JUNE 3/GOLD UP $17.50 TO $1323.30 //SILVER UP A FULL 19 CENTS TO $14.78//GLD GAINS ANOTHER 2.35 PAPER TONNES TO ITS INVENTORY//TRUMP HITS MEXICO WITH A 5% TARIFF BEGINNING JUNE 10 AND CONTEMPLATING AUSTRALIA/REMOVES “DEVELOPING” NATION STATUS AGAINST INDIA// /ANTITRUST PROBES INITIATED IN THE USA AGAINST, GOOGLE, FACEBOOK AND APPLE//ANOTHER BIG BANK IN CHINA HAS ENTERED THE MORGUE//MORE SWAMP STORIES FOR YOU TONIGHT///

 

 

GOLD: $1323.30  UP $17.50 (COMEX TO COMEX CLOSING)

Silver:  $14.78 UP 19 CENTS  (COMEX TO COMEX CLOSING)

Closing access prices:

Gold : 1325.50

 

silver:  $14.79

 

 

QUITE A WEEK!!

 

 

 

COMEX DATA

 

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

today RECEIVING   8/32

EXCHANGE: COMEX
CONTRACT: JUNE 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,305.800000000 USD
INTENT DATE: 05/31/2019 DELIVERY DATE: 06/04/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
323 H HSBC 18
363 C WELLS FARGO SEC 6
661 C JP MORGAN 15 6
661 H JP MORGAN 2
686 C INTL FCSTONE 2 4
690 C ABN AMRO 4
709 C BARCLAYS 2
737 C ADVANTAGE 1 2
800 C MAREX SPEC 2
____________________________________________________________________________________________

TOTAL: 32 32
MONTH TO DATE: 90

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT: 32 NOTICE(S) FOR 3200 OZ (0.0995 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  90 NOTICES FOR 9000 OZ  (.2799 TONNES)

 

 

 

SILVER

 

FOR MAY

 

 

45 NOTICE(S) FILED TODAY FOR 225,000  OZ/

 

total number of notices filed so far this month: 261 for 1305,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ N/A

 

 

 

Bitcoin: FINAL EVENING TRADE: $ N/A

 

 

 

 

end

 

XXXX

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI FELL BY A CONSIDERABLE SIZED 2615 CONTRACTS FROM 212,579 DOWN TO 20,964  DESPITE THE 6 CENT GAIN IN SILVER PRICING AT THE COMEX.( LIQUIDATION OF THE SPREADERS HAVE STOPPED FOR SILVER AND IT STOPPED FOR GOLD AS WELL. WE WILL WITNESS A RISE IN THE SPREADERS IN SILVER ONCE WE START TRADING IN JUNE… READY FOR THE FIRST DAY NOTICE JULY CONTRACT.) TODAY WE ARRIVED FURTHER FROM 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 FAIR SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:

 0 FOR MAY, 0 FOR JUNE, 2185 FOR JULY AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  2185 CONTRACTS. WITH THE TRANSFER OF 2185 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 2185 EFP CONTRACTS TRANSLATES INTO 10.925 MILLION OZ  ACCOMPANYING:

1.THE 6 CENT GAIN 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.

18.845 MILLION OZ STANDING FOR SILVER IN MAY.

1.330 MILLION OZ STANDING FOR SILVER IN JUNE//

 

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

2185 CONTRACTS (FOR 1 TRADING DAYS TOTAL 2185 CONTRACTS) OR 10.925 MILLION OZ: (AVERAGE PER DAY: 2185 CONTRACTS OR 10.925 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF MAY:  10.924 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 1.428% 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:          903.03    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.

MAY 2019: TOTAL EFP ISSUANCE:                                                136.55 MILLION OZ

RESULT: WE HAD A CONSIDERABLE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 2615 DESPITE THE 6 CENT GAIN IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A VERY LARGE SIZED EFP ISSUANCE OF 2185 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 WILL RESUME THEIR LIQUIDATION OF THE SPREAD TRADES FOR SILVER ONCE THE JUNE CONTRACT COMMENCES IN EARNEST….

TODAY WE LOST A SMALL SIZED: 500 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 2173 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH DECREASE OF 2615  OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 6 CENT GAIN IN PRICE OF SILVER AND A CLOSING PRICE OF $14.59 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. 1.053 BILLION OZ TO BE EXACT or 150% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 45 NOTICE(S) FOR  225,000, 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/ A MAY:  18.845 MILLION OZ ..JUNE 1.330 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 ROSE BY AN UNBELIEVABLE SIZED 21,846 CONTRACTS, TO 465,977 WITH THE  $17.10 PRICE GAIN WITH RESPECT TO COMEX GOLD PRICING FRIDAY// YESTERDAY/THE SPREADING LIQUIDATION HAS STOPPED AND THESE GUYS WILL MORPH INTO SILVER ONCE JUNE GETS UNDERWAY.  THE GAIN IN OI GOLD CONTRACTS IS REAL AND NOT PUMPED UP BY SPREADING.   

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 15,085 CONTRACTS:

APRIL 0 CONTRACTS,JUNE: 0 CONTRACTS, AUGUST 2019: 15,085 CONTRACTS, JUNE 2020  0 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 465,077.  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 AN ATMOSPHERIC SIZED GAIN IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 36,931 CONTRACTS: 21,846 OI CONTRACTS INCREASED AT THE COMEX  AND 15,085 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 36,931 CONTRACTS OR 3,693,100 OZ OR 114.87 TONNES.  FRIDAY WE HAD A GOOD GAIN OF $17.10 IN GOLD TRADING….AND WITH THAT GAIN IN  PRICE, WE  HAD A HUMONGOUS GAIN IN GOLD TONNAGE OF 114.87  TONNES!!!!!! THE BANKERS WERE SUPPLYING COPIOUS SUPPLIES OF SHORT GOLD COMEX PAPER.

 

WITH RESPECT TO SPREADING:  WE  HAD ZERO ACTIVITY OF THE SPREADERS//  

 

 

FOR NEWCOMERS, HERE IS THE MODUS OPERANDI OF THE CORRUPT BANKERS WITH RESPECT TO THEIR SPREAD/TRADING.

 

 

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES:

 

 

“AS YOU WILL SEE, THE CROOKS WILL NOW SWITCHED TO SILVER AS THEY INCREASE THE OPEN INTEREST FOR THE SPREADERS. THE TOTAL COMEX SILVER 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 SILVER 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 : 15,085 CONTRACTS OR 1,508,500 OR 46.92 TONNES (1 TRADING DAYS AND THUS AVERAGING: 15,085 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 1 TRADING DAYS IN  TONNES: 46.92 TONNES

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

THUS EFP TRANSFERS REPRESENTS 46.92/3550 x 100% TONNES =1.32% OF GLOBAL ANNUAL PRODUCTION

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     2324.84 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

MAY 2019 TOTAL ISSUANCE:                    449.10 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: AN UNBELIEVABLE  SIZED INCREASE IN OI AT THE COMEX OF 21846 WITH THE  PRICING GAIN  THAT GOLD UNDERTOOK ON FRIDAYDAY($17.10)) //.WE ALSO HAD A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 15,085 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 15085 EFP CONTRACTS ISSUED, WE  HAD AN ATMOSPHERIC SIZED GAIN OF 36,931 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

15,085 CONTRACTS MOVE TO LONDON AND 21,846 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 114.87 TONNES). ..AND THIS GAIN OF  DEMAND OCCURRED WITH THE RISE IN PRICE OF $17.10 WITH RESPECT TO FRIDAY’S TRADING AT THE COMEX. WE  HAD ZERO PRESENCE OF SPREADING LIQUIDATION  //FRIDAY /TODAY/

 

 

 

we had:  32 notice(s) filed upon for 3200 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD UP $17.50 TODAY//SEEMS THE BOYS FOUND RELIGION

A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A HUGE “PAPER” GOLD DEPOSIT OF 2.35 TONNES

 

 

 

INVENTORY RESTS AT 743.21 TONNES

 

 

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

SLV/

WITH SILVER UP 19 CENTS TODAY:

NO CHANGES  IN SILVER INVENTORY AT THE SLV:

 

 

 

 

 

 

 

/INVENTORY RESTS AT 312.038 MILLION OZ.

 

 

end

 

OUTLINE OF TOPICS TONIGHT

 

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

1. Today, we had the open interest in SILVER FELL BY AN CONSIDERABLE SIZED 2615 CONTRACTS from 212,579 DOWN TO 210,267 AND FURTHER FROM THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..THE SPREADERS HAVE STOPPED THEIR LIQUIDATION IN SILVER AND GOLD FOR NOW  BUT WILL NOW MORPH INTO SILVER AS THE COMEX SILVER MONTH OF JUNE COMMENCES IN EARNEST..

 

 

 

 

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: 2185 CONTRACTS  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2185CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI LOSS AT THE COMEX OF 2615 CONTRACTS TO THE 2185 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A SMALL LOSS OF 500 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES: 2.500MILLION 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  18.765 MILLION OZ FOR MAY AND NOW 1.260 MILLION OZ FOR JUNE.

 

 

RESULT: A CONSIDERABLE SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 6 CENT GAIN IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A STRONG SIZED 2185 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 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

I)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 8.62 POINTS OR 0.30%  //Hang Sang CLOSED DOWN 7.23 POINTS OR 0.03%   /The Nikkei closed DOWN 190.31 POINTS OR 0.92%//Australia’s all ordinaires CLOSED DOWN 1.25%

/Chinese yuan (ONSHORE) closed UP  at 6.9072 /Oil DOWN TO 54.12 dollars per barrel for WTI and 62.58 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED UP // LAST AT 6.9072 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9250 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 STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

 

 

 

 

3A//NORTH KOREA/ SOUTH KOREA

 

 

 

 

 

 

b) REPORT ON JAPAN

3 China/Chinese affairs

i)China/Fed=ex

We highlighted to you China’s anger of the “misplacing of two pkgs destined for China’s Huawei.  Now China is investigation what happened as well as giving warning to foreign companies.

( zerohedge)

ii)And the next domino to fall:  Bank of Jinzhou with total assets of 105 billion USA

( zerohedge)

iii)Rural USA has used approximately one billion dollars worth of Huawei equipment.  If faced with a collective bill to replace the banned equipment, it would mean bankruptcy for many small operators.

(zerohedge)

iv)Sunday,

The trade war rhetoric continues as China lashes out at the USA that it is they who are solely to blame
(courtesy zerohedge)

v)MONDAY MORNING

American universities are already dealing with a slump in applications as tuition costs climb at a rate that far outpaces inflation.  NOw Mainland China warns students to raise their risk assessment before deciding to study in the uSA

( zerohedge)

4/EUROPEAN AFFAIRS

i)EUROPE/ITALY

Luongo outlines the roadmap that Salvini faces with respect to coalition partner 5 star and the ERU

( Tom Luongo)

ii)GREAT BRITAIN/EU/BRITISH STEEL
It is interesting that the initial press reports showed that British Steel was killed by Brexit plans.  But closer examination of the facts reveal it was the huge fees that had to be paid to the EU which caused its demise.
(Murray/Mises)

ii)Michel Barnier talks of lies when he talks about Great Britain and their Brexit strategy.

(Mish Shedlock/Mishtalk)

iii)GERMANY

Pompeo again threatens Germany to drop Huawei or they will be cut off from intelligence sharing
( zerohedge)

iv)UKTrump now endorses Boris Johnson and also says that Farage should lead the Brexit talks

( zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

i)Israel

 

The USA has confirmed that it has now updated its maps showing the disputed Golan Heights, the property of Israel.

( zerohedge)

i b)Israel

Then this happened yesterday as Jewish settlers entered East  Jerusalem’s Al Aqsa Mosque Compound on Jerusalem day which celebrates the anniversary of the 1967 war when the Western section and the Wall was captured by the Israelis from Jordan control
( zerohedge)

ii)IRAN/SAUDI ARABIA/ISRAEL

The Saudi King now urges the global coalition to use all means to stop Iran at its upcoming emergency summit to be held this Thursday. However as we witnessed over the past few weeks, Iran’s economy is already imploding from within.  Their exports of Iranian oil is now down to 400,000 barrels. By March 2018 it black market rate currency fell to 122,000 riyals to the dollar.  In Sept 2018 it fell to 138,000 riyals and it is a touch higher now.
(zerohedge)

iii)Russia/Malaysia/Holland

We have been covering this story for several years and it was obvious to us that it was the Ukrainians that shot down the MH17 plane.  Now the Malaysian PM stated that there was no evidence that Russia shot down the plane and it seems that he is pointing the finger at the Ukrainians.
(zerohedge

iv)ISRAEL/SYRIA

A major Israeli airstrike kills up to 10 Pro Assad forces including some Iranian personnel.  This was in retaliation for a rocket fired on to Israeli soil from Syria
(courtesy zerohedge)

6. GLOBAL ISSUES

i)Michael Every highlights the last 4 or 5 day events which has caused markets around the world to tumble\
Enjoy
(//Michael Every/Rabobank)
ii)Goldman Sachs finally capitulates and now sees a full blown extended trade war with both China and Mexico
( zerohedge)

7. OIL ISSUES

 

 

 

8 EMERGING MARKET ISSUES

 

i)VENEZUELA/

 

This is a major blow to Maduro as a major Russian defense contractor exits Venezuela and it appears that this contractor has withdrawn most of its advisers.  This is a broad signal of a major Russia exit form a defense supporting the Maduro government.

(zerohedge)

ii)INDIA/USA

Now it is India’s turn to face the wrath of Trump.  Trump now signals that he wants to end India’s designation as a developing nation as he continues with his protectionist policies..

(courtesy zerohedge)

iib)First India and now Trump is considering Australia.  Soon Trump will hit the entire globe with tariffs

(courtesy Mish Shedlock/Mishtalk)

 

9. PHYSICAL MARKETS

a)A GOOD COMMENTARY BY TED BUTLER.  He explains how JPMorgan while being the largest short in silver acquired a massive 850 million oz of silver.

(courtesy Ted Butler/GATA)

b)A good commentary from the South China Morning Post in Hong Kong.  Here the paper wonders if China has enough USA dollars on its balance sheet to survive a trade war

 

( SCMP/GATA)

c)The Malaysian prime Minister wants a gold backed currency:  will the uSA try and overthrow him?

( RT/GATA)

d)In Britain, you can invest in gold and pay no capital gains tax if you sell

(London Telegraph/Williams)

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

 

 

MARKET TRADING//

Market trading/last night/Shanghai initial trading 8 pm est

Key data points : 8 pm

usa dollar vs cny: 6.9080

usa dollar vs cnh: 6.9380

usa 10 yr bond yield: 2.12… deadly//

Trump continues with protectionist policies.

ii)Market data

Another indicator that the USA economy turned south:  USA Manufacturing crashes as well as the “hope” part of the index\\ zerohedge)

iii)USA ECONOMIC/GENERAL STORIES

a)Trump declares war on the Silicon Valley:  the dept of Justice is launching an atin monopoly probe on Google due to its huge number of purchases of over 200 start ups.

It looks like the remedy will be a blockage of purchases for Google as opposed to the EU which fined the company in the billions

( zerohedge)

b)Monday morning/Google to open down 3%

(zerohedge)

b ii)And now the Federal trade Commission opens up a competition probe against Facebook

(courtesy zerohedge)

b iii)AND NOW APPLE ON REPORTS OF A DEPT OF JUSTICE ANTI TRUST PROBE(COURTESY ZEROHEDGE)

c)As if Boeing does not have enough problems:  Now the FAA is ordering Boeing to replace wing components on hundred of Boeing 737’s(zerohedge)

d)Citizens are fleeing Chicago has the city and the state itself is in deep financial trouble.  As you can see below housing prices have fallen during the past 10 years as opposed to other cities in the uSA
( zerohedge)

e)Why is Trump angry with Huawei?  It is not that Huawei is spying on the USA but Huawei will not let the USA spy on the rest of the world with Huawei technology.  Also the reason for the Mexican tariffs is to stop Chinese goods coming into Mexico and then re importing to the USA(courtesy Tom Luongo)

f)Trumps calls for a A T and T boycott to force big changes at CNN

( zerohedge)

SWAMP STORIES

i)Steve Cohen of NY University is one of the best authorities on Russia.  He considers that Russiagate is the no 1 threat to USA national security and he explains why

( Steve Cohen/N.Y.University)

ii)Two important points here:

1. Mueller purposively omitted  a section of the conversation between two lawyers which is without a doubt exculpatory 2.  In the Michael Flynn case with Judge Sullivan the DOJ refuses to hand over the transcripts of the conversation with the Russian Kislyak. Does this mean that the DOJ did not originally hand over this most important document to the defense initially?  And why does the DOJ continue to defy the judge now?

quite a story…

the report:

iii)The GOP now are targeting both Brennan and Comey as the investigation heats up

( zerohedge)

E)SWAMP STORIES/MAJOR STORIES//THE KING REPORT
end
LET US BEGIN:

 

Let us head over to the comex:

 

THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY AN UNBELIEVABLE  SIZED 21,846 CONTRACTS TO A LEVEL OF 464,721 WITH THE RISE OF $17.10 IN GOLD PRICING WITH RESPECT TO FRIDAY // COMEX TRADING)

WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF JUNE..  THE CME REPORTS THAT THE BANKERS ISSUED A VERY STRONG SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 15,085 EFP CONTRACTS WERE ISSUED:

0 FOR JUNE ’19: 0 CONTRACTS , AUG; 15,085 CONTRACTS: 0 AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  15,085 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 OUR 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: 36,931 TOTALCONTRACTS IN THAT 15,085 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A HUMONGOUS  SIZED 21,490 COMEX CONTRACTS. NONE OF THE GAIN IN OI WAS DUE TO THE LIQUIDATION OF THE SPREADERS. THE BANKERS SUPPLIED THE NECESSARY SHORT PAPER IN GOLD TO CONTAIN THE PRICE RISE.

 

NET GAIN ON THE TWO EXCHANGES ::  36,931 CONTRACTS OR 3,693,100 OZ OR 114.87 TONNES.

 

We are now in the  active contract month of JUNE and here the open interest stands at 2013 CONTRACTS as we lost 1369 contracts.  We had only 58 notices filed on Friday so we lost 1311 contracts or 131100 oz of gold that will not stand for delivery as there appears to be no gold at the comex and thus they morphed into London based forwards (hoping to find the fast vanishing supplies of physical gold over there) as well as accepting a fiat bonus for their effort.  The next contract month is the non active month of July and here the OI rose by 64 contracts up to 1559 contracts.  The next big active month for deliverable gold is August and here the OI rose by 21,280 contracts up to 348,673.

 

 

 

 

 

TODAY’S NOTICES FILED:

WE HAD 32 NOTICES FILED TODAY AT THE COMEX FOR  3200 OZ. (0.1804 TONNES)

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now for the wild silver comex results.

Total COMEX silver OI FELL BY A CONSIDERABLE SIZED 2615 CONTRACTS FROM 211,579 DOWN TO 209,964 (AND FURTHER FROM 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 CONSIDERABLE  OI COMEX LOSS OCCURRED DESPITE THE 6 CENT RISE IN PRICING.//YESTERDAY.

 

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JUNE.  HERE WE HAVE 50 OPEN INTEREST STAND FOR DELIVERY WITH A LOSS OF 202CONTRACTS.  WE HAD 216 NOTICES FILED ON FRIDAY SO WE GAINED 14 CONTRACTS OR AN ADDITIONAL 70,000 OZ OF SILVER WILL STAND AT THE COMEX.  NOTICE THE DIFFERENCE BETWEEN GOLD AND SILVER.  WE STILL HAVE SOME PHYSICAL SILVER IN THE PITS AT THE COMEX AND THUS THE COMMERCIALS WILL GO AFTER THAT SUPPLY TO PUT OUT FIRES ELSEWHERE.  (WITH GOLD, THERE IS NO SUPPLY LEFT. OUR BANKER FRIENDS ARE IN DEEP TROUBLE WITH RESPECT TO GOLD.)

THE NEXT MONTH AFTER JUNE IS THE ACTIVE MONTH OF JULY.  HERE THE OI FELL BY 3047 CONTRACTS DOWN TO 150,548.  WE GOT OUR INITIAL 5 CONTRACTS OF OI FOR AUGUST TO STAND AT 5. THE NEXT BIG ACTIVE DELIVERY MONTH AFTER AUGUST IS SEPT AND HERE THE OI ROSE BY 321 CONTRACTS UP TO 25,484 CONTRACTS.

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 45 notice(s) filed for 225,000 OZ for the JUNE, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY: 329,615  CONTRACTS 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  445,482  contracts (some spreading liquidation)

 

 

 

 

 

INITIAL standings for  JUNE/GOLD

June 3/2019

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
999.99
oz
Delaware
Deposits to the Dealer Inventory in oz nil

oz

 

 

 

 

 

 

 

 

 

 

Deposits to the Customer Inventory, in oz  

 

 

 

nil oz

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

No of oz served (contracts) today
32 notice(s)
 3200 OZ
(0.099 TONNES)
No of oz to be served (notices)
1981 contracts
(198100 oz)
6.1617 TONNES
Total monthly oz gold served (contracts) so far this month
90 notices
9000 OZ
0.2799 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

STRANGE:!! This is 2nd day notice and still no gold enters the gold comex

 

we had 0 dealer entry:

 

 

 

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: nil  oz

 

 very little gold arrives from outside/ nothing arrived   today

we had 1 gold withdrawal from the customer account:

 

 

Gold withdrawals;

i)  We had 1 withdrawal:

 

out of Delaware: 999.99 oz

 

.

total gold withdrawals; 999.99   oz

 

 

i) we had 0 adjustments today

FOR THE JUNE 2019 CONTRACT MONTH)

Today, 0 notice(s) were issued from JPMorgan dealer account and 15 notices were issued from their client or customer account. The total of all issuance by all participants equates to 32 contract(s) of which 2 notices were stopped (received) by j.P. Morgan dealer and 6 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 JUNE /2019. contract month, we take the total number of notices filed so far for the month (90) x 100 oz , to which we add the difference between the open interest for the front month of  JUNE. (2013 contract) minus the number of notices served upon today (32 x 100 oz per contract) equals 207,100 OZ OR 6.442 TONNES) the number of ounces standing in this NON active month of MAY

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

No of notices served (90 x 100 oz)  + (2011)OI for the front month minus the number of notices served upon today (32 x 100 oz )which equals 207,100 oz standing OR 6.442 TONNES in this  active delivery month of JUNE.

 

 

 

 

SURPRISINGLY LITTLE TO NO  GOLD HAS BEEN ENTERING THE COMEX VAULTS AND WE HAVE WITNESSED THIS FOR THE PAST YEAR!!  WE HAVE ONLY 6.233 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 6.442 TONNES OF GOLD STANDING// THEY SEEM TO BE USING CONSIDERABLE GOLD VAPOUR TO SETTLE UPON UNSUSPECTING LONGS.

 

 

 

 

total registered or dealer gold:  200,412.535 oz or  6.233 tonnes
total registered and eligible (customer) gold;   7,677,316.825 oz 238.79 tonnes

 

 

 

OF OPEN INTERESTS FOR THE UPCOMING JUNE 2019 CONTRACT VS JUNE 2018

 

 

 

 

 

FOR THE INITIAL JUNE 2018 CONTRACT WE HAD A HUGE 32.152 TONNES STAND. (VS 6.442 TONNES TODAY/JUNE 2019)

HOWEVER BY MONTH’S END ONLY 21.56 TONNES EVENTUALLY STOOD AS THE REST MORPHED INTO LONDON BASED FORWARDS.  AS YOU CAN SEE, THE CROOKS ARE FOLLOWING THE SAME FORMAT OF MORPHING VS LAST YEAR AS ONLY GOLD VAPOUR SEEMS TO BE PHYSICALLY PRESENT AT THE COMEX AND LONGS MUST TRY THEIR LUCK IN LONDON.

IN THE LAST 32 MONTHS 117 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 June

INITIAL  standings/SILVER

IN TOTAL CONTRAST TO GOLD, HUGE ACTIVITY IN SILVER TODAY.
june 3 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 1,493.186.511 oz
CNT
Brinks
BNS

 

 

 

 

 

 

 

Deposits to the Dealer Inventory
NIL oz
Deposits to the Customer Inventory
600,393.720 oz
HSBC
No of oz served today (contracts)
45
CONTRACT(S)
(225,000 OZ)
No of oz to be served (notices)
5 contracts
25,000 oz)
Total monthly oz silver served (contracts) 261 contracts

1,305,000 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 milli

into HSBC:   600,393.720 oz

 

 

 

 

 

 

 

 

 

 

 

total customer deposits today:  600,393.720  oz

 

we had 4 withdrawals out of the customer account:

 

i) out of Scotia  600,473.770 oz

ii) Out of Brinks; 267,903.020 oz

 

iii)  out of CNT 624,809.721 oz

 

 

 

 

 

total 1,493,186.511 oz

 

we had 0 adjustment :

 

 

 

total dealer silver:  87.865 million

total dealer + customer silver:  304.941 million oz

 

 

The total number of notices filed today for the JUNE 2019. contract month is represented by 45 contract(s) FOR  225,000  oz

To calculate the number of silver ounces that will stand for delivery in JUNE, we take the total number of notices filed for the month so far at 261 x 5,000 oz = 1,305,000 oz to which we add the difference between the open interest for the front month of JUNE. (50) and the number of notices served upon today (45 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JUNE/2019 contract month: 261(notices served so far)x 5000 oz + OI for front month of MAY( 59) -number of notices served upon today (45)x 5000 oz equals 1,330,000 oz of silver standing for the JN contract month.

WE GAINED 14 CONTRACTS OR AN ADDITIONAL 70,000 OZ WILL STAND AS THESE GUYS REFUSE TO MORPH INTO LONDON BASED FORWARDS AND THEY ALSO NEGATED A FIAT BONUS. THERE ARE PHYSICAL SUPPLIES OF SILVER AT THE COMEX AND THUS WE WITNESS  QUEUE JUMPING IN FULL FORCE. IN GOLD THERE IS NO PHYSICAL OUNCES PRESENT.

 

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

TODAY’S ESTIMATED SILVER VOLUME:  112,847 CONTRACTS

 

 

 

 

 

 

CONFIRMED VOLUME FOR YESTERDAY: 98,730 CONTRACTS..

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 98,730 CONTRACTS EQUATES to 493 million  OZ 70.5% 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

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

 

NPV for Sprott 

1. Sprott silver fund (PSLV): NAV RISES TO -3.92% June 3/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -1.78% to NAV (june 3/2019 )
Note: Sprott silver trust back into NEGATIVE territory at -3.92%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.10 TRADING 12.68/DISCOUNT 3.17

END

And now the Gold inventory at the GLD/

JUNE 3/WITH GOLD UP $17.50 TODAY: ANOTHER BIG CHANGE, A DEPOSIT OF 2.35 TONNES OF GOLD INTO THE GLD//

MAY 31/WITH GOLD UP $17.10 TODAY: NO CHANGES  IN GOLD INVENTORY AT THE GLD/GLD INVENTORY RESTS AT 740.86 TONNES

MAY 30: WITH GOLD UP $6.40 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.52 TONNES/INVENTORY RESTS AT 740.86 TONNES

MAY 29/WITH GOLD UP $3.90 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 737.34 TONNES

MAY 28/WITH GOLD DOWN $6.50 TODAY: A BIG  CHANGE IN GOLD INVENTORY AT THE GLD> A WITHDRAWAL OF 1.47 TONNES/INVENTORY RESTS AT 737.34 TONNES

MAY 24/WITH GOLD DOWN $1.60 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 738.81 TONNES

MAY 23/WITH GOLD UP $11.10 TODAY: A STRANGE WITHDRAWAL OF .88 TONNES FORM THE GLD/INVENTORY RESTS AT 738,81 TONNES

MAY 22//WITH GOLD FLAT TODAY: WE HAD A GOOD 1.52 TONNES OF GOLD DEPOSIT INTO THE GLD/INVENTORY RESTS TONIGHT AT 739.69 TONNES

 

MAY 21/WITH GOLD DOWN $3.65 TODAY: A SURPRISE 2.00 TONNES WERE ADDED  TO THE GLD GOLD INVENTORY//INVENTORY RESTS AT 738.17 TONNES

MAY 20/WITH GOLD UP $1.00 A HUGE 2.96 TONNE DEPOSIT INTO THE GLD//INVENTORY RESTS AT 736.17 TONNES

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

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

JUNE 3/2019/ Inventory rests tonight at 743.21 tonnes

*IN LAST 603 TRADING DAYS: 190.76 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 503 TRADING DAYS: A NET 24.92 TONNES HAVE NOW BEEN LOST INTO THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JUNE 3/WITH SILVER UP 19 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 312.038 MILLION OZ//

MAY 31/WITH SILVER UP 6 CENTS TODAY: A DEPOSIT OF 422,000 OZ INTO THE SLV INVENTORY//INVENTORY RESTS AT 312.038 MILLION OZ/

May 30/WITH SILVER UP 19 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ///

MAY 29/WITH SILVER UP 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 28/WITH SILVER DOWN 23 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 24/WITH SILVER DOWN 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ/

MAY 23/WITH SILVER UP 16 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 22/WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS TONIGHT AT 311.616 MILLION OZ

MAY 21: WITH SILVER DOWN 3 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV; A WITHDRAWAL OF 750,000 OZ///INVENTORY RESTS AT 311.616 MILLION OZ//

MAY 20/WITH SILVER UP 6 CENTS:NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 312.366 MILLION OZ

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/

 

JUNE 3/2019:

 

Inventory 312.038 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 2.08/ and libor 6 month duration 2.52

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

G0LD LENDING RATE: + .44

 

XXXXXXXX

12 Month MM GOFO
+ 2.27%

LIBOR FOR 12 MONTH DURATION: 2.51

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.24

end

 

PHYSICAL GOLD/SILVER STORIES

 

end
i) GOLDCORE BLOG/Mark O’Byrne

Gol

 

 

GATA STORIES WITH RESPECT TO GOLD/PRECIOUS METALS.

A GOOD COMMENTARY BY TED BUTLER.  He explains how JPMorgan while being the largest short in silver acquired a massive 850 million oz of silver.

(courtesy Ted Butler/GATA)

Ted Butler: The CFTC’s summer camp letter

 Section: 

11:30a Friday, May 31, 2019

Dear Friend of GATA and Gold:

Silver market analyst and market rigging critic Ted Butler today makes good fun of the U.S. Commodity Futures Commission’s refusal to answer questions about seemingly improper activity in the monetary metals futures markets. Butler’s commentary is headlined “The CFTC’s Summer Camp Letter” and it’s posted at GoldSeek’s companion site, SilverSeek, here:

http://silverseek.com/commentary/cftc%E2%80%99s-summer-camp-letter-17657

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

* * *

end

The CFTC’s Summer Camp Letter

Theodore Butler

|

May 31, 2019 – 8:25am

 

About 30 years ago, my wife arranged for our then ten-year old son to attend a sleep-away YMCA summer camp in Tallulah Falls, in the Georgia Mountains. While Ross wound up going back to the same camp for several years, eventually serving as a counselor, I knew the first year would involve more than a little concern for his mother (and me) for how he was doing. Since the only communication would be by postal mail (no cellphones or texting back then) and I knew my son was not likely to write without some prodding, I sent him off with a number of pre-printed letters, in which all he had to do was fill in the blanks.

I can’t say my mail assistance appeared constructive upon receiving Ross’ first letter, as he indicated that he made no new friends, the weather was rotten, as was the food and his camp counselor wasn’t nice – all in addition to him having no fun. Fortunately, subsequent letters were progressively better and, as I indicated, the camp turned out to be a great experience for years to come. I also recollect how he told us later about a kid who cried every night going to sleep because he missed his parents. Asked on the last night why he was crying since he was going home the next day, the kid responded because he was going to miss the camp.

Given the CFTC’s abject failure to respond to simple questions about how commodity prices are being set through speculative futures positioning, I thought it might be instructive to attempt to make it as simple as possible for it to answer – in a fill in the blank and multiple choice format. The attempt is not to put words in the agency’s mouth, but just help it address the important issues at stake. Feel free to send along any you might wish to add.

  1. The main purpose of futures trading is to allow (real producers and users to hedge price risk or large paper speculators to make bets). An alternative default answer to all questions is we don’t know or haven’t looked or JPMorgan told us not to look.

If the answer to #1 is to allow real producers and users and to hedge price risk, then why are there no real producers and users present in COMEX silver futures and managed money speculators are the largest single category?

If the answer to #1 is we don’t know or haven’t thought about that, then go back to sleep and forget the rest of the quiz. If the answer to #2 is because JPMorgan told us not to look, then proceed.

  1. 2. Data published by your agency indicates that JPMorgan has been the biggest short seller in COMEX silver futures since acquiring Bear Stearns in 2008 and, further, that it has never taken a loss, only profits in COMEX silver futures. Is this true?

If the answer to #2 is we don’t know/haven’t looked, then take an Ambien and try to get back to sleep. If the answer is because JPMorgan told us not to look, then proceed.

  1. Since 2011, JPMorgan has amassed, all while remaining the biggest short seller in COMEX silver futures, the largest hoard of physical silver in history, some 850 million oz. Does the CFTC find it all odd or even potentially illegal for the same entity to be both the largest paper short seller and physical acquirer of the same commodity?

If the answer to #3 is we don’t know/haven’t looked, then take two more Ambien and count backward from 10,000 until unconsciousness sets in. If the answer is because JPMorgan told us it wasn’t necessary to ask or look, then schedule another junket to Boca Raton and update your employment application to JPM.

  1. Final question – what does the agency do all day? (Try to look relevant, give speeches, make sure we’re not deviating from what JPMorgan wishes, try to get some sleep).

I hope no one takes me to mean that any of this is humorous, because nothing could be more serious than if prices of important commodities are being set artificially. And it’s not just silver, but many other important commodities, like crude oil, corn, soybeans and cotton, to name just a few. All these commodities and more share a manipulative common denominator, namely, the participation and market share of the managed money technical funds have grown so large that only those not looking (or willfully blind) can fail to see it. A few examples.

About a month ago, the most important US crop, corn, was trading close to multi-year lows ($3.50 per bushel). At that time, the managed money technical funds held their largest net and gross short position in history (the CFTC began publishing managed money positions in late 2009).  The gross short position of the 105 traders on the short side of Chicago Board of Trade (owned by the CME Group) on April 23 was 530,000 contracts or 2.65 billion bushels of corn, an average of more than 5000 contracts per trader (25 million bushels).

As of last Tuesday, May 21, corn had rallied to nearly $4 per bushel (more since then) as the managed money traders bought back 190,000 contracts of gross shorts (and even more on a net basis). Yes, I’m aware of corn prices declining as a supposed consequence of the trade war and rising because of very late historical planting progress (due to the flooding in farm country). But can anyone seriously doubt the price influence of record managed money shorting at the price lows and the 250,000 net contracts of buying by managed money traders on the rally? I mean, anyone apart from the CFTC and CME Group? And yes, corn prices penetrated the key moving averages on the way down and way up.

In soybeans (another CBT/CME market), prices fell to 10-year lows, penetrating $8 per bushel earlier this month. As of May 7, the managed money traders held a record net and gross short position in soybeans, with a gross short position of more than 223,000 contracts (1.1 billion bushels) held by 100 traders. Prices have rallied sharply since then but, unlike corn, it’s too soon to see how much managed money short covering has and will take place. Yes, I know that soybeans have been at the center of the trade war dispute with China, but can anyone fail to see the connection between record price lows and record high managed money short positions? (Excepting the CFTC and CME).

Finally, cotton is also a very important US crop and has also traded close to multi-year price lows, falling close to 15 cents per pound to 65 cents in early May in a matter of weeks. The managed money technical funds were, of course, the big sellers and short sellers on that price smash and as of last Tuesday, May 13, held their largest net and gross short position in history. Can anyone fail to see the connection between record large managed money short positions and record to near-record low prices? It’s not just silver investors and miners taking it on the chin, thanks to the still sleeping, good for nothing regulators at the CFTC, the American farmer is getting hammered as well.

And just so no one thinks I’m just barking at the moon about something that can’t possibly be fixed, let me assure you that the solution to the managed money traders building up such massive short and long positions that it distorts prices is quite simple. The solution is legitimate speculative position limits. Let’s face it, everyone (including the CFTC) agrees that the managed money traders are speculators, pure and simple. Therefore, the solution is legitimate speculative positions on the managed money technical funds.

Since the technical funds operate as one, buying and selling when prices penetrate moving averages, those traders abiding by this particular strategy, must be consolidated and assigned position limits that reflect the aggregate position of the technical funds. The problem is not that many individual managed money technical funds build up long and short positions that are far in excess of what would be considered excessive on an individual basis. The problem is that collectively they build up such large collective positions that do distort prices – as outlined above.

Assigning individual position limits doesn’t do much good if there are many traders following the exact same strategy – as is evident from the record collective positions. The solution is to assign speculative position limits that apply to the technical funds collectively. Sure, the CME Group will scream because this might cut into its trading revenue, but what’s more important – profits for the CME or the financial well-being of real producers, like the American farmer? It’s mindboggling to me that I believe I am the only one pointing this out. And not for a minute am I forgetting that the massive and excessive managed money positions are put on and taken off with a large measure of influence from their commercial counterparties. That’s little solace to a real producer whose cost of production exceeds a corn or cotton price driven down by record managed money shorting.

Of course, as egregious and manipulative as the collective managed money positions have become in just about every commodity, none compare to COMEX silver futures. As of last Tuesday, May 21, the gross short position of the managed money traders in COMEX silver futures was 81,988 contracts,  just shy of 410 million oz, and held by 47 traders or more than 8.7 million oz per trader. I would not at all be surprised if this short position is even larger when the new COT report is published on Friday, but I doubt it will exceed the record managed money gross short position of 104,482 contracts of last Sept 4, held by 62 traders. It is interesting that last week’s managed money short position was larger per trader than back on Sept 4.

410 million oz is roughly half of total world annual silver mine production. No other commodity, not crude oil, corn, soybeans or cotton come close to rivalling the amount of managed money buying or selling in real world terms as exists in silver. For instance, the recent record gross short position in corn is less than 10% of world corn production and extreme managed money long or short positions in crude oil rarely exceed a percent or two of annual world oil production. Purely speculative traders shouldn’t be allowed to hold such large positions which clearly affect prices, but COMEX silver futures positioning is in a league of its own.

What makes the situation even more egregious is that of the 47 managed money traders holding 410 million oz of silver short, half the world’s annual mine production, not a single ounce represents a legitimate hedge of any kind, just a rank speculation. For the umpteenth time, I am not opposed to speculation (I’m a speculator myself); I’m opposed to speculators dictating prices to the world’s real producers and consumers. I’m not trying to trick anyone when I ask this simple question – would the price of silver be higher or lower if there didn’t exist 47 speculators holding 410 million oz short? I’m not asking you to pick a specific price, just whether the price would be higher or lower. Only a wise guy (or a drug-induced sleeping regulator) would fail to conclude higher prices. That, my friends, is conclusive proof of manipulation.

To complete the story, the prime counterparties to the managed money traders in COMEX silver (and gold) have been commercial banks, led by JPMorgan. But based upon Bank Participation report data, these commercial banks, particularly U.S. banks, are not especially prominent players in crude oil, corn, soybeans, cotton and most other commodities – just precious metals. Therefore, while I publicly assail JPMorgan as being the big silver and gold manipulator and crook, I see scant evidence of JPM’s involvement in other commodities. No doubt that the managed money traders are being led by the price nose into and out from the extreme positions they hold by traders called commercials – just that the commercials in this case are not primarily banks and JPMorgan. Fair is fair.

On the other hand, I doubt JPMorgan could have affected its brilliant stroke of (criminal) genius in other commodities that it has pulled off in silver and gold. Of course, I’m referring to JPM’s almost unbelievable physical accumulation of 850 million oz of silver and more than 20 million oz of gold. It would be impossible to amass anywhere near equivalent physical quantities of any other commodities. For starters, there would be no place to store such quantities – not a problem for silver or gold. And make no mistake, JPM’s physical silver and gold holdings will make all the difference in the world at some point, particularly considering that JPMorgan has now completely eliminated its COMEX silver short position.

Ted Butler

May 31, 2019

www.butlerresearch.com

END

The Malaysian prime Minister wants a gold backed currency:  will the uSA try and overthrow him?

(courtesy RT/GATA)

Will the U.S. now try to overthrow Malaysia’s prime minister too?

 Section: 

‘Gold Is More Stable’: Malaysia Needles U.S. with Proposal for Pan-Asian Bullion-Backed Currency

From Russia Today, Moscow
Friday, May 31, 2019

Malaysian Prime Minister Mahathir Mohamad has floated the idea of creating a gold-backed common trading currency for all of East Asia, slamming regional currency exchange as “manipulative” and criticizing the United States’ heavy-handed foreign policy. …

Libyan leader Muammar Gaddafi proposed a pan-African gold dinar that would be used to sell the country’s oil on the world market in 2009, less than two years before his government fell to a NATO-backed regime change operation that has left the once-prosperous nation a conflict-ridden war zone.

… 

One of the “moderate” rebels’ first actions upon brutally murdering Gaddafi was to create a central bank to replace the state-owned monetary authority that had previously managed Libya’s wealth.

The United States has historically not taken kindly to countries that attempted to trade oil in non-dollar currencies, as Iraq’s Saddam Hussein can attest — or could, if he hadn’t been regime-changed as well.

Syria too dropped its peg to the dollar in 2007, not long before the West went from awarding Bashar al-Assad the French medal of honor to declaring him a bloodthirsty monster.

… For the remainder of the report:

https://www.rt.com/business/460698-malaysia-proposes-gold-forex-currency…

* * *

Help keep GATA going:

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

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

END

For your interest…

Dawson City tourism group plans to scatter gold to trigger second gold rush

 Section: 

By Sidney Cohen
Canada Broadcasting Corp., Toronto
Saturday, June 1, 2019

A Dawson City tourism group wants to reboot the most storied period in Yukon’s history.

The Klondike Visitors Association is pitching Gold Rush 2: a tourism campaign that would offer a gold-rush-esque experience to visitors of the town famous for wealth and debauchery at the turn of the century.

… 

The association hopes to crowd-fund $100,000, which it will use to buy “real Klondike gold.” That gold will then be scattered along the banks of Bonanza Creek to simulate a modern-day bonanza.

You read that correctly.

The tourism group wants people to pay for gold that will be tossed into the river.

Its goal is to lure visitors up to Dawson to pan for gold themselves. …

… For the remainder of the report:

https://www.cbc.ca/news/canada/north/dawson-gold-rush-revival-1.5157613

END

A good commentary from the South China Morning Post in Hong Kong.  Here the paper wonders if China has enough USA dollars on its balance sheet to survive a trade war

 

(courtesy SCMP/GATA)

Does China have enough U.S. dollars to survive the trade war?

 Section: 

By Karen Yeung
South China Morning Post, Hong Kong
Friday, May 30, 2019

The Chinese government is officially sitting on the world’s largest stockpile of foreign exchange reserves, but it has been scrambling recently to block backchannels for capital outflows as trade tensions with the United States increase.

Beijing’s increasing scrutiny of the use of the U.S. dollar by Chinese companies and individuals, in the absence of any immediate signs of a financial crisis, along with accelerating efforts to lure in foreign capital, have raised suspicions among analysts that the world’s second-largest economy is worried about the risk of running short of the U.S.

… 

On the surface, China should be the last country to worry about a shortage — about two-thirds of its U.S.$3.1 trillion worth of foreign exchange reserves, the world’s largest, are believed to be held in U.S. dollar-denominated assets.

But the huge foreign reserves and a relatively stable currency do not reflect the true stresses underlying the economy, analysts said, because the concerns are that those reserves may not be enough to provide the safety buffer needed to pay for China’s imports and pay off its debt in adverse circumstances if the yuan faced a devaluation or a sharp drop in value. …

… For the remainder of the report:

https://www.scmp.com/economy/china-economy/article/3012460/does-china-ha…

END

In Britain, you can invest in gold and pay no capital gains tax if you sell

(London Telegraph/Williams)

How to invest in gold and pay no capital gains tax in the UK

 Section: 

By Adam Williams
The Telegraph, London
Sunday, June 2, 2019

In turbulent times, investors traditionally turn to gold. Its appeal is a lack of correlation between its price and those of other assets. But gold is often held for decades, often leading to a hefty tax bill when the owner comes to sell.

Yet a loophole exists that allows gold investors to dodge capital gains tax altogether. The tax is not applied to any British legal currency, which means that gold sovereigns, gold Britannia coins and silver Britannia coins are exempt, regardless of how much they increase in value.

… 

Those who invest in gold bars, by contrast, are liable to pay tax on their profit, potentially costing them thousands of pounds. While the initial purchase price of sovereigns is slightly higher, the tax break means long-term savings can be considerable.

Rob Halliday-Stein of BullionByPost, a gold dealer, said: “For wealthy individuals looking to realise large profits from their investment, sovereigns represent the best value.”

The price of gold bars and sovereigns is broadly the same, at between L1,050 and L1,070 an ounce, although it fluctuates over time. Older gold coins are typically sold at a premium as they have historical value in addition to the cost of the precious metal itself.

This premium can grow significantly over time if a coin becomes scarce.

Mr. Halliday-Stein added: “Gold bullion coins have commanded large premiums in the past, depending on market factors at the time. In the 1960s there was a premium of up to 40 percent on gold sovereigns.”

The Royal Mint is currently selling a rare 200-year-old George III gold sovereign for L100,000. It was minted in 1819 and there are thought to be just 10 left in the world. …

… For the remainder of the report:

https://www.telegraph.co.uk/money/consumer-affairs/invest-gold-pay-no-ca…

* * *

end



iii) Other Physical stories
A must read email from Nicholas B to me on the fraudulent LBMA
(courtesy \Nicholas B)

Good Morning Bill/Harvey,

Today is the first working day of June so (big drum roll) the ‘transparent’ LBMA has now released the particulars of total loco London vault gold holdings as at 28th February 2019.A minute ago the Deutsche Bank share price was quoted at Euro 5.89 (a new recent low).A banking analyst would examine the most recently promulgated data re assets/liabilities/contingent liabilities/value of derivative contracts etc. in order to make an informed determination as to whether this 5.89 is a fair price or whether NIL would be more appropriate value for a Deutsche Bank share.

When it comes to the LBMA, we are expected to be appreciative of this new ‘transparency’, but it is more in the realms of complete disinformation because there is absolutely no disclosure concerning all the claims on this loco London vault gold. What is the use of any information on Deutsche Bank’s assets, if it has to be reviewed in a total vacuum of information relating to liabilities? I recently read that, at a price of $18,000 , more detailed monthly information can be obtained in respect of LBMA monthly trading volumes. What an absolute farce! All disclosed LBMA particulars of physical vault gold are metronomically  stable, so the gross value of LBMA trading nets out to a zero sum game of mere farcical  churning of paper contracts. Maybe a dribbling of physical gold supply does enter/leave the LBMA in a particular month, but is this single piece of data worth $18,000? If one assumes that all LBMA trading is merely the churning of paper contracts in a zero sum game, how incorrect can such a base case assumption be given that month end vault gold holdings never fluctuate more than microscopic  amounts.

As at 28th February 2019, the total loco London physical vault gold holdings  were 7,629 tonnes of which 5,052 tonnes were allocated to the BOE and GLD claimed holdings of 788 tonnes as at that date. Therefore only 1,789 tonnes of physical vault gold were available to satisfy the liability for all allocated claims, and indeed all unallocated claims (for those who cling to the delusion that unallocated gold claims will  be settled by physical gold delivery).Since Harvey Organ began, on 1st January 2018,his daily chronicling of  Exchange for Physical (EFP) transfers from the COMEX to the LBMA , the total of such transfers now totals 9,588 tonnes for the 17 months to 31st May 2019.It is an absolute disgrace beyond comprehension that after 17 months of such daily EFP transfers dominating the COMEX trading scene, no informed commentator has been able to extract from the CME,LBMA  or the CFTC regulators any meaningful explanation as to  the precise nature of these EFP transfers. If the assumption is made that these EFP transfers are merely (fraudulent) adjustments to prevent the COMEX open interest  from exploding into the stratosphere and that no physical gold delivery will be involved, and the assumption is also made that unallocated gold contracts will only be liquidated via ‘fiat’ settlement, then ,based on the LBMA’s own data, 1,789 tonnes of physical vault gold are available to meet all allocated gold claims. What is the total true volume of these allocated gold claims? No one really knows but assume this fraudulent fractional reserving is at least 100/1 (some commentators postulate a ratio of up to 500/1).In such a context, the absolutely maniacal suppression of the headline paper price of gold makes perfect sense based on the Rubin doctrine of ‘kicking the can down the road’, no matter what the cost.
Regards

Nicholas

-END-

Our resident expert on silver exports/production Steve St Angelo provides a great commentary on the huge importation of silver by India

(courtesy Steve St Angelo)

U.S. Silver Exports To India Explode Past Six Months

While silver investment demand in the West continues to remain weak, Indians are purchasing the white shiny metal hand over fist.  In just the past six months, U.S. silver exports to India have exploded to record highs.  Yes, there is no better way of putting it if we compare how little silver India imported from the United States during the previous six month period.

Furthermore, according to the Metals Focus Consultancy, they forecast even stronger Indian silver demand in 2019 due to rural Indians spending their “Cash Handouts” from the government to assist local economies ahead of the President’s election.  How interesting.  When Americans receive a government check in the mail, they use it to buy more throw-away crap they don’t need.  However, many Indians use it to purchase silver as an investment.

Regardless, the chart below shows just how much silver the U.S. has exported to India over the past six months;

From March to August 2018, U.S. silver shipments totaled a paltry two metric tons.  Now, compare that to the 517 metric tons from September to February 2019. Even if we include U.S. silver exports to India for Jan-Feb 2018, it only amounted to 1.2 metric tons.  So, as we can see from the data above, there is extremely high demand for silver in India.

Now, if we look at the total annual U.S. silver exports for the past several years, the change in Indian demand is even more striking:

Total U.S. silver exports were 289 metric tons (mt) in 2016 and fell to 157 mt in 2017.  Then due to the enormous increase in Indian silver demand, total U.S. silver exports surged to 604 mt in 2018.  However, if we remove the “Indian component” in 2018, total U.S. silver exports would have only been 205 mt in 2018.

Moreover, the 517 mt of U.S. silver exports to India for the past six months was nearly double the total exports in 2016 and more than triple that of 2017.  While it’s true that this huge increase in Indian silver demand hasn’t impacted the price yet, wait until the economy and financial system start to really come apart over the next few years.

Today, as the markets continue to sell off due to more Trade Wars with Mexico, gold and silver are in the green.  Even though gold is outperforming silver today, they are doing exactly as I predicted during significant market downturns. And, I believe this is only the beginning of an even greater dislocation between the overall markets and precious metals in the years ahead.

-END-

 
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
GOLD//SILVER TRADING TODAY:

Gold Surges Above “Key Pivot”, Hits 3-Year High Against Yuan

Gold futures prices are up $45 in the last two trading days, bursting through the $1300 Maginot Line, and surging to the highest since March (in USDollars).

Silver is also on a good run…

 

But Gold’s outperformance continues, with Gold/Silver ratio near 90.0x – the highest since 1993…

 

Goldman earlier highlighted $1307 as a key pivot in gold. Their bias was for that level of resistance to hold but instead it broke and gold is up significantly the second consecutive day of large gains.

“Getting through 1,307 would allow for a minimum next level target at 1,330. The broader implications of that break would however support the view that Gold might finally be continuing a trend that stalled in January,” they wrote.

However, in Yuan, gold is near 3-year highs, as the quasi-peg has officially broken…

END

* * *

Your early MONDAY morning currency, Asian stock market results,  important USA/Asian currency crosses, gold/silver pricing overnight along with the price of oil Major stories overnight/7 AM EST

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 6.9072/ GETTING VERY DANGEROUSLY CLOSE TO 7:1

//OFFSHORE YUAN:  6.9250   /shanghai bourse CLOSED DOWN 8.62 POINTS OR 0.30%

HANG SANG CLOSED DOWN 7.23 POINTS OR 0.03%

 

2. Nikkei closed DOWN 190.31 POINTS OR 0.92%

 

 

 

 

3. Europe stocks OPENED RED /

 

 

 

USA dollar index FALLS TO 97.65/Euro RISES TO 1.1187

3b Japan 10 year bond yield: FALLS TO. –.09/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.32/ 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:: 54.12 and Brent: 62,58

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO -.21%/Italian 10 yr bond yield DOWN to 2.62% /SPAIN 10 YR BOND YIELD DOWN TO 0.71%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.83: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 2.88

3k Gold at $1317.00 silver at: 14.70   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 20/100 in roubles/dollar) 65.37

3m oil into the 54 dollar handle for WTI and 62 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 108.72 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 .9986 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1167 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 0.21%

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 2.10% early this morning. Thirty year rate at 2.56%

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

6.  TURKISH LIRA:  UP  TO 5.8774..they are toast

Sea Of Red” For Global Markets As Traders Brace For Recession Amid Global Trade War

Global stocks continued to slide and investors sought the safety of government bonds, the yen, the Swiss franc and gold on the first trading day of June as rising trade tensions sparked fears of an upcoming recession (which according to Morgan Stanley will hit in 3 quarters or less, while JPMorgan said the probability of a U.S. recession in the second half of 2019 had risen to 40% from 25% a month ago) denting stocks again…

 

… sending the 10Y TSY yield as low as 2.07%, the lowest level in almost 21 months, after JPMorgan said it now expects the 10Y yield to drop to 1.75% by year end…

 

… pushing the inversion between the 3M and 10Y yield to a whopping 28 bps…

 

… and sending oil sliding close to bear market territory.

 

With no improvement in tone or sentiment between the US and China, and in fact with China striking a combative tone on Sunday, blaming the U.S. for the collapse in trade talks and saying it won’t be pressured into concessions after the White House rattled markets Friday by announcing tariffs on Mexican goods, the worsening trade and broader economic backdrop made for a jarring start to June after a torrid May that wiped $3 trillion off global equities.

Also over the weekend, China’s Defence Minister Wei Fenghe warned the United States not to meddle in security disputes over Taiwan and the South China Sea, after acting U.S. Defence Secretary Patrick Shanahan said Washington would no longer “tiptoe” around Chinese behaviour in Asia.

“We’re in a phase of brinkmanship — it’ll be a difficult month,” Rob Mumford, an emerging market portfolio manager at GAM Investments, said at a roundtable in Hong Kong. “We’re at the maximum pressure.”

US equity index futures all pointed to a drop at the open, though losses were pared modestly from earlier in the session. In Europe, the Stoxx 600 Index also came off its lows, with gains in food and healthcare shares offsetting declines in banks. European shares fell further and the Swiss franc jumped to a two-year high as Beijing sent another shot across Washington’s bows on trade and then euro zone data came in weak though the main groundswell was in bonds.

“No one now thinks a deal would be possible at the G20. It is going to be a prolonged battle. Investors are rushing to the safe assets,” Mitsubishi’s Fujito said.

German government bond yields dropped to a new record all-time lows of -0.219%, while those on two-year U.S. Treasuries were seeing their biggest two-day fall since early October 2008, when the global financial crisis was kicking off.

 

“Bonds are more or less on fire and I think we are going to spend the week with trade dominating everything else,” said SocGen fx strategist Kit Juckes. With German and UK political concerns and worries about Italy’s finances resurfacing too, “it is hard to think the yen is not going to be at least one of the winners this week.”

There was not flight to safety for Deutsche Bank, whose stock dropped to a new all time low, sliding below €6.00 for the first time ever after JPMorgan said DB’s issue is not about capital or liquidity but about poor operating profitability and it needs to stop “tinkering with its restructuring efforts.” The German bank “needs to make objective decisions about what business and/or asset can be closed or reduced”, JPM’s Kian Abouhossein and Amit Ranjan wrote, adding that CEO Sewing is “up to the challenge” to take action against status quo as he is over-delivering on cost targets. One look at the chart below suggests the market disagrees.

 

Asian stocks reversed an earlier decline as utilities and IT stocks boosted the regional index. Markets in the region were mixed. South Korea’s Kospi index and India’s S&P BSE Sensex Index rose, while Japan’s Topix index and Australia’s S&P/ASX 200 fell. The MSCI Asia Pacific Index climbed 0.2% in Hong Kong. The Kospi closed 1.3% higher, with Chasys Co. and Heung-A Shipping Co Ltd leading gains. India’s S&P BSE Sensex Index advanced 1.2%, led by basic materials and technology shares. Chinese shares ended little changed though the yuan faced pressure.

A private survey of China’s manufacturing sector published on Monday suggested a modest expansion in activity as export orders bounced from a contraction. In contrast to the fall in NBS manufacturing PMI, the Caixin manufacturing PMI was unchanged in May at 50.2, and above the 50.0 expected, although sub-indexes suggested weaker production, higher inventories and stronger new orders. Business confidence appeared to have deteriorated in light of lingering trade tension with the US.

 

Additionally, economists noted increases in new export orders pointed to possible front-loading of U.S.-bound shipments to avoid potential tariff hikes that U.S. President Donald Trump – who kicked off a potentially confrontational state visit to Britain on Monday – had threatened to slap on another $300 billion of Chinese goods. “Chinese companies probably see the current export conditions as severe as during the China shock in 2015,” said Wang Shenshen, economist at Tokai Tokyo Research Center.

And speaking of economic headwinds, with the bitter trade weighing, factory activity contracted in most Asian countries and the euro zone last month, the latest PMI surveys showed. The eurozone’s slowdown was for the fourth month running, and at an accelerating pace, as slumping automotive demand, Brexit and wider political uncertainty took their toll. “The sector remains in its toughest spell since 2013,” said Chris Williamson, chief business economist at IHS Markit.” The UK mfg PMI also dipped below 50, indicating contraction.

 

Elsewhere, Emerging market stocks and currencies were heading for their biggest 3-day gain in two months as bets a sell-off last month had gone too far outweighed falling oil prices and renewed trade tensions. The MSCI Emerging Markets Index of stocks climbed to a two week high, while its currency counterpart traded above its 200-day moving average.

“Why should emerging markets sell off just because the U.S. is shooting itself in the head?” said Jan Dehn, Ashmore Group’s head of research based in London. “I can understand why Mexico sold off, but this is a policy mistake, which will hurt America. So it is only right that America is sold, not emerging markets.”

Asian currencies led by South Korea’s won were the best performers, while Chinese telecom stocks rallied after a report Beijing will issue commercial licenses for fifth-generation telecommunication services.  The Yen rose, as did Europe’s go-to safety play, the Swiss franc, which rallied to its highest in nearly two years against the euro. The euro hovered at $1.1171 having been stuck in one of its tightest ranges ever against the dollar.

Brent crude fell for a fourth day, tumbling as much as 1.8% to $60.86 per barrel. Oil has dropped almost 20% since April, approaching a bear market. WTI futures dropped 1.3% too to below $53 a barrel for the first time since mid-February. Copper futures in Shanghai fell 0.5% to two-year lows while safe-haven gold jumped as much as 0.5% to a 10-week high of $1,312.4 per ounce.

Expected data include PMIs and construction spending. Box and Coupa Software are reporting earnings.

Market Snapshot

  • S&P 500 futures down 0.4% to 2,742.00
  • STOXX Europe 600 down 0.7% to 366.56
  • MXAP up 0.2% to 152.60
  • MXAPJ up 0.5% to 500.95
  • Nikkei down 0.9% to 20,410.88
  • Topix down 0.9% to 1,498.96
  • Hang Seng Index down 0.03% to 26,893.86
  • Shanghai Composite down 0.3% to 2,890.08
  • Sensex up 1% to 40,124.89
  • Australia S&P/ASX 200 down 1.2% to 6,320.55
  • Kospi up 1.3% to 2,067.85
  • German 10Y yield fell 1.1 bps to -0.213%
  • Euro up 0.03% to $1.1172
  • Italian 10Y yield rose 1.4 bps to 2.297%
  • Spanish 10Y yield fell 2.7 bps to 0.688%
  • Brent futures down 3.8% to $62.05/bbl
  • Gold spot up 0.7% to $1,315.17
  • U.S. Dollar Index little changed at 97.71

Top Overnight News from Bloomberg

  • Trump landed in the U.K. for a three-day state visit at a sensitive time for the country’s ruling Conservative Party. Rival candidates are jostling to replace outgoing Prime Minister Theresa May, and the president has already weighed in with his own opinions on the contenders
  • Trump opened another potential front in his trade war, terminating India’s designation as a developing nation and thereby eliminating an exception that allowed the country to export nearly 2,000 products to the U.S. duty-free. Meanwhile China was planning retaliatory trade measures against the U.S.
  • China’s government says it’s willing to work with the U.S. to end an escalating trade war but blames President Donald Trump’s administration for the collapse in talks and won’t be pressured into concessions
  • “We don’t have plans to change our inflation target, but are looking at our framework more broadly,” San Francisco Fed President Mary Daly says in reply to question after speech in Singapore
  • President Trump on Saturday defended his decisions to impose or raise levies against imports from Mexico and China, respectively, saying “companies are moving to the U.S.” to avoid paying the levies
  • Trump downplayed the chance he would impose tariffs on Australia, a top U.S. ally, after the New York Times reported his administration considered doing so last week
  • With U.K. Prime Minister Theresa May about to hand over the reins of power, candidates to succeed her now feel free to speak out on issues such as Huawei Technologies Co. Ltd.’s role in the country’s 5G telecoms infrastructure
  • The Social Democrats, the junior coalition partner in Germany’s government, will begin searching for an interim chief after Andrea Nahles said she lost the support of her party
  • Factory output in the euro area fell close to a six-year low in May, with slumping orders and declining workforces signaling a bleak outlook for demand. The data underscores a picture of an economy that is struggling to emerge from a slowdown that has lasted more than a year
  • Britain’s manufacturing sector unexpectedly shrank in May for the first time since the direct aftermath of the 2016 Brexit referendum. IHS Markit’s manufacturing PMI dropped to 49.4 from 53.1 in April as factories unwound Brexit preparations when the departure date was pushed back. The reading was weaker than the 52 forecast
  • Deutsche Bank AG and UniCredit SpA moved some of their swaps trades from London to Frankfurt in May as banks used a lull in the ongoing Brexit drama to prepare for the worst

Asian equity markets traded negatively with risk appetite subdued as the US faces a 2-front trade war against China and Mexico, although stronger than expected Caixin PMI data helped limit losses in China. Nonetheless, a risk averse tone was seen from the reopen after China released a white paper that blamed the US for the setback of trade talks which pressured US equity futures to extend on the losses from Wall St’s worst May performance since 2010. ASX 200 (-1.2%) and Nikkei 225 (-0.9%) declined with the energy sector the underperformer in Australia after the recent oil slump, while safe-haven currency flows weighed on Tokyo stocks and with weakness in SoftBank exacerbated on reports of funding difficulties for its next USD 100bln tech fund. Hang Seng (U/C) and Shanghai Comp. (-0.3%) were initially higher after the PBoC maintained net liquidity through CNY 80bln of reverse repos and after Chinese Caixin Manufacturing topped estimates, although the gains were short-lived as trade concerns remained heavily in focus with China playing the blame game, while it is also set to draft its own blacklist of ‘unreliable’ entities and probe FedEx over possible infringement of Huawei’s legal rights regarding rerouted packages. Finally, 10yr JGBs were steady with only marginal gains seen despite the widespread risk aversion and the BoJ presence in the market for JPY 800bln in up to 5yr JGBs.

Top Asian News

  • Bank of Jinzhou Auditors Resign Citing Loan Inconsistencies
  • China’s Top Courier Gains as FedEx Targeted in U.S. Trade War
  • SpiceJet Has ‘Offers’ for Stake in Indian Budget Airline
  • Turkish Inflation Slows Again as Food Prices Bring Relief

Major European indices began the week lower in continuation from the Asia-Pac session which was weighed on by China releasing a white-paper blaming the US for the set back in trade talks and are to draft a ‘black-list’ of unreliable entities. Throughout the mornings trade bourses have been grinding higher but are still in negative territory [Euro Stoxx 50 -0.1%]; sectors are mixed on the day with some moderate outperformance seen in Utilities, which Nomura Quants note is not sufficient to trigger an excessive volatility shock as the sell-off in cyclicals in minimal compared with prior selloffs. Notable movers this morning include Infineon (-6.4%) who are near the bottom of the Stoxx 600 after it was reported that they are to acquire Cypress Semiconductors for an enterprise value of EUR 8bln; Co’s boards have already consented to this acquisition. Elsewhere, airline names are somewhat subdued after reports that the global airline industry is to record its lowest profit in five-years, particularly easyJet (-2.1%) which is also weighed on following reports that the Co. are this week to drop out of the FTSE 100 (-0.4%). At the other end of the Stoxx, and topping the DAX are Wirecard (+2.3%) following the CEO stating they expect an outstanding H1.

Top European News

  • Euro-Area Manufacturing Remained Stuck in Its Slump in May
  • U.K. Manufacturing Slips Into Contraction After Brexit Delay
  • Danske Moves Toward Total Baltic Exit Amid Laundering Saga
  • One Man’s $75 Million Perk Triggers Indignation in Denmark
  • Glencore’s Executive Departures Hasten as Oil Chief Leaves

In FX, the dollar was little changed on the day thus far, following on from a relatively subdued session overnight as the index remains sub-98.00 ahead of this week’s key risk events which includes US ISM manufacturing PMI, ECB’s monetary policy meeting and US jobs data. The index remains near the middle of the intraday 97.57-80 range with gains capped by bleeding US yields.

  • EUR/GBP – Hardly fazed on manufacturing PMI day in which the EZ number was unrevised (as expected) whilst UK’s manufacturing sector slipped into contraction, with new orders and employment both declining whilst stockpiling paused following the Brexit delay. Sterling remains dedicated to Brexit related development as new members line up for the Tory leadership, with the latest from Environmental Sectary Gove, a front runner, reportedly considering a further extension beyond October 31st, whilst leading candidate Johnson said that if he is elected, the UK will leave the bloc with or without a deal on Brexit day. EUR/USD remains within a relatively tight 1.1157-90 range with clean air to the upside until the 1.1200 handle. Beyond that, the pair’s 50 DMA resides around 1.1208 with resistance seen at 1.1264 (May high). Meanwhile, Cable hovers around the 1.2650 mark with little seen to the upside by way of near-term tech levels.
  • CHF/JPY – Both firmer on the day, albeit the Yen to a lesser extent, in a continuation of the Trump triggered risk-off mood around the market. USD/JPY fell to whisker away from the 108.00 level (low 108.08) whilst its Franc counterpart slipped further below parity vs. the Greenback. Deutsche Bank recommends “good news rallies should be sold as trade tensions may get relief rallies” as the JPY-crosses “should remain under pressure”. It’s worth keeping in mind USD/JPY sees almost 1bln in option expiries at 108.00-15 ahead of supports at 107.77 and 107.27 (Jan 10 low and 61.8% Fib respectively) whilst USD/CHF sees its 200 DMA at 0.9959 (having already tested the level) ahead of its 200 WMA at 0.9847.
  • AUD/NZD – Marginally firmer in the aftermath of optimistic China Caixin manufacturing data which provided the antipodeans with some relief following last week’s losses. AUD/USD hovers around the 0.6950 mark (high 0.6960, low 0.6928) despite a looming RBA rate cut, with participants on the look-out for guidance into the aggressiveness of the much-anticipated easing cycle. Meanwhile, its antipodean counterpart seems to be benefiting more as the AUD/NZD cross breached its 200 DMA (1.0624) as it tests the 1.0600 level ahead of its 50 DMA (1.0571)

In commodities, WTI and Brent futures are recovering off Asia-Pac lows with the former back above the 53.00/bbl handle and climbing towards the next round figure, whilst the latter is attempting to turn positive on the day having already dipped below the 61.00/bbl figure overnight. The weekend saw the release of Russian May crude production which stood at an 11-month low at 11.11mln BPD, down from last month’s 11.24mln BPD, although this was mainly due closures from the Druzbha pipeline due to oil contamination. Elsewhere, Saudi reported a M/M decline in oil output to 9.65mln BPD from the prior 10.05mln BPD, whilst the Kingdom’s energy minister stated that Saudi is committed to do whatever is required to stabilise the oil market. GS takes into account the supply/demand side concerns and net-net expects prices to remain volatile in the coming months, albeit around current levels. Turning to OPEC, the bank sees higher production from Saudi, Russia, UAE and Kuwait to offset Iranian and Venezuelan shortfalls. Thus, GS expects backwardation to persist in the coming months, whilst also revising lower its Q2 Brent forecast to 65.50/bbl from 72.50/bbl, also citing spare capacity created by a new Permian pipeline. Elsewhere, gold (+0.7%) benefits from its safe haven characteristics and extends gains above its 1300/oz level whilst copper prices are seeing some reprieve following last week’s slump as the red metal was underpinned by optimistic Caixin manufacturing data from China.

Goldman Sachs suggest that oil prices may recover from here due to a tight EU crude market, sudden moves lower, OPEC’s reluctance to increase supply and above consensus growth forecasts, However, increasingly uncertain macro outlook, rising production an OPEC spare capacity suggests prices at likely to remain around current levels with high volatility

US Event Calendar

  • 9:45am: Markit US Manufacturing PMI, est. 50.6, prior 50.6
  • 10am: ISM Manufacturing, est. 53, prior 52.8
  • 10am: Construction Spending MoM, est. 0.4%, prior -0.9%
  • Wards Total Vehicle Sales, est. 16.9m, prior 16.4m

DB’s Jim Reid concludes the overnight wrap

Obviously being a Liverpool supporter it was a glorious weekend for me. Not even the kids could spoil it although on Saturday we went out strawberry picking as a family and aimed to leave at 930am but eventually left hot, bothered and bad tempered at 1pm. There were tantrums, numerous toilet related accidents, several changes of clothes, more tantrums, buckets of suncreams to apply, sunglasses to find, pack lunches to prepare etc etc. Originally we finally got ready to leave 2 hours late and then as we reversed the car we found that our electric gates wouldn’t open. After 30mins of failed brute force we called someone out. They came in an hour, fixed it and off we went 3.5 hours late. As for the final it was an awful game. In fact given it was Europe’s premier sporting occasion and given that it featured two English sides I’d imagine those in Brussels this morning will be lobbying extensively for the hardest possible Brexit so they don’t have to watch such a poor spectacle again. Anyway a great result… for me at least.

Markets have been on the wrong end of some bad results over the past month and after a strong 2019 up until the end of April, May was a big risk-off month with this trend accelerating over the last week. Craig has already published the May/YTD/QTD performance review(link here ) this morning so please see that for more but the highlights are Bunds going from 0% to a multi-century record low of -0.202% and the S&P500 (-6.2%) having its 3rd worst month in the last 92 behind only December and September last year which saw declines of -9.0% and -6.8% respectively. We’ll review the last week in a bit more detail later on but the highlight on Friday was a 13.9bp rally for 2yr US Treasuries (24.2bps on the week – the most for nearly a decade) as the probability of multiple US rate cuts this year surged as the out of the blue Mexican tariffs added to the recent Chinese ones. I suppose one of the additional worries would be that if the US has been so quick to escalate the trade war on these two countries the bar must be a bit lower to carry out a trade assault on Europe at some point in the future. Interesting times.

Quickly looking forward to this week before we analyse the weekend news, the data highlights will be the final global manufacturing PMIs and US ISM (today), the services and composite PMIs/US ISM (Wednesday), the latest ECB meeting (Thursday) and then another payroll Friday to end the week. The US ISM today may be the key release. The consensus expects a 0.2pt increase to 53.0 however our US economists have highlighted that in the current business cycle, the new exports orders components has led the headline by 5 months, and that the recent sharp downtrend in new export orders does not bode well. In the background we are still waiting for the date of a potentially China hawkish speech from US VP Pence (rumoured to have been moved from tomorrow’s 30th anniversary of the Tiananmen Square incident, maybe to avoid being maximum inflammatory). It could still be this week and likely be a big event. In terms of Fedspeak, the big event is the long awaited Fed research conference on “Monetary Policy Strategy, Tools, and Communications Practices” tomorrow and Wednesday. The future of how to interpret the 2% inflation mandate is the most widely anticipated part of the get together but this will likely be nearer the start of the conversation rather than the end of it. So so don’t expect a revolution yet.

China’s May Caixin manufacturing PMI has already been published overnight and it has diverged a touch from the official PMI from Friday as it slightly beat expectations at 50.2 (vs. 50.0 expected). Surprisingly, the commentary alongside the release said that the new orders component continued to rise over the previous month. However, the output sub-index fell to 50.1 (vs. 50.7 in last month), the lowest reading since January 2019. China also held a press conference yesterday and issued a white paper outlining their official position on the trade talks. They stated that the US ‘should bear the sole and entire responsibility’ for the breakdown in negotiations. Vice Commerce Minister Wang Shouwen didn’t overly escalate matters though and said that China is willing to work with the U.S. to find solutions, but the latter’s strategy of maximum pressure and escalation can’t force concessions from China. The white paper reiterates what the Chinese have recently suggested they require for a trade deal – a) US should remove all additional tariffs, b) China’s purchases of goods from the U.S. should be realistic, and c) there should be a proper balance in the text of the agreement. China has also launched an investigation into FedEX for ‘wrongful delivery of packages’, with the state broadcaster CCTV saying the investigation ‘will be a warning to other warning companies, organisations and individuals violating China’s rules and regulations’. This came after news at the end of last week that the Chinese are drafting an ‘unreliable entity list’ of foreign companies. So tensions are continuing to build.

Elsewhere, President Trump has said overnight that he is “really okay” with imposing tariffs on Mexico over illegal immigration if an agreement can’t be reached on stemming the flow of migrants at the border. He added that Mexico is sending a “big delegation” to the White House on Wednesday and we will see “what can be done, but if it’s not done, you know what we’re going to be doing, and, uh, I’m really okay with that.” On a more dovish note, Mr Trump downplayed a New York Times report which said that his administration considered imposing tariffs on Australia last week. Trump’s response to the report was that the US has very strong ties with Australia and he didn’t mention tariffs. Meanwhile, President Trump has said that his top economic adviser Kevin Hassett will leave the White House shortly and he will name his replacement “soon” after he returns from a trip to Europe this week.

Markets in Asia have started the week on largely negative footing with the Nikkei (-1.26%), Hang Seng (-0.35%) and Shanghai Comp (-0.49%) all lower while the Kospi (+0.84%) is up. The Japanese auto index is down a further -1.04% this morning after declining -3.60% on Friday. All the G10 currencies are trading slightly stronger (+0.10-0.30%) this morning. Elsewhere, futures on the S&P 500 are down -0.54% while oil prices (WTI -0.95% and Brent -1.39%) are also weak. In other overnight data releases, Japan’s final May manufacturing PMI came in two tenth above the preliminary read at 49.8 (vs. 50.2 in last month) while capital spending in Q1 remained strong at +6.1% yoy (vs. +2.6% yoy expected).

Elsewhere Andrea Nahles, the head of junior German coalition partner the SPD, resigned yesterday throwing ever more questions out there about the sustainability of the coalition.

Recapping Friday’s and last week’s market action now, the moves were dominated by the trade-war escalation and generally poorer economic data. The S&P fell -2.62% in a holiday-shortened week for its worst weekly performance of the year, sliding early in the week before staging a modest recovery on Thursday that was subsequently erased after the Mexico tariff induced selloff on Friday (-1.32% on Friday). That was the fourth consecutive weekly decline, a streak that hasn’t occurred since October 2014. Other US indexes staged similar moves, with the DOW and NASDAQ down -3.01% and -2.41% (-1.41% and 1.51% Friday), respectively. Some cyclical sectors lagged, with banks down -3.96% (-1.53% Friday), with other recent laggards actually outperforming with the Philly semiconductor index down only -1.20% (-1.45% Friday).

That poor move by banks was largely attributable to the sharp move lower in bond yields, as treasuries rallied on risk aversion and tepid inflation data. Ten-year yields fell -18.7bps (-8.0bps Friday) but the real action was in the front end, where 2-year yields fell -24.2bps (-13.9bps Friday) for their sharpest weekly move in almost 10 years. US core PCE for the first quarter was revised lower by 0.3pp to 1.0% on an annualised quarter-on-quarter rate. That’s significantly below the Fed’s target, and though there remains scope for inflation to rise over the next several months and quarters, the market is pricing full-on easing from the Fed now. Futures prices now imply 55bps of cuts this year, an additional 34bps of cuts compared to the preceding week. The sharp repricing in the front end is keeping the 2y10y yield curve in positive territory though, as it rose +4.4bps this week to 19.8bps (4.8bps Friday).

Other global equity indexes followed the US lower, with the STOXX 600 down -1.82% (-0.81% Friday) and European banks ending -3.22% (-1.67% Friday), back to their lowest level since December’s mini meltdown. Bunds rallied, though not as sharply as treasuries, with yields dropping -8.5bps to a new all-time low of -0.20% (-2.7bps). Italian BTPs notably underperformed, with yields rising +11.6bps (+1.4bps Friday), in the face of generalised safe haven flows into bonds. In credit, European HY cash spreads widened +14bps (+8bps Friday), while spreads in the US staged their worst performance of the year, widening +38bps (+20bps Friday). Despite all the carnage in equities and credit, the VIX and V2X remained surprisingly calm, rising only +2.9pts and +0.7bps (+1.4pts and +0.7pts Friday) to 18.71 and 17.42 respectively.

 

 

 

3. ASIAN AFFAIRS

I)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED DOWN 8.62 POINTS OR 0.30%  //Hang Sang CLOSED DOWN 7.23 POINTS OR 0.03%   /The Nikkei closed DOWN 190.31 POINTS OR 0.92%//Australia’s all ordinaires CLOSED DOWN 1.25%

/Chinese yuan (ONSHORE) closed UP  at 6.9072 /Oil DOWN TO 54.12 dollars per barrel for WTI and 62.58 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED UP // LAST AT 6.9072 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.9250 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 STRONGER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING STRONGER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

 

 

 

3 a NORTH KOREA/SOUTH KOREA

SOUTH KOREA

end

3 b JAPAN AFFAIRS

3 C CHINA/CHINESE AFFAIRS

China/Fed=ex

We highlighted to you China’s anger of the “misplacing of two pkgs destined for China’s Huawei.  Now China is investigation what happened as well as giving warning to foreign companies.

(courtesy zerohedge)

China Launches Investigation Of FedEx In “Warning To Foreign Companies”

Just hours after China’s retaliatory tariffs on the U.S. officially kicked in at midnight on Saturday in Beijing, affecting more than 2,400 goods that face levies of as much as 25%, compared with the previous charges of 10%, China took its first non-tariff retaliatory step, when it launched an investigation into FedEx for the wrongful delivery of packages, the country’s state run Xinhua News Agency reported.

Earlier this week we reported that anticipating a backlash from Chinese officials that could seriously undermine its prospects in one of the world’s largest growth markets, FedEx apologized to Huawei on Wednesday after the global logistics company “accidentally” diverted two packages sent from Japan that had been addressed to Huawei in China. The packages, which purportedly contained mundane – yet ‘urgent’ – legal documents, had been inexplicably rerouted to FedEx’s US headquarters in Memphis. Two more packages sent from Vietnam were nearly re-routed as well.

Following the mishap, Huawei said it was reviewing its relationship with FedEx, and now Beijing has also gotten involved and in commentary read on its flagship evening news program, the state-run China Central Television said that “now that China has established a list of unreliable entities, the investigation into FedEx will be a warning to other foreign companies and individuals that violate Chinese laws and regulations.”

“China welcomes foreign companies on condition that they abide by China’s law, regulation, market rules and the spirit of contract, and can’t harm Chinese customers’ legitimate rights.”

The Fedex “warning” comes one day after China said it will establish a list of “unreliable” entities that harm the interests of domestic companies, which could affect foreign enterprises as trade tensions escalate.

Following the report, China’s de facto social network mouthpiece, Global Times editor-in-chief, Hu Xijin, tweeted that Fedex had prompted “strong suspicion” after the shipment diversion to “wrong places” and an investigation is being launched.

Hu Xijin 胡锡进@HuXijin_GT

Based on what I know, FedEx has caused strong suspicion from Chinese side as it diverted several Huawei packages addressed to China to the US and other wrong place. Relevant Chinese authorities will launch investigation on FedEx.

And just so there was no confusion about the intent behind the investigation, Xinhua used two hashtags in the two Weibo posts on the FedEx announcement: #RetaliateAgainstUSTradeBullying and #ChinaUSTrade.

END
And the next domino to fall:  Bank of Jinzhou with total assets of 105 billion USA
(courtesy zerohedge)

Domino #2: Chinese Bank With $105 BN In Assets On Verge Of Collapse

While the western world (and much of the eastern) has been preoccupied with predicting the consequences of Trump’s accelerating global trade/tech war, Beijing has had its hands full with avoiding a bank run in the aftermath of Baoshang Bank’s failure, scrambling to inject massive amounts of liquidity last week in the form of a 250 billion yuan net open market operation to thaw the interbank market which was on the verge of freezing, and sent overnight funding rates spiking and bond yields and NCD rates higher.

Unfortunately for the PBOC, Beijing is now racing against time to prevent a widespread panic after it opened the Pandora’s box when it seized Baoshang Bank two weeks ago, the first official bank failure in a odd replay of what happened with Bear Stearns back in 2008, when JPMorgan was gifted the historic bank for pennies on the dollar.

And with domino #1 down, the question turns to who is next, and will they be China’s Lehman.

This was the question we asked last Thursday, when we published a list of regional banks that have delayed publishing 2018 reports, the biggest red flag suggesting an upcoming bank solvency “event.”

One day later we may have gotten our answer, when the Bank of Jinzhou,  a city commercial bank in Liaoning Province, the second name in the list above, and with some $105 billion in assets, notably bigger than Baoshang, announced that its auditors Ernst & Young Hua Ming LLP and Ernst & Young had resigned, not long after the bank announced it would delay the publication of its annual reports.

For those confused, the delay of an annual report and the resignation of an auditor, means a bank failure is not only virtually certain but practically imminent.

As the bank – which first got in hot water in 2015 over its exposure to the scandal-ridden Hanergy Group – writes in a filing on the Hong Kong Stock Exchange, E&Y was first appointed as the auditors of the Bank at the last annual general meeting of the Bank held on 29 May 2018 to hold office until the conclusion of the next annual general meeting of the Bank. That never happened, because on 31 May 2019, out of the blue, the board and its audit committee received a letter from EY tendering their resignations as the auditors of the Bank with immediate effect.

The reason for the resignation: the bank refused to provide E&Y with documents to confirm the bank’s clients were able to service loans, amid indications that the use of proceeds of certain loans granted by the Bank to its institutional customers were not consistent with the purpose stated in their loan documents.

As a result, “after numerous discussions and as at the date of this announcement, no consensus was reached between the Bank and EY on the Outstanding Matters and the proposed timetable for the completion of audit.” As a result, after a clear breakdown in relations with its own auditor, the Board decided to appoint Crowe (HK) CPA Limited as the new auditors of the Bank to fill the casual vacancy following the Resignation and to hold the office until the conclusion of the 2019 annual general meeting of the Bank (we are taking the under with lots of leverage as Crowe will likewise quit in the coming weeks if not days).

And confirming that not even the bank’s management believes this “justification” will be enough to avoid a rout in the stock, the bank reported that it has requested the trading in the H shares (which was frozen on April 1) on The Stock Exchange of Hong Kong Limited to be suspended until the publication of the 2018 Annual Results. For anyone who hopes that these shares will ever be unfrozen for trading, there are a few bridges in Brooklyn that are for sale.

The real question facing Beijing now is how quickly will Bank of Jinzhou collapse, how will Beijing and the PBOC react, and what whether the other banks on the list above now suffer a raging bank run, on which will certainly not be confined just to China’s small and medium banks.

end

Rural USA has used approximately one billion dollars worth of Huawei equipment.  If faced with a collective bill to replace the banned equipment, it would mean bankruptcy for many small operators.

(zerohedge)

4/EUROPEAN AFFAIRS

 

i) EUROPE/ITALY

Luongo outlines the roadmap that Salvini faces with respect to coalition partner 5 star and the ERU

(courtesy Tom Luongo)

Salvini Faces A Political Minefield After EU Elections

Authored by Tom Luongo,

Since the moment Lega and Five Star Movement entered into a coalition government after 2018’s election, there has been a concerted external campaign to sow dissent between the two coalition members.

It seems a week doesn’t go by where I don’t see a headline saying that the end of the “Italian Government is Nigh” or some such nonsense.

Incessant poll watching, childish gotcha legal challenges and hair-splitting by European ‘journalists’ results in continuous speculation about when Lega leader Matteo Salvini will finally get tired of his left-of-center coalition partner and sweep away the government.

The votes were barely counted when the countdown to new elections in Italy began in the press. Salvini’s Lega took 34% of the vote while M5S just 17%.

It made Lega, along with Nigel Farage’s Brexit Party the two biggest single political parties in the European Parliament.

Salvini came out on Thursday and put some of those gremlins to bed.
There will be no early election, in September we will be preparing the budget,” Salvini told reporters in parliament.

“If I wanted to bring down the government I wouldn’t spend night and day putting together policy proposals,” Salvini said. “There are so many things to do, I don’t want an early election.”

At the same time Bloomberg is reporting that Salvini is threatening to blow up the coalition if M5S doesn’t back his part of their agenda – a flat tax, infrastructure spending and increased political power for the northern Italian states.

It seems that they have for now.

The failing leadership of Luigi Di Maio of M5S could change things. Di Maio faces a vote on Tuesday to remain party leader. If he loses, Salvini may be forced to kill the coalition because Di Maio’s replacement will be unlikely to work with him, at least that’s the line Bloomberg is peddling.

The EU would like nothing more than for this to happen.

Because without M5S Salvini would be hard-pressed to form a new government committed to the types of reforms and confrontations with Brussels he needs to front unless Lega took close to a real majority.

Salvini would have to then go back to Forza Italia and Silvio Berlusconi who he crossed last year to form the coalition with Di Maio. And Berlusconi will do as he’s told.

His only other potential dance partner who wouldn’t make life miserable for him would be the Brothers of Italy who never score higher than 5%.

And M5S wouldn’t be happy with Salvini at all if he called for snap elections now. So, unless Lega’s poll numbers climb to 45% by the end of the year, Salvini may be stuck for a while. And this is why he’s not publicly looking for new elections.

Brussels will pounce on every small division between the two parties and attempt to separate them.

That’s why you keep hearing about it from the major press, they want to goad him, via his ego, into calling for elections.

Not only would it put Salvini in a coalition with people hostile to his sovereignist agenda, it would make him an even bigger target of media hatred.

It would give the goons in Brussels someone to conflate with the rest of the new “Far-Right Neo-Nazis” rising across Europe to scare the people with. Salvini, Hungary’s Viktor Orban, France’s Marine Le Pen (who’s more leftist than half of the Greens I know) and, of course, Britain’s Nigel Farage are the new bogey(wo)men of 21st century Europe.

But is any of this division ever true?

In this case it’s likely more smoke than fire. Salvini and Di Maio are on opposite sides of some basic economic issues, but they have also both shown a great ability to craft a unified front to present to both Europe and Italians over the year of their partnership.

No relationship is without its problems. But that doesn’t mean that every time one mildly disagrees with the other that the government will come down tomorrow. But that’s the way it is presented daily.

In fact, their overcoming ideological differences is the very thing that makes them so dangerous. Because they have put those differences aside, somewhat, to tackle the bigger issues first – getting a better deal out of Brussels, and failing that, convincing the Italian people that there is no negotiating with the EU.

And that’s where their power truly lies, in exposing the intractable and tyrannical nature of the EU leadership and its rules. Showing Italians that no matter what is put forth the EU isn’t working for Italy’s best interests.

Despite their differences in ideology, Salvini and Di Maio are patriots first. And being able to successfully govern from a Euroskeptic position outside of the traditional Left/Right false divide sends a powerful message to the rest of that part of Europe rethinking its commitments to the EU.

Nigel Farage is doing the same thing in Britain with the Brexit Party. And it’s why he’ll win a General Election if Labour’s Jeremy Corbyn is stupid enough to call for one after last week’s results. I talked with Rory Hall at The Daily Coin about all of these issues earlier this week. (Listen here)

Looking at the markets’ response to the EU election results it is pretty clear that Europe’s political problems are taking center stage. The EU is already putting pressure on Italy’s capital markets threatening $4 billion in fines the Italians don’t have for potentially breaching budget rules if they go forwards with Salvini’s tax cuts.

Never forget that Germany’s idea of austerity is meant to keep the debtor nation on a drip feed of support in exchange for destroying the value of a nation’s wealth so it can be bought for pennies on the dollar to restructure the debt, c.f. Greece.

That’s the plan for Italy and the clowns in M5S better realize that Salvini is the best chance they have to get what they want or all of this will have been for nothing.

The euro continues to grind lower as Italian debt yields are rising quickly again. Germany’s economic data continues to deteriorate faster than expectations, and Donald Trump waits in the wings to tariff the world if anyone looks at him cross-eyed. Any further disruption of global trade by his Orangeness will only serve to send the dollar higher, debt quality to fade, costs to rise and credit markets to implode, if they aren’t already.

That’s the real struggle Salvini and M5S, no matter who is leading them face. Salvini knows this. The big question now is whether he can shepherd this coalition into an effective buttress against what the EU will throw at them between now and September’s budget talks.

* * *

END
GREAT BRITAIN/EU/BRITISH STEEL
It is interesting that the initial press reports showed that British Steel was killed by Brexit plans.  But closer examination of the facts reveal it was the huge fees that had to be paid to the EU which caused its demise.
(Murray/Mises()

The EU, Not Brexit, Killed British Steel

Authored by Justin Murray via The Mises Institute,

On 22 May 2019, British Steel announced that they had become insolvent and the company entered receivership with the UK. The explanation provided for this failure is that British Steel is a victim of the UK’s decision to exit the European Union’s bureaucratic fold . On the surface, this appears to be true, as the company stated that orders from the continent have declined due to uncertainty over the exit process that the UK Parliament has dragged out over the past three years. However, if we dig deeper, we find that it was the EU, not the Brexit decision, which killed the company.

European Overregulation

If we look at the company’s latest annual report, we find that the company went from a profit of £92 million in FY ending 2017 to a £19 million loss in FY ending 2018. To douse water on the Brexit claims, the company’s revenues actually increased 11% year-over-year. The real problem was the company’s expenses bloated by a tremendous 25% over the same period. The steel production process is energy intensive, so a significant portion of this price increase is related to a sharp spike in energy prices in the UK over late 2017 to early 2018. The second major cost driver is British Steel was no longer able to delay paying for the EU’s mandatory cap-and-trade policy. Under the cap-and-trade system, companies were able to pull forward future credits to pay for current years. British Steel’s future credits ran out in 2018 and were facing a £100 million bill to cover their 2018 charges. This amount represents a full 10% of the company’s annual revenue base and was so large thatthe company requested the British Government to provide a loan to cover the costs as the company only has around £5 million in cash to make such a payment. A good deal of the aforementioned energy price spike is also related to the EU’s cap-and-trade regime becoming more aggressive as it moves into the 2021-2030 phase of the program .

British Steel would have become financially insolvent on 22 May 2019 even had the UK voted to remain in the EU.

Had British Steel not been handed an insane £100 million bill for carbon emissions and who knows how much passed through via the utility bill, the company would be in good shape right now. And people don’t even get to enjoy the feeling that a polluting industry is held in check as the steel purchases will only shift to countries like China, Russia and India, which occupy three of the top four places in global emissions, where there is little concern for emission levels and EU emissions credits have no legal authority.

The Brexit excuse is just a convenient way to latch onto a more visible event as pointing out that EU environmental policy destroyed British Steel would be politically embarrassing to the EU Parliament and UK politicians that would see a domestic cap-and-trade program created after Brexit.

This is Just a Microcosm

This event is just one of many real world examples of the EU’s destructive centralization policies. The cap-and-trade program and a host of other micromanagement regulatory impositions are a key driver behind the EU’spoor economic performance and terrible employment conditions. Given how onerous the EU’s regulatory regime is, the UK ultimately made the right choice to exit the union. If the company didn’t have to pay the absurd £100 million cap-and-trade tax, British Steel would be able to more nimbly adjust pricing to factor in any punitive tariff backlash the EU would impose on the UK for daring to exit their political sphere of control. Imagine how many other millions of Pounds in wasted bureaucratic overhead British companies could shed should the UK elect to engage in a no-deal exit and refuse to impose those same rules and regulations the British public voted to abandon.

END
Michel Barnier talks of lies when he talks about Great Britain and their Brexit strategy.
(Mish Shedlock/Mishtalk)

Lies, Lies, and More Lies: EU Style

Authored by Mike Shedlock via MishTalk,

Brexit chief negotiator, Michel Barnier, is boxing with the wind, landing no punches with wild blasts at the UK.

Looking for humorous lies of the day? I can help.

Please consider EU Chief Negotiator Blames Brexit on ‘Nostalgia for the Past’.

  1. In an interview with the New York Review of Books, Barnier identified “typically British” causes for the vote to leave, saying one was “the hope for a return to a powerful global Britain, nostalgia for the past”.
  2. He also warned Tory leadership hopefuls that Theresa May’s withdrawal agreement was the only option for leaving the EU.
  3. Speaking about anti-EU sentiment across the continent, he said: “People on the ground feel lost, that they have been abandoned; they feel their cultural identity is in danger … we have to respect these local identities. “The more the economy is global, the more people need to be reassured that their roots will be respected.”
  4. “If the UK wants to leave in an orderly manner, this treaty is the only option,” Barnier said. “If the choice is to leave without a deal – fine. If the choice is to stay in the EU – also fine.”
  5. He also repeated negotiations on Britain’s future relationship with the EU could start immediately once the agreement was signed. “We are ready, we are waiting,” he said.
  6. The two-times EU commissioner and former French foreign minister, is increasingly seen as the next president of European commission. “That’s not a question for today,” Barnier said.
  7. Talking about the EU, he stressed the importance of Europe speaking with one voice to increase its clout in the world: “The fact that we speak with one voice on issues of trade or competition makes us a global actor. Otherwise, Europe would turn into a museum.”
  8. Speaking of his political heritage on the French centre right, Barnier recalled that Charles de Gaulle had once said merging all the peoples of Europe would be like making a purée de marrons (chestnut puree). “That doesn’t sound very appealing, so we cannot merge all the nations.”

Lies and Contradictions

  • Point 1 contradicts point 8: Barnier blasts the UK for the nostalgia of doing things its own way while stating “We cannot merge all the nations.” Which is it?
  • Point 7 contradicts point 8: This contradiction is even more obvious. Barnier simultaneously wants Europe to speak with one voice while also stating the obvious “We cannot merge all the nations.”
  • Point 3 contradicts points 1 and 7. It is also a lie. You cannot “respect local identities” while demanding “Europe speak with one voice.”
  • Points 2 and 4 are lies. No deal can be very orderly. The only way it won’t be is if the EU insists on making it disorderly.
  • Point 5 is a lie. Barnier specifically stated he would use the Irish backstop as a means of “permanently” applying pressure on the UK.
  • Point 6. I accept Barnier’s statement, at least in regard to not fitting in with the rest of the discussion. However, the statement isn’t very clear. Does he want the job? The answer is yes, or he would have explicitly stated so.

Lie Caught on Tape

Of all the lies, point 5 is a standout.

Barnier admitting using the Irish backstop as a means to permanently trap the UK.

I have clips of Barnier on video: Let’s Discuss Brexit (and How the EU Bragged, on Film, About Screwing the UK)

Yes, Barnier used the word “permanent“.

END

GERMANY
Pompeo again threatens Germany to drop Huawei or they will be cut off from intelligence sharing
(courtesy zerohedge)

Pompeo Again Threatens Germany: Drop Huawei Or Intelligence Sharing Blocked

 

Secretary of State Mike Pompeo has again put Germany and the rest of Europe on notice regarding China’s controversial telecom giant Huawei, warning they could be cut off from crucial US intelligence sharing over Huawei’s 5G networks now being built.

Pompeo issued the ultimatum following a meeting with German Foreign Minister Heiko Maas on Friday, saying the decision on whether to allow Huawei equipment would have severe consequences, according to Reuters. His words came at the start of a five-day European tour: “They [Germany] will take their own sovereign decisions, [but we] will speak to them openly about the risks… and in the case of Huawei the concern is it is not possible to mitigate those anywhere inside of a 5G network,” Pompeo said.

 

U.S. Secretary of State Mike Pompeo with German Foreign Minister Heiko Maas. File photo via RFERL

Germany, alongside the UK and France, has refused to budge amidst the ratcheting pressure from the US over worries that China’s intelligence is using its next generation networks as “back door” for aggressive telecommunications eavesdropping.

Pompeo told the news conference further: “(There is) a risk we will have to change our behavior in light of the fact that we can’t permit data on private citizens or data on national security to go across networks that we don’t have confidence (in).”

As we reported previously the Trump administration first notified its Berlin counterparts of the intelligence sharing concerns in early March, when US Ambassador to Germany Richard A. Grenell told Germany’s economics minister in an official letter that the European ally and intelligence partner “wouldn’t be able to keep intelligence and other information sharing at their current level if Germany allowed Huawei or other Chinese vendors to participate in building the country’s 5G network.”

It was noted at the time the warning is “likely to cause alarm among German security circles” amid persistent terror threat, largely the result of Merkel’s disastrous “Open Door” policies which allowed over 1 million middle eastern immigrants into he country. And yet it appears Germany’s national security state establishment has remained unmoved, or at least unable to prevail over Merkel’s government.

Meanwhile on Thursday a Chinese Foreign Ministry spokesman responded to the White House position at a moment Pompeo keeps up the pressure campaign on European allies, saying, the US has not offered proof that Huawei’s products present a security risk.

“We hope that the United States can stop these mistaken actions which are not at all commensurate with their status and position as a big country,” said spokesman Geng Shuang, according to Reuters.

And Huawei, for its part, is reportedly taking steps to block its employees from taking part in technical meetings with American contacts, which has even included sending home American employees that were based at its Chinese headquarters in Shenzen.

end

UK

Trump now endorses Boris Johnson and also says that Farage should lead the Brexit talks

(courtesy zerohedge)

Trump Endorses “Very Talented” Boris Johnson, Says Farage Should Lead Brexit Talks

Observing diplomatic protocol has never been high on President Trump’s list of priorities, and why would it be? After all, it was his propensity for expressing his unfiltered opinion that helped endear him to the American public. So, as he prepares to embark Monday on a state visit to the UK where he will honor the soldiers who fought in ‘D-Day’, it’s worth asking: Why would he start now?

In keeping with his history of offering his unsolicited advice to the UK over its fumbling Brexit strategy, Trump has once again dived headlong into the kingdom’s biggest issues of the day: The ongoing Brexit negotiations, and the Tory leadership contest to install the UK’s next prime minister.

During an interview with the Sunday Times, Trump explained how he would handle negotiations with the EU if he were in Theresa May’s shoes. Instead of committing to pay the $50 billion ‘divorce settlement’ to which the UK is legally obligated, Trump would tell the bloc to kick rocks – then sue them if they complained.

Trump

Because she lacked the temerity to make these bold decisions, Theresa May, Trump said, had left the UK in a very difficult position (if only she had taken his advice!). Now, the UK has “very little to lose” in its Brexit-related negotiations.

“If I were them I wouldn’t pay $50 billion. That is me. I would not pay, that is a tremendous number,” Trump told the Sunday Times.

If a deal can’t be reached by the Oct. 31 extended deadline, then the  UK should simply “walk away,” Trump added.

“If they don’t get what they want I would walk away. If you don’t get the deal you want, if you don’t get a fair deal, then you walk away,”

President Trump went on to praise his “friend” Nigel Farage, whose Brexit Party just won a sweeping plurality of the vote in last months’ EU Parliamentary elections, and recommended that whoever May’s successor might be, they should seriously consider sending Farage to Brussels to lead the next round of Brexit negotiations. Trump said it was “a mistake” not to include Farage in Brexit negotiations and encouraged the next prime minister to send him to Brussels.

“I like Nigel a lot. He has a lot to offer. He is a very smart person. They won’t bring him in. Think how well they would do if they did. They just haven’t figured that out yet,” Trump said.

One day earlier, Trump angered most of the candidates vying for the Tory leadership when he offered his unsolicited endorsement of Boris Johnson – who has encountered some resistance from his fellow Tories in recent days despite being the frontrunner among the party’s membership (who will ultimately vote on the top two candidates on the leadership ballot).

“I like him. I have always liked him. I don’t know that he is going to be chosen, but I think he is a very good guy, a very talented person. He has been very positive about me and our country.”

Following Trump’s endorsement, Liz Truss, Chief Secretary to the Treasury, endorsed Johnson, cementing the former foreign secretary’s first cabinet-level endorsement.

Infographic: Who Conservatives want as their next leader | StatistaYou will find more infographics at Statista

Trump added that other candidates had approached him in a bid to secure his endorsement, saying that he could “help anybody” he were to endorse.

“I could help anybody if I endorse them. I mean, we’ve had endorsements where they have gone up for 40, 50 points at a shot.”

But as Trump prepares to depart across the Atlantic, where he and his four adult children will meet the Queen, as well as Prince Harry, William and his wife, Kate, one individual will be conspicuously absent: The Duchess of Sussex, Megan Markle, who will reportedly be home tending to her newborn son, Archie. Trump created a controversy late last week when he said that he didn’t know “that she was nasty” after being confronted with a comment she made about moving to Canada if Trump had won. Though Trump followed that up by praising Markle, saying he thought she made “a very good” American princess.

end

5.RUSSIAN AND MIDDLE EASTERN AFFAIRS

ISRAEL

The USA has confirmed that it has now updated its maps showing the disputed Golan Heights, the property of Israel.

(courtesy zerohedge)

US Confirms It Updated Maps To Show Disputed Golan Heights As Israeli

After Israel’s Prime Minister Benjamin Netanyahu on Thursday showed off a map of Israel he received from the White House signed by President Trump, the State Department has confirmed it has officially changed its maps to show the disputed Golan Heights as Israeli territory.

The Netanyahu photo immediately generated controversy, given the US president had written the word Nice” beside an arrow pointing to the Golan, which appeared as part of Israel. The prime minister boasted this was one of the early “updated” versions which the president had autographed.

 

Via the AFP: Prime Minister Benjamin Netanyahu displays a map of Israel indicating the Golan Heights are inside the state’s borders, signed by US president Donald Trump on May 30, 2019.

Trump’s son-in-law and senior adviser Jared Kushner gifted him the map while touring the region ahead of a US-sponsored economic peace summit set to be held in Bahrain in late June, during which Trump’s so-called “Deal of the Century” plan will be unveiled, designed to achieve economic stability for the Palestinians as part of a peace plan.

The Palestinians under President Mahmoud Abbas have declared their intent to boycott the summit, saying they weren’t even consulted and don’t agree with what’s on the agenda. And crucially, China and Russia will also stay away in solidarity with the Palestinian side, but also presumably to flex their muscles in the Middle East.

“I know we have for sure… we updated the maps,” a State Department spokesperson said later in the day when pressed on if the US has formally changed the maps.

Hananya Naftali@HananyaNaftali

The US has published for the first time a map that shows the Golan Heights as Israeli territory 🇮🇱🇺🇸

The White House bestowed US formal recognition on the disputed Syrian-claimed Golan as Israeli territory in late March days after Trump issued a single bombshell tweet which announced “it is time” for the US to “fully recognize Israel’s sovereignty” over the Golan Heights.

Donald J. Trump

@realDonaldTrump

After 52 years it is time for the United States to fully recognize Israel’s Sovereignty over the Golan Heights, which is of critical strategic and security importance to the State of Israel and Regional Stability!

Israel fully annexed the Golan Heights in 1981 after capturing it from Syria during the Six-Day War of 1967. The United Nations has never recognized Israeli annexation and settlement there, but has repeatedly condemned it — all of which has resulted in a Syria-Israel state of war ever since.

END
Israel
Then this happened yesterday as Jewish settlers entered East  Jerusalem’s Al Aqsa Mosque Compound on Jerusalem day which celebrates the anniversary of the 1967 war when the Western section and the Wall was captured by the Israelis from Jordan control
(courtesy zerohedge)

Severe Clashes As Jewish Settlers Enter Jerusalem’s Al-Aqsa Mosque Compound

Surreal footage shows a massive riot broke out inside al-Aqsa Mosque compound in Jerusalem on Sunday, with Israeli security forces storming Islam’s third holiest site, which sits atop Temple Mount.

 

IDF stand outside the Al-Aqsa Mosque on Jerusalem’s Temple Mount, Sunday. via The Jerusalem Post

It all started when Jews were controversially allowed entrance to the compound to celebrate Jerusalem Day which marks Israeli control over the Old City in the aftermath of the June 1967 Six-Day War. In response to reports that Jewish entrance was imminent, Palestinians began to riot, which included throwing stones, chairs, and objects at entering police.

Multiple reports noted the incident marked the first time in about three decades that Jews were allowed access to the compound during the final days of the month of Ramadan, which was likely the result of Israeli authorities feeling emboldened by the US formal recognition of Jerusalem as the Israeli capital last year.

Embedded video

כאן חדשות

@kann_news

תיעוד: ידויי אבנים וזריקת חפצים לעבר כוחות ישראליים בהר הבית@HaimOmri

71 people are talking about this

Israeli Jews are generally forbidden to enter the compound during this sensitive month of the Islamic calendar when tensions are typically on edge, but this year they flooded into Palestinian dominant East Jerusalem.

Embedded video

Middle East Eye

@MiddleEastEye

Clashes broke out as Israeli forces stormed Jerusalem’s al-Aqsa compound during the final days of Ramadan, while Jewish Israelis celebrated Jerusalem Day in the Old City

323 people are talking about this

Clashes began early in the morning when hundreds of hardline Israeli nationalist settlers showed up to the gates demanding entry to al-Aqsa, with Palestinians gathering to resist their entrance, resulting in the Israeli Defense Forces (IDF) storming the mosque with tear gas, stun bombs, and rubber bullets, which led to a handful of injuries among the Palestinians.

Embedded video

Quds News Network

@QudsNen

Watch | Israeli police attack worshippers with rubber-coated rounds and teargas canisters in Al-Aqsa Mosque in occupied Jerusalem, today.

38 people are talking about this

Tensions were already soaring in Jerusalem’s contested Old City after on Friday a 16-year old Palestinian was shot dead by Israeli forces as he tried to gain entry to East Jerusalem directly from the occupied West Bank city of Hebron.

Over the weekend Israeli protesters and settlers flooded East Jerusalem to gain entry to al-Aqsa Mosque compound. IDF personnel reported cleared the area in front of the mosque to allow settlers to dance and chant. Image via Quds News Network.

Likely such tragic incidents and increasingly violent clashes are likely to occur as the full implications of the recent White House recognition of Israeli ownership over the Jerusalem “capital” continues to unfold.

IRAN/SAUDI ARABIA/ISRAEL
The Saudi King now urges the global coalition to use all means to stop Iran at its upcoming emergency summit to be held this Thursday. However as we witnessed over the past dfew weeks, Iran’s economy is already imploding from within.  Their exports of Iranian oil is now down to 400,000 barrels. By March 2018 it black market rate currency fell to 122,000 riyals to the dollar.  In Sept 2018 it fell to 138,000 riyals and it is a touch higher now.
(zerohedge)

Saudi King Urges Global Coalition To “Use All Means To Stop Iran” At Emergency Summit

Perhaps sensing that the US “maximum pressure” campaign against Iran is fast deflating, with even ultra-Hawk John Bolton late this week saying American military build-up had successfully “deterred” imminent Iran threats – suggesting the crisis has been averted –the Saudis are now going on the offensive

 

Image source: AP via Al Jazeera

Saudi Arabia’s aging King Salman went on an anti-Iran tirade during an emergency meeting of Arab leaders hosted in Mecca on Thursday, saying the Shia country isthe greatest threat to global security for the past four decades. He also echoed past US and Israeli charges that Tehran is currently developing nuclear and ballistic missiles in order to threaten its neighbors and extend its influence over the region. 

He said Iran’s leaders were “harboring global and regional terrorist entities and threatening international waterways.” He called for “using all means to stop the Iranian regime” from its regional “interference”. Iran for its part rejected these as “baseless accusations” and has denied it had any role in a spate of recent “sabotage” attacks in the Gulf region.

The king further condemned Iran’s tactics to disrupt maritime trade and global oil supplies in “glaring violation of UN treaties” following Riyadh’s blaming Iranian operatives for using underwater mines to attack and “sabotage” four tankers near the Strait of Hormuz weeks ago, two of which were Saudi flagged.

The Iranian regime has been interfering in other countries’ affairs, developing their nuclear programs and threatening international navigation,” King Salman said during his speech, according to a translation by Saudi-owned Al-Arabiya.

Embedded video

Al Arabiya English

@AlArabiya_Eng

Iran has been “supporting terrorism, undermining stability, and looking to expand its influence over the past four decades,” Saudi Arabia’s King Salman said at the GCC Summit in . https://english.alarabiya.net/en/News/gulf/2019/05/31/GCC-Summit-kicks-off-in-Mecca.html 

The Saudis are attempting to build a strong consensus of Arab states which will stand aggressively against Iran and its allies in the region; however, these efforts could be crippled by the ongoing inter-GCC economic and diplomatic war involving Qatar.

The US welcomed the move toward “Arab unity” to confront Iran, with a State Department spokesperson saying Thursday,Gulf unity is essential in confronting Iran, to confronting their influence, to countering terrorism writ large, and, of course, to ensuring a prosperous future for the Gulf,” according to the AP.

Saudi officials also blamed Iran for fueling the war in Yemen by backing Houthi rebels, which the Saudi coalition has been fighting mostly via airstrikes since 2015, resulting in what the UN has called the “world’s worst humanitarian crisis”. Visiting delegations were even shown destroyed Houthi drones and missile fragments upon their arrival in Jeddah.

Notably, the Iraqi delegation scoffed at the summit’s anti-Iran emphasis. Iraqi President Barham Salih told the summit that stability in Iraq is paramount and that any threats to Iran’s security could spark war in the region, sending fragile post-war Iraq back into sectarian bloodshed and chaos.

This week the Pentagon revealed that nearly 1,000 troops newly deployed to Middle East to counter the Iran threat would be stationed in Saudi Arabia and Qatar.

Over the past week, following Trump’s extended hand for Iran’s leaders to “call me,” we’ve seen a consistent deescalation following weeks of dangerous escalation, including threats and counter-threats of military action by both sides.

Iranian President Hassan Rouhani reportedly said this week that the “road is not closed” on talks with the US if Washington drops the sanctions and returns to upholding the 2015 nuclear deal (JCPOA) – something not at all likely to happen.

END
Sept 2018
Reuters:  the black market rate for Iranian riyals.

Iranian rial hits record low at 138,000 to dollar: Bonbast website

GENEVA (Reuters) – The Iranian rial hit a record low against the U.S. dollar on the unofficial market on Tuesday, a foreign exchange website reported, amid a deterioration in the economic situation and the reimposition of sanctions by the United States.

The dollar was being offered for as much as 138,000 rials, according to website Bonbast.com which tracks the unofficial market.

The rial also hit a record low on Monday, trading for approximately 128,000 to the dollar, according to Bonbast. The official rate, cited by the central bank website, is 42,000.

The currency has been volatile for months because of a weak economy, financial difficulties at local banks and heavy demand for dollars among Iranians who fear the pullout of Washington from a landmark 2015 nuclear deal and renewed U.S. sanctions could shrink Iran’s exports of oil and other goods.

A set of U.S. sanctions targeting Iran’s oil industry is due to take effect in November.

Last week, Iran’s parliament sacked the minister of economic affairs and finance, the latest in a continuing shakeup of top economic personnel. In early August Iranian lawmakers voted out the minister of labor and in July President Hassan Rouhani replaced the head of the central bank.

Protests linked to the tough economic situation erupted last December, spreading to more than 80 cities and towns and resulting in 25 deaths.

Sporadic protests, led by truck drivers, farmers and merchants in Tehran’s bazaar, have continued since then and have occasionally resulted in violent confrontations with security forces.

Reporting by Babak Dehghanpisheh, Editing by William Maclean and Alison Williams

end
Russia/Malaysia/Holland
We have been covering this story for several years and it was obvious to us that it was the Ukrainians that shot down the MH17 plane.  Now the Malaysian PM stated that there was no evidence that Russia shot down the plane and it seems that he is pointing the finger at the Ukrainians.
(zeorhedge)

In “Jaw-Dropping” Speech Malaysian PM Says “No Evidence” Russia Shot Down MH17

In unexpected statements Malaysia Prime Minister Mahathir Mohamad has questioned the methodology behind Dutch investigators who produced what the West considers the authoritative report on the tragic shoot down of Malaysian Airlines flight MH17 in 2014 while flying over war-torn eastern Ukraine. He criticized that the Dutch-led Joint Investigation Team (JIT) seems “to be concentrated on trying to pin it on the Russians”.

The Malaysian leader told reporters at the Japanese Foreign Correspondents Club (FCCJ) in Tokyo on Thursday“They are accusing Russia but where is the evidence?” Mahathir said his country accepted that a “Russian-made missile” shot down its civilian airliner, killing all 283 passengers and 15 crew members on board, but that “You need strong evidence to show it was fired by the Russians.”

 

Malaysian Prime Minister Mahathir Mohamad (left) shakes hands with Japan’s Prime Minister Shinzo Abe in Tokyo on Friday. Image source: AFP

He ultimately questioned the objectivity of the investigators in what major regional media described as a “jaw dropping speech”.

Australia’s prime state run news service ABC Newsnoted the Malaysian PM’s speech has sent shock waves through the region as it questioned everything Australia’s own leaders have said. “From the very beginning we see too much politics in it,”Mahathir said in reference to the official Dutch-led investigation.

A total of 38 Australians were killed in the Boeing-777 shoot down and crash, and the majority were Dutch nationals. The ABC report summarized of the “bombshell” charges leveled by PM Mahathir:

“Based on these findings, the only conclusion we can reasonably now draw is that Russia was directly involved in the downing of MH17,” Australia’s then-prime minister and foreign minister Malcolm Turnbull and Julie Bishop said in a joint statement.

“The Russian Federation must be held to account for its conduct in the downing of MH17 over eastern Ukraine, which resulted in the tragic deaths of 298 passengers and crew, including 38 people who called Australia home.”

But in a bombshell speech to the Japanese Foreign Correspondents Club (JFCC) on Thursday, Dr Mahathir was having none of it, accusing those who blamed Russia of scapegoating the nation for “political” reasons.

The Malaysian PM further went so far as to point to Ukrainian pro-government forces as being prime suspects: “It could be by the rebels in Ukraine; it could be Ukrainian government because they too have the same missile,”he said.

Interestingly, this has been Russia’s position all along, which has already led some international media sources to suggest of the deeply contrarian Friday speech, “Dr Mahathir is known to enjoy a good conspiracy theory.”

 

Malaysian Airlines flight MH17 was shot down over eastern Ukraine on July 17, 2014 – amid heavy fighting in Ukraine’s civil war. 

Mahathir further slammed the decision to exclude Malaysian investigators from the black box examination: “We may not have the expertise but we can buy the expertise. For some reason, Malaysia was not allowed to check the black box to see what happened,” he said.

“We don’t know why we are excluded from the examination but from the very beginning, we see too much politics in it and the idea was to find out how this happened but seems to be concentrated on trying to pin it to the Russians.”

The Malaysian PM’s headline grabbing comments were made in English in response to a reporter’s question:

He concluded that, “This is not a neutral kind of examination”  again questioning the basis on which suspicions of pro-Kiev forces appeared to have been superficially ruled out from the start.

“I don’t think a very highly disciplined party is responsible for launching the missile,” he added, according to Australia’s ABC.

 

MH17 reconstruction, via Reuters

Russia has also rejected the conclusions of the European JIT report, saying the missile that struck the civilian airliner was manufactured in the Soviet Union in 1986, and was part of the Ukrainian army arsenal at the time of the shoot down.

END

ISRAEL/SYRIA
A major Israeli airstrike kills up to 10 Pro Assad forces including some Iranian personnel.  This was in retaliation for a rocket fired onto Israeli soil from Syria
(courtesy zerohedge)

Major Israeli Airstrikes Kill Up To 10 Pro-Assad Forces In Pre-dawn Raid

Israel has admitted responsibility in a significant overnight attack on Syria which reportedly killed up to ten pro-Assad forces, including possibly seven of what the Israeli media is claiming were Iranian and Hezbollah “foreign fighters”.

The predawn raid took place south of Damascus in Quneitra province and unlike prior Israeli attacks appeared to included a multi-pronged sustained offensive of warplanes and helicopters on artillery and intelligence facilities. Syrian state media confirmed the attack, saying its anti-air defenses were active and successful over Quneitra and over the capital of Damascus, but put its early casualties as three killed

and seven among the wounded.

 

Prior file photo of Syria-Israel exchange of fire from earlier this year, via the AP

The Israeli Defense Forces (IDF) via its official media accounts said it responded to “2 rockets launched from Syria to Israel, 1 landing within Israeli territory,” according to a statement, but without specifying who the IDF believes actually fired the rocket. The “seven foreign fighters” number originated with the Syrian opposition source Syrian Observatory for Human Rights based in the UK.

The IDF further noted that it “sees the Syrian regime as responsible for all attacks against Israel from Syrian territory.” The Times of Israel provided the following details based on IDF official statements:

Beginning at 4:10 a.m., Israel Defense Forces helicopters and planes attacked several targets connected to the Syrian army, including two artillery batteries, several observation and intelligence outposts, and an SA-2 type air defense unit, the IDF said in a statement.

Syrian media reported that Israel also struck several targets connected to Iran and is proxy militias in Syria, in the area of al-Kiswah, south of Damascus. These strikes reportedly targeted weapons caches and a military training facility.

The report added that the intelligence posts struck were located near the contested Golan Heights border and the artillery sites were just south of Damascus. It is unclear whether the exchange resulted in any material damage on the Israeli side.

Embedded video

Israel Defense Forces

@IDF

Last night, 2 rockets were launched from Syria to Israel, 1 landing within Israeli territory. In response, we struck a number of Syrian Armed Forces military targets.

Meanwhile Prime Minister Benjamin Netanyahu said Sunday morning that Israel would continue to respond “with great force” against attacks and threats, something he’s consistently identified with pro-Iran forces.

“We are not prepared to tolerate firing into our territory and we react with great force against any aggression against us,” he said. “This is a consistent policy that I lead and so we will continue to do for the sake of Israel’s security.”

Concerning the claimed initial rocket fired from the Syrian side, the Israeli report had the following details:

Saturday night’s rockets appeared to be a relatively long-range variety, reportedly fired from the Damascus area, some 35 kilometers (22 miles) away, similar to an attack earlier this year aimed at Mount Hermon. Mount Hermon is located in the northern tip of Israel’s Golan Heights. In addition to a popular ski resort, the area is also home to a number of military installations.

In January, Iranian troops in Syria fired a medium-range, Iranian-made missile at Mount Hermon in what the IDF said at the time was a “premeditated” attack aimed at deterring Israel from conducting airstrikes against the Islamic republic’s troops and proxies in Syria.

View image on TwitterView image on TwitterView image on TwitterView image on Twitter

Israel Defense Forces

@IDF

The Syrian Armed Forces targets we struck included:
🎯 2 artillery batteries
🎯 Observation & intel posts
🎯 An SA-2 aerial defense battery

We hold the Syrian regime accountable and will firmly operate against any attempt to harm Israeli civilians.

 

Syria has consistently denied that it allows Iranian forces to run its own such operations inside the country, while a number of Middle East analysts have expressed doubt over the IDF’s past version of events involving claims of Iran firing rockets into Israeli territory, with the level of Iran’s troop presence in Syria subject of fierce debate.

But it remains that Syria and Israel are in an active state of war along the Golan border region. As Damascus-based journalist Danny Makki stated in the aftermath of Israel’s predawn strikes, it is “Important to note that after a lengthy period of mock air attacks over the last few months, there have been three relatively important incidents/attacks in the space of a few weeks alone on the Israel-Syria front.”

END

6.GLOBAL ISSUES

T-Day: US-China Trade War Is An Echo Of What Happened Between The US And Japan In The 1940s

Michael Every highlights the last 4 or 5 day events which has caused markets around the world to tumble\
Enjoy
(courtes yMichael Every/Rabobank)

Submitted by Michael Every of Rabobank

Today begins a week pregnant with historical memories of events that are uncomfortably close to our own in some worrying respects, even if we seem to be getting our memories all wrong as we get older. We will also be seeing some key data and events that many will no doubt also get wrong if recent form is any guide.

After all, as we lead up to the annual memorial of D-Day US President Trump will be in London for ‘T-Day‘; and reports suggest there will be a vast number of protestors to show their displeasure, while the Mayor of London has already publicly compared his visitor to 20th century fascist leaders. Oddly, when Chairman of the Chinese Communist Party and Chinese President Xi Jinping arrived for his state visit, there were no such protests or declarations, just the same tea with the Queen. Trump will, of course, press the UK hard to drop Huawei on national security concerns, which will immediately mean that there won’t be any more Chinese state visits to the UK anyway, which is putting the consequences of that decision mildly.

Will the US president get further involved in either the Tory Party leadership contest or Brexit though? Against protocol, he’s already come put to back Boris and a Farage-ist Hard Brexit. Combine that with the strained trade relations between the EU and the US even before Trump moves on the continent later this week, one social media commentator yesterday wondered if we shouldn’t start imagining the US putting tariffs on EU car exports and NOT doing so for the UK…and German auto production shifting to the UK post-Brexit rather than the other way round. Don’t rule it out in the current febrile state of the world.

Underlining the context of the Trump visit, this weekend saw China increase tariffs on some US products again, just as the US begins actually physically taking tariffs on Chinese goods that are only now arriving by sea. We also saw a Chinese white paper on the trade issue underline its fundamental position that core US demands over subsidies and IP and genuinely open markets cannot be met as they conflict with China’s sovereignty. (And, from their own historical perspective of unequal treaties, of dignity.) China will fight to the end rather than submit.

Indeed, China is fighting back. Besides the rare earth threat, China has just announced it will be creating a list of “unreliable” firms, institutions, and individuals to target who “don’t obey market rules, the spirit of contracts, and who carry out a block or cut in supply for Chinese enterprises for non-commercial purposes and who severely harm Chinese enterprises’ rights and interests.” It shouldn’t be hard for China to spot that pattern of behaviour given how critics allege it’s standard practice by Chinese entities vs. foreign firms; yet this takes us into the realm of revenge attacks – as if the two Canadians being held in China weren’t evidence of that already. What happens if a firm has to both comply with US sanctions vs. Huawei and yet then faces Chinese punishment?

Moreover, the weekend’s Shangri-La defence summit in Singapore saw blatant evidence of US-China tensions: China declared its militarization of the South China Sea followed provocative naval intrusions by the West, rather than vice versa; that it had never invaded another country (Vietnam and India might disagree on that); and that, if necessary, it would not hesitate to invade Taiwan. With the political atmosphere in China already being VERY carefully monitored as we approach tomorrow’s second ‘T-day’ of the week, the 30th anniversary of Tiananmen Square, the overall atmosphere has now deteriorated so rapidly that instead of writing about tariffs as the big threat, or of China selling US Treasuries, the UK Telegraph’s Ambrose Evans-Pritchard is talking about a Chinese rare-earth boycott being met by a US oil embargo to China, and the historical echo of what happened between the US and Japan in the 1940s. (Note, it was related to what Trump will be commemorating in Europe later this week.)

If that isn’t enough to focus on for today for the markets, we also have some “throw-aways”. The US is withdrawing GSP trade privileges for India, arguing that if the country can run a space program it doesn’t deserve GSP status, which is a slap in the face diplomatically if a small hit economically; Mexico’s president is suggesting that he might be able to accommodate US demands over immigration controls at the border to try to avoid looming tariffs a week today; suggestions of US tariffs on Australia were shot down by Trump; Syria (or perhaps Iranian proxies in Syria) shot two missiles at Israel, who responded in kind; and the Wall Street Journal says Alphabet/Google is being investigated for a possible anti-trust charge by the US Department of Justice.

Against all that backdrop you can make a bullish case for oil, and a very bearish case too, and the latter is clearly well ahead in that struggle, and inflation expectations are tanking; you can’t see anything wrong with the signal that global bond markets are sending; and you can’t make any argument for anything other than a strong USD.

end
Goldman Sachs finally capitulates and now sees a full blown extended trade war with both China and Mexico
(courtesy zerohedge)

Goldman Capitulates, Sees Full-Blown, Extended Trade War With Both China And Mexico

One of the most difficult things for a bank to admit is that its forecasts about the markets and economy have been wrong.

Yet embarrassing at it may be, in recent weeks we have observed just this phenomenon over and over, as one bank after another admitted their rates forecasts for 2019 were dead wrong (thanks to the resurgence of growth-sapping trade war), and the result has been a dramatic revision lower in 10Y yield forecasts for the end of the year, which started with Bank of America two weeks ago when the bank admitted it was “unrealistically optimistic” ahead of coming “rate misery” when it cut its year-end 10Y yield forecast from 3.00% to 2.60%. Incidentally, today Bank of America was also one of the first to cut its year end S&P forecasts, stating that “we cut our 2019E EPS by 1.2% to $166 from $168 and 2020E EPS by 2.2% to $176 from $180, on renewed trade tensions between the US and China, plus new tariffs on Mexico.Increased China tariffs would lower the S&P’s EPS by an additional ~1% and tariffs on Mexico could represent a 0.6% drag in 2019, then -1.5% in 2020.”

In any case, at the time BofA cut it rates forecast in mid-May, we said that “now that BofA has thrown in the towel, expect the rest of Wall Street to do the same, admitting they too got absolutely everything wrong on the bond side.” Sure enough, today JPMorgan did just that when it said that it now sees 10-year Treasury yields at 1.75% at year-end, compared with 2.45% previously. The forecast for March is 1.65%. The bank also sees two-year yields at 1.40% in December and 1.30% in March, after the bank last week announced it now expects two rate cuts by the Fed before year end: one quarter point cut in September and December. Other banks have also piled on and Barclays notably now expecting no less than three rate cuts in the second half of the year.

Yet even as one after another Wall Street bank takes the machete to its forecasts, one bank has remained resolute in its projections, and despite the ongoing projection carnage, has refused to cut either its Fed rate forecast or its 10Y interest rate forecast.

That bank is Goldman Sachs, the same Goldman which we referenced last Friday when we said that “a financial cage match is forming between Goldman and JPMorgan”:

In the hawkish corner we have Goldman’s chief economist, Jan Hatzius who until very recently was expecting no rate cuts in the coming year, and in fact is anticipating the Fed will hike toward the end of 2020, arguably as a result of the upcoming inflationary spike as a result of trade war. In the dovish corner, we have JP Morgan which as of this morning has turned so bearish that the latest report from the bank’s chief economist, Michael Feroli, says that “Making Abysmal Growth Attainable” again would require not one but two rate cuts before the end of 2020!

But while Goldman stubbornly refuses to trim either its rate, market and GDP forecasts, today it made a small but notable adjustment to one of its core views: the bank’s heretofore optimistic take on how the trade war plays out.

Long story short, Goldman is no longer optimistic, and as Jan Hatzius writes, “we have revised our trade war assumptions and now expect a 10% tariff rate by July on both the final $300bn of Chinese imports (60% subjective odds) and on all Mexican products (70% odds for the first 5%, and just over 50% odds for the step-up to 10%). For China, this represents a middle ground between our previous assumption of a delay following the G20 summit in late June and the full 25% across-the-board tariff proposed by the US Trade Representative.”

First some more details on China:

New tariffs on all imports from China, some additional non-tariff restrictions, and no deal until late 2019….While there is still a clear possibility that a meeting between Presidents Trump and Xi at the G20 summit on June 28-29 could avert further escalation, we believe the probability has risen that the next round of tariffs will take effect and we now view this as the base case (60% probability).

The probability of this next round has risen, in our view, because both sides continue to escalate the dispute with increasingly confrontational rhetoric and new forms of non-tariff retaliation. Moreover, while we believe that both sides would ultimately like to reach an agreement, neither side appears to be under much political pressure to do so at the moment. That said, we continue to expect that President Trump will want to announce some type of agreement with China to lower those tariffs by late 2019 or early 2020. This would allow consumers—and likely equity markets—to benefit prior to the 2020 presidential election.

How does trade war with China end?

It seems likely that by later this year both sides will become more interested in reaching an agreement as the economic and political costs of tariffs and other trade restrictions mount. We assume that the US and China will reach an   agreement late in 2019 that reduces—but probably does not eliminate—US tariffs in return for policy concessions from China. However, we do not expect that the US and China will conclude a far-reaching agreement, as had seemed likely only a few weeks ago. Indeed, even a deal later this year should not be expected to resolve all the differences between the two countries (and residual uncertainty is likely to remain about whether tariffs could be re-introduced at a later date).

Next, Goldman’s view on Mexican tariffs:

New tariffs on Mexico take effect temporarily but stop short of 25%. President Trump has proposed a 5% tariff on all goods entering the US from Mexico effective June 10. The tariff would increase by 5pp on July 1 and every month thereafter until it reaches 25%, where it would remain until the President determines that Mexico “substantially stops the illegal inflow of aliens coming through its territory.” According to the White House, avoiding the tariffs would require Mexico to secure the Mexico-Guatemala border, crack down on criminal organizations, and establish a “safe third country agreement” to prevent asylum seekers entering Mexico from claiming asylum in the US.

In light of the fact that these tariffs would take effect in less than 10 days and include a number of specific conditions, we believe it is fairly likely (70% probability) that at least the 5% tariff takes effect. That said, the President threatened another high-profile immigration-related action—closing the US-Mexico border—but never implemented it, raising the possibility that this might also be a false alarm. While this is clearly possible, we believe the proposed tariff is more likely to take effect since a 5% tariff would be less disruptive than a full border closing.

We believe it is a closer call as to whether the rate steps up to 10% on July 1, but see this as slightly more likely than not given the short time that Mexico would have to make reforms and the possibility that US-Mexico relations deteriorate once the first round of tariffs has taken effect, as occurred with US-China relations. However, we expect that tariff escalation would stop at 10% and that a resolution is likely to be reached in the next few months that would eliminate the tariff. We do not expect the US-Mexico-Canada Agreement (USMCA) to be ratified as long as this tariff is in effect .

At this stage, we believe the Mexican authorities want to engage and may not immediately retaliate. On the three main White House demands (secure the Mexico-Guatemala border, crack down on criminal organizations, and establish a “safe third country agreement”), we see scope for compromise as all three are issues that interest and benefit Mexican authorities as well (though progress on the third could be constrained by domestic politics and sensibilities).

But wait, there’s more: as Hatzius admits, “additional tariff rate increases or an across-the-board auto tariff are also possible but not our base case. We still expect deals with China and Mexico to lead to a removal of the tariffs, but not until late 2019/2020.”

Goldman’s various scenarios sumamarized visually:

In other words, expect a long and painful trade war which will conclude in early 2020 at the earliest.

What happens next? Here, as we observed most recently this morning, Goldman is confident that accelerating trade wars will impact prices, pushing them sharply higher, and in effect resulting in a stagflationary outcome, to wit:

The trade war is likely to become increasingly visible in the inflation numbers. Our new core PCE forecast incorporates a ½pp tariff boost and sees inflation climbing from 1.57% in April to 2% in August and to 2.3%-2.4% in early 2020, before diminishing under our assumption of tariff removal. If all proposed tariffs are implemented, we estimate a peak core inflation boost of +1¼pp.

So while Goldman expects cost-push (certainly not demand-pull) inflation to hit over the next 12 months, the bank notes that while growth effects are much less predictable, it still just took off a 0.5% from its previous 2.5% H2 GDP forecast, to wit:

“financial conditions have already tightened by about 50bp, and we attribute some of the weakness in the survey data in late May to the impact of the escalating trade war. On the back of these developments, we are lowering our H2 GDP forecast by about ½pp to 2%. We expect growth to rebound moderately in 2020 as tariffs come off and financial conditions stabilize.

Yet while Goldman was willing to admit it was wrong in its complacent outlook on trade war, it still remains stubborn in refusing to cut its Fed Funds rate forecast, even as all its peers are doing just that. Well, it may no tbe cutting it explicitly, but it sure is doing so as implicitly as it can, in a kinda, sorta way:

Because of the downside risks to growth, we have sharply raised our subjective probabilities for Fed rate cuts.But while it is a close call, the outlook has not yet changed enough for cuts to become our baseline forecast. So far, the FCI move has been far smaller than those of 2015-2016 and 2018, and while some further tightening is likely, we still don’t expect output and employment growth to fall below trend. With only a moderate tightening in financial conditions, still-decent growth, and inflation headed above 2%, cutting rates could look overly political in light of President Trump’s vocal demands for easier policy.

To be sure, what the Fed does next is without doubt the most important question: will Powell cut as a result of deflation, or will the rising price component of the upcoming stagflation be enough to pressure to Fed from cutting rates and in fact will the FOMC hike rates? Here is Goldman’s discussion on the topic:

There is no question that the probability of cuts in the remainder of 2019 has risen, owing to a combination of the tightening in financial conditions and the associated deterioration in the near-term growth outlook, continued below- target inflation, and increased acknowledgment on the Fed’s part—e.g. in Vice Chair Clarida’s speech last Thursday—that the risks are tilted toward cuts. We have therefore sharply lifted our subjective probabilities of cuts, for example raising our odds for Q3 and Q4 by 19pp each (to 28% and 31%). Our updated modal and expected funds rate paths are shown in Exhibit 9.

But while it is a close call, we have not yet seen enough of a change in the outlook to adopt a baseline expectation of rate cuts.

On the growth and employment side, even our revised forecast looks for growth slightly above trend and a mild downward trend in the unemployment rate as the drag from financial conditions gradually diminishes and the strength of household demand offsets the weakness in business investment. The main reason for these relatively limited changes is that financial conditions have only tightened moderately so far. Admittedly, part of this relative reflects the 50bp rally in the bond market over the past three months, which in turn is partly predicated on the expectation of Fed easing. So a decision by the FOMC not to deliver on this expectation could result in further FCI tightening.

Meanwhile, on the inflation side, we share Chair Powell’s view expressed at the May 1 FOMC press conference that the current weakness in the PCE ex food and energy is largely temporary. In fact, the most recent data have reinforced this view. The PCE ex food and energy rose a firm 0.247% in April and the Dallas Fed’s trimmed-mean PCE index showed its largest month-to-month increase of the entire expansion and now stands at a year-on-year rate of just over 2.0%, as illustrated in Exhibit 10. The news on household inflation expectations has also been fairly solid, with a rise in the University of Michigan’s 5-10 year consumer measure in May to 2.6%, the top end of the range seen in the past three years. Combined with the prospective tariff impact, these signals increase our confidence that the PCE ex food and energy measure will indeed rise above 2% by early 2020.

So our baseline is still one in which unemployment moves sideways or lower from levels that are already below the FOMC’s estimate of the sustainable rate, while inflation is above the 2% target. If this forecast is correct, a decision to cut on the basis of a relatively limited tightening in financial conditions might well look overly political in light of President Trump’s vocal demands for easier policy. Since Fed officials must think not just about near-term risk management but also about the longer-term credibility and political independence of the institution, this might be another reason to resist  cuts, barring a bigger shift in the outlook for employment and inflation.

So after that lengthy apology that it had been largely wrong about much if not all, and cognizant that it will likely continue to be wrong in a world in which the market and economy flip by 180 degrees depending on what Trump may tweet at any given moment, Goldman warns that it will probably be wrong yet again:

There are several ways in which our decision to buck the trend toward forecasting rate cuts could prove ill-advised. Perhaps the slowdown in some of the May business surveys sets the stage for a sharp deterioration in the first-tier ISM and employment releases in the coming week. Perhaps the weakness in the PCE ex food and energy will persist for one reason or another. And most importantly, perhaps the US-China escalation will continue until the impact on business confidence and financial conditions is sufficiently severe to force a change, including in the FOMC’s policy.

The bank’s conclusion: “we will continue to evaluate our view in light of changes in the economic data, the policy environment, and financial conditions, and make changes as appropriate.” And since these days Goldman is best known for abusing its clients’ balance sheet as it unloads existing positions before taking the other side of whatever trade it is recommending via its public-facing research, once Goldman does reverse and predicts rate cuts, that will be the sign that the bottom is once again in.

7  OIL ISSUES

 

8. EMERGING MARKETS

INDIA/USA

Now it is India’s turn to face the wrath of Trump.  Trump now signals that he wants to end India’s designation as a developing nation as he continues with his protectionist policies..

(courtesy zerohedge)

Trump Declares Trade War On India, Imposes New Tariffs

President Trump has a victory present for newly re-elected Prime Minister Narendra Modi – and it’s the economic equivalent of a flaming bag of shit on India’s doorstep.

In his latest act of aggressive protectionism in what has already been an action-packed week, Trump late Friday announced that his administration was terminating India’s designation as a developing nation under a trade program that allowed Indian exporters to ship 2,000 products into the US duty free. The decision to revoke India’s preferential trade status, which mirrors Trump’s decision to revoke Turkey’s status under the program a few weeks back, comes one day after Modi was sworn in for a second term.

Modi

Under the decades-old program – known as the Generalized System of Preferences – Indian companies were able to avoid some $5.7 billion in duties back in 2017.

The new standards will take effect June 5.

“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Trump said in a proclamation on Friday evening. “Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”

The decision isn’t unexpected: The White House warned back in March that it could end India’s preferential treatment if India didn’t agree to certain reforms, but it decided to hold off so as to not hurt Modi politically during the run up to the election. According to Bloomberg, Trade Representative Robert Lighthizer has become increasingly frustrated with India’s trade barriers and practices. The trade rep has taken issue with the country’s self-designation as a developing nation at the World Trade Organization.

The White House’s Friday proclamation also imposes tariffs on solar cells and washing machines from India and Turkey. Those tariffs had been imposed by Trump in 2018, but India and Turkey had been exempt because of their status as developing nations under the GSP.

One critic of Trump’s decision warned that ending the designation for India would cost American businesses hundreds of millions of dollars a year.

Dan Anthony, executive director of the Coalition for GSP, a trade group, said that the decision “will cost American businesses over $300 million in additional tariffs every year.”

“There are no winners from today’s decision,” Anthony said in a statement.

“American importers will pay more, while some American exporters will continue to face current market access barriers in India and others, including farmers, are very likely to be subject to new retaliatory tariffs.”

Read the White House order below:

Subject: Proclamation to Modify the List of Beneficiary Developing Countries Under the Trade Act of 1974

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

1. In Executive Order 11888 of November 24, 1975, the President designated India as a beneficiary developing country for purposes of the Generalized System of Preferences (GSP) (19 U.S.C. 2461 et seq.).

2. Pursuant to section 502(d)(1) of the Trade Act of 1974, as amended (the “1974 Act”) (19 U.S.C. 2462(d)(1)), the President may withdraw, suspend, or limit the application of the duty-free treatment accorded under the GSP with respect to any beneficiary developing country. In taking any action under section 502(d)(1) of the 1974 Act, the President shall consider the factors set forth in sections 501 and 502(c) of the 1974 Act (19 U.S.C. 2461 and 2462(c)).

3. Section 502(c)(4) of the 1974 Act (19 U.S.C. 2462(c)(4)) provides that, in determining whether to designate any country as a beneficiary developing country, the President shall take into account, among other factors, the extent to which such country has assured the United States that it will provide equitable and reasonable access to the markets and basic commodity resources of such country and the extent to which such country has assured the United States that it will refrain from engaging in unreasonable export practices.

4. Consistent with section 502(d)(1) of the 1974 Act, and having considered the factors set forth in sections 501 and 502(c), I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets. Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.

5. Section 502(f)(2) of the 1974 Act (19 U.S.C. 2462(f)(2)) requires the President to notify the Congress and the affected beneficiary developing country, at least 60 days before termination, of the President’s intention to terminate the affected country’s designation as a beneficiary developing country, together with the considerations entering into such decision. I notified the Congress and India on March 4, 2019, of my intent to terminate India’s designation, together with the considerations entering into my decision.

6. Pursuant to section 203 of the 1974 Act (19 U.S.C. 2253), and after receiving a report from the International Trade Commission prepared under section 202 of the 1974 Act (19 U.S.C. 2252), the President may implement a measure in the form of a safeguard to address increased imports of articles that are a substantial cause of serious injury to a domestic industry producing like or directly competitive products. When acting pursuant to section 203 of the 1974 Act, the President shall take action that he determines will facilitate efforts of the domestic industry to make a positive adjustment to import competition and provide greater economic and social benefits than costs.

7. In Proclamation 9693 of January 23, 2018, pursuant to section 203 of the 1974 Act, I implemented a safeguard measure on imports of certain crystalline silicon photovoltaic (CSPV) cells, whether or not partially or fully assembled into other products (including, but not limited to, modules, laminates, panels, and building-integrated materials) (“CSPV products”). In Proclamation 9694 of January 23, 2018, pursuant to section 203 of the 1974 Act, I implemented a safeguard measure on imports of large residential washers.

8. The safeguard measures implemented by Proclamations 9693 and 9694 exempt imports of covered products from developing countries that are Members of the World Trade Organization (WTO), including India, if such a country’s individual share of total imports of the product does not exceed 3 percent and if imports of all such countries with less than 3 percent import share do not collectively account for more than 9 percent of total imports of the product.

9. Consistent with my determination that it is appropriate to terminate the designation of India as a beneficiary developing country under the GSP, effective June 5, 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. To reflect India’s removal from the list, I have determined that it is appropriate to revise subdivision (b)(2) of U.S. note 17 and subdivision (b) of U.S. note 18 to subchapter III of chapter 99 of the Harmonized Tariff Schedule of the United States (HTS) to delete the references to India.

10. Section 604 of the 1974 Act (19 U.S.C. 2483) authorizes the President to embody in the HTS the substance of the relevant provisions of the 1974 Act, and of other Acts affecting import treatment, and actions thereunder, including removal, modification, continuance, or imposition of any rate of duty or other import restriction.

11. In Proclamation 9887 of May 16, 2019, I terminated the designation of Turkey as a beneficiary developing country for purposes of the GSP and removed the exemption for Turkey from application of the safeguard measures on CSPV products and large residential washers. To reflect this termination and removal, I made certain modifications to the HTS, effective with respect to goods entered for consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. eastern daylight time on May 17, 2019.

NOW, THEREFORE, I, DONALD J. TRUMP, President of the United States of America, acting under the authority vested in me by the Constitution and the laws of the United States of America, including title V and sections 203 and 604 of the 1974 Act, do hereby proclaim that:

(1) The designation of India as a beneficiary developing country is terminated, effective June 5, 2019.

(2) To reflect this termination, general notes 4(a) and 4(d) and pertinent subheadings of the HTS are modified as set forth in Annex A to this proclamation.

(3) Any provisions of previous proclamations and Executive Orders that are inconsistent with the actions taken in this proclamation are superseded to the extent of such inconsistency.

(4) The exemption for India from application of the safeguard measures on CSPV products and large residential washers is removed, effective June 5, 2019.

(5) To reflect this revision, subdivision (b)(2) of U.S. note 17 and subdivision (b) of U.S. note 18 to subchapter III of chapter 99 of the HTS are each modified as set forth in Annex B to this proclamation.

(6) Any merchandise from India or Turkey subject to the safeguard measures implemented by Proclamation 9693 and Proclamation 9694 that is admitted into a United States foreign trade zone on or after 12:01 a.m. eastern daylight time on June 5, 2019, must be admitted as “privileged foreign status” as defined in 19 CFR 146.41, and will be subject upon entry for consumption to the safeguard measures implemented by Proclamation 9693 and Proclamation 9694.

IN WITNESS WHEREOF, I have hereunto set my hand this thirty-first day of May, in the year of our Lord two thousand nineteen, and of the Independence of the United States of America the two hundred and forty-third.

DONALD J. TRUMP

end

First India and now Trump is considering Australia.  Soon Trump will hit the entire globe with tariffs

(courtesy Mish Shedlock/Mishtalk)

War With The World? Trump Slaps Tariffs On India, Considering Australia

Authored by Mike Shedlock via MishTalk,

Add India to the list of countries the US is in a trade war with. For now, Australia barely avoided Trump’s wrath.

“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Mr. Trump said on Friday.

Tariffs start June 5 as Trump Pressures India Over Open Markets.

Mr. Trump on Friday said India would be removed from the U.S.’s privileged-trading program called the Generalized System of Preferences on Wednesday. Under the decadeslong program meant for some developing economies, the U.S. had allowed India to avoid tariffs on certain exports to the U.S. in the interest of promoting tighter trade ties and development.

India, the U.S.’s ninth-largest trading partner, is a top beneficiary of the GSP program. Mr. Trump’s move will add tariffs of as much as 7% on Indian exports of goods like chemicals, auto parts and tableware to the U.S., which in 2018 accounted for more than 11%, or $6.3 billion, of India’s total exports of goods valued at $54.4 billion, according to the Congressional Research Service, a research agency for the U.S. Congress.

Spotlight Australia

Please consider Trump Administration Considered Tariffs on Australia.

Some of President Trump’s top trade advisers had urged the tariffs as a response to a surge of Australian aluminum flowing onto the American market over the past year. But officials at the Defense and State Departments told Mr. Trump the move would alienate a top ally and could come at significant cost to the United States.

The administration ultimately agreed not to take any action, at least temporarily.

The measure would open yet another front in a global trade war that has pitted the United States against allies like Canada, Mexico, Europe and Japan, and deepened divisions with countries like China. It would also be the end of a reprieve for the only country to be fully exempted from the start from steel and aluminum tariffs that Mr. Trump imposed last year.

The tariffs on Australia would have hit imports of aluminum, although measures that would have applied to other products had been discussed as well. Shipments of Australian aluminum to the United States have surged since last year, when Australia became one of the few countries not to face metal tariffs.

Unfair Competition

Trump wants to protect US steel and aluminum manufacturers from “unfair competition”.

How come the rest of the world, including Canada and Australia can produce steel and aluminum cheaper than the US?

Even if there was a nefarious answer to that question (there isn’t), the fact remains that far more US industries benefit from cheaper metals than are harmed by them.

Logically, no matter the reason, the US should welcome cheap steel and aluminum.

Chain Reaction

Trump put tariffs on steel and aluminum from Mexico, Canada, and China, so importers turned to Australia.

Aluminum imports from Australia rose by 45 percent from 2017 to 2018. They are up even more, by 350 percent, for the first three months of 2019, compared with the same period in 2018.

The same thing is happening across the board.

Tariffs on China drove imports from Vietnam, India, and other places.

For now, Australia is still a small supplier. Yet Trump is hopping mad.

Understanding Trade

I saw an interesting Tweet yesterday in which someone claimed “trade is a zero sum game”.

That is seriously wrong. Unfortunately, that is how Trump views things. Trump believes there is a winner and loser to every deal. The fact is both sides have to believe they gain, or there is no deal.

Here’s a simple example I gave someone other night in a discussion at karaoke.

Imagine an island with 8 people. Four are net makers and four are fishermen. The net makers make and mend nets, and perhaps gather coconuts in their spare time.

The net makers trade nets and coconuts for fish.

In the absence of trading nets for fish, the net makers would have to learn how to fish. The fisherman would have to learn now to make nets and plant and gather coconuts.

It’s much easier to become skilled at one or two things than dozens of things. In essence, this is what trade is all about: Everyone wins.

Better Deal

By insisting on getting a better deal than the other side, Trump risks a slowdown in trade.

Trump thinks this will bring jobs back to the US.

It won’t.

Steel and aluminum are particularly misguided tariffs because very few are employed in industries that produce steel. By a factor of 10 or more there are more US manufacturers who use steel and aluminum.

The US has some legitimate gripes, but tariffs never have, nor ever will, produce the results Trump hoes for.

Not Easy to Win

Instead of trade wars being easy to win, we see Trump is in a trade war with the world, with precisely zero victories.

Meanwhile, China Puts U.S. Soybean Buying on Hold as Tariff War Escalates.

No one wins trade wars. Upping the ante just makes for bigger losses all around.

Venezuela

This is a major blow to Maduro as a major Russian defense contractor exits Venezuela and it appears that this contractor has withdrawn most of its advisers.  This is a broad signal of a major Russia exit form a defense supporting the Maduro government.

(zerohedge)

Major Russian Defense Contractor Exits Venezuela In Huge Blow To Maduro

A major Russian defense contractor has pulled out of Venezuela and withdrawn most of its advisers in what appears to signal a broader Russian exit of defense support to the Maduro government.

The Wall Street Journalnotes that it’s a huge blow to Maduro — and though it appears primarily motivated by lack of confidence in Caracas’ ability to pay the bills — this could mark the writing on the wall in terms of the future powerful backing of Maduro’s biggest international supporter. It further comes as the US has vowed to keep up the pressure and after the Kremlin condemned what it called ongoing “US-backed coup attempts”.

 

Prior file photo of Venezuelan Defense Minister Vladimir Padrino (center) during joint military exercises with Russia which involved the arrival of two Tupolev Tu-160 strategic long-range bombers on December 10, 2018. Image source: AFP/Getty photo

The WSJ reports the following details:

Russian state defense contractor Rostec, which has trained Venezuelan troops and advised on securing arms contracts, has cut its staff in Venezuela to just a few dozen, from about 1,000 at the height of cooperation between Moscow and Caracas several years ago, said a person close to the Russian defense ministry.

The report describes a “gradual pullout” which has been noticeably ramping up of late, citing sources to say further it’s due to “a lack of new contracts” and crucially “the acceptance that Mr. Maduro’s regime no longer has the cash to continue to pay for other Rostec services associated with past contracts.”

The oil-rich but cash poor socialist country has long been deep in default on payments to international creditors, totaling in the billions owed to Russia and China alone with oil-for-debt swaps no longer able to keep up, given plummeting oil production over the past two decades since Huge Chavez’s rule.

 

Venezuelan-Russian-made Mil Mi-17 helicopters overfly a column of T-72B tanks during a military parade in 2017, via 

Among the benefits Russia and China received in their loans-for-oil Venezuela arrangements included having a defense and technology foothold in Latin America (Venezuela is Russia’s biggest Latin American customer).

At the same time, Maduro has recently touted powerful global partners to fend off total global isolation, bolstering his domestic standing with promises that he has the backing to withstand US aggression.

Rostec’s pullout now greatly endangers that prior status quo, per the WSJ:

Rostec’s withdrawal of permanent and temporary employees is a major setback for Maduro, who hasfrequently touted assistance support from Russia and China as a sign that other global powers are willing to assist him in his bitter standoff against the U.S. Russian military support has been central to Maduro’s pledge to defend Venezuela from any foreign invasion.

Certainly Moscow will continue to give Caracas political and moral support, with even perhaps the occasional long-range bomber deployment like last December, yet such a visible withdrawal of Russian military contractors and technicians will be taken as a sign by Washington planners that Russia and other external backers won’t actually go to bat for Maduro should the end of his regime draw near during the next crisis scenario, or if US military pressure and efforts turn more muscular.

 

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

Euro/USA 1.1187 UP .0031 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 /GREEN

 

 

USA/JAPAN YEN 108.32 UP 0.051 (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 1.2632   UP   0.00007  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3495 DOWN .0014 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  MONDAY morning in Europe, the Euro ROSE BY 31 basis points, trading now ABOVE the important 1.08 level RISING to 1.1187 Last night Shanghai COMPOSITE CLOSED DOWN 8.62 POINTS OR 0.30% 

 

 

 

 

 

//Hang Sang CLOSED DOWN 7.23 POINTS OR 0.03% 

 

 

 

 

/AUSTRALIA CLOSED DOWN 1.30%// EUROPEAN BOURSES ALL RED

 

 

 

 

 

 

The NIKKEI: this MONDAY morning CLOSED DOWN 190.31 POINTS OR 0.92% 

 

 

 

 

 

 

 

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL RED

 

 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 7.23 POINTS OR 0.03%

 

 

 

 

 

 

/SHANGHAI CLOSED DOWN 8.62 POINTS OR 0.30% 

 

 

 

 

 

 

 

 

 

Australia BOURSE CLOSED DOWN 1.25% 

 

 

Nikkei (Japan) CLOSED DOWN 190.31  POINTS OR 0.92%

 

 

 

 

 

 

 

 

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1317.55

silver:$14.71

Early MONDAY morning USA 10 year bond yield: 2.10% !!! DOWN 3 IN POINTS from FRIDAY’S night in basis points and it is trading WELL ABOVE resistance at 2.27-2.32%.

 

The 30 yr bond yield 2.56 DOWN 1  IN BASIS POINTS from FRIDAY night.

USA dollar index early MONDAY morning: 97.65 DOWN 10 CENT(S) from  FRIDAY’s close.

This ends early morning numbers MONDAY MORNING

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And now your closing MONDAY NUMBERS \12: 00 PM

Portuguese 10 year bond yield: 0.76%  DOWN 5 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.09%  DOWN 1   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.69% DOWN 3   IN basis point yield from YESTERDAY

ITALIAN 10 YR BOND YIELD: 2.67 DOWN 11  POINTS in basis point yield from YESTERDAY/

 

 

the Italian 10 yr bond yield is trading 187 points HIGHER than Spain.

GERMAN 10 YR BOND YIELD: FALLS –.20%   IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.76% 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 MONDAY

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

Euro/USA 1.1204  UP   .0047 or 47 basis points

USA/Japan: 108.41 UP .142 OR YEN DOWN 14  basis points/

Great Britain/USA 1.2618 UP .0007 POUND UP 7  BASIS POINTS)

Canadian dollar UP 36 basis points to 1.3473

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY: AT 6.9037    0N SHORE  (UP)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  6.9257  (YUAN UP)..GETTING REALLY DANGEROUS

TURKISH LIRA:  5.8404 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.09%

 

Your closing 10 yr US bond yield DOWN 1 IN basis points from FRIDAY at 2.11 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.56 DOWN 4 in basis points on the day

Your closing USA dollar index, 97.56 DOWN 19  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 MONDAY: 12:00 PM

London: CLOSED UP 23.09  0.32%

German Dax :  CLOSED UP 65.97 POINTS OR 0.56%

Paris Cac CLOSED UP 20.74 POINTS 0.51%

Spain IBEX CLOSED UP 18.60 POINTS or 0.21%

Italian MIB: CLOSED UP 72.13 POINTS OR 0.36%

 

 

 

 

 

WTI Oil price; 53.57 12:00  PM  EST

Brent Oil: 61.57 12:00 EST

USA /RUSSIAN /   ROUBLE CROSS:    65.39  THE CROSS LOWER BY 0.04 ROUBLES/DOLLAR (ROUBLE HIGHER BY 4 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.20 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 :  52.80//WORLD DEFLATING

 

 

BRENT :  60.72

USA 10 YR BOND YIELD: … 2.08…   VERY DEADLY// AND INDICATIVE OF A HUGE RECESSION COMING UPON US

 

 

 

 

 

 

 

 

 

USA 30 YR BOND YIELD: 2.54..VERY DEADLY/ AND INDICATIVE OF A HUGE RECESSION COMING UPON US:

 

 

 

 

 

EURO/USA 1.1242 ( UP 85   BASIS POINTS)

USA/JAPANESE YEN:108,07 DOWN .198 (YEN UP 20 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 97.24 DOWN 51 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2666 UP 41  POINTS

 

the Turkish lira close: 5.8317 (AFTER GOV’T INTERVENTION THIS MORNING)

 

the Russian rouble 65.34   UP 0.09 Roubles against the uSA dollar.( UP 09 BASIS POINTS)

Canadian dollar:  1.3445 UP 63 BASIS pts

USA/CHINESE YUAN (CNY) :  6.9037  (ONSHORE)/we need to watch these levels/anything greater than 6.95 will be deadly./

 

USA/CHINESE YUAN(CNH): 6.9216 (OFFSHORE) we need to watch these levels/anything greater than 6.95 will be deadly/

German 10 yr bond yield at 5 pm: ,-0.20%

 

The Dow closed  UP 4,74 POINTS OR 0.02%

 

NASDAQ closed DOWN 120.13 POINTS OR 1.61%

 


VOLATILITY INDEX:  18.86 CLOSED UP 0.15

LIBOR 3 MONTH DURATION: 2.502%//

 

 

 

FROM 2.520

 

 

 

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

TRADING IN GRAPH FORM FOR THE DAY//

Tech Wreck Trumps Bullard Bounce; Dollar Dumps As Bonds & Bullion Jump

Did anyone else see an analogy for the world in this?

in this?

 

 

China opened optimistically, but faded soon after the open, only to flatline during the afternoon session…

 

European markets were the opposite, opening down hard then ramping all day long..

 

A double-whammy from Bullard boosted stocks briefly (but battered bond yields and the dollar)

1325ET FED’S BULLARD: RATE CUT MAY BE WARRANTED SOON TO LIFT INFLATION

1505ET FED’S BULLARD: INFLATION BELOW TARGET IS ANOTHER RATE-CUT ARGUMENT

But tech-probe trouble trumped the Fed Put today…(Dow ended unch, S&P red and Nasdaq clubbed like a baby seal)

zerohedge@zerohedge

Will the @federalreserve at least wait for the S&P to drop 10% from record all time highs in the history of the world before capitulating and cutting rates.

The reaction to the news that the DoJ is considering an antitrust investigation into Google parent Alphabet and an FTC probe of Facebook has been dramatic and justifiable in tech shares, with the Nasdaq 100 down hard today. But the reality is FAANG stocks have been in trouble for a while

Today’s bloodbath sent the Nasdaq back into correction territory (down 10.8% from highs)…

 

 

Credit markets are starting to crack more systemically…

 

 

Flashing very bright warning lights to stocks…

 

 

Bond yields continued to collapse, this time led by the short-end…

 

 

Yields are utterly collapsing…

 

 

Dramatically inverting the front-end of the curve…

And 3M-2Y is at 2007 crisis lows…

David Rosenberg@EconguyRosie

Surely if Powell is a “markets guy” then he’ll eventually understand that when the 2-year T-note yield drifts more than 50 bps below the funds rate, nasty things tend to happen. Time to take the blinders off.

The entire curve is underwater now out to beyond the 20Y…

MONETARY MAYHEM™@MONETARY_MAYHEM

Yield curve to @federalreserve

See MONETARY MAYHEM™’s other Tweets

The Dollar tumbled on the day, accelerating lower after Bullard hinted at rate-cuts soon…

 

With DXY breaking down to the 97.00 Maginot Line…

 

 

Bitcoin is unchanged, Ripple higher…

 

 

PMs and copper gained as the dollar dropped but early gains for oil were eviscerated…

 

Despite dollar weakness, oil tumbled once again – now down almost 22% from April highs…

 

Gold extended its recent surge…

 

Pushing to almost 90.0x ratio with Silver…

 

And notably gold is dramatically outperforming Yuan reaching near 6-year highs…

 

Finally, the market is pricing in 3 rate-cuts by the end of 2020…

Is that really a good reason to buy stocks?

StockCats@StockCats

if there had only been some warning signs…

end

 

i) Market trading/last night/Shanghai initial trading 8 pm est

Key data points : 8 pm

usa dollar vs cny: 6.9080

usa dollar vs cnh: 6.9380

usa 10 yr bond yield: 2.12… deadly//

Trump continues with protectionist policies.

(zerohedge)

Futures, Yuan Tumble In Early Asian Trading

Following another weekend highlighted by no progress in trade-talks and further recriminations (from China this time, blaming Trump for the latest collapse in discussions), equity futures and yuan are opening notably lower…

Bloomberg reports that Beijing released a white paper on Sunday saying the escalating trade war between the world’s two largest economies hasn’t “made America great again” — appropriating Trump’s 2016 campaign slogan. The paper instead contends that the trade actions have done serious harm to the U.S. economy by increasing production costs, causing prices hikes, damaging growth and people’s livelihoods and creating barriers to U.S. exports to China. In short, Trump’s tariffs aren’t helping, China concluded.

It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues, will only make things worse for all sides,” according to the white paper.

Additionally, as Bloomberg notes, President Trump opened another potential front in his trade war on Friday, terminating India’s designation as a developing nation and thereby eliminating an exception that allowed the country to export nearly 2,000 products to the U.S. duty-free.

“I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets,” Trump said in a proclamation.

“Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.”

S&P futures are testing the trade-deal hope lows…

 

Dow futures down around 200 points…

 

and Yuan is giving back late-Friday’s bounce gains…

end
EARLY THIS AFTERNOON:

Stocks Spike After Fed’s Bullard Suggests Rate-Cuts “Soon”

Update: The Bullard bounce has been destroyed by AAPL’s tumble after a Reuters reports that the Justice Dept. has been given jurisdiction over it for a potential probe as part of broad tech company review…

*  *  *

And just like that, The Fed Put is secure again…

St.Louis Fed head Jim Bullard unleashed the beast this morning in a Q&A but daring to admit that a rate-cut may be warranted soon to lift inflation.

A downward policy rate adjustment may be warranted soon to help re-center inflation and inflation expectations at target and also to provide some insurance in case of a sharper-than-expected slowdown…

The direct effects of trade restrictions on the U.S. economy are relatively small, but the effects through global financial markets may be larger…

“Even if the sharper-than-expected slowdown does not materialize, a rate cut would only mean that inflation and inflation expectations return to target more rapidly.”

Having rallied up to unchanged at the open, before plunging, US stocks are ramping off the lows…

Bullard’s comments mark the first time a Fed official has publicly suggested the need for a rate cut since the central bank put rates on hold in January, according to Bloomberg.

And do not forget that the market is already priced for 3 rate cuts before the end of 2020…

But, what Mr. Bullards seems to forget is thatthe last three recessions all took place with 3 months of the first rate cut after a hiking cycle!

END

ii)Market data/

Another indicator that the USA economy turned south:  USA Manufacturing crashes as well as the “hope” part of the index\\(courtesy zerohedge)

US Manufacturing ‘Hope’ Crashes To Record Low

Following the US Services sector’s collapse (and Canada and China’s plunge), US Manufacturing’s soft survey data tumbled in May.

The headline PMI fell to its lowest level since September 2009 as output growth eased (with output expectations crashing to the joint-lowest since records began) and new orders fell for the first time since August 2009.

The ISM Manufacturing print also disappointed at 52.1 (53.0 exp), the weakest since Oct 2016 (despite a rise in new export orders and employment)

Three of five ISM components declined, including production, inventories and supplier deliveries,and stagflation looms as prices paid rose.

ISM’s production gauge dropped to 51.3 in May, the lowest level since August 2016, even as the gauge of backlogs declined to a two-year low.

As Bloomberg notes, the ISM index’s lowest reading of Trump’s presidency — down from a 14-year high in August — follows a slew of other economic data that suggest the sector was on shakier ground even before the latest escalation of tariffs between the U.S. and China began to pinch margins.

Respondents are unanimous in their tariff tantrums…

“Ongoing tariffs [issue is] impacting costs and influencing supplier realignment on country of origin. Border issue is causing delays in imports from Mexico.” (Computer & Electronic Products)

“The threat of additional tariffs has forced a change in our supply chain strategy; we are shifting business from China to Mexico, which will not increase the number of U.S. jobs.” (Chemical Products)

“Sales continue to decline. Volumes are off, [and] profits haven’t decreased in proportion to sales. Higher-margin vehicles continue strong sales, but low- to mid-range sales are down.” (Transportation Equipment)

“The threat of a 15-percent increase on Section 301 tariffs is a concern. Although the potential has been around for months, the recent deadline was not expected. We had calculated and communicated the potential cost impact to our leadership.” (Petroleum & Coal Products)

As Chris Williamson, Chief Business Economist at IHS Markit, noted:

“May saw US manufacturers endure the toughest month in nearly ten years, with the headline PMI down to its lowest since the height of the global financial crisis. New orders are falling at a rate not seen since 2009, causing increasing numbers of firms to cut production and employment. At current levels, the survey is consistent with the official measure of manufacturing output falling at an increased rate in the second quarter, meaning production is set to act as a further drag on GDP, with factory payroll numbers likewise in decline.

“While tariffs were widely reported as having dampened demand and pushed costs higher, both producers and their suppliers often reported the need to hold selling prices lower amid lacklustre demand. While this bodes well for inflation, profit margins are clearly being squeezed as a result.

“With future optimism sliding sharply lower in May, risks to nearterm growth have shifted further to the downside.

“While companies of all sizes are struggling, the biggest change since the strong growth seen late last year is a deteriorating performance among larger companies, where surging order book growth just a few months ago has now turned into contraction, the first such decline seen in the series’ ten-year history.”

 

iii)USA ECONOMIC/GENERAL STORIES

Trump declares war on the Silicon Valley:  the dept of Justice is launching an atin monopoly probe on Google due to its huge number of purchases of over 200 start ups.

It looks like the remedy will be a blockage of purchases for Google as opposed to the EU which fined the company in the billions

(courtesy zerohedge)

Trump Declares War On Silicon Valley: DoJ Launches Google Anti-Monopoly Probe

Once shielded by the logic of Silicon Valley’s relentless churn of innovation – which dictated that no reigning tech empire could rule for long before going the way of Yahoo and AOL – tech giants like Facebook, Amazon and Google have been subjected to intensifying anti-trust pressure – Elizabeth Warren’s “Break up Big Tech”s billboard is only the latest example. Indeed, big tech trust-busting has become one of the few issues in contemporary Washington that garners genuine bipartisan support.

Warren

Since the Trump administration swept into power two years ago in spite of thinly veiled opposition from Silicon Valley – as it was later revealed, big tech effectively conspired with the Clinton campaign to hurt Trump’s chances – the drumbeat of unprecedented anti-trust scrutiny has grown steadily louder, facilitated by the president’s own publicly-voiced suspicions.

And on Friday, the levee finally broke.

Just before midnight on Friday, at the close of what was a hectic month for markets, WSJ dropped a bombshell of a story:The paper reported that the DoJ has opened an anti-trust investigation of Alphabet Inc., which could “present a major new layer of regulatory scrutiny for the search giant, according to people familiar with the matter.” The report was sourced to “people familiar with the matter,” but was swiftly corroborated by the New York Times, Bloomberg and others.

For months now, the FTC has appeared to be gearing up for a showdown with big tech. The agency – which shares anti-trust authority with the DoJ – has created a new commission that could help undo big-tech tie-ups like Facebook’s acquisition of Instagram, and hired lawyers who have advanced new anti-monopoly theories that would help justify the breakup of companies like Amazon.

But as it turns out, the Trump administration’s first salvo against big tech didn’t come from the FTC; instead, this responsibility has been delegated to the DoJ, which has reportedly been tasked with supervising the investigation into Google.

That’s not super surprising, since the FTC already had its chance to nail Google with an anti-monopoly probe back in 2013. But the agency came up short. From what we can tell, it appears the administration will divvy up responsibility for any future anti-trust investigations between the two agencies, which means the FTC – which is already reportedly preparing to levy a massive fine against Facebook – could end up taking the lead in those cases.

Goog

Though WSJ didn’t specify which aspects of Google’s business might come under the microscope, a string of multi-billion-euro fines recently levied by the EU might offer some guidance. The bloc’s anti-trust authority, which has been far more eager to take on American tech giants than its American counterpart (for reasons that should be obvious to all), has fined Google over its practice of bundling software with its standard Android license, the way its search engine rankings favor its own product listings, and ways it has harmed competition in the digital advertising market.

During the height of the controversy over big tech’s abuses of sensitive user data last year, the Verge published a story speculating about how the monopolistic tendencies of each of the dominant Silicon Valley tech giants could be remedied. For Google, the Verge argued, the best remedy would be a ban on acquisitions – a strategy that has been bandied about in Congress.

Our best model for tech antitrust is the Department of Justice’s anti-bundling case against Microsoft in the ’90s, which argued that Microsoft was using its control over the PC market to force out competing operating systems and browsers. If you’re looking for a contemporary equivalent, Google is probably the closest fit. On a good day, Google (or Alphabet, if you prefer) is the most valuable company in the world by market cap, with dozens of different products supported by an all-encompassing ad network. Google also has clear and committed enemies, with Microsoft, Oracle, Yelp, and even the Motion Picture Association of America calling for restrictions on the company’s power.

But according to Open Markets’ Matthew Stoller, the best long-term remedy for Google’s dominance has more to do with Google’s acquisitions. “If you’re looking for a silver bullet, probably the best thing to do would be to block Google from being able to buy any companies,” says Stoller. “Suddenly, you have to compete with Google, you can’t just be bought out by Google.”

That might sound tame compared to Europe’s billion-dollar fines, but it cuts to the core of how Google is organized. The company has acquired more than 200 startups since it was founded, including central products like YouTube, Android, and DoubleClick. The company’s modular structure is arguably a direct result of that buying spree, and it’s hard to imagine what Google would look like without it. More recent buys like Nest have fallen under the broader Alphabet umbrella, but the core strategy hasn’t changed. Would Google still be an AI giant if it hadn’t bought DeepMind? Probably, but everyone involved would have had to work a lot harder.

Even better, anti-monopoly activists would have a bunch of different ways to block those acquisitions. The Department of Justice’s antitrust division hasn’t contested Google’s acquisitions so far, but it could always change its approach.The strongest fix would come from Congress, where Sen. Amy Klobuchar (D-MN) has introduced a bill that would place an outright ban on acquisitions by any company with a market cap higher than $100 billion. (As of press time, Google is worth roughly $840 billion.)

We feel it’s no exaggeration to say that this is only the beginning of what could become an epoch-defining story arch. And like every good story, this one will have main characters and bit players. As far as we can tell, one of the leading roles will likely be played by Justice Department antitrust chief Makan Delrahim, a previously obscure Trump Administration official who is now in charge of one of the most consequential investigations in recent memory.

Setting aside what it might mean for Silicon Valley, the investigation will also have major ramifications for markets, since shares of the big tech companies have been at the vanguard of the torrid post-crisis bull market. Though the influence of FANG stocks on overall market performance has waned this year, they remain hugely influential.

Tech giants are far and away the biggest contributors to SPX sales growth…

FANG

…and they have generated nearly all SPX after-tax adjusted profit margin since the crisis.

Chart

News of the investigation could adversely impact shares of the big tech companies, which will in turn create a serious drag for the major indexes. For investors, it will be one more threat to a bull market which is already teetering thanks to President Trump’s trade war with China (and now Mexico).

We imagine we’ll be hearing more about the probe through both official and unofficial channels in the coming weeks.

END
Monday morning/Google to open down 3%
(zerohedge)

Google Shares Slump 3% After Tech Giant’s Weekend From Hell

Between the DoJ firing the Trump Administration declaring war on the Silicon Valley tech giant, and the cloud outages that plagued much of the US and Europe Sunday afternoon, Google parent Alphabet had an extremely rough weekend.

And as expected, markets are now pricing this in, as Google shares slump 3% in pre-market trading on Monday.

Goog

Shares are down 15% in one month…one of the rockiest stretches for the company in recent memory.

And now the Federal trade Commission opens up a competition probe against Facebook
(courtesy zerohedge)

Facebook Tumbles After FTC Opens Competition Probe

Following the first report about the Trump Administration’s looming war with Silicon Valley – a late Friday report from WSJ about the DoJ opening an anti-trust probe into Google – WSJ‘s latest follow up on Monday is a report that the FTC is preparing to open a similar investigation into Facebook.

The news sent Facebook shares down 9% in midday trade, wiping $6 billion off CEO Mark Zuckerberg’s net worth in minutes.

FB

Per WSJ, the fact that the FTC – which is already preparing to levy a massive fine against Facebook for data privacy violations – has secured jurisdiction over the anti-trust probe suggests that it is considering even more rigorous scrutiny.

Earlier, the Washington Post published more details about the incipient anti-trust push when it revealed that the FTC also has jurisdiction over an anti-trust probe into Amazon, as the FTC and DoJ divide up the anti-trust push not on a company by company, but on an issue-by-issue, basis, as WSJ explained.

Jurisdictional agreements between the FTC and Justice Department don’t assign one agency the right to oversee one company for all purposes. Instead, the two antitrust agencies clear each other to work on specific issues. Both the FTC and Justice Department, for example, in the past have conducted oversight of issues related to Google and Amazon.

If the intraday drop holds, it will be the biggest decline in FB shares since December.

end

AND NOW APPLE ON REPORTS OF A DEPT OF JUSTICE ANTI TRUST PROBE

(COURTESY ZEROHEDGE)

Apple Shares Drop To Session Lows On Reports Of DoJ Anti-Trust Probe

The latest scoop on the Trump Administration’s big-tech anti-monopoly push comes courtesy of Reuters, which just sent Apple shares reeling by reporting that the DoJ will lead an anti-monopoly probe into the consumer-tech giant.

AAPL

A fusillade of reports about the DoJ-FTC joint anti-trust push into Silicon Valley’s largest and most powerful companies began on Friday with a WSJ report published just before midnight. According to that report, which was swiftly confirmed by other news orgs, the DoJ is taking the lead on the investigation into Google. Then, on Monday, that initial report was followed by a handful of reports on Monday about investigations into Amazon, Facebook and, now, Apple.

Here’s more from Reuters:

The U.S. Justice Department has jurisdiction for a potential antitrust probe of Apple Inc as part of a broader review of technology companies, two sources told Reuters.

The Justice Department’s Antitrust Division and Federal Trade Commission (FTC) met in recent weeks to give the Justice Department the jurisdiction to undertake a potential antitrust probe of Google, owned by Alphabet Inc and Apple, the sources said.

Here’s who’s leading the investigation into whom, at last count:

FTC: Facebook, Amazon

DoJ: Apple, Google

And just like that, the ‘Bullard bounce’, which briefly sent stocks into the green, is being eroded.

As WSJ explained on Monday in a report about the investigation into Facebook, both agencies will likely be involved with various aspects of each probe, even as they divide up who which agency will take the lead investigating various companies.

The Reuters report hit just as Tim Cook was presenting at Monday’s Apple developer conference.

At this point, it appears the Trump Administration is launch anti-monopoly crackdowns on all of the high-flying FAANG stocks, except Netflix.

Citizens are fleeing Chicago has the city and the state itself is in deep financial trouble.  As you can see below housing prices have fallen during the past 10 years as opposed to other cities in the uSA
(courtesy zerohedge)

Chicago’s Pension Nightmare Is Wreaking Havoc On The City’s Housing Market

As a result of high taxes and government debt, combined with a nightmarish looming pension liability, Chicago’s housing market continues to collapse, according to a new write-up in the City Journal.

Average home prices in Chicago have still not recovered from the downturn that started in 2009, despite the fact that property taxes continue to climb. This is part of the reason Illinois ranks highest among states losing people to other areas of the country. Chicago homeowners are also taking big losses when they sell their homes.

Ball State economist Michael Hicks said last month:

“Taxes are high, the services [that taxes] pay for are terrible, and the debt load is so high, so palpably unsustainable that people have no belief that the resources can be found to turn it all around.”

“You won’t recruit a business, you won’t recruit a family to live here,” Chicago mayor Rahm Emanuel said in 2012, warning about the city’s pension problems. And that looks to be the case: Realtor.com predicted that Chicago would have the weakest housing activity this year among the nation’s top 100 markets.

But unions in Chicago continue to push for higher pension contributions, even while efforts to curb the problem have failed. This has resulted on the money having to come from somewhere – and that somewhere is taxes. According to the report, Chicago’s annual pension payments have doubled over the last few years, to nearly $1.2 billion, and are set to rise to $2 billion in 3 years.

In 2015, the city approved $543 million in property tax increases as a result. Chicago schools also raised local homeowner taxes by $224 million in 2017. “Every penny” of these taxes goes into the pension system and Chicago now bears the title of “highest residential property-tax rates of any American city.”

And not surprisingly, residents are leaving Illinois and Chicago as a result. From 2011 to 2017, the state ranked second among states in outmigration, losing 640,000 more residents than it gained:

A recent Bloomberg study of metropolitan-area migration data found that the city had a net migration loss of 105,000 in 2014; it got worse in 2017, with the net loss totaling 155,000.

And while some governors, like New York’s Andrew Cuomo, acknowledge that taxes are driving people out, Illinois’ new governor Jay Pritzker has instead introduced legislation for more taxes on the wealthy, offering them a great excuse to leave Chicago, and the state. The city is losing its luster with millennials, too. Chicago now ranks as third-least attractive among the 53 largest metro areas in the U.S., losing an average of 19,000 young adults per year. Illinois ranks behind all but two states in trying to attract young adults. 

The city’s economy is also sputtering, averaging less than 1% growth in private sector jobs in each of the last 2 years.

And when residents flee the city, they put a home up for sale in the market without buying one in the same market. This has caused the price of housing to plunge – according to the report, the “average price of a single-family home in Chicago is lower than it was before prices began plunging back in 2009.”

The national average is a rise of 30% in home prices since the crash. Housing speculators in the city have been decimated:

Crain’s Chicago Business told the story of a Chicago-area executive who lost more than half a million on the sale of his home when he retired to move elsewhere. If he had invested the money in the stock market instead, he said, “I’d probably have $6 million now.”

This has led to a slew of underwater mortgages – the most in any major US market. It’s estimated that 135,000 mortgages may risk default during the next economic downturn.

In early April, we noted  that Chicago pension funds looked like a “collapsing ponzi scheme”. Back in December 2018, we noted that each Chicagoan owed $140,000 to bail out the city’s pensions.

And we’d love to say, “Let this be a lesson to the rest of the nation” who believes that government financial problems and pension liabilities are simply “no big deal”, but we’re certain they’re not listening anyway.

END

Why is Trump angry with Huawei?  It is not that Huawei is spying on the USA but Huawei will not let the USA spy on the rest of the world with Huawei technology.  Also the reason for the Mexican tariffs is to stop Chinese goods coming into Mexico and then re importing to the USA

(courtesy Tom Luongo)

Luongo: What’s The Plan Mr. Tariff Man?

Authored by Tom Luongo,

For three years now all I’ve heard is “Trust the plan.” “Trump has a plan.” Maybe he does and maybe, just maybe, he doesn’t.

Trump’s latest folly to place a 5% per month tariff on Mexico if it doesn’t control the border with the U.S. is just another idiotic move in his quest to control global trade.

It’s not like Mexican President Andres Manuel Lopez Obrador is Trump’s enemy on the border. In fact, if anything, AMLO has been on Trump’s side. But, like Trump, he’s got just as big a Deep State problem and that precludes anything substantive getting done.

This latest outburst by Trump ensures that his USMCA, the “Greatest Deal Ever,” won’t get ratified. And it just goes to show that he’s so weak as a President that he can’t win any wins within his own government so now he’s going to punish Mexico while pandering to his mostly brain-dead base.

He’s looking at his rising approval numbers and surveying the carnage in global trade and thinking he has the political capital for this. And, sadly, he’s right.

But this tariff is not about the border. It’s far from that. Trump is going to be Mr. Legal Immigration. He’s going to let in as many skilled foreign workers as he can to fill the jobs he’s trying to win back from China, India and Europe.

Notice how Americans aren’t going to fill those jobs. And Trump doesn’t care one whit about that in the end, as long as those rubes in flyover country keep showing up to his rallies, genuflecting to his God-Emperorness and donating to his re-election by the millions.

After all he’s running against the largest, if not sorriest, pack of braying jackals (Tulsi Gabbard notwithstanding, of course) ever assembled by the Democrats, the party of Illegal Immigration.

If these tariffs aren’t about the border than what are they about? They are about China. They are about stopping the re-branding of Chinese imports as being from Mexico and skirting his Holy Tariff of Anitoch which is the key to his escalating trade war with China.

As much as companies can move their factories and operations to other countries because of high tariffs, they can also change their path to entry into the U.S. This is why Trump is looking to declare every other potential destination for goods coming from China tariff-free a currency manipulator and bring them under the purview of increased tariffs.

And it’s not just China that will feel Trump’s wrath. Secretary of State Mike Pompeo is in Germany shaking down the Germans over their refusal to not use Huawei’s equipment in their 5G network rollout.

Pompeo is threatening to cut off intelligence sharing with the Germans over this issue citing the ever-present security concerns over Huawei’s hardware. From Zerohedge:

Pompeo told the news conference further: “(There is) a risk we will have to change our behavior in light of the fact that we can’t permit data on private citizens or data on national security to go across networks that we don’t have confidence (in).”

But the real truth here is not the worry that Huawei is spying on behalf of the Chinese government. It is that Huawei refuses to let the U.S. use its hardware to spy on the rest of the world, including its own citizens.

I remind you of a post I wrote back in January on this issue.

The real issue is that nothing has changed since a 2014 report from The Register that Huawei categorically refuses to install NSA backdoors into their hardware to allow unfettered intelligence access to the data that crosses their networks.

So, I ask the question again, “What the real plan, Mr. Tariff Man?” Because if it’s to make America great again, cutting off all trade you don’t like won’t achieve that in yours or anyone else’s lifetime.

Since that’s been ruled out, as Mike Shedlock noted the other day, no agreement Trump makes is worth the paper it’s printed on. And the fallout will be felt even harder by our own companies.

Liz Ann Sonders

@LizAnnSonders

US-Mexico manufacturing supply chains highly integrated, with 2/3 of US imports taking place intra-company (between factories owned by same company); some manufactured items cross border more than once, which will become cost-prohibitive @DeutscheBank@SoberLook

The plan then must be to make America great by destroying what’s left of its credibility worldwide, gut domestic consumption and production and ensure our businesses will never be able to win another competitive contract ever again.

Good luck with that Mr. President. You can be sure the markets will have their own.

*  *  *

end

As if Boeing does not have enough problems:  Now the FAA is ordering Boeing to replace wing components on hundred of Boeing 737’s

(zerohedge)

 

“They Are Prone To Cracking”: FAA Orders Boeing To Replace Wing Components On Hundreds Of 737s

As if trade war wasn’t enough for traders to worry about with futures reopening sharply lower after China’s government blamed the U.S. for the latest collapse in trade talks, it appears that Boeing is about to resume the position as yet another very popular 737 model suddenly finds itself in hot water.

Accord to Bloomberg, the wing components on as many as 312 Boeing 737s, including some of the grounded 737 Max, are prone to cracking and must be repaired within 10 days, aviation regulators said late Sunday.

With Boeing already under scrutiny for the 737 MAX fiasco, Boeing – which is suddenly finding a lot of faults that never existed before the company found itself under congressional scrutiny – informed the FAA that so-called “leading edge slat tracks” may not have been properly manufactured and pose a safety risk, the agency said. The parts allow the wing to expand to create more lift during takeoff and landing.

In response, the FAA plans to issue an order calling for operators of the planes worldwide to identify whether the deficient parts were installed and to replace them. A complete failure wouldn’t lead to a loss of the aircraft, the FAA – which was humiliated for siding with Boeing and was initially against the grounding of the 737 MAX only to flip flop when the rest of the world boycotted the troubled airliner – said, but “could cause damage during flight.”

Because “damage during flight” of a key component rarely if ever leads to a “loss of the aircraft”?

As Boeing noted in the statement, it has notified operators of the planes about the needed repairs and is sending replacement parts to help minimize the time aircraft are out of service, the company said in a statement.

Boeing identified 148 parts made by a subcontractor that are affected. The parts may be on a total of 179 737 Max aircraft and 133 737 NG planes worldwide, including 33 Max and 32 NG aircraft in the U.S., the FAA said. The NG, or Next Generation, 737s are a predecessor to the Max family (which by that logic must be the next, next generation).

Jeremy Dwyer-Lindgren@photoJDL

So many 737MAX…

This latest quality control fiasco piles on even more problems for Boeing, whose 737 Max has been grounded worldwide since March 13 after two fatal crashes tied to a malfunction that caused a flight control system to repeatedly drive down the plane’s nose. Boeing is finalizing a “software fix” along with proposed new training that will be required before the planes fly again. One only hopes that Boeing’s software “fix” isn’t in some way connected to the Google cloud…

 
Trumps calls for a A T and T boycott to force big changes at CNN
(courtesy zerohedge)

Trump Calls For AT&T Boycott To Force “Big Changes” At CNN

President Trump and his family might be about to meet Queen Elizabeth II for a historic state visit, but despite the momentous occasion, the president’s mind appears elsewhere, as he has been tweeting at a constant clip since landing in the UK a few hours ago.

In one string of tweets, the president lamented the fact that CNN  – which just announced a round of layoffs at its London office – “is the primary source of news available from the US. After watching it for a short while, I turned it off.”

Trump described the coverage as “all negative & so much Fake News, very bad for US. Big ratings drop.”

Then he asked: “Why doesn’t owner @ATT do something?,” before exhorting Americans to boycott AT&T to force the company, which recently bought CNN owner Time Warner in a deal that was aggressively opposed by the Trump DoJ, to make “big changes” at the cable news channel.

“When the world watches @CNN, it gets a false picture of the USA. Sad!”

Trump’s favorite network, Fox News, isn’t widely available in the UK, and British Sky Television – which was once controlled by the Murdoch family (as are the tabloid “The Sun” and the broadsheet “Times of London”), who still control Fox News – was recently taken over by Comcast after the company outbid the Murdochs. Rupert Murdoch, the family patriarch, founded the pay-TV channel in London back in the late 1980s.

END
I was wondering when this will strike: Walmart sued for selling fake medicine i.e. homeopathic medicine. The problem here is that it is sold in almost every pharmacy throughout the world.
(courtesy zerohedge)

“Wide-Scale Consumer Fraud:” Walmart Sued For Selling Fake Medicine

A new lawsuit by the Center for Inquiry (CFI) alleges Walmart is “committing wide-scale consumer fraud and endangering the health of its customers through its sale and marketing of homeopathic medicines.”

The lawsuit was filed in the District of Columbia last month. CFI is also involved in a similar suit against CVS, which has been ongoing since June 2018.

“Walmart sells homeopathics right alongside real medicines, in the same sections in its stores, under the same signs,” said Nicholas Little, CFI’s Vice President and General Counsel. “Searches on its website for cold and flu remedies or teething products for infants yield pages full of homeopathic junk products. It’s an incredible betrayal of customers’ trust and an abuse of Walmart’s titanic retail power.”

CFI defines Homeopathy as an 18th-century pseudoscience “premised on the absurd, unscientific notion that a substance that causes a particular symptom is what should be ingested to alleviate it.” The nonprofit organization dedicated to defending science says these snake oil medicines that line the shelves at Walmart are diluted with limited to no traces of an active ingredient.

“Walmart can’t claim it doesn’t know that homeopathy is snake oil, because it runs its own enormous pharmacy business and make its own homeopathic products,” said Little. “So whether it’s a scientifically proven remedy like aspirin or flatly denounced junk like homeopathic teething caplets for babies, Walmart sells all of it under its in-house ‘Equate’ branding. It’s all the same to Walmart.”

CFI said the use of homeopathic treatments “can result in worsened or prolonged symptoms, and in some cases, even death.”

“Despite being among the richest corporations on Earth and the largest retailer in the United States, Walmart chooses to further pad its massive wealth by tricking consumers into throwing their money away on sham medicinal products that are scientifically proven to be useless and potentially dangerous,” said Robyn Blumner, president and CEO of the Center for Inquiry. “We intend to put a stop to it.”

CFI has become the top nonprofit to advocate for science-based medicine and against the proliferation of fake drugs in major retailers.

In 2015 CFI provided expert testimony to the FDA and the Federal Trade Commission. As a result, the FTC announced in 2016 that the marketing of homeopathic products would need to include disclaimers that read: “(1) there is no scientific evidence that the product works and (2) the product’s claims are based only on theories of homeopathy from the 1700s that are not accepted by most modern medical experts.”

As for Walmart and even CVS, CFI intends to put an end to mega-retailers deceiving consumers by selling fake drugs and misleading consumers by making no meaningful distinction between real medicine and homeopathic treatments.

end

SWAMP STORIES

Steve Cohen of NY University is one of the best authorities on Russia.  He considers that Russiagate is the no 1 threat to USA national security and he explains why

(courtesy Steve Cohen/N.Y.University)

 

Russiagate Is The #1 Threat To US National Security, Cohen

The systemwide US Russophobia that reached its nadir with Russiagate has created a “catastrophe” for both domestic politics and foreign relations that threatens the future of the American system, professor Stephen Cohen tells RT.

War with Russia could easily break out if the US insists on pursuing the policy of “demonization” that birthed Russiagate instead of returning to detente and cooperation, New York University professor emeritus of Russian history Stephen Cohen argues on Chris Hedges’ On Contact. While NATO deliberately antagonized post-Soviet Russia by expanding up to its borders, the US deployed missile defense systems along those borders after scrapping an arms treaty, leaving President Vladimir Putin devoid of “illusions” about the goodwill of the West – but armed with “nuclear missiles that can evade and elude any missile defense system.”

Now is the time for a serious, new arms control agreement. What do we get? Russiagate instead.”

Cohen believes the conspiracy theory – which remains front-page news in US media despite being thoroughly discredited, both by independent investigators and last month by special counsel Robert Mueller’s report – is the work of the CIA and its former director, John Brennan, who are dead set against any kind of cooperation with Russia. Attorney General William Barr, who is investigating the FBI over how the 2016 counterintelligence probe began, should take a look at Brennan and his agency, Cohen says.

If our intelligence services are off the reservation to the point that they can first try to destroy a presidential candidate and then a president…we need to know it,” Cohen says.

This is the worst scandal in American history. It’s the worst, at least, since the Civil War.”

And the damage wrought by this “catastrophe” hasn’t stopped at the US border.

The idea that Trump is a Russian agent has been devastating to “our own institutions, to the presidency, to our electoral system, to Congress, to the American mainstream media, not to mention the damage it’s done to American-Russian relations, the damage it has done to the way Russians, both elite Russians and young Russians, look at America today,” Cohen declares.

“Russiagate is one of the greatest new threats to national security. I have five listed in the book. Russia and China aren’t on there. Russiagate is number one.”

And the potential damage it could still cause is enormous.

Source:RT

END

Two important points here:

1. Mueller purposively omitted  a section of the conversation between two lawyers which is without a doubt exculpatory

2.  In the Michael Flynn case with Judge Sullivan the DOJ refuses to hand over the transcripts of the conversation with the Russian Kislyak. Does this mean that the DOJ did not originally hand over this most important document to the defense initially?  And why does the DOJ continue to defy the judge now?

quite a story…

the report:

“It’s All A Fraud”: Deceptive Edits Found In Mueller Report

Rep. Devin Nunes (R-CA) on Saturday called for the immediate release of “all backup and source information” for the Mueller report after internet sleuth @almostjingo (Rosie Memos) discovered that the special counsel’s office deceptively edited content which was then cited as evidence of possible obstruction.

It’s all a fraud” tweeted Nunes, replying to a tweet by @JohnWHuber (Undercover Huber), who also posted a comparison between the Mueller report and a newly released transcript of a November 2017 voicemail message left by former Trump lawyer John Dowd, in which he asked former national security adviser Michael Flynn’s attorney for a “heads up” if Flynn was planning on saying anything that might damage the president.

Mueller’s team omitted key context suggesting that Dowd was trying to strongarm Flynn and possibly obstruct justice by shaping witness testimony, while the actual voicemail reveals that Dowd was careful not to tread into obstruction territoryin what was a friendly and routine call between lawyers.

Devin Nunes

@DevinNunes

This is why we need all backup and source documentation for the released publicly. It’s all a fraud…

Undercover Huber@JohnWHuber

Voicemail from John Dowd to @GenFlynn’s Counsel

LEFT: Mueller report

RIGHT: Full transcript released today per court order

Mueller’s hacks removed that Dowd wanted a heads up “not only for the president, but for the country” and wasn’t asking for “any confidential information”

View image on Twitter
View image on Twitter

Dowd qualifies his request by saying “without you having to give up any…confidential information” in order to determine “If, on the other hand, we have, there’s information that…implicates the President, then we’ve got a national security issue, or maybe a national security issue, I don’t know… some issue, we got to-we got to deal with, not only for the President but for the country.”

Rosie memos@almostjingo

Once again edited messages to make them appear more damaging, full transcript of this phone call reveals Dowd’s message was pretty typical for a lawyer and he clearly states he’s not interested in any confidential info. What else did they manipulate🙄

Mueller’s deceptive edits beg the question; what else may have been manipulated by the special counsel to make Trump look guilty?When reached for comment by attorney ‘Techno Fog’ (@Techno_Fog), Dowd said of the edits: “It is unfair and despicable. It was a friendly  privileged call between counsel – with NO conflict. I think Flynn got screwed.” 

Techno Fog@Techno_Fog

EXCLUSIVE

We got a statement from former Trump lawyer John Dowd, responding to the Special Counsel’s deceptive edits of his voicemail to Flynn’s lawyer

It is unfair and despicable. It was a friendly privileged call between counsel – with NO conflict. I think Flynn got screwed”

Dowd told Fox News: “During the joint defense relationship, counsel for the president provided to Flynn’s counsel documents, advice and encouragement to provide to SC [the special counsel] as part of his effort to cooperate with the SC,” adding “SC never raised or questioned the president’s counsel about these allegations despite numerous opportunities to do so.

Flynn pleaded guilty last year to lying to the FBI about contacts with Russians and is currently awaiting sentencing.

DOJ stonewalls on Flynn evidence

Meanwhile, the Justice Department has resisted a court order to release the transcripts of Flynn’s conversations with Russian officials, including former Russian ambassador Sergey Kislyak.

This raises at least two questions. First, did the DOJ give Flynn the transcripts?And second, did the DOJ violate a previous court order from Judge Emmett Sullivan to produce evidence during discovery? 

Techno Fog@Techno_Fog

Note – per competing Orders, still not certain if Judge Sullivan will require all audio recording transcripts be filed with court. DOJ seems to read the orders that he doesn’t need them.https://twitter.com/Techno_Fog/status/1129416066382336000 

Techno Fog@Techno_Fog

New entry from Judge Sullivan on the Flynn case.

Read closely at the dates and omissions – could be a change to his prior order that the gov’t file “the transcripts of any other audio recordings of Mr. Flynn”

View image on Twitter

Techno Fog@Techno_Fog

Note that the 5/16 Order required the production of “the transcripts of any other audio recordings of Mr. Flynn, including, but not limited to, audio recordings of Mr. Flynn’s conversations with Russian officials”

Compliance may be an issue. Awaiting Judge response…

Techno Fog@Techno_Fog

Re: Flynn

Based on the DOJ ignoring the Court order to file the Russian Ambassador call transcript – I’m assuming they didn’t provide it to Flynn’s team.

That could also be a violation of the Court’s discovery order (linked below).https://www.scribd.com/document/412148680/Flynn-Judge-Sullivan-Standing-Order-Re-Discovery 

Flynn – Judge Sullivan Standing Order Re Discovery

US v. Michael Flynn – Standing Discovery Order of Judge Sullivan; DE 20; filed 2/16/2018

scribd.com

Techno Fog@Techno_Fog

In particular, note these parts of Judge Sullivan’s prior 2/2018 Order:

“Due process requires disclosure of “evidence [that] is material either to guilt or to punishment” upon request”

Provide any evidence . . . “material either to defendant’s guilt or punishment” pic.twitter.com/zWTi3O5zNC

View image on TwitterView image on Twitter

Could there be exculpatory evidence in the transcript that Flynn’s team never received?

END

The GOP now are targeting both Brennan and Comey as the investigation heat up

(courtesy zerohedge)

GOP Targets Comey And Brennan As Investigations Heat Up

Congressional Republicans have set their sights on former FBI Director James Comey and former CIA Director John Brennan for their roles in the Trump-Russia ‘witch hunt’ that may have been conducted illegally using flimsy evidence.

In particular, GOP lawmakers along with President Trump are looking to blame the two former intelligence chiefs over the use of the highly controversial Steele report – created by former UK spy Christopher Steele .

The dossier, a shadowy document that makes a series of salacious allegations about Trump, has long been a flashpoint for Republicans.

Some Republicans allege that FBI investigators relied too heavily on it to obtain a Foreign Intelligence Surveillance Act (FISA) warrant on former Trump campaign aide Carter Page. Some of the allegations in the dossier have been verified, while others were proven false or remain unsubstantiated. –The Hill

In May, a dispute erupted over whether Comey or Brennan pushed to include the Steele Dossier in the US intelligence community assessment (ICA) on Russian interference. According to Fox Newsan email chain exists indicating that Comey told his subordinates that Brennan insisted on the dossier’s inclusion, while a former CIA official “put the blame squarely on Comey,” according to the report.

According to former Rep. Trey Gowdy (R-SC), communications between Comey and Brennan are the key to unlocking the decisions behind the dossier.

“Whoever is investigating this, tell them to look for emails between Brennan and Comey in December of 2016,” Gowdy told Fox News‘s Sean Hannity last month.

Republican lawmakers took Gowdy’s cue.

“Comey and Brennan have made a lot of statements, some under oath, about the origins of the Trump Russia investigation, the timing and role of the Steele dossier and reasons for surveillance of Trump campaign officials. As I’ve been saying for awhile now, some of that is inconsistent with the contents of classified documents and the sworn testimony of other witnesses,” Rep. John Ratcliffe (R-Texas), a member of the Judiciary Committee, told The Hill.

“And more recently, some of what Brennan and Comey have been saying is now inconsistent with one another. As Attorney General Barr said this morning, it just doesn’t jive. Someone isn’t telling the truth,” he continued. –The Hill

Attorney General William Barr has placed Connecticut US attorney John Duham in charge of reviewing the origins of the Trump-Russia investigation, while President Trump gave Barr complete power to declassify information linked to the investigation – leading Democrats to suggest that Trump would ‘pursue a political agenda’ while investigating the politicized ‘witch hunt’ against him.

“Selectively declassifying sources and methods in order to serve a political agenda will make it harder for the intelligence community to do their jobs protecting this country from those who wish to do us harm,” said Senate Intelligence Vice Chairman Mark Warner (D-VA).

Perhaps Congressional Republicans will focus next on Joseph Mifsud – the Maltese professor and Clinton ally who ‘seeded’ the rumor that Russia had dirt on Hillary Clinton.

 

END

SWAMP STORIES/KEY STORIES/KING REPORT

(COURTESY OF CHRIS POWELL/GATA)

U.S. Officials Meet in Secret over Junk-Loan Frenzy as Recession Alarms Flash

The Financial Stability Oversight Council, a panel of top U.S. regulators charged with preventing future financial crises, met Thursday to discuss the past decade’s surge in corporate borrowing

    U.S. Treasury Secretary Steven Mnuchin on Thursday led a secret meeting of top U.S. financial regulators… Members of the group include Federal Reserve Chairman Jerome Powell… heads of the Office of the Comptroller of the Currency, Federal Deposit Insurance Corp., Consumer Financial Protection Bureau, Securities and Exchange Commission and Commodity Futures Trading Commission…  https://www.thestreet.com/markets/as-recession-warnings-flash-top-officials-meet-in-secret-over-junk-loan-frenzy-14977371

Why is the Plunge Protection Team meeting with 3% GDP, low inflation and stocks within 6% of highs?

@realDonaldTrump on Friday: In order not to pay Tariffs, if they start rising, companies will leave Mexico, which has taken 30% of our Auto Industry, and come back home to the USA. Mexico must take back their country from the drug lords and cartels. The Tariff is about stopping drugs as well as illegals!

    90% of the Drugs coming into the United States come through Mexico & our Southern Border. 80,000 people died last year, 1,000,000 people ruined. This has gone on for many years & nothing has been done about it. We have a 100 Billion Dollar Trade Deficit with Mexico. It’s time!

@OANN: Mexico’s President Lopez Obrador asks Pres. Trump to have U.S. officials meet with the Mexican foreign minister in Washington on Friday to seek a solution that benefits both nations.

Mexico’s President to Donald Trump: America Is for Migrants

Poor people have a right to migrate to the United States, and migrants should not be stopped by force, according to a letter from Mexico’s president to U.S. President Donald Trump…

https://www.breitbart.com/politics/2019/05/31/mexicos-president-donald-trump-america-immigrants/

Trump roiled the global equity markets on Friday with his Mexico tariff threat.  ESMs tumbled 27 handles when DJT announced the threat (18:30 ET Friday).  A second down leg commenced during the final hour of Asian trading.  It did not end until 6:36 ET.  A smaller down draft occurred on the NYSE open.  However – wait for it – traders bought the dip, creating a bottom 18 minutes after the NYSE open.

ESMs made a low of 2751.  The S&P 500 Index bottomed at 2750.63.  ESMs hit 2769 at the Euro close.

The morning rally in the US was conditioned buying and May performance gaming for the Euro close.

After the European close high, ESMs declined until the afternoon arrived and May performance gaming in the US commenced. Unfortunately for bulls, the rally ended after 40 minutes.  A stark afternoon decline occurred.  At 14:48 ET, someone juiced ESM.  An almost vertical rally appeared.  Performance gamers got serious. The rally ended when the final hour arrived.  ESMs hit a new low with only 22 minutes remaining to game performance.  A 5-handle rally appeared; but it rolled over into the close.

While the equity plunge on Friday garnered most of the attention, oil tumbled 6% and bonds surged.  Obviously, this is a sign of economic concern.  Gold rallied 1.5% as the dollar declined smartly.  This is a sign that an increasing number of traders and investors are discovering that Fed Funds futures have priced in two Fed rate cuts this year.  This makes the equity decline even more troubling.  If gold rallies on Fed rate cuts but equities decline, the market expects the Fed largesse to be friendlier for gold than equities.

JP Morgan says ‘adverse’ impact from Mexico tariffs would cause the Fed to cut rates twice

Interest rate cuts are likely in September and December… matching current market projections

https://www.cnbc.com/2019/05/31/jp-morgan-says-impact-from-mexico-tariffs-would-cause-fed-to-cut-twice.html

We noted last week that the US 2-year note indicated that Fed Funds were 25 bps above neutral.  On Friday, the 2-year note yield fell to 1.938%.  Fed funds were 2.39%, about 45 bps above neutral.  Most everyone expects the Fed to cut its target rate by 25 bps after its June 18-19 meeting.

Justice Department Is Preparing Antitrust Investigation of Google [There’s new sheriff in DC.]

Probe would closely examine Google’s practices related to search, other businesses

https://www.wsj.com/articles/justice-department-is-preparing-antitrust-investigation-of-google-11559348795

Trump on Friday night: “I have determined that India has not assured the United States that India will provide equitable and reasonable access to its markets.  Accordingly, it is appropriate to terminate India’s designation as a beneficiary developing country effective June 5, 2019.

China launches investigation of FedEx in trade war escalation [for the wrongful delivery of packages]

https://www.latimes.com/business/la-fi-china-fedex-trade-war-20190601-story.html?cid=dlvr.it

Mexican president hints at migration concessions to defuse U.S. trade spat http://www.reuters.com/article/us-usa-trade-mexico-idUSKCN1T237F

Everything Is Up for Review at the Fed’s Big Policy Confab in Chicago [Tuesday & Wednesday]

The Chicago conference is billed as the main event in a yearlong review of how the Fed tackles the goals it’s been given by Congress: maximum employment and price stability…. [Academic echo chamber]

https://www.bloomberg.com/news/articles/2019-06-02/everything-s-up-for-review-at-fed-s-big-policy-confab-in-chicago

Trump lifts year-round ethanol restrictions, could lower gas prices

https://www.foxbusiness.com/economy/trump-ethanol-gas-prices

 

-END

 

WELL THAT ABOUT DOES IT FOR TONIGHT

I WILL SEE YOU TUESDAY NIGHT.

HARVEY

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One comment

  1. themagicbusguy · · Reply

    Awesome, thanks Harvey. You might double check that GLD addition as the Boys may be up to shinanagins.

    Like

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