are due on June 1 and if those get effective, I think markets will price in the risk of the U.S. imposing its additional $300 billion of tariffs ahead of the G20 meeting (near the end of June).”

Elsewhere, stocks retreated in South Korea and Hong Kong, while India’s S&P BSE Sensex Index extended a rebound into the second day and the main Australian index climbed to an 11-year peak as higher commodity prices boosted miners.

As Bloomberg notes, “traders are reassessing prospects for a trade deal after commentary on the blog Taoran Notes, which was carried by state-run Xinhua News Agency and the People’s Daily, the Communist Party’s mouthpiece, accused the U.S. of playing “tricks to disrupt the atmosphere.” Indications that the talks are paused will focus attention on the next opportunity for Presidents Xi Jinping and Donald Trump to meet — at the Group of Twenty meeting in Japan next month.”

As a result of the collapse in trade “optimism”, US equity futures including the S&P 500, Dow Jones and Nasdaq signaled a lower U.S. open after yesterday’s gains, while the Stoxx Europe 600 Index fell for the first time in four days, led by autos, with most sectors in red. Germany’s exporter-heavy DAX fell the most, auto stocks lost as much as 1.6%. Easyjet was a standout of the gauge after releasing earnings, while takeaway food delivery firms including Just Eat and Delivery Hero tumbled after Amazon confirmed an investment in rival Deliveroo.

Sentiment on Thursday was briefly, if erroneously soothed by better U.S. economic news, with housing starts surprisingly strong and a welcome pickup in the Philadelphia Federal Reserve’s manufacturing survey. Upbeat results from Walmart burnished the outlook for retail spending, though the chain also warned that tariffs would raise prices for U.S. consumers.

As the US earnings season winds down, of the 457 S&P 500 companies reporting about 75% have beaten profit expectations, according to Reuters data.

In rates, the sudden trade wind chilling helped Treasuries, with the 10-year yield down at 2.37% after a second strong week running for bond markets. German bonds pushed toward fresh highs with yields having dropped 14bps over the past two weeks as the U.S.-China trade conflict and uncertainty over Italy has spurred a strong risk-off bid. Yields on Spanish 10-year debt fell to a record as bonds across the euro region firmed.

In FX, the standout mover was the yuan, which was already trading at five-month lows, and smashed support after stops were triggered once the offshore Yuan tumbled below 6.92 yesterday, prompting Deutsche Bank to suggest “Stairway to Seven” is in the cards. The USDCNH hit a multi month high of 6.9491 even though Reuters reported again that the PBOC would not allow the currency to drop below 7.00.

Elsewhere in FX, the dollar lost a little of its shine against the safe-haven yen to stand at 109.64 from a top of 110.03. Against a basket of currencies, the dollar increased for a second day to head for its best week since February. The once again was depressed by fears about a Savlini government in Italy, holding at $1.1173, down 0.5% for the week so far. Sterling, down for the 6th day in a row, was one of the worst performers as Britain’s Prime Minister Theresa May battled to keep her Brexit deal, and her premiership, intact amid growing fears of a disorderly departure from the European Union. The pound touched a three-month low of $1.2783 and was down 1.6% for the week so far. Also under pressure was the Australian dollar, losing 1.5% for the week to $0.6880 as investors piled into bets that interest rates would be cut in June.

Of note, after soaring 100% in two weeks, Bitcoin tumbled over 20% at one stage after what appeared to be a flash crash. It was last down 7%, albeit back on course for its third week of gains and having doubled in value this year.

In commodity markets, spot gold steadied at $1,287 per ounce as risk sentiment soured. Crude oil gained, as rising tensions in the Middle East stoked fears of potential supply disruptions, while iron ore rose to its highest level in almost five years on supply woes. WTI was last up 33 cents at $63.20 a barrel, while Brent crude futures rose 19 cents to $72.81. OPEC and non-OPEC producers will meet in Saudi Arabia this weekend over whether to continue with supply cuts that have boosted prices more than 30% so far this year.

Expected data include Leading Index and University of Michigan Consumer Sentiment Index. CAE and Deere report earnings.

Market Snapshot

  • S&P 500 futures down 0.5% to 2,864.25
  • STOXX Europe 600 down 0.6% to 380.63
  • MXAP down 0.02% to 154.55
  • MXAPJ down 0.8% to 504.53
  • Nikkei up 0.9% to 21,250.09
  • Topix up 1.1% to 1,554.25
  • Hang Seng Index down 1.2% to 27,946.46
  • Shanghai Composite down 2.5% to 2,882.30
  • Sensex up 1% to 37,777.24
  • Australia S&P/ASX 200 up 0.6% to 6,365.30
  • Kospi down 0.6% to 2,055.80
  • German 10Y yield fell 1.1 bps to -0.106%
  • Euro unchanged at $1.1174
  • Italian 10Y yield fell 6.2 bps to 2.311%
  • Spanish 10Y yield fell 4.7 bps to 0.858%
  • Brent futures up 0.2% to $72.74/bbl
  • Gold spot little changed at $1,286.67
  • U.S. Dollar Index little changed at 97.90

Top Overnight News from Bloomberg

  • China’s state media signaled a lack of interest in resuming trade talks with the U.S. under the current threat to escalate tariffs and without new moves that show the U.S. is sincere. The Chinese government said stimulus will be stepped up to buttress the domestic economy.
  • Without new moves that show the U.S. is sincere, it is meaningless for its officials to come to China and have trade talks, according to a commentary by the blog Taoran Notes, which was carried by state-run Xinhua News Agency and the People’s Daily, the Communist Party’s mouthpiece
  • Theresa May is confronting the end of her premiership after her own party forced her to agree to set a timeline to quit as U.K. prime minister. Before announcing the schedule for her departure, May will try one last time to finish the job she started and get her Brexit deal approved in a vote in Parliament at the beginning of June
  • The pound headed for the longest losing streak against the euro since the turn of the century as rising U.K. political risks fanned concern about the nation’s ability to achieve an orderly Brexit.
  • President Donald Trump is wary of drawing the U.S. into a war with Iran, in part out of concern that an armed conflict with the Islamic Republic would imperil his chances at winning a second term, according to people familiar with the matter. U.S.’s evidence of Iran threat readied for release by Pentagon
  • The U.S. announced a rollback of steel tariffs against Turkey that it originally levied in August as trade and diplomatic relations deteriorated because of Turkey’s economic crisis and a row over the Turkish government’s detention of an American pastor.
  • Italy’s Matteo Salvini has a new medicine to fix his country, and he calls it “the Trump cure.” After being the steady hand in Rome’s populist coalition government for most of the past year, the deputy prime minister and anti-immigrant League party leader projected himself as the country’s Donald Trump on Thursday
  • Amazon.com Inc. is leading a $575 million investment in Deliveroo, buying a slice of the fast-growing startup to propel its drive into the European food and groceries business. U.K.-based Deliveroo has raised $1.53 billion to date.
  • Deputy prime minister and anti-immigrant League party leader Matteo Salvini projected himself as the country’s Donald Trump during intense campaigning for the European Parliamentary elections on May 26.
  • European Central Bank officials dragging their feet over a potential revamp of their negative interest rates might be shutting off one way to convince investors they are serious on stoking inflation.

Asian equity markets were mostly higher as the region took impetus from the positive performance on Wall St, where all major indices notched a 3rd consecutive win streak with risk sentiment underpinned by encouraging earnings from Walmart and Cisco. ASX 200 (+0.6%) and Nikkei 225 (+0.9%) traded positive with Australia led by continued strength in tech and amid the growing list of calls for a rate cut next month including notorious RBA watcher McCrann, while Japanese exporters were buoyed by recent favourable currency moves and as Sony shares surged over 10% after the announcement of a JPY 200bln share buyback. Hang Seng (-1.2%) and Shanghai Comp. (-2.5%) were pressured after a lack of PBoC reverse repo operations throughout the week resulted to net weekly drain of CNY 50bln. In addition, China cancelled orders of 3247 tons of pork from US which was the largest cancellation in more than a year and was seen to be another fallout of the ongoing US-China trade dispute, while commentary in Chinese state media suggested China may have no interest in resuming trade discussions with the US for now. Finally, 10yr JGBs were lower amid the upbeat risk tone in Japan and on spill-over selling from the bear flattening stateside, while the BoJ’s Rinban announcement was for a reserved JPY 200bln of long to super-long JGBs.

Top European News

  • Europe Could Reap Silver Lining From U.S.-China Trade Dispute
  • Euro-Area Core Inflation Revised Up to 1.3%, Highest Since 2017
  • LetterOne Wins Enough Shareholder Backing to Take Over DIA
  • EasyJet Gains After Insulating Against Drop in Summer Fares
  • Spanish Yield Drops to a Record as Nation’s Debt Allure Grows

A relatively downbeat session thus far for major European stocks [Eurostoxx 50 -0.5%], following on from a mixed lead in Asia where the Shanghai Composite shed 2.5% as hopes for a trade deal dwindled amid reports that China may not want to continue trade talks with the US for now. Major indices are broadly lower by around 0.5-0.7%, although, the FTSE 100 outperforms as UK exports benefit from the weaker Sterling. Sectors are showing broad-based losses with the exceptions of utilities (defensive sector) and energy names due to price action in the complex. Elsewhere, Thomas Cook (-24.8%) shares slumped for a second consecutive day, with traders citing the downside to a downgrade at Citi with a price target of zero. Finally, GVC Holdings (+2.5%) remain near the top of the Stoxx 600 after the Co. cut its potential impact from the FOBT GBP 2 limit from GBP 120mln to GBP 105mln. Notable pre-market US earnings this morning from Deere & Co (DE), who missed on EPS but beat on revenue and lowered their net income guidance.

Top Asian News

  • China Traders Snap Up Most Hong Kong Stocks Since Early 2018
  • Nissan Adds Renault’s Bollore to Board as Part of Overhaul
  • Taiwan Parliament Approves Gay Marriage Law in First for Asia
  • Offshore Yuan Smashing Support Level Brings Record Low in Sight

In FX, the Greenback has held onto the bulk of its post-US data/survey gains by virtue of advances against riskier/high beta counterparts as safer-havens within the G10 community are outperforming in wake of pretty defiant comments from China revealing a reluctance to pursue talks further given recent actions taken by the US. The index is hovering just below the 98.000 level after an apparent clean break of Fib resistance at 97.842 within a 97.953-759 range. To recap, 98.102 is the mtd DXY high and then the 2019 peak at 98.346 comes into focus.

  • JPY/CHF – As noted, the Yen and Franc are back in favour on US-China trade stains, but also as Brexit, Italian budget and geopolitical issues weigh on broad risk sentiment, with Usd/Jpy retreating from circa 110.00 highs back towards 109.50 and away from decent option expiries at the big figure (1.2 bn). Usd/Chf is holding around 1.0100, but Eur/Chf is back below 1.1300 and near recent lows not far from key chart supports and levels that may prompt some form of SNB action.
  • CAD/AUD/GBP – All on the back foot due to the aforementioned bearish/negative factors, as the Loonie revisits recent lows around 1.3500 and Aussie extends losses through 0.6900 to 0.6873 following latest jobs data that heightens the prospect of a June RBA rate cut after this month’s dovish hold. Similarly, the Pound continues to slide, and Cable has now hit fresh lows since the Valentine’s Day base of 1.2773 at 1.2755 on confirmation that cross party talks have come to a conclusion with no collusion in terms of an alternative WA. Note also, Gbp/Jpy has tripped stops on a break of the psychological 140.00 level.
  • EUR/NZD – Also victims of the ongoing Usd revival and overall downturn in risk appetite, with the single currency declining to fresh weekly lows and testing bids said to be sitting at 1.1160 and protecting 1.1150 ahead of the current 1.1135 May base, while the Kiwi is slipping further away from 0.6550 and closer to 0.6525 given only scant support from Aud/Nzd cross flows within 1.0550-25 parameters.
  • EM – Mixed blessings for the Turkish Lira as the US halved its tariff on steel, but removed preferential status on metals overall, while the AKP is still reportedly on a mission to tap CBRT reserves. Usd/Try extending above 6.0000 and testing resistance at 6.1000 before paring back, while the Yuan is not taking much heed of reports that 7.0000 is the PBoC’s line in the sand as the US-China tariff spat shows no sign of improving.

In commodities, choppy trade in the energy complex, although WTI (+1.1%) and Brent (+0.7%) futures are ultimately higher ahead of this week’s JMMC meeting in Saudi Arabia, which sets the stage for the OPEC/OPEC+ meeting in June. Focus will be on Iran’s situation amidst US sanctions and the expiry of waivers and whether there is scope to extend the current output cut deal between OPEC and its allies. Ship tracking data showed that Iranian oil shipments in May thus far has fallen to zero, however, ING highlights that a large number of Iranian tankers turn off their transponders. This follows reports of a tanker carrying Iranian oil reportedly unloading its cargo of almost 130k tonnes of oil near Zhousan, in China, Iran’s largest customer. Furthermore, comments from Iran’s revolutionary guard emphasis rising tensions between the country and the US, with the latest stating that “even short-range missiles can reach US warships in the Gulf”. Market participants will be on the lookout for how US President Trump reacts to these threats from Iran. In terms of weekly price action so far, WTI futures are poised for a positive week after having breached its 50 WMA (61.81) to the upside whilst similarly, Brent futures are set for a week of gains, after having dipped below USD 70/bbl (and its 50 WMA at the figure) earlier in the week. Elsewhere, precious metals are little changed with spot gold (-0.2%) meandering further below the 1300/oz level after having lost more ground to yesterday’s rising Buck.

US Event Calendar

  • 10am: Leading Index, est. 0.2%, prior 0.4%
  • 10am: U. of Mich. Sentiment, est. 97.2, prior 97.2; Current Conditions, est. 112.2, prior 112.3

DB’s Jim Reid concludes the overnight wrap

It’s a bit of a teary eyed trip down memory lane coming up this weekend as I’m playing my first proper gig in over a decade. The cricket club that I’m President of is having a fund raiser and although there are discussions that they’d raise more money if I didn’t sing and play live, I have offered up my services nevertheless. We haven’t rehearsed so we’re doing almost the identical covers set to our last gig and even then it was out of date. Given that the average age of the cricket club is probably early 20s I wonder how many of our set will have been released before these guys were born. So I’m a bit worried they won’t know any of them. Tragically this also means I’ll miss Britain coming near the bottom of the pile at Eurovision tomorrow night. Nul points!!!

Unlike voters unfairly shunning Britain’s annual song contest entry, markets have been surprisingly well behaved over the last few sessions and have seemingly become becalmed about the current trade spat regardless of the fact that a resolution anytime soon is very unlikely. That was even despite the latest Huawei developments late on Wednesday night. A +0.89% gain for the S&P 500 yesterday means that the index is up for three days in a row and has retraced to being down only -2.65% from the recent highs now. That being said more trade-sensitive sectors and stocks are still struggling. The semi-conductor index for example – which fell -1.68% yesterday – is down -10.00% from the highs of last month, while Apple is still down -10.23% over the past two weeks. Nevertheless, the VIX index continues to slide lower, falling -1.1pts yesterday to back below 16 for the first time in eight sessions.

Yesterday we saw China’s Global Times Editor Hu Xijin – a must follow now on Twitter – tweet that “Since the US has made unfair requests with China, we are willing to accompany the US suffering more and more negative impact though China may take greater pain. We have no choice.” Although grammatically the tweet doesn’t quite make sense it leaves you with the impressions that pride is as important as the economic impact to the Chinese at the moment. On the other side White House Commerce Secretary Wilbur Ross said that President Trump has a “wide range of actions” he could take on auto tariffs. On that, Bloomberg ran a story suggesting that Trump would give the EU and Japan 6 months to curb auto sales into the US in return for delaying new tariffs. So that is a tentative November timetable which means that the uncertainty window has the potential to run for some time now. Imagine if we had Auto tariffs and a hard Brexit occurring within days of each other!! European Autos declined -0.48% yesterday and underperformed the broader STOXX 600 index (+1.27%).

As for other markets, there were decent gains for the likes of the NASDAQ (+0.97%), DOW (+0.84%) and DAX (+1.74x%). High yield credit spreads were -7bps tighter in the US while in bond markets we saw Bunds hold steady at -0.097% while Treasuries weakened +2.5bps to touch 2.40% again. However Europe wasn’t all one-way traffic with BTPs (-6.2bps) standing out and reversing some of the recent underperformance. That appeared to partly reflect comments from the 5SM’s Di Maio who suggested that Italy’s debt-to-GDP ratio won’t breach 140%. On the flip side the League’s Salvini said that the government will “tear apart every single rule butchering Italy” should the League do well in the EU elections. There’s a real good-cop-bad-cop dynamic going on in Italy right now with much of it political posturing ahead of the EU elections. As for currencies, EM FX finished -0.32%, with high yielders like the Brazilian real (-0.98%) and Turkish lira (-0.69%) underperforming. Weak currencies pressured EM equities, with MSCI EM down -0.44%. In other FX space, the euro (-0.24%) was a shade weaker and the dollar rallied +0.28% for its third consecutive advance. Sterling was a bigger mover though, falling -0.37% and below $1.280 following the latest Brexit developments – more on that below.

Overnight, the Trump administration has said that new restrictions on Huawei announced earlier in the week would take effect today, with the parent company and 67 affiliates in 26 countries placed on a blacklist that will limit Huawei’s access to US suppliers, according to the Federal Register notice. The US Commerce Secretary Wilbur Ross also said that Trump has given his department 150 days to establish a process to screen US companies’ purchases of equipment from Huawei, and other equipment providers with which officials have concerns. In the meantime, China’s Toran Notes, a WeChat blog run by state-owned Economic Daily, reported today that if the US doesn’t make any new moves that truly show sincerity, then it is meaningless for its officials to come to China and have trade talks. The blog added that “We can’t see the U.S. has any substantial sincerity in pushing forward the talks. Rather, it is expanding extreme pressure,” citing Trump’s steps this week to curb Chinese telecom giant Huawei while reiterating that China has three main concerns including tariff removal, achievable purchase plans and a balanced agreement text. The blog went on to say, “In addition, if anyone thinks the Chinese side is just bluffing, that will be the most significant misjudgement since Korean War”. The same article was also carried by state-run Xinhua News Agency and the People’s Daily (Communist Party’s mouthpiece). So, rhetoric and actions continues to indicate that neither side is in any rush to temper the recent escalation. Elsewhere, China’s National Development and Reform Commission spokeswoman Meng Wei said that China will “study the possible impact of US tariffs on the Chinese economy, and roll out responsive measures when necessary,” possibly hinting that more stimulus is likely to come.

The above rhetoric from China on not being interested in talking to the US if attitudes don’t change is weighing on Chinese and Hong Kong markets this morning with the CSI (-1.67%), Shanghai Comp (-1.46%) and Shenzhen Comp (-1.66%) all down over 1% while the Hang Seng is down a relatively modest -0.77%. The Nikkei (+1.02%) and Kospi (+0.14%) are both up but they are off their highs since China’s state media reports started filtering in. It’s noteworthy that CNH didn’t rally alongside equities yesterday as it weakened another -0.35% (a further -0.15% this morning), highlighting the continued fears over trade despite the improvement in risk appetite. Elsewhere, futures on the S&P 500 are down -0.28% this morning erasing earlier gains.

Back to yesterday, where our FX strategists published their latest Blueprint report entitled “Stairway to Seven”. With Brexit, trade tensions and geopolitical issues still in play, their bias is for higher volatility and weaker risk appetite. In terms of their trade recommendations, with Europe – and especially Germany – particularly exposed to global risks the team are abandoning their positive view on the euro and see EUR/USD potentially breaking 1.10 through the summer. They are also becoming even more concerned on Asia and see USD/CNY breaking through 7. They do not see a quick resolution to the trade war and argue that Chinese authorities will become more amenable to currency weakness. The JPY should be a continued beneficiary of global volatility and they forecast a move down to 105 in USD/JPY. See their full report here .

Over to Brexit, where Prime Minister May is under ever increasing pressure from within her own party. She met yesterday with the 1922 Committee, which governs the Conservative party’s internal rules and could greenlight a leadership challenge against her via a change in rules. Though she survived without an immediate threat, May also agreed to meet with the Committee again after her WA gets put to another vote. That vote, likely to be held the week of June 3, will be key. As it currently stands, it looks likely to fail. Now that May looks likely to depart if it fails, that lowers the incentive for Labour to cooperate. The odds of a Tory leadership struggle resulting in a hard-Brexit Prime Minister and a subsequent general election have risen. Indeed, that’s why our FX team remains bearish the pound in yesterday’s FX blueprint.

In the US, Fed Governor Brainard, viewed as a good representative of the centre of the FOMC’s thinking, was the latest Fed official to toe the party line on inflation dynamics, calling the latest misses “transitory” and citing the trimmed mean as a truer measure of underlying pressures. However, she did also discuss the potential benefits of letting inflation rise above 2%, in order to “demonstrate to the public our commitment to our inflation goal on a symmetric basis.” That sounds like she would likely support a shift to average inflation targeting or a similar regime next year. Separately, Minneapolis Fed President Kashkari, one of the more dovish FOMC members, echoed her comments, saying the Fed should “actually allow inflation to climb modestly above 2 percent in order to demonstrate that we are serious about symmetry.”

As for the data, given that the releases at the moment are still covering the pre-trade escalation period they are somewhat being taken with a pinch of salt for now. For completeness though, the May Philly Fed PMI rose +8.1pts and far more than expected to 16.6 (vs. 9.0 expected). The details were a bit more mixed though with employment stronger but new orders weaker. As for the April housing data, starts (+5.7% mom vs. +6.2% expected) and permits (+0.6% mom vs. +0.1% expected) missed and beat respectively however both benefited from upward revisions to the prior month. Finally claims declined 16k to 212k and a little bit more than expected following a holiday related spike. No particularly big takeaways overall therefore.

Looking at the day ahead, this morning we’ve got final April CPI revisions due for the Euro Area (no change from the preliminary core reading of +1.2% yoy expected) and March construction output data. In the US the April leading index and preliminary May University of Michigan consumer sentiment survey is due. Away from that the Fed’s Williams is due to meet community leaders at 4.15pm BST and 7pm BST while Clarida is due to speak at a ‘Fed Listens’ event at 6.40pm BST. The BoE’s Brazier is also due to speak at 1pm BST. Elsewhere, EU finance ministers are due to meet in Brussels to discuss a plan for the Euro Area budget.

3. ASIAN AFFAIRS

i)FRIDAY MORNING/ THURSDAY NIGHT: 

SHANGHAI CLOSED DOWN 73.42 POINTS OR 2.48%  //Hang Sang CLOSED DOWN 328.61 POINTS OR 1.16%   /The Nikkei closed UP 187.11 POINTS OR 0.89%//Australia’s all ordinaires CLOSED UP .69%

/Chinese yuan (ONSHORE) closed DOWN  at 6.9145 /Oil UP to 61.64 dollars per barrel for WTI and 71.08 for Brent. Stocks in Europe OPENED GREEN/ONSHORE YUAN CLOSED DOWN // LAST AT 6.9145 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.9468 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

3 a NORTH KOREA/SOUTH KOREA

NORTH KOREA

 

 

end

3 b JAPAN AFFAIRS

 

end

3 C CHINA/CHINESE AFFAIRS

i)China/

Trade optimism fizzles as China states it has no more plans for talks. Obviously they are quite concerned with the Huawei situation

(courtesy zerohedge)

Trade Optimism Fizzles As China Says No Plans For More Talks

Well, it looks like President Trump finally did it. He finally pushed Beijing so hard on Huawei that they had no choice but to respond.

The Chinese weren’t kidding when they warned that Washington’s latest aggression toward Huawei – adding the Chinese telecoms giant to a blacklist that will make it extremely difficult, if not impossible, for Huawei to buy components from American companies – might crash trade talks.

Trade

Because after the Commerce Department formally added Huawei to the blacklist, the Chinese media and Chinese officials turned up the rhetoric, warning that there are no plans for another round of talks. Markets didn’t take this well: Chinese stocks plunged 2.5% overnight on Friday – a big drop, though still not as bad as the 3% decline from last Monday,the market’s worst day in three years. European shares didn’t fare much better because, as one analyst explained to Bloomberg…

“The China state media commentaries fueled concerns that the U.S.-China trade disputes will prolong, deterring risk-taking,” said Koji Fukaya, chief executive officer at FPG Securities Co. in Tokyo. “This issue will probably be one of the major market drivers for a while as U.S.-China trade war influences global economic conditions.”

US futures were in the red, leaving stocks on track for a lower open. Yields on Treasuries and bunds declined. Asia’s emerging currencies and the yuan weakened. The yen and Swiss franc advanced.

A comment on Taoran, seen as a venue for the government’s views, accused the US of playing “little tricks to disrupt the atmosphere,” and insinuated that the Huawei blacklisting had seriously jeopardized talks.

“We can’t see the U.S. has any substantial sincerity in pushing forward the talks. Rather, it is expanding extreme pressure,” the blog wrote. “If the U.S. ignores the will of the Chinese people, then it probably won’t get an effective response from the Chinese side,” it added.

One former government official said there’s no point in holding another round of talks if the US won’t listen to Beijing.

“If the U.S. doesn’t make concessions in key issues, there is little point for China to resume talks,” said Zhou Xiaoming, a former commerce ministry official and diplomat. “China’s stance has become more hard-line and it’s in no rush for a deal” because the U.S. approach is extremely repellent and China has no illusions about U.S. sincerity,” he said.

This comes after Treasury Secretary Steven Mnuchin said this week that he and the other negotiators “will mostly likely go to Beijing at some point” in the near future.

As BBG noted, another striking detail about the coverage is that China’s strident trade rhetoric has suddenly been plastered across state-controlled media. The People’s Daily ran three aggressive articles, including two editorials, with titles like “No Power Can Stop The Chinese People From Achieving Their Dream” – “the trade war will not cripple China, it will only strengthen us as we endure it.”

Looking ahead, President Xi and President Trump might have an opportunity to revive talks at the G-20 summit in Osaka next month. Until then, both sides will likely dig in.

end
Huawei bonds tumble the most on record after the new prohibition of sales of components from uSA sources to it
(courtesy zerohedge)

Huawei Bonds Tumble Most On Record

Washington invoked what BBG called “the nuclear option” Thursday night, meaning that a new prohibition on sales of components to the Chinese telecom giant will take place on Friday.

And as investors question how Huawei will adapt, or whether this new status might have serious repercussions for its business, they sold first and asked questions later, with Huawei’s dollar-denominated bonds (4% of 2027) suffered their largest drop on record in the past two days.

Huawei

The company’s 4% due-2027 notes plunged by a record 2.1 cents to 94 cents on the dollar as of 3:49 am in Hong Kong, their lowest level in two months. Huawei’s 4.125% 2026s also fell 2 cents to 95.4 cents on the dollar as creditors fled the Chinese telecom giant.

Huawei

The drop outpaced the declines in Asian equity and currency markets, which have been reeling from Beijing’s aggressive trade rhetoric.

The plunge came even as China’s Economic Daily reported overnight that Huawei has “drafted a contingency plan years ago to cope with restrictions on supply of U.S. chips and technologies one day,” citing a letter to employees from He Tingbo, president of Huawei’s chip division Hisilicon. The report also claimed that Huawei will be able to continue its service to clients in such scenario, and will push for innovation and achieve technological independence.

Beijing, meanwhile, tried to shift the focus to “Huawei-related stocks” which climbed even as the Shanghai Composite closed down 2.5%, and cited this as evidence that the narrative of Huawei’s ‘back-up plan’ is helping to reassure markets.

Hu Xijin 胡锡进@HuXijin_GT

Shanghai stock exchange index dropped 2.48% Friday due to worry of an overall escalation of trade war, but Huawei related stocks soared. This is vote of confidence of the market on Huawei’s long prepared back-up plan. Huawei’s US supplies will become real victims.

But bond holders aren’t convinced. For now, the most likely scenario the company’s suddenly panicking bondholders are seeing, is insolvency.

end
Very problematic as Beijing faces China and Russia who have their back as they both firmly oppose unilateral USA snactions
(courtesy zerohedge)

Beijing Backs Iran, “Firmly Opposes” Unilateral US Sanctions

In the latest sign of Beijing’s frustration with the US, the Chinese leadership have reiterated their opposition to American sanctions against Iran. After a meeting with Iranian Foreign Minister Javad Zarif, Chinese Foreign Minister Wang Yi reiterated Beijing’s ‘firm opposition’ to unilateral US sanctions against Iran.

  • CHINA’S FOREIGN MINISTER WANG YI MEETS IRAN’S ZARIF
  • CHINA FIRMLY OPPOSES U.S.’S UNILATERAL SANCTIONS AGAINST IRAN

With the US moving more firepower into the Persian Gulf, an attempt to send Tehran an unmistakable message, Zarif asked Beijing to try and save the 2015 nuclear deal, WSJ reports.

Iran

Iranian Foreign Minister Javad Zarif and Chinese Foreign Minister Wang Yi.

Zarif’s meeting with his Chinese counterpart is the first step on a tour of Asia, as Iran canvasses its key economic partners now that US sanctions have been reimposed.

Mr. Zarif’s visit to China, where he will meet his Chinese counterpart, is part of a longer trip that includes other key economic partners Russia, Japan and India. It comes amid growing tensions between Washington and Tehran, which spiked over the past week when the U.S., citing unspecified intelligence, deployed an aircraft carrier, a bomber task force and other personnel to the Middle East.

The Iranian embassy in China said on Twitter that Mr. Zarif had “arrived in Beijing to maintain consultations between all-weather friends in the wake of new efforts to manufacture unnecessary tensions.”

China’s Foreign Ministry confirmed Mr. Zarif’s visit but declined to release further information.

The Iranian situation is difficult for Beijing, said Yin Gang, a Middle East politics expert with the government-backed Chinese Academy of Social Sciences. He said the conflict isn’t simply between the U.S. and Iran but between Arab states and Iran. China, Mr. Yin said, “wants a balanced diplomacy in the Middle East, and hopes to make friends and do business with everyone.”

China imports crude from Iran and has expressed reservations about US sanctions in the past. However, given the state of the relationship between Washington and Beijing, the Chinese appear to be signaling that a proxy war over Iran could be just around the corner if Washington doesn’t seriously reevaluate its approach.

end

An excellent commentary from James Rickards as he discusses the problems China faces with the trade war

a must read

(courtesy James Rickards)

Is China’s “Mandate Of Heaven” In Jeopardy?

Authored by James Rickards via The Daily Reckoning,

U.S. policy through the Bush and Obama administrations was to soft-pedal questionable Chinese trade practices, pirating technology and theft of intellectual property in return for cheap manufactured goods and China’s willingness to finance trillions of dollars of U.S. government debt.

Now Trump has changed the rules of the game. He’s said lost jobs in the U.S. are not worth the cheap goods and cheap financing. He bet that China had no alternative but to keep producing those goods and keep buying our debt, even if the U.S. imposes tariffs to help create manufacturing jobs here.

President Trump and President Xi had been on a collision course involving issues of trade, tariffs, and currency manipulation, which are coming to a head.

It’s important to understand that China’s economy is not just about providing jobs, goods and services. It is about regime survival for a Chinese Communist Party that faces an existential crisis if it fails to deliver. It is an illegitimate regime that will remain in power only so long as it provides jobs and a rising living standard for the Chinese people. The overriding imperative of the Chinese leadership is to avoid societal unrest.

Once the Chinese job machine stalls out, popular unrest could emerge on a scale much greater than the 1989 Tiananmen Square protests. This is an existential threat to Communist power.

If China encounters a financial crisis, Xi could quickly lose what the Chinese call, “The Mandate of Heaven.” That’s a term that describes the intangible goodwill and popular support needed by emperors to rule China for the past 3,000 years.

If The Mandate of Heaven is lost, a ruler can fall quickly.

China has serious structural economic problems and its internal contradictions are catching up with it. Economies can grow through consumption, investment, government spending and net exports. The “Chinese miracle” has been mostly a matter of investment and net exports, with minimal spending by consumers.

The investment component was thinly disguised government spending — many of the companies conducting investment in large infrastructure projects were backed directly or indirectly by the government through the banks.

This investment was debt-financed. China is so heavily indebted that it is now at the point where more debt does not produce growth. Adding additional debt today slows the economy and calls into question China’s ability to service its existing debt.

China is now confronting an insolvent banking system, a real estate bubble, and a $1 trillion wealth management product Ponzi scheme that is starting to fall apart.

Up to half of China’s investment is a complete waste. It does produce jobs and utilize inputs like cement, steel, copper and glass. But the finished product, whether a city, train station or sports arena, is often a white elephant that will remain unused.

Chinese growth has been reported in recent years as 6.5–10% but is actually closer to 5% or lower once an adjustment is made for the waste. The Chinese landscape is littered with “ghost cities” that have resulted from China’s wasted investment and flawed development model.

What’s worse is that these white elephants are being financed with debt that can never be repaid. And no allowance has been made for the maintenance that will be needed to keep these white elephants in usable form if demand does rise in the future, which is doubtful.

Essentially, China is on the horns of a dilemma with no good way out. On the one hand, China has driven growth for the past eight years with excessive credit, wasted infrastructure investment and Ponzi schemes.

The Chinese leadership knows this, but they had to keep the growth machine in high gear to create jobs for millions of migrants coming from the countryside to the city and to maintain jobs for the millions more already in the cities.

The two ways to get rid of debt are deflation (which results in write-offs, bankruptcies and unemployment) or inflation (which results in theft of purchasing power, similar to a tax increase).

Both alternatives are unacceptable to the Communists because they lack the political legitimacy to endure either unemployment or inflation. Either policy would cause social unrest and unleash revolutionary potential.

China has hit a wall that development economists refer to as the “middle income trap.” Again, this happens to developing economies when they have exhausted the easy growth potential moving from low income to middle income and then face the far more difficult task of moving from middle income to high income.

The move to high-income status requires far more than simple assembly-style jobs staffed by rural dwellers moving to the cities. It requires the creation and adoption of high-value-added products enabled by high technology.

China has not shown much capacity for developing high technology on its own, but it has been quite effective at stealing such technology from trading partners and applying it through its own system of state-owned enterprises and “national champions” such as Huawei in the telecommunications sector.

Unfortunately for China, this growth by theft has run its course. The U.S. and its allies, such as Canada and the EU, are taking strict steps to limit further theft and are holding China to account for its theft so far by imposing punitive tariffs and banning Chinese companies from participation in critical technology rollouts such as 5G mobile phones.

My view is that a crisis in China is inevitable based on China’s growth model, the international financial climate and excessive debt. A countdown to crisis has begun.  Geopolitical issues will make the economic issues even harder to resolve.

Yes, headlines are dominated by the trade war. That escalating confrontation is a big deal, but it’s not the only flash point in U.S.-China relations, and not even the most important. China is as much concerned about a military confrontation in the South China Sea as it is about the economic confrontation in the trade wars.

China dredged sand surrounding useless rocks and atolls in the South China Sea and converted them into artificial islands and then built out the islands to include naval ports, air force landing strips, anti-aircraft weapons and other defensive and offensive weapons systems.

Not only are the Chinese militarizing rocks, but they are trampling on competing claims by the Philippines, Vietnam, Brunei, Malaysia and other countries surrounding the sea.

The world has developed rules-based platforms for resolving these issues without military force. The U.S. is guaranteeing freedom of passage, freedom of the seas and the territorial rights of allies such as the Philippines.

So far, the U.S.-Chinese confrontation has been about naval vessels passing in close quarters and surveillance aircraft being harassed by fighter jets. The risk of such tactics is an accidental collision, a rogue shot fired or a command misunderstood.

Any such incident could lead to retaliation, and there’s no telling where it might stop. Trump is not someone to back down, and Chinese leadership does not want to appear weak before the U.S.

That’s especially true at a time of great economic uncertainty. China does not want war at this time. But diverting the people’s attention away from domestic problems toward a foreign foe is an old trick leaders use to unite the people in times of uncertainty. Rallying the people around the flag is a tried and true method to garner support.

If China’s leadership decides that the risk of losing legitimacy at home outweighs the risk of conflict with the United States, the likelihood of war rises dramatically.

I’m not predicting it, but wars have started over less. This is a very dangerous time.

Be sure to hold cash, gold, silver, land and other assets that will cushion you against a market crash.

END
Your weekly economic lesson from Alasdair Macleod as he discusses the end game.  The trade wars will not help the USA because they do not safe and as such their budget deficit will still blow out.  This will lead to a hyperinflationary depression in the USA as dollars leave the globe and circulate in great quantities in the USA
(courtesy Alasdair Macleod)

The Monetary Planners Are Losing Control: “It Always Happens This, They Only Hasten The End”

Authored by Alasdair Macleod via GoldMoney.com,

President Trump has declared he will extend tariffs of 25% on all America’s imports of Chinese goods. China is responding with tariff increases of its own. The consequences of this action and reaction will be to kick-start higher monetary inflation in America and an economic slump. This article explains how an overdue credit crisis will be made considerably worse by trade protectionism. It could become the credit crisis to end all credit crises and undermine the whole fiat currency system.

Introduction

Following President Trump’s imposition of 25% tariffs on all Chinese imports, it is time to assesses the consequences. Already, we have seen a contraction in US-China trade of 20% in the first three months of 2019 compared with the same quarter last year, and also compared with the average outturn for the whole of 2018. This contraction was worse than that which followed the Lehman crisis.

In assessing the extent of the impact of Trump’s tariffs on the US economy, we must take into account a number of inter-related factors. Clearly, higher prices to US consumers will hit Chinese imports, which explains why they have dropped 20% so far, and why they will likely drop even more. Interestingly, US exports to China fell by the same percentage, though they are about one quarter of China’s exports to the US.

These inter-related factors are, but not limited to:

  • The effect of the new tariff increases on trade volumes
  • The effect on US consumer prices
  • The effect on US production costs of tariffs on imported Chinese components
  • The consequences of retaliatory action on US exports to China
  • The recessionary impact of all the above on GDP
  • The consequences for the US budget deficit, allowing for likely tariff income to the US Treasury.

These are only first-order effects in what becomes an iterative process, and will be accompanied and followed by:

  • Reassessment of business plans in the light of market information
  • A tendency for bank credit to contract as banks anticipate heightened lending risk
  • Liquidation of financial assets held by banks as collateral
  • Foreign liquidation of USD assets and deposits
  • The government’s borrowing requirement increasing unexpectedly
  • Bond yields rising to discount increasing price inflation
  • Banks facing increasing difficulties and the re-emergence of systemic risk.

We can expect two stages.

The first will be characterised by monetary expansion will little apparent effect on price inflation. Putting aside statistical manipulation of price indices, this is the current situation and has been since the Lehman crisis.

It will be followed by a second phase, following an acceleration of currency debasement. It will be characterised by increasing price inflation, and ultimately the collapse of purchasing power for unbacked fiat currencies.

The trade framework

The simple accounting identity at national level linking trade with changes in the quantity of money and credit is comprised of three factors: the budget deficit, the trade deficit, and changes in total savings. They are captured in the following equation:

(Imports – Exports) = (Investment – Savings) + (Government Spending – Taxes)

In other words, a trade deficit is the net result of a shortfall in the combination of a savings surplus over industrial investment and the budget deficit. For a detailed explanation as to why this is so, see Trade wars – a catalyst for economic crisis. The equation tells us that it is the expansion of money and credit which gives rise to trade imbalances, which is why when there is no change in the savings rate and in the absence of other factors the twin deficits arise. Otherwise, monetary inflation would lead directly into price inflation, the effect in a closed economic system.

Mainstream economists often disagree with this point, having discarded Say’s law. Say’s law explains the division of labour. It maintains that we specialise in our own production to buy all the other things we require and desire, and money is just the intermediation between our production, consumption and deferred consumption (savings). It was the iron rule of pre-Keynesian classical economic theory and allowed no latitude for state-issued money that was inflated into the system. Keynes had to disprove it (he did not – his definition was deliberately misleading) in order to develop his inflationist theories and create an economic role for intervening governments. It was this fundamental error of post-Keynesian economics that has led to successive economic crises, despite the ability of ordinary economic actors to adapt to government interference.

Understand this, and it follows that money and credit not earned through production can only lead to the importation of products from exogenous sources, or alternatively, fuel a rise in prices to reflect the increased quantity of money circulating between consumers and domestic producers. Free trade, the ability to substitute lower-priced goods from abroad for domestic equivalents, reduces the price impact of monetary inflation. If it wasn’t for the availability of foreign substitutes, price inflation would be far higher, which is why tariffs on imported goods only serve to push up price inflation.

Unintended consequences

Obviously, being a tax on imports, tariffs benefit the Treasury’s finances; a fact which President Trump continually boasts about. To be precise, a 25% tariff on all Chinese imports in the remaining five months of the current fiscal year (based on the first quarter of 2019) can be expected to raise $45bn, which reduces the Office of Management’s budget deficit estimate of $1,092bn for fiscal 2019 to $1,047bn. The tax benefit is therefore relatively minor, and likely to be more than offset by the recessionary consequences of higher tariffs on government tax revenues and welfare costs. This article will go into more detail why this is so.

If for a moment we assume there will be a limited impact on consumer demand from increased tariffs, the effect on prices at the margin would be to drive them sharply higher for all consumer goods in the product categories where Chinese supply is a factor, with some spill-over into others. Price inflation would simply begin to escalate. But given the indebtedness of the average American consumer, the ability to pay higher prices is obviously restricted, suggesting that overall demand must suffer, not just for imported Chinese goods, but for domestically-produced goods as well. It is therefore likely there will be both an impact on price inflation and a fall in consumer demand.

Besides the effect on consumers, manufacturers relying on part-manufactured Chinese imports and processed commodities now face cost pressures from tariffs which they may or may not be able to pass on to consumers. The cost pressures on manufacturers are bound to lead to a reassessment of their business models. This will be communicated to their bankers as increased lending risk, and they in turn will almost certainly restrict credit availability. The credit cycle would then move rapidly into a contractionary phase as both businesses and their bankers take fright.

Anyone who has analysed post-war credit cycles will be familiar with these dynamics. We are probably not there yet, despite the warning shot from financial markets in the fourth quarter of 2018. For now, the initial softening of consumer demand has led to a general assumption that monetary policy will ease sufficiently to prevent little more than a mild recession, benefiting capital values. Government bond yields have eased, and arbitrage across bond markets has ensured investment grade corporate bond yields have declined as well. Since end-November when the central banks began to ease monetary policy, the effective yield on investment grade corporate bonds, reported by Bank of America Merrill Lynch, has fallen from 4.8% to 4%. This is hardly an assessment of increasing lending risk.

As well as bond markets, equity markets are also expecting monetary easing, instead of a gathering crisis, and have rallied along with bonds. Clearly, financial markets have not noted the seriousness of trade protectionism, having become complacent while trade restrictions have generally eased in recent decades. However, market historians will note that this brief recovery phase was also the pattern in stock markets between October 1929, when the Smoot-Hawley Tariff Act was passed by Congress, and April 1930, two months before President Hoover signed it into law. If the correlation with that period continues, equities could be in for a substantial fall (in 1929-32 it was 88% top to bottom).

In the Wall Street Crash, equities fell as collateral was liquidated into falling markets. Non-financial assets, such as property, similarly lost value and productive assets (plant, machinery etc.) failed to generate anticipated cash flows. This nightmare was famously described by Irving Fisher, and has continued to frighten economists ever since.

While debt was a problem in 1929, it was generally confined to corporate borrowers and speculators. Today’s context of Fisher’s nightmare is in record levels of government, corporate and consumer debt. The potential disruption from the unwinding of the credit cycle is therefore worse today. Trump’s trade protectionism so far is targeted at one country, unlike Smoot-Hawley which was across the board. At first glance, Smoot Hawley was more dangerous, but it is the lethal combination of tariffs and the end of the expansionary phase of the credit cycle which should concern us.

The credit cycle with its periodic crises is both a given and overdue. The addition of trade tariffs will act as a catalyst to make things worse. Inflation and unemployment will rise, and as unemployment rises, government welfare costs will too. Being mandated, it will be impossible for the US Government to reduce them without revising the law. We can only guess the effect on the borrowing requirement, but with the Office of Management’s forecast deficit for fiscal 2019 at $1,095bn, perhaps over $1,200bn might be closer to the mark. The full impact is likely to be felt in 2020, when it could top $1500bn.

The cost of borrowing will escalate

With government borrowing already escalating, the interest rate burden on the government will become a very public issue. The following chart becomes the baseline for the government’s future borrowing costs.

Interest costs are already running away, before the addition of two other factors; a more rapidly accelerating borrowing requirement (as discussed above) and higher interest rates. After an initial round of monetary easing, higher interest rates can be expected to arise from a combination of three further factors. The most obvious is the increased rate paid by a borrower placing ever-greater demands on the bond market as the recession deepens.

With a gathering US and therefore global slump developing, foreigners will also become sellers of dollars and US Treasuries, simply because they do not need and cannot afford to run substantial dollar balances and investments. A foreign corporation may not like its home currency compared with the mighty dollar, but when costs and losses at its operating base need covering it has no option but to sell its dollars. Foreigners selling dollars and US Treasuries put all the funding onus on US residents, in conditions which, thanks to tariffs, are leading to increasing prices.

The impact of rising price inflation is bound to lead to higher nominal interest rates. While domestic investors can be expected to buy US Treasuries at supressed yields while recessionary fears persist, their appetite for guaranteed losses will be strictly limited. Commentators who have foreseen this difficulty expect quantitative easing to be reintroduced to guarantee affordable funding for the government. The argument in favour of more QE accords with the likely monetary response to collapsing consumer demand. It resolvs both the capital needs of hard-pressed banks and government funding demands.

Therefore, ahead of the next credit crisis, QE is the logical planners solution to stabilising an economy. It worked in the wake of the Lehman crisis. The inflationists are ready to try it again. Attention is even being paid to modern monetary theorists, the ultimate inflationists, who argue that increased government spending, so long as it is not inflationary at the price level, is good for the economy. It is the inflation assumption that could unwind it all.

Inflation will become the most important issue

Inflation is a more complex issue than presented by modern monetary theorists and other post-Keynesians. The root of price inflation is found in a combination of monetary inflation and the public’s changing preferences for holding money. An increase in the money quantity can be neutralised by an increase in the public’s preference for holding money relative to goods. Equally, if the public rejects money as a medium of exchange entirely, whatever the quantity, its purchasing power will vanish.

Modern economists take the view that monetary inflation does not appear to be a problem, citing Japan’s relationship between monetary expansion and prices. It appears that monetary expansion has not led to expected price inflation in the US, but here there is an issue with the statistics under-recording the price effect. Very few economists pay attention to relative preferences between money and goods.

In a credit crisis, it should be obvious that these preferences will change. Foreigners will reduce their relative preferences for dollars and will be a source of dollar liquidation to be absorbed by domestic US financial and non-financial sectors. A lower dollar in terms of its purchasing power of commodities will be the consequence.

For US residents the situation is more complex. Initially, banks will try to reduce outstanding credit obligations to the private sector, leading to deflationary pressures. Lending for working capital will be curtailed, and cash will also be raised from asset sales. Instead, banks will be buyers of US Treasury bills and short-maturity Treasuries. The Fed will reduce interest rates to zero again, and possibly even introduce negative rates in an attempt to counter credit deflation and reduce the cost of the government’s funding.

As mentioned above, the government’s budget deficit will increase due to a combination of falling tax revenue and increasing welfare costs. Initially, funding the deficit will not be a problem because banks will be keen to avoid private sector credit risk. Furthermore, the Fed will want to reintroduce QE as part of a stimulus package. With an embarrassment of funding options, government spending will escalate even more, justified as a fiscal stimulus by the inflationists. The scene will then be set for a second stage, where the banks, underwritten by the Fed, start expanding credit again in favour of the government.

Unfortunately, a weakening dollar combined with trade protectionism is likely to push up consumer prices, despite falling demand. It is not only foreigners who are overweight in dollars, but domestic holders are as well, which will become an issue when the credit crisis threatens the banks. Despite the banks’ efforts to de-gear their lending to businesses and individuals, a systemic crisis in a fractional reserve system cannot be avoided. Whether it starts in America or elsewhere (such as in the fragile Eurosystem) is immaterial. The only solution for the authorities, of course, is to chuck yet more money at the problem. They will have no alternative to accelerating the debasement of the currency to protect the banks.

The budget deficit widens even further

A broken economy with a collapsing currency forces a government to increasingly rely on monetary inflation as its principal source of revenue. The gap between a government’s spending and tax revenues widens even further. This returns us to the accounting identity described towards the beginning of this article: in the absence of savings, a budget deficit leads to a trade deficit.

With the budget deficit widening, so will be the tendency for the trade deficit. But we are now in a world where politicians feel they have no option but to discourage imports with even more trade protectionism. It is easier to tell the public that nasty foreigners are profiting from their economic misery than admit the fault lies squarely on the shoulders of the government’s excess spending.

The consequences for other fiat currencies

With the dollar being the world’s reserve currency, rising dollar interest rates and price inflation will affect almost all the other fiat currencies. We can argue over the fundamentals for various currencies, but what truly matters is which foreign currencies everyone owns. It should be noted at the outset that Americans own very little foreign currency liquidity, their currency being the reserve currency, and also because the dollar’s recent strength has reflected liquid inward flows.

It will be foreigners liquidating their excess dollars who call the shots. It is a myth that foreigners are short of dollars, perpetuated by those who seem to think that foreign loan obligations need cover for repayment. They don’t, and many of them will not be repaid anyway. More pressing is the problem of contracting global trade, requiring lower dollar balances and the liquidation of portfolio assets which will be falling in price, reflecting the slump. Call it the “Great Unwinding”, reflecting decades of inward investment since the end of Bretton Woods.

The combination of trade protectionism and the turning of the credit cycle threatens to result in an economic slump of severe proportions. The experience of Smoot-Hawley in the 1930s was that America’s trade protectionism rapidly led to a worldwide depression. Since the dollar was on a gold standard, commodity and food prices fell heavily. This time, with no gold backing, it will be currencies that lose purchasing power, at least to the extent they neutralise contracting demand, that being de facto monetary policy already. Therefore, there could be for a short time the appearance of price stability in other currencies, giving central banks the leeway to maintain their price inflation targets.

This will simply encourage central banks to run the loosest possible monetary policies, hoping for a controlled devaluation to stimulate demand. For a time, the only evidence of the true effect of these policies will not be rising commodity prices, but a rising gold price. Gold will be reflecting what is truly happening to prices while the balancing act between falling demand and fiat devaluation plays out.

The monetary planners will give themselves firepower to manage currencies through enhanced swap arrangements, and whatever other means they cook up. But it will always be inflationary. Consequently, they will lose control over prices, and will resort to other more direct means, such as price controls. It always happens that way, and they only hasten the end.

end

4/EUROPEAN AFFAIRS

UK

Corbyn is a fool: the opposition leader wants to nationalize the UK national energy grid.  They just handed the election to Farage as both the conservatives and labour disintegrate

(courtesy Mish Shedlock/Mishtalk)

Green Revolution Nonsense: Corbyn Wants To Nationalize UK National Energy Grid

Authored by Mike Shedlock via MishTalk,

UK Labour leader Jeremy Corbyn made an absurd proposal on Wednesday. He wants to nationalize SSE. Shares hammered.

The Telegraph reports Labour Power Grab Wipes £500m Off Firms.

The threat of a Labour government wiped more than £500m off SSE and National Grid on Wednesday as party plans to seize UK energy networks emerged.

Sector shares slipped as The Telegraph revealed Jeremy Corbyn wants to renationalise the £62bn network, compensating shareholders with government bonds below market rate.

SSE shares closed at a five-month low, sinking as much as 3.2pc as the City baulked at the plans. National Grid, which presents full-year results tomorrow, sank more than 2pc before halving its losses.

Labour’s official Bringing Energy Home proposal claims public ownership would spark a “Green Industrial Revolution”.

The Confederation of British Industry called the plans “hanging a ‘closed’ sign above the UK”. “The country needs policies focused on powering economic growth in the future, not revisiting mistakes,” said policy director Matthew Fell.

Support for Labour’s nationalisation agenda has slumped in recent weeks, says a ComRes poll for Water UK

ENA Members

Plan Details

For details of Corbyn’s absurd plan, please see Jeremy Corbyn draws up plans to seize control of UK’s energy with sweeping nationalisation of networks

A leaked Labour party document has revealed plans for a swift and sweeping renationalisation of the country’s £62bn energy networks at a price decided by Parliament. The blueprint, seen by the Telegraph, lays bare for the first time Mr Corbyn’s plan to bring all energy network companies under public ownership “immediately” following a Labour election win.

Those in Labour’s sights include the FTSE 100 energy giant National Grid, which is worth over £29bn, and the transmission arms of Big Six energy companies SSE and Scottish Power. The nationalisation agenda will also include all 19 of the UK’s smaller regional gas and power grids and the massive subsea power cables linking the UK to Europe.

The agencies will be tasked with sourcing low carbon or renewable sources for 60pc of all energy use by 2030. They will also oversee the rollout of electric vehicle charging networks and new energy storage projects across the country.

A spokesman for National Grid warned that the state-ownership plans “would only serve to delay” the huge investments needed to help the UK take a lead in the green economy.

The Price?

The Government gets to set the price paid for the takeover.

Labour Self Destruction

The Labour party is already split in several pieces over Brexit.

This move will raise more than a few eyebrows.

Corbyn in Praise of Venezuela

Recall that Corbyn is a supporter and fan of Venezuela and Hugo Chavez.

Here’s an even better video, just not one that I can embed: Corbyn Calls Hugo Chavez ‘An Absolute Legend in Every Way’

Green Revolution Nonsense

I am pleased as punch with the monstrous stupidity of this proposal.

Why?

Because Corbyn just handed Nigel Farage and his Brexit Party (which I support) a second major issue on a on a silver platter.

The Brexit Party is already in first place in the polls as noted in Brexit Party Surge: Tories Drop to 5th Place in European Parliament Polls

Labour and the Tory party are both in self-destruct mode.

end

UK

The pound hits a 4 month low as stalks with labour collapse

(courtesy zerohedge)

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

TURKEY

Early last night, the Turkish lira tumbles to 6.0840 after Trump terminates its preferential trade agreement with Turkey stating that Turkey is no longer in need of help as a developing nation and thus all goods will have the normal tariffs assigned to those goods. However as a kind gesture, he has initiated a 25% tariff on Turkish steel instead of the 50% that everybody else pays.

(courtesy zerohedge)

Turkish Lira Tumbles After Trump Terminates Preferential Trade Agreement In Retaliation For S-400 Order

For months, the Trump administration had been warning, at first, then outright threatening Turkey against following through with an agreement struck last year to purchase the advanced Russian S-400 missile defense system, and despite several “fake news” reports that Erdogan had canceled the deal with Moscow, Turkey ultimately said it would go ahead and receive the Russian missiles, demonstrative flipping off its NATO allies.

But if Erdogan was hoping that Trump would be all bark and no bite when it comes to retaliating against this painfully obvious snub of its “western” allies, well he had another thing coming.

Late on Thursday, the Turkish lira suddenly tumbled when Washington made it clear that this aggression will not stand, and the White House said it had terminated a preferential trade agreement with Turkey, finding the country no longer needed help as a developing country. However, the US did halve tariffs on Turkish steel from 50% to 25%.

Stating that Turkey received the preferential treatment in 1975 under the Generalized System of Preferences (GSP), which allows products to enter the US duty-free, US President Donald Trump said in the proclamation, “I have determined that, based on its level of economic development, it is appropriate to terminate Turkey’s designation as a beneficiary developing country effective May 17, 2019.”

“Consistent with my determination that it is appropriate to terminate the designation of Turkey as a beneficiary developing country under the GSP, effective May 17, 2019, I have determined to remove it from the list of developing country WTO Members exempt from application of the safeguard measures on CSPV products and large residential washers,” the proclamation said.

Mitigating the move, the White House also said that it will “remove the higher tariff on steel imports from Turkey” and instead impose a 25 percent ad valorem tariff on the imports from Turkey, “commensurate with the tariff imposed on such articles imported from most countries.”

White House explained that the change is due to imports of steel articles from Turkey falling by 48% in 2018, “with the result that the domestic industry’s capacity utilization has improved at this point to approximately the target level recommended” in Commerce Sec.’s report.

In March, US Trade Rep Robert Lighthizer noted the administration’s intention to remove Turkey from the list of nations benefiting from the GSP.

The announcement comes at a very painful time for Turkey, which has been gripped in a stagflationary recession since March 2019, which has sent the Lira plunging, while the country’s inflation has soared. Predictably, with traders already on edge, and looking at how the US could retaliate for Erdogan’s unwillingness to budge on the Russian S-400 order,  the Turkish lira tumbled as much as 1%, as the USDTRY spiked from 6.058 to 6.10 before recouping some losses.

Earlier today, Moody’s warned that if the Turkish government didn’t put forward “a credible broad-based plan to address the structural issues” and avoid a downgrade, “and in the near-term dampen the market volatility pressure on the lira,” it would result in a downgrading of the country’s sovereign credit rating.

According to Moody’s, the Turkish government’s interest payments rose over 30% in nominal terms in 2018 and almost 50% in the first three months of 2019. The credit rating agency said it expects interest payments to reach 8.2% of government revenue this year, up from a mere 5.9% in 2017, “eroding” the government’s fiscal strength.

But the bigger risk facing Turkey is that the amount of foreign denominated debt repayments for the balance of 2019 exceed the nation’s entire stock of FX reserves, excluding gold.

Which means that within a few months, Erdogan may be forced to make the same choice as Venezuela: liquidate the nation’s gold ,or hyperinflate. The third option, admit defeat and beg for an IMF bailout will never happen as long as “executive president” Erdogan is in charge.

END

IRAN

There is fear that Iranian operatives have moved missiles in Iraq and are planning to attack USA interests there.  We do not know how many missiles have been mobilized

(courtesy zerohedge)

Secret Satellite Photos Of Iranian Missiles In Persian Gulf Behind Intensifying Crisis

As the international hand-wringing continues over whether there is an actual heightened “Iran threat” with American troops in the cross hairs, and as some US allies – notably Spain, Germany, and The Netherlands – actually withdraw their forces from US operations support in the region, we must ask at this point, what do we actually know in terms of Bolton’s original intelligence cited earlier this month which sparked the ongoing crisis? 

Aside from knowing much or all of the intelligence was reportedly provided to the administration by Israeli Mossad, we have the piecemeal explanations of both top admin officials and regional allies.  Secretary of State Mike Pompeo told Iraqi officials during his unplanned stopover in Baghdad last week that U.S. intelligence showed Iran-backed militias moved missiles near bases housing American forces,” according to Fox.

 

Iranian weaponry and military equipment exhibition in Tehran on February 2, 2019. Image source: AFP

According to that report, a senior Iraqi source relayed of the US message: They said if the U.S. were attacked on Iraqi soil, it would take action to defend itself without coordinating with Baghdad.”So the crisis appears focused on potential Iranian proxy actions in Iraq – apparently enough to take the very rare step of evacuating all non-emergency US personnel from the US embassy in Baghdad (a move that hadn’t even been done at the height of ISIS’ offensive across western and northern Iraqi).

However, US allies even disagree on this point. For starters, the deputy head of the US-led coalition, British Army Maj. Gen. Christopher Ghika, caused an almost unheard of row among allies when earlier this week he flatly stated“No – there’s been no increased threat from Iranian-backed forces in Iraq and Syria,” in a videolink briefing at a Pentagon press conference.

Furthermore, Iraqi Prime Minister Adel Abdul Mahdi said on Tuesday that the Iraqis had no information showing “movements that constitute a threat to any side,” but added that his government “is doing its duty to protect all parties.”

So is the new “threat” which warranted the latest US military build-up, which has caused Iran’s military to warn “We are on the cusp of a full scale confrontation with the enemy” — all based on either Iran or Iran-backed “popular mobilization units” in Iraq moving around a few missiles? If so, it would be nothing new.

All the way back in August of last year we reported, based on Reuters“Iran Stuns Enemies By Moving Ballistic Missiles To Iraq – Within Easy Striking Distance of Tel Aviv.” It was known at that time that Iran had transferred short-range ballistic missiles to Shia proxy forces in Iraq for “months” prior, according to Western and Iraqi intelligence sources. This is why a number of prominent Middle East watchers and military analysts have shrugged, “nothing new… nothing to see here” in response to the “new” vaunted White House intelligence. This also appears to be the attitude of Britain’s chain of command within the joint “Operation Inherent Resolve” coalition.

And enter the New York Times, which in a report published late Wednesday citing three defense officials, found that: “The intelligence that caused the White House to escalate its warnings about a threat from Iran came from photographs of missiles on small boats in the Persian Gulf that were put on board by Iranian paramilitary forces.”

Eric Schmitt@EricSchmittNYT

Secret satellite photos of Iranian missiles in Persian Gulf ignites heated debate among White House, Congress, allies and the public over new threats from Iran https://nyti.ms/2Jo6OXg

President Hassan Rouhani of Iran, center, and military commanders during National Army Day in Tehran last month.

Iran Threat Debate Is Set Off by Images of Missiles at Sea

The photographs fueled fears that Iran would fire missiles at U.S. naval ships in the Persian Gulf. But some said the moves could be defensive acts against Washington provocations.

nytimes.com

And further, the report stated:

Overhead imagery showed fully assembled missiles, stoking fears that the Islamic Revolutionary Guards Corps would fire them at United States naval ships. Additional pieces of intelligence picked up threats against commercial shipping and potential attacks by Arab militias with Iran ties on American troops in Iraq.

The NYT also noted that some  top lawmakers are seeking to ensure that Congress is consulted before taking any military action against Iran. Speaker Nancy Pelosi reportedly “criticized the administration’s lack of transparency on the intelligence” in a closed-door meeting involving House Democrats.

Pompeo’s latest statements presented in the earlier Fox report seems to confirm the new NYT report. US allies in the region have also reportedly dismissed the “satellite evidence” of the Iranians moving missiles as mere usual defensive posturing.

And then there’s the possibility that all of this bluster and heated war rhetoric and build-up could have merely originated from Iran’s moving or assembling missiles on their own soil or in their own territorial waters in the Persian Gulf.

END
IRAN/USA
two more warships travel through the Straits of Hormuz without incident.  They are joining the USS Abraham Lincoln as well as a strike force including B 52 bombers as the uSA builds up its forces in the Gulf
(courtesy zerohedge)

Two More US Warships Travel To Persian Gulf As Tensions With Iran Escalate

In the latest provocation against Tehran by the US, two Navy destroyers have entered the Persian Gulf as the American military continues to add to its assets in the region to head off any planned ‘aggression’, USNI reports.

The USS McFaul and USS Gonzalez traveled through the Strait of Hormuz Thursday afternoon without being challenged by IRGC forces in the are. They join the USS Abraham Lincoln, which is stationed in the Gulf of Oman, as well as a strike force that includes several B-52 bombers, as the US continues to build up its military presence in the region. Another Aircraft Carrier, the USS Kearsarge, is anchored off the coast of the UAE.

Destroyer

According to USNI, if the US wanted to attack Iran from the water, its ships would be better off outside of the Persian Gulf, where it would be more difficult for Iranian missiles to reach them, and where they would be outside of Iran’s “domain awareness.”

The move comes after the US government has continued to warn about heightened threats from Iran. These fears have already prompted the evacuation of non-essential embassy personnel from the Baghdad embassy and the Erbil consulate.

Secret satellite photos of Iranian missiles on a small boat in the Gulf have helped ratchet up tensions, and the US has threatened to attack Iran if the regime starts stockpiling enriched uranium and heavy water again, as it has warned it would abandon the Iran deal if its European partners don’t make good on promises to buy Iranian oil and other financial considerations. CENTCOM has maintained that Iran is a ‘growing threat’ in the region.

An investigation into the source of attacks on two Saudi tankers that Iran is suspected of having orchestrated.

END

6.GLOBAL ISSUES

Canada/Mexico/USA

Canada and Mexico reach a deal with the USA as they both lift tariffs against each other

(courtesy zerohedge)

US, Canada Reach Deal On Lifting Metals Tariffs

Update: Confirming what Bloomberg reported earlier, Canada and the U.S. have agreed to end all pending WTO tariff litigation with the agreement taking effect in ‘no later than two days’.

The Loonie is extending gains…

*  *  *

In a move that helps clear the way for USMCA ratification, Bloomberg reports that, according to people familiar with the matter, the U.S. is poised to lift steel and aluminum tariffs on Canada and Mexico in favor of stronger enforcement actions.

The effective date for removing the tariffs is the outstanding issue, one of the people said.

The move will lift the 25% steel and 10% aluminum tariffs the U.S. placed on the two trading neighbors almost a year ago in the name of national security.

US equities extended gains on the news (as did Canadian and Mexican stocks)…

 

And the Loonie and peso jumped…

 

7  OIL ISSUES

 

8. EMERGING MARKETS

VENEZUELA

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

Euro/USA 1.1168 DOWN .0006 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /RED

 

 

USA/JAPAN YEN 109.64 DOWN 0.240 (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 1.2757   DOWN   0.0039  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3484 UP .0023 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 FRIDAY morning in Europe, the Euro FELL BY 6 basis points, trading now ABOVE the important 1.08 level  FALLING to 1.1168 Last night Shanghai COMPOSITE CLOSED DOWN 73.42 POINTS OR 2.48% 

 

 

 

 

 

//Hang Sang CLOSED DOWN 328.61 POINTS OR 1.16% 

 

 

 

 

/AUSTRALIA CLOSED UP .67%// EUROPEAN BOURSES RED

 

 

 

 

 

 

The NIKKEI: this FRIDAY morning CLOSED UP 187.11 POINTS OR 0.89% 

 

 

 

 

 

 

 

 

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL RED

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 328.61 POINTS OR 1.16%

 

 

 

 

 

 

/SHANGHAI CLOSED DOWN 73.42 POINTS OR 2.48% 

 

 

 

 

 

 

 

 

 

Australia BOURSE CLOSED UP .69% 

 

 

Nikkei (Japan) CLOSED UP 187.11  POINTS OR 0.89%

 

 

 

 

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1285.30

silver:$14.48

Early FRIDAY morning USA 10 year bond yield: 2.38% !!! DOWN 2 IN POINTS from THURSDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%.

 

The 30 yr bond yield 2.82 DOWN 2  IN BASIS POINTS from YESTERDAY night.

USA dollar index early FRIDAY morning: 97.89 UP 3 CENT(S) from  THURSDAY’s close.

This ends early morning numbers FRIDAY MORNING

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And now your closing  FRIDAY NUMBERS \12: 00 PM

Portuguese 10 year bond yield: 1.08%  DOWN 5 in basis point(s) yield from THURSDAY/

JAPANESE BOND YIELD: -.06%  DOWN 1   BASIS POINTS from THURSDAY/JAPAN losing control of its yield curve/

 

SPANISH 10 YR BOND YIELD: 0.91% DOWN 4   IN basis point yield from THURSDAY

ITALIAN 10 YR BOND YIELD: 2.68 DOWN  7  POINTS in basis point yield from THURSDAY/

 

 

the Italian 10 yr bond yield is trading 177 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS –.10%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.78% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A HUGE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR FRIDAY

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

Euro/USA 1.1178  DOWN     .0029 or 29 basis points

USA/Japan: 109.86 UP .394 OR YEN DOWN 39  basis points/

Great Britain/USA 1.2800 DOWN .0046 POUND DOWN 46  BASIS POINTS)

Canadian dollar UP 7 basis points to 1.3435

 

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The USA/Yuan,CNY: AT 6.8837    0N SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  6.9166  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  56.0368 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.06%

 

 

 

Your closing 10 yr US bond yield UP 1 IN basis points from THURSDAY at 2.40 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.84 UP 1 in basis points on the day

Your closing USA dollar index, 97.80  UP 23  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 FRIDAY: 12:00 PM 

London: CLOSED UP 56.56  0.78%

German Dax :  CLOSED UP 210.80 POINTS OR 1.74%

Paris Cac CLOSED UP 73,85 POINTS OR 1.37%

Spain IBEX CLOSED UP 127.29 POINTS or 1.39%

Italian MIB: CLOSED DOWN 288,66 POINTS OR 1.38%

 

 

 

 

 

WTI Oil price; 63.36 12:00  PM  EST

Brent Oil: 73.08 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    64.52  THE CROSS LOWER BY 0.14 ROUBLES/DOLLAR (ROUBLE HIGHER BY 14 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.10 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 :  62.70

 

 

BRENT :  72.06

USA 10 YR BOND YIELD: … 2.39…   VERY DEADLY//

 

 

 

 

 

 

 

 

 

USA 30 YR BOND YIELD: 2.82..VERY DEADLY/

 

 

 

 

 

EURO/USA 1.1161 ( DOWN 13   BASIS POINTS)

USA/JAPANESE YEN:109.98 UP .099 (YEN DOWN 10 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 97.98 UP 13 cent(s)/

The British pound at 4 pm: Great Britain Pound/USA:1.2724 DOWN 70  POINTS

 

the Turkish lira close: 6.0537

 

the Russian rouble 64.76   down 0.15 Roubles against the uSA dollar.( DOWN 15 BASIS POINTS)

Canadian dollar:  1.3458 DOWN 5 BASIS pts

USA/CHINESE YUAN (CNY) :  6.9179  (ONSHORE)/we need to watch these levels/anything greater than 6.95 will be deadly./

 

USA/CHINESE YUAN(CNH): 6.9476 (OFFSHORE) we need to watch these levels/anything greater than 6.95 will be deadly/

German 10 yr bond yield at 5 pm: ,-0.10%

 

The Dow closed  DOWN 98.68 POINTS OR 0.38%

 

NASDAQ closed DOWN  15.96 POINTS OR 0.67%

 


VOLATILITY INDEX:  15.96 CLOSED UP 0.67

 

LIBOR 3 MONTH DURATION: 2.525%//

 

 

 

FROM 2.524

 

 

 

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

 

Dow Suffers Worst Streak Since 2016 Despite Best Dip-Buying In A Decade

Quite a week…

Embedded video

The_Real_Fly@The_Real_Fly

Today’s markets action

China was ugly overnight after defending any dip all week – have to make sure the stock market does not reflect weakness after the trade deal fell apart!!

 

But Europe soared this week as US delayed auto tariffs…

 

China remains the best performer YTD, barely…

 

The late-day headlines from CNBC that “trade talks have stalled” – merely repeating what was said overnight numerous times – triggered the algos to dump after early gains (thanks to op-ex gamma hedging and US-Canada tariff headlines)…Small Caps were the week’s biggest laggard…

The Dow is down four weeks in a row – something it has not done since May 2016!!

The midweek ramp was all one big short-squeeze and the machines ran out of ammo today…

 

Another failed IPO today…

 

Trade deal hope was dashed this week…

The ratio between Morgan Stanley’s China Trade Sensitive Basket and the S&P 500 has dropped to the lowest since U.S. President Trump and Chinese President Xi announced a truce at the G-20 meeting in Argentina in December.

Credit ended the week wider (despite ripping back midweek from Monday’s gap wider)…VIX was around unch…

 

Stocks and bonds decoupled this week (as stocks short-squeezed higher midweek)…

 

Treasury yields were bid on the week and accelerated lower in the last hour as repeated headlines of trade talks being stalled sparked more bond buying…

 

10Y Yields fell back close to YTD lows this week

 

Notably crude and inflation breakevens decoupled late in the week…

 

The yield curve closed the week just above inversion…

 

But before we leave bond-land, both US and Europe priced in more dovishness from their respective central banks this week (41bps of cuts in 2019 for the Fed and 35bps of cuts for the ECB)…

 

The Dollar Index rose on the week – its best week in over 2 months…

 

The last two weeks have seen offshore yuan collapse over 3.1% getting closer to 7.00 – the biggest 2-week plunge since Aug 2015’s devaluation

 

Cable was a disaster this week with GBPEUR down 10 days in a row – the longest losing streak in 19 years

 

The Loonie rallied on the day after US dropped steel tariffs…

 

Cryptos had a violent week but ended significantly higher, led by a 33% rise in ethereum…

 

With Bitcoin reaching almost $8500 before crashing Friday…

 

The dramatic outperformance of Ethereum in the last few days has erased all of Bitcoin’s outperformance over the last 6 weeks…

 

WTI rallied on the week (copper did not) despite a strong dollar and trade talks breakdown but silver was the biggest loser…

 

Finally, in case you thought something had change in recent days – despite the collapsing fun-durr-mentals and the death of trade talks – you were right. Bloomberg’s Luke Kawa notes that over the past 10 sessions (or since the trade war resurfaced) the S&P 500 has averaged a drop of 0.5% overnight and a gain of 0.3% during the day. That 0.8 percentage point average gap over the two-week stretch constitutes the biggest disparity between poor overnight retreats and intraday advances since July 2009.

In other words, as the US-China trade deal began to collapse confidence in the markets, ‘someone’ was panic-buying US equities during the day after ‘someone else’ was dumping them overnight at historically high levels.

With global money supply now collapsing, stock markets are gonna need more dip-buying to support this debacle…

END

MARKET TRADING

Late in the afternoon: stocks tumble on CNBC reports that trade talks have stalled.  Interestingly enough, the same report came in the early morning.

Stocks Tumble After CNBC Reports “Trade Talks Have Stalled”, Scheduling “In Flux”

Confirming that algos have a several millisecond memory at best, moments ago stocks slumped after CNBC reported…. what China’s press already reported some 18 hours ago.

As a reminder, and as we noted first thing this morning, the reason why futures slumped overnight is because Chinese officials turned up the trade war rhetoric, warning that there are no plans for another round of talks. Additionally, front page commentary in the Communist Party’s People’s Daily evoked the patriotic spirit of past wars, saying the trade war would never bring China down, while commentary on the blog Taoran Notes, which was carried by state-run Xinhua, accused the U.S. of “playing tricks to disrupt the atmosphere.”

The message was clear: no talks are scheduled, and more importantly, China has no urge to schedule talks in the immediate future or to engage the “barbarian” Trump.

However, for some bizarre reason, the market levitated for much of the day even though the China deal mood had soured substantially overnight, prompted by positive sentiment over the jump in fake consumer confidence, and Trump’s decision to end steel tariffs with Mexico and Canada (which he only did so he can focus on trade war with China).

And so, with exactly one hour in trading left, CNBC doubled downreporting what traders already knew thanks to the latest round of belligerent Chinese rhetoric, namely that “negotiations between the US and China appear to have stalled as both sides dig in after disagreement earlier this month.” Additionally, CNBC also echoed what Chinese officials had already said, and citing two sources briefed on the status of the talks, said that scheduling for the next round of negotiations is “in flux” because it is unclear what the two sides would negotiate.

Finally, pointing out the obvious, CNBC notes that “China has not signaled it is willing to revisit past promises on which it reneged earlier this month, despite showing up for talks in Washington last week.”

The market reaction was instantaneous and negative, sending the S&P sharply lower… and yet prompting questions: why is the market sharply lower on “news” which everyone already knew? Perhaps the biggest question is just what idiot is the marginal price setter in a market in which nearly day-old news can hammer stocks not once but twice, and linked to that,  just how dumb are the algos.

Here is the reaction in the S&P, which soared earlier just because Gartman turned short, and which has tumbled once more repeating the slow drift observed overnight in futures.

While the reaction was far less notable, even the Yuan responded, and dropped back to session lows, even though there was nothing new reported by CNBC.

But the most dramatic observation from the day’s violent reversal is that Gartman may actually be right

end

ii)Market data/

The generally more accurate gauge of consumer confidence is the Bank of America survey as compared to the U. of Michigan report.  Yesterday the U. of Michigan was bullish on confidence.  Today’s B of America report was bearish.

(courtesy zerohedge)

Confidence In Consumer Confidence Surveys Plummets

One of the reasons for today’s latest, and quite remarkable turnaround higher in stocks, is that Friday’s University of Michigan consumer sentiment report showed that, following a small dip in April, in May US consumers responded with a surprising surge in confidence, led by a spike in expectations, i.e., “hope”, which helped the overall survey print at the highest level in 15 years, or since January 2004.

Which, on the surface, is perplexing as a repeating argument for why various economic metrics have been sputtering lately is the renewed trade war with China. Meanwhile, in what appears to be a far more accurate survey of consumer sentiment, also on Friday Bank of America released its latest consumer confidence indicator, which found that “consumer sentiment has begun to turn down amid the latest news on trade.”

Specifically, according to the report by BofA economist Joseph Song, consumers reacted negatively to the escalation in the trade war, and the confidence indicator started to slip lower on May 11th, coinciding with the announcement that the US will raise tariffs on imports from China to 25% from 10%.

Digging into the details, BofA found that the deterioration in confidence was driven by a decline in both current conditions and expectations, diametrically opposite to what UMich found, beginning the question are US sentiment and confidence surveys – which clearly have the power to boost stocks, something which the president has clearly made a prerogative of his administration – just as manipulated as any “data” out of China?

Among the findings in the BofA report, is that the current expectations indicator had rebounded back to recent highs before the latest trade news, which the bank notes is “unwelcomed news as even a short term trade dispute could have a meaningful, albeit temporary, impact on spending.”

Case in point, when we asked respondents if they had reduced or delayed spending at the start of the year, roughly 48% reported some pull back with lower income households citing the government shutdown as the primary reason and upper income households noting the stock market selloff.

Naturally, a protracted trade war would have not just a dire impact on the S&P, with even uber-bullish JPMorgan now conceding that a full blown trade war would push the S&P back down to 2,550, but it would also have a substantial adverse impact on consumer spending.

Worse, as we noted in the latest SLOOS report, consumer borrowing conditions have been less favorable of late. According to the latest Fed Senior Loan Officer Opinion Survey for 2Q 2019, lending standards tightened on balance with more banks reporting tighter conditions than easier.

The tighter standards appear to be having a bigger impact on lower income households. When asked if it is easier or harder to get a loan, fewer lower income respondents are reporting it is easier compared to last year.

But worst of all is the argument we made first two weeks ago (and which Citi’s Matt King hammered in his latest presentation), namely that the economic weakness has nothing to do with credibility availability, and everything to do with credit demand, or lack thereof, with BofA also noting that “banks are reporting weaker demand for all consumer credit.”

We find two plausible reasons for the slowdown. First, there has been limited change in the consumer’s ability to pay off debt. When asked if it is easier or harder to make a minimum debt payment, we find little change from last year.

Finally, BofA also found that consumers are comfortable living within their means. When asked what respondents would do with more disposable income, majority of respondents continue to report that they would pay down debt or save more. As the bank concludes, “this isn’t all bad news: a more conservative consumer could lead to a more resilient economy.”

And while the BofA consumer confidence survey is certainly in line with what one would expect, one can’t help but wonder if, with two separate confidence surveys reaching two diametrically opposite conclusions, whether confidence in consumer confidence surveys, at least one of which appears to have been gamed for market manipulation purposes, just crashed to an all time low.

iii)USA ECONOMIC/GENERAL STORIES

Baltimore is now crippled by the cryptocurrency ransomware attack.

(courtesy zerohedge)

More Chaos: Baltimore City Cryptocurrency Ransomware Attack Paralyzes Real Estate Industry

Last week, we reported the Baltimore City government was paralyzed by cryptocurrency ransomware, which infected computers associated with severs tied to the city’s communication network.

A new report from The Baltimore Sun shows the hack has disrupted city servers for the eighth straight day. This time, essential systems required for transacting real estate deals have gone offline, throwing the entire industry across the city into chaos, which means no homes can currently be bought or sold.

As of Wednesday, all real estate transactions have ground to a halt because title insurance companies cannot access city servers to verify properties are free of liens to create a new deed. Those processes have been disrupted by the ransomware attack, according to title insurance companies and real estate agents.

The hack has also affected the city’s collection of transfer and property taxes and water bills.

Amy Caplan, the operations manager at Broadview Title, said servers that hold critical real estate data crashed Friday. Then Monday, title companies began issuing notices telling their agents to stop all transactions in the city.

“It’s crippling the entire city for sure,” Caplan said. “There’s just no resolution. It seems like there’s no contingency plan in place for Baltimore city.”

Mayor Bernard C. “Jack” Young told City Council members Monday that the ransomware paralyzed the city’s entire real estate industry. Young said officials were “working to minimize any impact on real estate transactions.”

On Tuesday, the mayor’s spokesperson said officials were attempting to gain access to its servers “to accurately provide an accounting of outstanding liens against properties scheduled for closings.”

“They’re working with outside experts and hope to gain access to the information as quickly as possible,” spokesman Lester Davis said in an email.

These outside experts could be special cyber agents from the Baltimore FBI Field Office.

Georgiana Tyler, president of the Greater Baltimore Board of Realtors, said the city had spent the last several days trying to access servers that are critical to the real estate industry. Tyler wasn’t sure when the problem would be resolved.

Real estate data shows more than 1,500 sales are pending across Baltimore, and the ransomware attack is expected to halt dozens of transactions this week.

Realtor R.J.Breeden, the owner of The Breeden Group, who has dozens of homes listed throughout the city, said the hack is a loss of confidence in city officials. Breeden said several of his deals this week won’t be closing because the title company he uses cannot write a deed without accessing lien certifications on city severs.

Breeden warned: “the entire real estate industry has come to a standstill.”

Realtor Joy Sushinsky, an agent with Long & Foster, said one of her deals has already folded because of the hack. Another deal is scheduled for Wednseday afternoon, and if that cannot be completed, the buyer and seller will have to pay $2,600 in extra costs. Sushinsky said this is a huge loss of revenue for her; she’s diving into her savings to pay her assistant.

“It’s just a mess,” she said.

First American Title Insurance Co. instructed agents on Monday to stop all transactions.

“While the City is aware of the problems created by the inability to accept or process real property sales and loan transactions and is working on a solution, it is unable to give a time frame on when it will be able to re-open. We have been told to check in weekly,” the company wrote.

“We understand that the situation presents difficulties for our agents, but feel that under the circumstances, declining to insure until systems are back in full service is the only way to approach the problem.”

An unnamed official at the city’s housing department said the ransomware had prohibited its ability to dish out money to grant programs to incentivize buyers.

The ransomware was discovered last Tuesday.

The Baltimore Sun said the ransomware was identified as RobbinHood. The hackers demanded cryptocurrency as the preferred payment to unlock the servers.

Another unnamed official said it could take weeks to restore the servers.

“This is a very unfortunate situation, but other cities have had this exact circumstance happen,” said Cindy Ariosa, treasurer for Bright MLS, the region’s multiple listing service for real estate. “It’s a sign of the times.”

Spencer Stephens, the corporate counsel for Bay County Settlements Inc., said several transactions this week are being delayed due to the hack.

“If you’re buying and you gave notice at your apartment and you’re planning on moving at the end of May, that timing is in question,” Stephens said. “If you’re a seller, it’s a problem because you want to move to your new house, and you want to get the funds out of our old home and make moving arrangements.”

The ransomware attack in Baltimore exposes how city officials have no contingency plan in the event of a cyber attack. This attack could cripple the local economy if the problem persists for the next several weeks.

end

auto loan delinquencies are now spiking levels not seen since 3rd quarter of 2009

(courtesy WolfRichter)

Auto-Loan Delinquencies Spike To Q3 2009 Level, Despite Strongest Labor Market In Years

Authored by Wolf Richter via WolfStreet.com,

But what will happen to banks and automakers when the cycle turns?

Serious auto-loan delinquencies – 90 days or more past due – jumped to 4.69% of outstanding auto loans and leases in the first quarter of 2019, according to New York Fed data. This put the auto-loan delinquency rate at the highest level since Q4 2010 and merely 58 basis points below the peak during the Great Recession in Q4 2010 (5.27%):

These souring auto loans are going to impact banks and specialized lenders along with the real economy – the automakers and auto dealers and the industries that support them.

This is what the banks are looking at.

The dollars are big. In Q1, total outstanding balances of auto loans and leases rose by 4% from a year ago to $1.28 trillion (this amount by the New York Fed is slightly higher than the amount reported by the Federal Reserve Board of Governors as part of its consumer credit data). Over the past decades, since in Q1 2009, total auto loans and leases outstanding have risen by 65%.

But the number of auto-loan accounts has risen only 34% over the decade, to 113.9 million accounts in Q1 2019. In other words, what caused much of the increase in the auto-loan balances is the ballooning amount financed with each new loan and longer loan terms that causes those loans to stay on the books longer.

The chart below shows the dollar amounts of auto loan balances (blue columns, right scale) in trillion dollars and the number of auto-loan accounts (red line, left scale) in millions:

Of this ballooning amount of auto loans, 4.67% is seriously delinquent (90+ days). This amounts to $60 billion. This chart shows the trajectory of what the banks and specialized lenders are facing, in billion dollars:

For lenders, these delinquent loans don’t represent total losses. This debt is collateralized by vehicles, which can be repossessed without much of a delay – unlike foreclosing on a house. But generally, the loan amount is far higher than what a repossessed vehicle will bring at the auction. Perhaps the banks can recover 50% on average of the loan amount. So, if all of the current vintage of 90+ day delinquencies turn into repossessions, and the banks lose 50% on them, it would amount to $30 billion in loan losses.

But there are more loans going delinquent even as we speak, and they will become seriously delinquent in Q2, and the next batch in Q3, and so on, and this is working itself forward wave after wave. So the cumulative losses over the next two years will be higher.

These losses are spread over thousands of banks, credit unions, and specialized non-bank lenders, and over asset-backed securities holders, such as pensions funds, other institutional investors, and bonds funds, and most will get through this by just licking their wounds. But some smaller subprime-focused non-bank lenders will collapse, and a few have already collapsed. So these defaulted auto loans are going to hurt, and they’re going to take down some smaller lenders, but they’re not going to take down the US banking system. They’re just not big enough.

This is what automakers are facing.

Lenders have already figured out that subprime auto loans have soured. They’ve been seeing this since 2015 or 2016. And ever so gradually, lenders have tightened their subprime underwriting standards. And subprime customers that don’t get approved for a new-vehicle loans may get approved for a much smaller loan for a cheaper used vehicle. This process has already been shifting potential new-vehicle customers to used vehicles.

For automakers, this has already shown up in their sales. New-vehicle sales, in terms of vehicles delivered to end-users, peaked in 2016 and have been declining ever since. Through Q1 this year, new-vehicles sales, fleet and retail, were down 3.2% from Q1 2018, and so 2019 looks to be another down-year for the industry – the third in a row.

But this isn’t happening in a recession with millions of people losing their jobs and defaulting on their auto loans because they lost their jobs. This is happening during one of the strongest labor markets in many years. It’s happening when the economy is growing at around 3% a year. It’s happening in good times. And people with jobs are defaulting.

This is not a sign of a worsening economy, but a result of years of aggressive and reckless auto lending, aided and abetted by yield-chasing investors piling into subprime auto-loan backed securities because they offer a little more yield in an era of central-bank engineered financial repression. It’s a sign like so many others in this economy, that the whole credit spectrum has gone haywire over the years. Thank you Fed, for having engineered this whole thing with your ingenious policies. So now there’s a price to pay – even during good times.

And we already know what a scenario looks like when the cycle turns, when unemployment surges and millions of people lose their jobs and cannot make their car payments, even people with a prime credit rating – that will then turn into subprime. We know what happens to the auto industry when the economy dives into a recession. We know what this will look like because we’ve seen it before. The auto industry is very cyclical.

What we haven’t seen before is this kind of credit stress among car buyers during good times – with the bad times still ahead. So when credit stress gets this bad during good times, we don’t even want to imagine what it might look like during bad times. Whatever that scenario will be, it won’t be fun for automakers.

The surprise was in the SEC 10-Q filing when no one was supposed to pay attention. Read...  Tesla Discloses Record Pollution Credits for Q1: Without Them, it Would Have Lost $918 Million and Bled $1.14 Billion in Cash

SWAMP STORIES

Barr’s first interview with Bill Hammer:  Government power was used to spy on American citizens states Barr.

(courtesy Fox news/BillHammer/Bill Barr)

 “Government Power Was Used To Spy On American Citizens,” Barr Says

In his first pair of interviews since being sworn in, Attorney General Barr told Fox News and WSJ that he was pursuing the investigation into the origins of the Trump-Russia probe – an investigation he has tasked John Durham, the US Attorney from Connecticut, with leading – because Americans need to know whether the government “put a thumb on the scale” to try and undermine President Trump both during the campaign and during the first two years of his term, just like “we need to ensure that foreign actors don’t influence the outcome of our elections.”

Separately, he told WSJ that “government power was used to spy on American citizens…I can’t imagine any world where we wouldn’t take a look and make sure that was done properly.”

Barr has doubled-down on using the term ‘spying’, which has angered Democrats, after first using it during Senate committee testimony from April 10, where he uttered the now-infamous phrase “I think spying did occur.”

Barr

The AG has declined to elaborate on what prompted these concerns, though he has said he’d be interested to see the underlying intelligence that sparked the FBI decision, in the summer of 2016, to open a counterintelligence investigation. At this point, Durham’s review isn’t a criminal investigation, and Barr hasn’t offered a timetable for when the investigation might be completed. Ultimately, the probe could lead to changing FBI protocols involving investigations into political campaigns.

Appearing to respond to Barr’s interviews, President Trump declared that his campaign was “conclusively” spied on.

Donald J. Trump

@realDonaldTrump

My Campaign for President was conclusively spied on. Nothing like this has ever happened in American Politics. A really bad situation. TREASON means long jail sentences, and this was TREASON!

As far as we know, the FBI first started investigating the campaign after an Australian ambassador told his superiors that George Papadopoulos had appeared to know about Russian plans to release ‘dirt’ on Hillary Clinton. The FBI later sent an informant, Stefan Halper, and a woman who identified herself as a research assistant, to meet with Papadopoulos and push him to say whether Russia was helping the Trump campaign.

Watch the Fox interview below:

see zerohedge for the interview
end

This is good:  Nellie Ohr deleted emails on Bruce Ohr’s computer while she was doing her research digging up dirt on Trump. So we have a non government employee destroy evidence on a government employee’s computer..  Sounds like obstruction of justice to me

(courtesy zerohedge)

Nellie Ohr Deleted Emails Exchanged With Top Ranking DOJ Husband: Judicial Watch

Nellie Ohr – a CIA-linked operative who gave extensive anti-Trump research to her DOJ official husband Bruce while she was working for Fusion GPS’ anti-Trump efforts, deleted emails from Bruce’s account during an April, 2016 exchange about Russian influence in Europe.

 

(Getty Images; AP; The Epoch Times; Photo illustration by The Epoch Times

Contained in over 339 pages of heavily redacted DOJ records obtained by Judicial Watch via FOIA lawsuit, the email chain between Nellie Ohr, Bruce Ohr, his top aide Lisa Holtyn and Stefan Bress – a first secretary at the German Embassy, discussed among other things the “Impact of Russian influence operations in Europe.”

Holtyn responds with, “I haven’t had a chance to confer with Bruce yet, but would certainly love to meet with the ‘A Team’!” Bruce Ohr then says, “That time works for me as well.” Bress then provides the personal details/passport numbers of the German analysts who will be meeting with Holtyn and Ohr. Holtyn tells Bress that the Ohr’s would like to host the German delegation for dinner and notes that Joe Wheatley and Ivana Nizich (a husband/wife team of DOJ Organized Crime prosecutors and friends of the Ohr’s) would join them as well. –Judicial Watch

At the end of the exchange with the subject line: “Analyst Russian Organized Crime – April 2016,” initiated by Bress, Nellie Ohr writes “Thanks! I’m deleting these emails now.

“This email is disturbing and suggests documents relevant to the improper targeting of President Trump were destroyed,” said Judicial Watch President Tom Fitton.

For those living under a rock for the last year, Nellie Ohr – a Russia expert who speaks fluent Russian – was employed by Fusion GPS – an opposition research firm paid by the Hillary Clinton campaign to dig up negative dirt on Donald Trump during the 2016 election. Fusion commissioned former UK spy Christopher Steele to assemble the so-called Steele Dossier while Nellie was in their employ.

According to a transcript of Congressional testimony released in March, Bruce admitted that Nellie passed along Fusion GPS Russia research using a memory stick.

Ohr worked with Fusion GPS between October 2015 and September 2016. She also admitted during testimony that she favored Hillary Clinton as a candidate, and would have been less comfortable researching her Russia ties (P. 105).

In 2010, she represented the CIA’s “Open Source Works” group in a 2010 “expert working group report on international organized crime” along with Bruce Ohr and Fusion GPS founder Glenn Simpson.

Josh Caplan

@joshdcaplan

Nellie Ohr, the wife of demoted DOJ official, Bruce Ohr, not only worked for Fusion GPS, but has also represented the CIA’s “Open Source Works” group. https://www.ncjrs.gov/pdffiles1/nij/230846.pdf 

Bruce, meanwhile, was demoted twice after the DOJ’s Inspector General discovered that he lied about his involvement with Simpson.

And as we noted in March; Emails turned over to Congressional investigators last August revealed that the Ohrs and Steele were much closer than previously disclosed.

Steele and the Ohrs would have breakfast together on July 30, 2016 at the Mayflower Hotel in downtown Washington D.C., while Steele turned in installments of his infamous “dossier” on July 19 and 26. The breakfast also occurred one day before the FBI formally launched operation “Crossfire Hurricane,” the agency’s counterintelligence operation into the Trump campaign.

And now we have evidence that Nellie was all over Bruce’s email, despite the fact that she was not a DOJ employee. 

END
Maxine Waters is one nutjob: here she calls Trump’s very immigration plan racist because it is not important for new immigrants to learn English and have a job
(zerohedge)

Maxine Waters Slams Trump’s “Very Racist” Immigration Plan

Congresswoman Maxine Waters, who has tried to position herself as one of President Trump’s most persistent critics in Congress, claimed during a Friday appearance on CNN that Trump’s new immigration plan was “very racist.”

Embedded video

New Day

@NewDay

Parts of President Trump’s newly unveiled immigration plan are “very racist,” @RepMaxineWaters tells @johnberman.

“It is not keeping with what this country is supposed to be all about,” she says. https://cnn.it/2JoA6VT

Waters said she agrees that something needs to be done to change our immigration policies…but this ain’t it.

“There should be comprehensive immigration reform…and not reform that should be about inciting those who have negative thoughts about those coming across the border…some of that is very racist…”

Asked for specific examples of what made Trump’s plan racist, Waters said the “merit-based” evaluation of green card applicants on criteria like whether they can already speak English or whether they are capable of earning a decent salary are “not keeping in step with the way we treat human beings.” Waters also objected to Trump’s plans to eliminate chain migration.

“It’s not keeping with what this country is supposed to be all about,” though Waters didn’t elaborate on what exactly she meant by that.

Of course, “Kerosene Maxine” isn’t the first top Democrat to bash Trump’s immigration plan. Nancy Pelosi responded to the plan’s unveiling yesterday during a Rose Garden press conference statement that to describe Trump’s priorities as “merit-based” would be “condescending” to applicants. She also insisted that the plan “wasn’t a serious proposal”, was “dead on arrival” and had “no chance of passing.”

Trump has said he plans to push the plan after the 2020 vote if he’s reelected and the Republicans manage to win back the House.

end

SWAMP STORIES/KEY STORIES/KING REPORT

(COURTESY OF CHRIS POWELL OF GATA)

Attention Powell and dovish Fed dolts!!!

“It’s not just tariffs. Transportation costs are up, labor costs are up. It’s an inflationary environment,” Del Monte CEO Greg Longstreet told Reuters on the sidelines of a conference.“A lot of that’s going to have to be passed on.The consumer is going to have to pay more for a lot of critical goods.

https://www.reuters.com/article/us-walmart-results/walmart-says-higher-china-tariffs-will-increase-prices-for-u-s-shoppers-idUSKCN1SM15O

Credit card rates are now at their highest level in history and may weigh on the economy

Americans now pay their banks an average 17% interest on credit cards — the highest level recorded by the Fed… [Yet Fed Funds are 2.38%!  Where are Dimon and other Street virtue signalers?]

https://www.cnbc.com/2019/05/16/credit-card-rates-are-now-at-their-highest-level-in-25-years-and-may-weigh-on-the-economy.html

If Fed officials and big-bank CEOs were really concerned about wealth disparity and average Americans, shouldn’t they do something about usuriously high credit card rates?

Sen. Josh Hawley (R-MO) on Senate floor Wednesday: “Big banks, big tech, big multi-national corporations, along with their allies in the academy and media — these are the aristocrats of our age. They live in the United States, but they consider themselves citizens of the world… The people who make the rules now, who run our large corporations, who set the tone for our popular culture, all belong to the same class. This economy has been their economy… The burden to protect the American people from forces parasitic on our national life and on our economy is on me and my colleagues. I take my responsibilities seriously…”[Populism on the left & right is proliferating.]

Meet the Senate’s new culture warrior…Hawley fashions a right-wing populism for the Trump era.

Prescription drug prices have got to get lower,” he said… He sees a political realignment underway, accelerated by Trump… “Most people don’t want to live a life centered around high-priced wine and cheese and theater tickets and so on. They don’t want to start a tech company… They want to have a life centered around their school and their church, and we need a politics that recognizes that, respects that and makes that way of life possible… the great American middle, the middle of our society… has defined our common citizenship…

 We’ve got to get technology and innovation that actually produce something of value to our economy and our society and doesn’t drain away value from the great middle of our society.”…

   The media, Hollywood and academia relentlessly press their values and priorities on the rest of us. … They idealize fame and preach self-realization through consuming more stuff. … That has produced, predictably, a good deal of dislocation and alienation and rightly so…

https://www.washingtonpost.com/news/powerpost/paloma/daily-202/2019/05/14/daily-202-meet-the-senate-s-new-culture-warrior-josh-hawley-fashions-a-right-wing-populism-for-the-trump-era/5cd9a1c81ad2e544f001dcf6/

Ex-FBI General Council, James Baker, is suddenly all over the media spinning his actions.

Mike Isikoff, the reporter that broke dossier story: Top FBI officials were ‘quite worried’ Comey would appear to be blackmailing Trump – when he attended a fateful Jan. 6, 2017, meeting at which he informed the real estate magnate about allegations he had consorted with prostitutes in Moscow, according to Jim Baker, the bureau’s chief counsel at the time…

https://news.yahoo.com/top-fbi-officials-were-quite-worried-comey-would-appear-to-be-blackmailing-trump-132955356.html

Ex-top FBI lawyer James Baker: We took Trump dossier ‘seriously’ but ‘not necessarily literally’

And did not treat it as “literally true in every respect.”… [Why was it used to obtain a FISA warrant?!]

https://www.washingtonexaminer.com/news/ex-top-fbi-lawyer-james-baker-we-took-trump-dossier-seriously-but-not-necessarily-literally

@ByronYork: If you’re interviewing James Baker, please consider asking: 1) Carter Page met secretly with Igor Sechin: Is that true? 2) Page met secretly with Igor Divyekin: Is that true? 3) Carter Page is a Russian agent: Is that true? All assertions in (now public) FISA application.

 

“Spygate” Fallout? Italian Prime Minister Conté Requests Resignation of Intelligence Officials…

@GeorgePapa19: The Italian prime minister has suddenly requested resignations from 6 deputy directors of Italian intelligence agencies: DIS, AISI and AISE. This was all after I outed Mifsud in Rome and the president called the Italian prime minister. Italy has flipped and are giving up Brennan.

https://theconservativetreehouse.com/2019/05/16/spygate-fallout-italian-prime-minister-giuseppe-conte-requests-resignation-of-intelligence-officials/

Solomon: Ukrainian who meddled against Trump in 2016 is now under Russia-corruption cloud

Sworn testimony released a few weeks ago by Congress revealed Leshchenko also was “a source” of Russian dirt on Trump that was fed to Hillary Clinton’s opposition research firm, Fusion GPS, the firm that created the so-called Steele dossier that led to a two-year Russia probe…

    The special prosecutor said “credible” information obtained from news media reports, as well as classified information the government possesses, suggest Leshchenko was receiving money from a Russian businessman and was trying to buy the condo in August and September 2016…

    Ukrainian officials told me Thursday that the U.S. embassy during Barack Obama’s presidency applied pressure in recent years to steer investigations away from Leshchenko. A source with direct knowledge said Leshchenko was one of the people the U.S. ambassador in Kiev asked Ukrainian prosecutors not to pursue in 2016… Lutsenko told Bloomberg,,, he’d like to offer evidence to U.S. Attorney General Barr, so that American authorities can check whether Hunter Biden paid U.S. taxes.

https://thehill.com/opinion/white-house/444167-ukrainian-who-meddled-against-trump-in-2016-is-now-under-russia

Kasich adviser will lobby against potential Russia sanctions

John Weaver, the top strategist for John Kasich’s presidential campaign in 2016, has registered as a foreign agent and plans to lobby against potential sanctions on Russia… Weaver is also a former adviser to John McCain’s presidential campaigns…

https://www.politico.com/story/2019/05/15/lobbying-against-russia-sanctions-weaver-kasich-1327880

@ScottMGreer: This is peak GOP campaign consultant behavior. Weaver is a horrible Never Trumper who insisted Trump and the GOP were controlled by Putin. Now he’s getting Kremlin checks.

 

SAT to Give Students ‘Adversity Score’ to Capture Social and Economic Background

New score comes as college admissions decisions are under scrutiny [Let the lawsuits begin!]

    This new number, called an adversity score by college admissions officers, is calculated using 15 factors including the crime rate and poverty levels from the student’s high school and neighborhood. Students won’t be told the scores, but colleges will see the numbers when reviewing their applications.

https://www.wsj.com/articles/sat-to-give-students-adversity-score-to-capture-social-and-economic-background-11557999000

Let us wrap up the week with this offering courtesy of Greg Hunter of USAWatchdog

(courtesy Greg Hunter/USAWatchdog)

Traitors Going to Jail, China Trade War, Economic Update

By Greg Hunter On May 17, 2019

Many think that nobody is going to jail for the Trump Russia collusion hoax that the FBI, DOJ and CIA tried to pull off.  Attorney General William Bar has just assigned a U.S. Attorney to look into the Russia scam that was made up to paint the President a spy.  People are going to be prosecuted and jailed for this treason.  

The China trade war is heating up and does not look like it will be resolved anytime soon.  China is calling for a boycott of U.S. products and claims to have more than $3 trillion to fight this dispute.  Trump is asking for a fair trade deal, but China wants the lopsided deal it has now.

The economy is a mixed bag of good and bad information.  If you’re following Deutsche Bank stock, things are looking terrible for one of the world’s biggest most troubled banks.

Join Greg Hunter as he talks about these stories and more in the Weekly News Wrap-Up.

-END-

end

WILL SEE YOU MONDAY NIGHT

I AM PROVIDING A LITTLE ADVANCE WARNING THAT ON MAY 23.2019 I WILL NOT PROVIDE A FULL COMMENTARY. HOWEVER LATE IN THE EVENING I WILL PROVIDE ONLY THE COMEX DATA
AND SOME MORNING DATA.

 

 

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