JUNE 20/GOLD AND SILVER FINALLY AFTER 6 YEARS OF TORMENT FROM OUR BANKERS BREAK OUT: GOLD ISU $47.95 TO $1393.10//SILVER IS UP 53 CENTS TO $15.51//HUGE MARGIN CALLS//MASSIVE VOLUMES AT THE COMEX//WAR DRUMS BEATING LOUDER AND LOUDER AS IRAN SHOOTS DOWN A USA DRONE IN INTERNATIONAL WATERS//MORE SWAMP STORIES FOR YOU TONIGHT///

 

 

GOLD: $1393.10  UP $47.95 (COMEX TO COMEX CLOSING)

Silver:  $15.51 UP 53 CENTS  (COMEX TO COMEX CLOSING)//

 

Closing access prices:

Gold : $1391.80

 

silver:  $15.46

 

Gold and silver broke out today as the bankers try desperately to cover their massive shortfall. Expect continued margin calls.  However the big explosion in price will occur when our derivative banks blow up with nobody able to cover their trillions in losses.  We have also witnessed massive volumes in Exchange for physical contracts.   When buyers of these paper gold/silver turn them into real gold, the real fireworks commence. Tomorrow’s Comex OI in both silver and gold will be astronomical.  I receive preliminary numbers late at night and if you interested, check in this spot at around 1 am and I will provide it for you…

____________________________________________________

OPEN INTEREST/PRELIMINARY: FOR FRIDAY

GOLD:

COMEX OPEN INTEREST ROSE BY A WHOPPING: 43,170 CONTRACTS

GOLD EXCHANGE FOR PHYSICAL ISSUANCE:  22,225 CONTRACTS

 

TOTAL:  65,395 CONTRACTS…SIMPLY MIND BOGGLING

 

IN SILVER:

TOTAL COMEX OI FELL BY 2164 CONTRACTS

SILVER EXCHANGE FOR PHYSICAL ISSUANCE: 4258 CONTRACTS

 

TOTAL OI GAIN:  2094 CONTRACTS.

____________________________________________________

 

 

COMEX DATA

 

 

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

today RECEIVING 36/85

EXCHANGE: COMEX
CONTRACT: JUNE 2019 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,344.600000000 USD
INTENT DATE: 06/19/2019 DELIVERY DATE: 06/21/2019
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
624 C BOFA SECURITIES 7
657 C MORGAN STANLEY 26
661 C JP MORGAN 36
686 C INTL FCSTONE 5
737 C ADVANTAGE 49 42
905 C ADM 5
____________________________________________________________________________________________

TOTAL: 85 85
MONTH TO DATE: 2,218

 

 

 

NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT: 85 NOTICE(S) FOR 8500 OZ (0.2643 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  2218 NOTICES FOR 221,800 OZ  (6.8989 TONNES)

 

 

 

SILVER

 

FOR JUNE

 

 

0 NOTICE(S) FILED TODAY FOR nil  OZ/

 

total number of notices filed so far this month: 391 for 1,955,000 oz

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

Bitcoin: OPENING MORNING TRADE :  $ 9220 DOWN $30 

 

 

 

Bitcoin: FINAL EVENING TRADE: $ 9450 UP $200

 

 

 

 

end

 

XXXX

 

 

Let us have a look at the data for today

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI ROSE A SMALL  SIZED 39 CONTRACTS FROM 239,466 UP TO 239,505 ACCOMPANYING THE 3 CENT LOSS IN SILVER PRICING AT THE COMEX.( LIQUIDATION OF THE SPREADERS HAVE STOPPED FOR GOLD . HOWEVER WE ARE WITNESSING A RISE IN SPREADING ACCUMULATION BY THE BANKERS IN SILVER)..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 HUGE SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP:,

0 FOR JUNE, 1505 FOR JULY. 0 FOR AUGUST, 0 FOR SEPT, AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  1505 CONTRACTS.( WITH THE TRANSFER OF 1505 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 1505 EFP CONTRACTS TRANSLATES INTO 7.525 MILLION OZ  ACCOMPANYING:

1.THE 3 CENT LOSS IN SILVER PRICE AT THE COMEX AND

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

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING  AND

21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

5.845 MILLION OZ STAND IN JANUARY.

2.955 MILLION OZ STANDING FOR FEBRUARY.:

27.120 MILLION OZ STANDING IN MARCH.

3.875 MILLION OZ STANDING FOR SILVER IN APRIL.

18.845 MILLION OZ STANDING FOR SILVER IN MAY.

2.120 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:

35,334 CONTRACTS (FOR 14 TRADING DAYS TOTAL 35,334 CONTRACTS) OR 176.67 MILLION OZ: (AVERAGE PER DAY: 2523 CONTRACTS OR 12.61 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF JUNE:  176. MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 25.23% 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:          1047.42    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 SMALL SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 39, DESPITE THE 3 CENT FALL IN SILVER PRICING AT THE COMEX /YESTERDAY... THE CME NOTIFIED US THAT WE HAD A  GOOD SIZED EFP ISSUANCE OF 1505 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 GAINED A STRONG SIZED: 1544 TOTAL OI CONTRACTS ON THE TWO EXCHANGES: 

i.e 1505 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH INCREASE OF 39  OI COMEX CONTRACTS. AND ALL OF THIS HUGE DEMAND HAPPENED WITH A  3 CENT LOSS IN PRICE OF SILVER AND A CLOSING PRICE OF $14.98 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. 1.199 BILLION OZ TO BE EXACT or 171% of annual global silver production (ex Russia & ex China).

FOR THE NEW FRONT MARCH MONTH/ THEY FILED AT THE COMEX: 0 NOTICE(S) FOR nil 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 2.120 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)

.

WITH RESPECT TO SPREADING:  WE NO DOUBT HAD VERY STRONG ACTIVITY OF  SPREADING ACCUMULATION IN SILVER TODAY AS TOTAL OI ROSE SHARPLY DESPITE THE SMALLISH LOSS OF 3 CENTS. 

 

 

 

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 JUNE 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 (JULY), 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.” 

 

IN GOLD, THE OPEN INTEREST ROSE BY A HUMONGOUS 13,315 CONTRACTS, TO 538,951 DESPITE THE  $1.85 PRICING LOSS WITH RESPECT TO COMEX GOLD PRICING YESTERDAY// /THE SPREADING LIQUIDATION HAS STOPPED AND THESE SPREADERS HAVE ALREADY MORPHED INTO SILVER AND THEY ARE INTO THE ACCUMULATION PHASE OF THEIR OPERATION. THUS THE GAIN IN OI IS REAL AS INVESTORS ARE POURING INTO THE GOLD SECTOR 

REMEMBER THAT THE GAIN IN GOLD AND SILVER OCCURED AFTER THE COMEX CLOSED AT 1:30.  FOMC RESULTS WERE AT 2 PM 

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 9159 CONTRACTS:

APRIL 0 CONTRACTS,JUNE: 0 CONTRACTS, AUGUST 2019: 9159 CONTRACTS, DEC>  0 CONTRACTS AND ALL OTHER MONTHS ZERO.  The NEW COMEX OI for the gold complex rests at 538,951.  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 22,466 CONTRACTS: 13,315 CONTRACTS INCREASED AT THE COMEX  AND 9159 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 22,466 CONTRACTS OR 2,246,600 OZ OR 69.87 TONNES.  YESTERDAY WE HAD A SMALL LOSS OF $1.85 IN GOLD TRADING.AND WITH THAT SMALL LOSS IN  PRICE, WE  HAD A HUMONGOUS GAIN IN GOLD TONNAGE OF 69.87  TONNES!!!!!! THE BANKERS WERE SUPPLYING COPIOUS SUPPLIES OF SHORT GOLD COMEX PAPER.

 

 

 

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF JUNE : 126,937 CONTRACTS OR 12,693,700 oz OR 394.82 TONNES (14 TRADING DAYS AND THUS AVERAGING: 9066 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 14 TRADING DAYS IN  TONNES: 394.82 TONNES

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

THUS EFP TRANSFERS REPRESENTS 394.82/3550 x 100% TONNES =11.12% OF GLOBAL ANNUAL PRODUCTION

 

ACCUMULATION OF GOLD EFP’S YEAR 2019 TO DATE:     2,646.30 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: A HUMONGOUS SIZED INCREASE IN OI AT THE COMEX OF 13,315 DESPITE THE PRICING LOSS THAT GOLD UNDERTOOK ON YESTERDAY($1.85)) //.WE ALSO HAD  A STRONG SIZED NUMBER OF COMEX LONG TRANSFERRING TO LONDON THROUGH THE EFP ROUTE: 9159 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 9159 EFP CONTRACTS ISSUED, WE  HAD AN ATMOSPHERIC SIZED GAIN OF 22,466 CONTRACTS IN TOTAL OPEN INTEREST  ON THE TWO EXCHANGES:

9159 CONTRACTS MOVE TO LONDON AND 13,315 CONTRACTS INCREASED AT THE COMEX. (IN TONNES, THE GAIN IN TOTAL OI EQUATES TO 69.87 TONNES). ..AND THIS INCREASE OF  DEMAND OCCURRED WITH A LOSS IN PRICE OF  $1.85 WITH RESPECT TO YESTERDAY’S TRADING AT THE COMEX. WE  HAD ZERO PRESENCE OF SPREADING ACCUMULATION IN GOLD  ///TODAY/

 

 

 

we had:  85 notice(s) filed upon for 8500 oz of gold at the comex.

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

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

GLD...

 

WITH GOLD UP $47.95 TODAY//

NO CHANGE IN GOLD INVENTORY AT THE GLD:

 

INVENTORY RESTS AT 764.10 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 53 CENTS TODAY:

 

A SMALL CHANGE WITH RESPECT TO SILVER INVENTORY  AT THE SILVER SLV: A DEPOSIT OF 749,000 OZ

 

 

 

 

 

 

/INVENTORY RESTS AT 319.819 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 ROSE BY A SMALL SIZED 39 CONTRACTS from 239,466 UP TO 239,505 AND CLOSER TO THE NEW COMEX RECORD SET LAST IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  1 1/3 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.  AS YOU CAN SEE, WE HAVE RECORD HIGH OPEN INTERESTS IN SILVER  ACCOMPANIED BY A CONTINUAL LOWER PRICE WHEN THAT RECORD WAS SET…..THE SPREADERS HAVE COMMENCED THEIR ACCUMULATION OF OPEN INTEREST CONTRACTS IN SILVER AND STOPPED THE LIQUIDATION OF THE SPREADERS IN GOLD

 

 

 

 

EFP ISSUANCE: 

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

 

FOR JUNE =0 CONTRACTS AND JULY: 1505 CONTRACTS FOR AUGUST: 0, FOR SEPT. 0  AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 1505 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  OI GAIN AT THE COMEX OF 39 CONTRACTS TO THE 1505 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A VERY STRONG GAIN OF 1544 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES: 7.772 MILLION OZ!!! AND YET WE ALSO HAVE A STRONG DEMAND FOR PHYSICAL AS WE WITNESSED A FINAL STANDING OF GREATER THAN 30 MILLION OZ FOR JULY, A STRONG 7.475 MILLION OZ FOR AUGUST..  A HUGE 39.505  MILLION OZ  STANDING FOR SILVER IN SEPTEMBER… OVER 2 million  OZ STANDING FOR THE NON ACTIVE MONTH OF OCTOBER.,  7.440 MILLION OZ FINALLY STANDING IN NOVEMBER.  21.925 MILLION OZ STANDING IN DECEMBER , 5.845 MILLION OZ STANDING IN JANUARY. 2.955 MILLION OZ STANDING IN FEBRUARY,  27.120 MILLION OZ FOR MARCH., 3.875 MILLION OZ FOR APRIL  18.765 MILLION OZ FOR MAY AND NOW 2.120 MILLION OZ FOR JUNE.

 

 

RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 3 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// YESTERDAY. WE ALSO HAD A STRONG SIZED 1505 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)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED UP 69.32 POINTS OR 2.38%  //Hang Sang CLOSED UP 348.29 POINTS OR 1.24%   /The Nikkei closed UP 128.99 POINTS OR 0.60%//Australia’s all ordinaires CLOSED UP .59%

/Chinese yuan (ONSHORE) closed UP  at 6.8559 /Oil DOWN TO 52.12 dollars per barrel for WTI and 61.21 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED UP // LAST AT 6.8559 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8618 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/HONG KONG/

4/EUROPEAN AFFAIRS

i)GERMANY/DEUTSCHE BANK

We now have the Fed investigating Deutsche bank for suspected money laundering especially with the Russian mob

( zerohedge)

ii)UK
Boris Johnson seems headed for being the next Prime Minister of Great Britain and lead them to ano deal Brexit
(courtesy Mish Shedlock/Mishtalk)
iii)The pound slides after the Bank of England keeps rates unchanged. However England seems headed for a no deal Brexit.
(courtesy zerohedge)

iv)FRANCE/NATIXIS

We now have another large bank whose investments are now souring:  there is now panic in an ill named hedge fund called H20 which is now totally illiquid as many are trying to bail out
(courtesy zerohedge)

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

 

i)IRAN/ISRAEL/HEZBOLLAH

Israel holds the largest “Hezbollah War Exercise” as they fear an attack from the Iranians who hold some of the land in the south of Lebanon

( zerohedge)

ii)IRAN/USA

Iran shoots down a USA drone.  Iran states that the drone was in Iranian airspace..the USA states that it was over the Strait of Hormuz.

Iran states that they are ready for war.

( zerohedge)

iii)Russia/USA/Iran

Russia warns not to attack Iran as the results would be “catastrophic”.  The crash site on that navy drone is in international waters
(courtesy zerohedge)

iv)TURKEY

The lira flash crashes again after Turkey threatens the uSA with retaliation if the uSA initiates sanctions
(courtesy zerohedge)

v)SAUDI ARABIA/USA

In a move that will thoroughly infuriate Trump, in a bipartisan vote, the senate blocks the arm sales to Saudi Arabia
(courtesy zerohedge)

6. GLOBAL ISSUES

 

a)There is no greater sign that the world is deflating than this: libor tumbles the most since May 2009.  This is why we are witnessing 10 yr yields from all countries collapse under this huge deflationary pressure as growth stymies

( zerohedge)

b)Simon Black gives up a very analysis on the demographics facing the globe.  However the once country that is in severe trouble on that front is Japan.

(courtesy Simon Black/SovereignMan)

 

7. OIL ISSUES

The shooting down of the USA surveillance drone over international waters causes oil to spike the most in 5 months

(courtesy zerohedge)

 

8 EMERGING MARKET ISSUES

 

i)VENEZUELA/

 

 

 

9. PHYSICAL MARKETS

i)Trump very early realized what Draghi was going to do..cut interest rates to ward off deflationary effects.  This of course would lower the Euro and make it more difficult for the uSA to compete.  Trump thus signals a move from a trade war towards a currency war.

(Bloomberg/GATA)

ii)A very important commentary from Ambrose Evans as he agrees with the above commentary that we are now entering a currency war as global demand dries up.  Europe will be defenseless

 

( Ambrose Evans \Pritchard)

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

 

 

 

MARKET TRADING//

a)Market trading/LAST NIGHT/

 

II)MARKET TRADING

 

 

ii)Market data

Philly Fed slumps in June as outgoing prices plunge putting massive pressures on margins

( zerohedge)

iii)USA ECONOMIC/GENERAL STORIES

a)This is big!! we are now witnessing a complete collapse in the USA trucking industry

(courtesy Michael Snyder)

b)USA farmers are now calling for a 3rd farm bailout as the trade war intensifies

(courtesy zerohedge)
c)Gundlach warns the Fed not to do what the bond market wants…it will not halt the recession
(courtesy Gundlach/zerohedge)

d)Goldman Sachs now capitulates: sees rate cuts in both  Juoly and September(courtesy zerohedge)

e)A good commentary from Michael Every as he explains in detail what is going throughout the globe.  As interest rates plummet to zero and below zero it will not help countries respective economies…the world is rapidly deflating…

(courtesy zerohedge)

f)Los Angeles area has been receiving a huge number of quakes in this last month.

We must pay close attention to this.
(courtesy Michael Snyder)

SWAMP STORIES

i)More shenanigans from the FBI as they totally ignored repeated warnings that the Manafort Black Ledger might be a fake

(courtesy zerohedge)

ii)the left is slamming Biden and his son????

(courtesy 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 A HUMONGOUS SIZED 13,315 CONTRACTS TO A LEVEL OF 538,951 DESPITE THE LOSS OF $1.85 IN GOLD PRICING WITH RESPECT TO YESTERDAY’S // COMEX TRADING)

WE ARE NOW IN THE ACTIVE DELIVERY MONTH OF JUNE..  THE CME REPORTS THAT THE BANKERS ISSUED A STRONG SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 9159 EFP CONTRACTS WERE ISSUED:

0 FOR JUNE ’19: 0 CONTRACTS , AUG; 9159 CONTRACTS: DEC: 0   AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  9159 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: 22,466 TOTAL CONTRACTS IN THAT 9159 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A HUMONGOUS SIZED 13,315 COMEX CONTRACTS.  THE BANKERS SUPPLIED THE NECESSARY SHORT PAPER IN GOLD TO CONTAIN THE PRICE RISE. 

 

NET GAIN ON THE TWO EXCHANGES ::  22,466 CONTRACTS OR 2,246,600 OZ OR 69.87 TONNES.

 

We are now in the  active contract month of JUNE and here the open interest stands at 298 CONTRACTS as we GAINED 103 contracts.  We had 19 notices filed yesterday so we  gained 122 contracts or 12,200 oz of gold that will stand for delivery as there appears to be some gold at the comex  as they will now try their luck on finding the fast vanishing supplies of physical gold over here.  The next contract month is the non active month of July and here the OI FELL by 8 contracts DOWN to 1279 contracts.  The next big active month for deliverable gold is August and here the OI ROSE by a whopping 10,795 contracts UP to 398,647.

 

 

 

 

 

TODAY’S NOTICES FILED:

WE HAD 85 NOTICES FILED TODAY AT THE COMEX FOR  8500 OZ. (0.2643 TONNES)

 

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And now for the wild silver comex results.

Total COMEX silver OI ROSE BY A SMALL SIZED 39 CONTRACTS FROM 239,466 DOWN TO 239,505 (AND CLOSER TO THE NEW RECORD OI FOR SILVER SET ON AUGUST 22.2018//244,196 CONTRACTS.  AND TODAY’S TINY  OI COMEX LOSS OCCURRED WITH A 3 CENT LOSS IN PRICING.//YESTERDAY.

 

 

WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF JUNE.  HERE WE HAVE 33 OPEN INTEREST CONTRACTS STANDING FOR DELIVERY FOR A LOSS OF 38 CONTRACTS.  WE HAD 38 NOTICES FILED YESTERDAY SO WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL OZ OF SILVER WILL STAND AT THE COMEX…. AND THESE GUYS REFUSED TO MORPH INTO A LONDON BASED FORWARD AS WELL AS NEGATING A FIAT BONUS FOR THEIR EXHAUSTIVE EFFORT IN TRYING TO OBTAIN METAL..

 

THE NEXT MONTH AFTER JUNE IS THE ACTIVE MONTH OF JULY.  HERE THE OI FELL BY 7646 CONTRACTS DOWN TO 110,267.  WE GAINED 25 CONTRACTS OF OI FOR AUGUST TO STAND AT 865. THE NEXT BIG ACTIVE DELIVERY MONTH AFTER AUGUST IS SEPT AND HERE THE OI ROSE BY 7411 CONTRACTS UP TO 81,818 CONTRACTS.

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 0 notice(s) filed for nil OZ for the JUNE, 2019 COMEX contract for silver

 

 

Trading Volumes on the COMEX TODAY: 511,157  CONTRACTS 

 

 

 

CONFIRMED COMEX VOL. FOR YESTERDAY:  343,758  contracts

 

 

 

 

 

INITIAL standings for  JUNE/GOLD

June 20/2019

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

nil

 

Deposits to the Customer Inventory, in oz  

NIL OZ

 

No of oz served (contracts) today
85 notice(s)
 8500 OZ
(0.2643 TONNES)
No of oz to be served (notices)
213 contracts
(21300 oz)
0.6625 TONNES
Total monthly oz gold served (contracts) so far this month
2218 notices
221800 OZ
6.8989 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

 

we had 0 dealer entry:

We had 0 kilobar entries

 

 

 

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

 

we had 0 deposit into the customer account

i) Into JPMorgan:  nil oz

 

ii) Into Everybody else: nil  oz

 

 

 

total gold deposits: nil  oz

 

  generally, very little gold arrives from outside/ NO amount  arrived   today

we had 0 gold withdrawal from the customer account:

 

 

Gold withdrawals;

i)  We had 0 withdrawal:

 

total gold withdrawals; nil   oz

 

 

i) we had 1 adjustment today
i) out of Scotia:  1207.621 oz was adjusted out of the dealer and this arrived into the customer account of Scotia and this should be deemed a settlement.

FOR THE JUNE 2019 CONTRACT MONTH)Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 85 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 36 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 (2218) x 100 oz , to which we add the difference between the open interest for the front month of  JUNE. (298 contract) minus the number of notices served upon today (85 x 100 oz per contract) equals 243,100 OZ OR 7.561 TONNES) the number of ounces standing in this active month of JUNE

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

No of notices served (2218 x 100 oz)  + (298)OI for the front month minus the number of notices served upon today (85 x 100 oz )which equals 243,100 oz standing OR 7.561 TONNES in this  active delivery month of JUNE.

We GAINED 122  contracts or an additional 12,200 oz will stand as these guys refused to morph into London based forwards as well as negating a fiat bonus. Somebody was in need of physical gold badly.!!

 

 

 

 

 

SURPRISINGLY LITTLE TO NO  GOLD HAS BEEN ENTERING THE COMEX VAULTS AND WE HAVE WITNESSED THIS FOR THE PAST YEAR!!  WE HAVE ONLY 10.04 TONNES OF REGISTERED (  GOLD OFFERED FOR SALE) VS 7.561 TONNES OF GOLD STANDING// THEY SEEM TO BE USING CONSIDERABLE GOLD VAPOUR TO SETTLE UPON UNSUSPECTING LONGS.

 

 

 

 

total registered or dealer gold:  322,910.634 oz or  10.043 tonnes (we again had a huge adjustment yesterday of gold leaving the customer and entering the dealer//this is nothing but gold vapour)
total registered and eligible (customer) gold;   7,697,379.508 oz 239.42 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 7.561 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 33 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 20 2019
Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 1,244,661.750 oz
Brinks
CNT
Delaware
JPMorgan

 

 

Deposits to the Dealer Inventory
NIL oz

 

Deposits to the Customer Inventory
1,896,121.844 oz
JPM
Delaware
CNT
No of oz served today (contracts)
0
CONTRACT(S)
(nil OZ)
No of oz to be served (notices)
201 contracts
1,005,000 oz)
Total monthly oz silver served (contracts) 391 contracts

1,955,000 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  3 deposits into the customer account

into JPMorgan:  597,808.710  oz

ii)into Delaware: 99,728.491 oz

iii) Into CNT: 1,1198,584.643 oz

 

 

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

JPMorgan now has 153.4 million oz of  total silver inventory or 50.36% of all official comex silver. (153.4 million/304.6 million

 

 

 

 

total customer deposits today:  1,896,121.844  oz

 

we had 4 withdrawals out of the customer account:

 

i) out of Delaware:  4037.99 oz

ii) Out of Brinks: 743,520.946 oz

iii) Out of JPMorgan: 102,924.800

iv) Out of CNT: 394,178.505 oz

 

 

 

 

 

total 1,244,661.750  oz

 

we had 0 adjustments :

 

 

 

total dealer silver:  87.119 million

total dealer + customer silver:  304.692 million oz

 

The total number of notices filed today for the JUNE 2019. contract month is represented by 0 contract(s) FOR nil 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 391 x 5,000 oz = 1,955,000 oz to which we add the difference between the open interest for the front month of JUNE. (33) and the number of notices served upon today (0 x 5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the JUNE/2019 contract month: 391(notices served so far)x 5000 oz + OI for front month of JUNE( 33) -number of notices served upon today (0)x 5000 oz equals 2,120,000 oz of silver standing for the JN contract month.

WE LOST 0 CONTRACTS OR AN ADDITIONAL NIL OZ WILL STAND AT THE COMEX AS THESE GUYS REFUSED TO MORPH INTO A LONDON BASED FORWARDS AND AS WELL THEY ALSO NEGATED A FIAT BONUS.  

 

 

 

 

 

 

 

 

 

TODAY’S NUMBER OF NOTICES FILED:

 

We, today, had 0 notice(s) filed for NIL OZfor the JUNE, 2019 COMEX contract for silver

 

 

 

 

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

 

TODAY’S ESTIMATED SILVER VOLUME:  256,383 CONTRACTS (we had considerable spreading activity..accumulation/and short covering

 

CONFIRMED VOLUME FOR YESTERDAY: 111,181 CONTRACTS..(we no doubt had considerable spreading activity as they are now starting to accumulate in silver)

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 111,181 CONTRACTS EQUATES to 555 million  OZ 79.4% OF ANNUAL GLOBAL PRODUCTION OF SILVER

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

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

 

end

 

 

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NPV for Sprott 

1. Sprott silver fund (PSLV): NAV FALLS TO -1.97% June 20/2019)
2. Sprott gold fund (PHYS): premium to NAV RISES TO -1.97% to NAV (june 20/2019 )
Note: Sprott silver trust back into NEGATIVE territory at -1.97%-/Sprott physical gold trust is back into NEGATIVE/

(courtesy Sprott/GATA)

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

NAV 13.69 TRADING 13.13/DISCOUNT 4.11

END

And now the Gold inventory at the GLD/

June 20/WITH GOLD UP $47.95, NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.10 TONNES

JUNE 19 WITH GOLD DOWN $1.65: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.10 TONES

JUNE 18/JUNE 18/WITH GOLD UP $7.60: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 764.10 TONNES

JUNE 17/WITH GOLD DOWN $1.65 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 764.10 TONNES

 

JUNE 14/ WITH GOLD UP $1.05 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 4.40 TONNES OF PAPER GOLD INTO THE GLD///INVENTORY RESTS AT 764.10 TONNES

june 13/WITH GOLD UP $6.60 TODAY: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 3.52 TONNES INTO THE GLD INVENTORY/INVENTORY RESTS AT 759.70 TONNES

JUNE 12/WITH GOLD UP $7.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 756.18 TONNES

JUNE 11/WITH GOLD UP $1.65 CENTS TODAY: A TINY CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .24 TONNES AND THIS IS TO PAY FOR FEES/INVENTORY RESTS AT 756.18 TONNES

JUNE 10/WITH GOLD DOWN $16.40 TODAY: A BIG  CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.17 TONNES/INVENTORY RESTS AT 756.42 TONNES

june 7/WITH GOLD UP $3.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.59 TONNES

jUNE 6/WITH GOLD UP  $8.40 TODAY/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 757.59 TONNES

JUNE 5 WITH GOLD UP $6.00 TODAY/STRANGE: A WITHDRAWAL OF 2.06 TONNES FROM THE GLD/INVENTORY RESTS AT 757.59 TONNES

JUNE 4/WITH GOLD UP 0.85 TODAY: A MONSTROUS PAPER GAIN OF 16.44 TONNES/GLD INVENTORY RESTS AT 759.65 TONNES

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: WI6H 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

 

 

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JUNE 20/2019/ Inventory rests tonight at 764.10 tonnes

*IN LAST 614 TRADING DAYS: 169.66 NET TONNES HAVE BEEN REMOVED FROM THE GLD
*LAST 514 TRADING DAYS: A NET 4.03TONNES HAVE NOW BEEN REMOVED FROM THE GLD INVENTORY.

 

end

 

Now the SLV Inventory/

JUNE 20/WITH SILVER UP 53 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 749,000 OZ/INVENTORY RESTS AT 319.819 MILLION OZ/

JUNE 19/WITH SILVER DOWN 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 319.070 MILLION OZ/

JUNE 18 WITH SILVER UP 18 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 319.070 MILLION OZ/

JUNE 17/WITH SILVER UP 1 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.775 MILLION OZ//

 

JUNE 14/WITH SILVER DOWN 9  CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.775 MILLION OZ/

JUNE 13/WITH SILVER UP 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 316.775 MILLION OZ/

JUNE 12/WITH SILVER UP 4 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.413 MILLION OZ INTO THE SLV INVENTORY/INVENTORY RESTS AT 316.775 MILLION OZ/

JUNE 11/WITH SILVER UP 10 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 315.652 MILLION OZ//

JUNE 10/WITH SILVER DOWN 38 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 315.652 MILLION OZ//

june 7/WITH SILVER UP ANOTHER 12 CENTS, NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 315.652 MILLION OZ//

jUNE 6/WITH SILVER UP ANOTHER 9 CENTS TODAY: A FAIR SIZE DEPOSIT OF 630,087 OZ//INVENTORY RESTS AT 315.652 MILLION OZ//

JUNE 5/WITH SILVER UP 4 CENTS TODAY: A HUGE PAPER DEPOSIT OF 2.396 MILLION OZ OF SILVER INTO THE SLV/INVENTORY RESTS AT 314.434 MILLION OZ//

JUNE 4/WITH SILVER UP 1 CENT TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 312.038 MILLION OZ//

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////

 

 

JUNE 20/2019:

 

Inventory 319.819 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 2.10/ and libor 6 month duration 2.30

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

G0LD LENDING RATE: + .20

 

XXXXXXXX

12 Month MM GOFO
+ 2.07%

LIBOR FOR 12 MONTH DURATION: 2.30

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = +.23

end

 

PHYSICAL GOLD/SILVER STORIES

 

end
i) GOLDCORE BLOG/Mark O’Byrne

Gold Breaks Abov

 

end

GOLD TRADING LAST NIGHT

Gold Spikes To 6Y Highs As Dollar, Bond Yields Plunge

The 10Y US Treasury yield is now down 11bps from the FOMC Statement, plunging back below 2.00% for the first time since November 2016, erasing almost the entire move since President Trump was elected

Citigroup sees 10-year Treasury yields falling to about 1.65% by year’s end as the Federal Reserve cuts interest rates up to three times to boost U.S. economy, senior technical strategist Shyam Devani tells Bloomberg.

“Yields have been falling across the curve, and this has been something you haven’t been able to fight,” Singapore-based Devani said by telephone.

“You’ve got a Fed that’s now changed its language and we’re on a path where there’s going to be rate cuts ahead — whether it’s two or three times, it’s hard to say — but there will be cuts”

“It’s a combination of things driving this including a slowing global growth environment, trade tensions and low inflation”

30Y is also extending its gains, with the yield dumping to 2.50%, erasing all of the post-Trump growth move…

Gold has spiked up to almost $1400…

Its highest since September 2013

The Dollar is extending its losses…

And the jaws of death keep yawning wider…

Something’s gotta give (reminder, Friday is quad witch)!

END

LAWRIE WILLIAMS: Can gold’s breakout be sustained?

Well yesterday’s price action in precious metals turned out to be something of a bull’s dream. The whole complex moved substantially higher, and though palladium and rhodium may have seemed the key players with some substantial dollar price increases, gold surged through what many analysts have seen as the key $1,365 level. Silver meanwhile, perhaps the most out of favour of the precious metals, showed a very substantial gain in percentage terms of nearly 4% in US dollar terms so far this week. With the gold:silver ratio still languishing at over 90 silver’s potential, should the gold price continue upwards, may just be beginning to show itself. But then silver can be the most erratic metal in the precious metals complex and can thus be the most dangerous to invest in, although potential percentage gains are the highest for those who like a price gamble.

We have noted here before that there would seem to be a number of economic and political factors predicating that gold has a strong short term future – and where gold goes the other precious metals tend to follow. But the triggers which created the latest surge were statements from the heads of the U.S. Fed, and of the European Central Bank both suggesting that the next move in interest rates on both sides of the Atlantic are likely to be downwards. While this was hardly unexpected, the twin official confirmations of this likelihood was sufficient to move the markets quite substantially. Add to that a tweet from the U.S. President taken as suggesting that the next stage in his Make America Great Again policies, following on from his tariff and sanctions impositions, could well be a currency war, and the markets were well and truly affected. A likely loosening of interest rate policy by the Fed and the possibility of a forced down U.S. dollar boosted both equities and precious metals. It remains to be seen how the all-important U.S. markets in particular take things when they open today. Asian and European equities have been rising, as has the gold price after an initial dip, but will this be sustained in the cool light of the American day!

There may well be a downwards reaction once the U.S. markets open, but we feel this will probably be shortlived and gold, and the other precious metals will, after a period of consolidation continue their upwards movement throughout the northern hemisphere summer months, albeit with the occasional setback.. If this is indeed the case then the consensus gold price forecasts for the second half of the year will likely be overtaken – perhaps in the next few weeks even. We certainly wouldn’t be surprised to see many bank and other analysts increasing their forecasts for the gold price in the second half of the year to $1,500 or above. But the powers that be may well try and put a stop to what might be seen as an excessive condemnation of the strength of the U.S. dollar and force prices back. But if President Trump is serious about weakening the dollar in the light of key competitive nations weakening their own currencies to gain a trade advantage, then the upwards momentum for gold – in U.S. dollar terms, which is the way the world sees it – may prove to be unstoppable making even a $1,500 price forecast for the second half of the year well within reach! We shall see what transpires. The next few days may be critical.

20 Jun 2019

end

For those that missed my interview with Chris Marcus, here it is again:

(courtesy Chris Marcus/Harvey Organ)

MEX Running Out of Silver? – with Harvey Organ

Anyone who studies the silver market for any period of time quickly realizes that things are far from normal.

For years silver investors have been stunned by the amount of paper silver contracts that are dumped on the market and keep the price low. While at the same time, other counter-parties are taking as much physical metal out of the market as they can. Which as you can well imagine has created quite a supply and demand imbalance.

So how does it all play out? And are we nearing the point where someone shows up for their silver and there’s a failure to deliver?

Fortunately Harvey Organ joined me on the show to explain what he’s seeing on the COMEX, and what investors should know before it’s too late to respond.

To find out more, click to listen to the interview now!

Chris Marcus
June 13, 2019

-END-

https://finance.yahoo.com/chart/%5EHUI/#eyJpbnRlcnZhbCI 6ImRheSIsInBlcmlvZGljaXR5IjoxLCJjYW5kbGVXaWR0aCI6NC4yOTc2M TkwNDc2MTkwNDc0LCJ2b2x1bWVVbmRlcmxheSI6dHJ1ZSwiYWRqIjp0cnV lLCJjcm9zc2hhaXIiOnRydWUsImNoYXJ0VHlwZSI6ImxpbmUiLCJleHRlb mRlZCI6ZmFsc2UsIm1hcmtldFNlc3Npb25zIjp7fS

GATA STORIES WITH RESPECT TO GOLD/PRECIOUS METALS.

Trump very early realized what Draghi was going to do..cut interest rates to ward off deflationary effects.  This of course would lower the Euro and make it more difficult for the uSA to compete.  Trump thus signals a move from a trade war towards a currency war.

(Bloomberg/GATA)

Trump moves from trade war toward currency war

 Section: 

By Shawn Donnan, Rich Miller, and Katherine Greifeld
Bloomberg News
Wednesday, June 19, 2019

President Donald Trump has already given the global economy trade wars. Now there are signs he may be gearing up for a currency war too.

With a series of tweets on Tuesday aimed at the European Central Bank and an announcement by Mario Draghi, its president, that he was prepared to cut interest rates further below zero in response to Europe’s slowing growth, Trump made a rare American presidential intervention into another economy’s monetary policy.

… 

“Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others,” he tweeted. Later, he added: “German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!” …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2019-06-19/trump-adds-currency-w…

* * *

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

A very important commentary from Ambrose Evans as he agrees with the above commentary that we are now entering a currency war as global demand dries up.  Europe will be defenseless

 

(courtesy Ambrose Evans \Pritchard)

Ambrose Evans-Pritchard: Currency war is next phase of global conflict and Europe, the chief parasite, is defenseless

 Section: 

By Ambrose Evans-Pritchard
The Telegraph, London
Wednesday, June 19, 2019

https://www.telegraph.co.uk/business/2019/06/19/currency-war-next-phase-…

Europe has been warned. Any use of monetary levers to hold down the euro exchange rate will be deemed a provocation by the Trump administration.

Further cuts in interest rates to minus 0.5 percent or beyond will be scrutinized for currency manipulation. A revival of quantitative easing will be considered a devaluation policy in disguise, as indeed it is, since the money leaks out into global securities and depresses the euro.

… 

The Bank for International Settlements says E300 billion of Europe’s QE funding reached London alone between 2014 and 2017.

If the ECB copies the Swiss National Bank and starts to amass foreign assets directly to cap currency strength Europe will face certain retaliation.

Whether the Swiss can get away with their policy for much longer is an open question. The SNB has foreign holdings of $760 billion — near 120 percent of GDP — and owns slices of Apple, Microsoft, Amazon, Facebook, and Exxon.

As the global economy falters we are entering the next phase of currency warfare. There is going to be an ugly fight for scarce global demand.

What is striking about Donald Trump’s tweets against the ECB this week is how quick he was to see the significance of Mario Draghi’s policy pirouette in Sintra — already dubbed “whatever it takes II” by bond markets — and how quickly he pounced:

* * *

Mario Draghi just announced more stimulus could come, which immediately dropped the euro against the dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.

— Donald J. Trump (@realDonaldTrump) June 18, 2019

* * *

This has the imprint of his trade guru Peter Navarro.

The dollar is of course overvalued. The Federal Reserve’s broad dollar index reached a 17-year high in early June. The manufacturing trade deficit has ballooned to $900bn.

These imbalances have been made worse by Mr. Trump’s own policies. His tax cuts at the top of the cycle have pushed the budget deficit to 4 percent of GDP. They forced the Fed to jam on the brakes last year.

This “loose fiscal/tight money” regime is the textbook formula for a strong currency. But the White House is not going to admit this. It is going to blame foreigners, and foreigners are not innocent either.

The eurozone is chief global parasite. It has been sucking demand out of the global economy with current account surpluses of E300 billion to E400 billion. China is a saint by comparison. This “free rider” behavior is the result of the euro structure and the austerity bias of the Stability Pact and German ideology amplified through currency union.

The rest of the world pays the price for euroland’s half-built experiment and its failure to stimulate — that is to say its failure to create a joint treasury with shared debt issuance that would make an investment revival possible in the depressed half of Europe.

Mr. Navarro has special twist on this: The warped mechanism of monetary union allows Germany to keep the implicit Deutsche Mark “grossly undervalued” and to lock in a beggar-thy-neighbor trade advantage over southern Europe. Hence Germany’s chronic current account surplus of 8.5 percent of GDP.

Mr. Trump’s White House has had enough of this and the battleground is over the currency. Democrats are singing from the same hymn sheet. Presidential candidate Elizabeth Warren has launched a campaign of “economic patriotism” with active currency management.

The Economic Policy Institute in Washington proposes buying the bonds of any country engaged in currency manipulation to neutralize the effect. The U.S. Treasury is in charge of currency policy and can effectively order the Fed to support U.S. foreign policy objectives.

It reminds me of the Reagan Doctrine during the Cold War: playing Moscow at its own game by sponsoring guerrilla insurgencies (Nicaragua, Afghanistan, etc). It bled the Soviet Union dry.

This is the new world order that Mario Draghi faces as he tries to stop the eurozone from sliding into a deflationary quagmire. The ECB’s market measure of inflation expectations — 5-year/5-year swaps — have collapsed with all the nefast consequences this has for nominal GDP growth and Italy’s debt trajectory.

Yields on 10-year Bunds have crashed to minus 0.30 percent. The bond markets are signalling an ice age. Clearly the decision to shut down the E2.6 trillion QE program in January and declare mission accomplished — when Euroland was already in an industrial recession — was a policy blunder. It was forced upon Mr. Draghi by hawks.

He is now taking revenge on the ECB’s governing council with a fait accompli. Unless the eurozone starts to recover “additional stimulus will be required,” and for good measure: “If the crisis has shown anything, it is that we will use all the flexibility within our mandate to fulfil our mandate,” he said in Sintra.

This pledge was made without first securing the consent of the Teutonic bloc. Angela Merkel’s Christian Democrats called it “an alarming signal for the ECB’s integrity.” This time Mr. Draghi may have overreached in every sense.

The ECB can of course buy corporate bonds and bank debt (a shield for Italy). It can do some stealth monetization of public debt. But plain-vanilla QE at this stage is tinkering. Little more stimulus can be extracted by pulling down the long end of the yield curve. The curve is near inversion already.

“It is ceremonial. The ECB is powerless. It is scrounging about trying to create a sense of action, but none of this has any effect,” says Ashoka Mody, a former bailout chief in Europe for the IMF and author of “Eurotragedy: a Drama in Nine Acts.”

The deflationary cancer is now so deeply lodged in the eurozone that it would take helicopter money or People’s QE — monetary financing of public works — to fight off any future global slump. Such action would violate the Lisbon Treaty and would test to destruction Germany’s political acquiescence in the euro project.

In truth QE in Europe has always worked chiefly through devaluation. The euro’s trade-weighted index fell 14 percent a year after Mr. Draghi first signalled in 2014 that bond purchases were coming. That was powerful stimulus. When the euro climbed back up the eurozone economy stalled.

It takes permanent suppression of the exchange rate to keep euroland going. As the Japanese have discovered, it is very hard for an economy with near zero inflation and a structural trade surplus to stop its exchange rate from rising unless it resorts to overt currency warfare. That is exactly what Mr. Trump is not going to allow.

Every avenue of monetary stimulus is cut off in the eurozone. Only fiscal stimulus a l’outrance — 2 or 3 percent of GDP — will be enough to weather a serious crisis. That too is blocked.

“The ECB has masked the fragility over the last seven years and nobody knows when the hour of truth will come,” said Jean Pisani-Ferry, economic adviser to France’s Emmanuel Macron and a fellow at the Bruegel think tank.

“There is no common deposit scheme for banks. Cross-border investments are retreating. The vicious circle between banks and states could come return any moment,” he said.

Mario Draghi’s rhetorical coup in July 2012 worked only because he secured a partial approval from Germany for the ECB to act as lender-of-last resort for Italy’s debt (under strict conditions). That immediately halted an artificial crisis. The situation today is entirely different. The threat is a deflationary slump. The ECB has no answer to this.

Markets thought they heard a replay of “whatever it takes” in Mr. Draghi’s speech and hit the buy button. But economists heard another note in Sintra: a plaintive appeal for EMU fiscal union before it is too late.

The exhausted monetary warrior was telling us that the ECB cannot alone save the European project a second time.

* * *

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



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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

71671201

Spencer Platt | Getty Images

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

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

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

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

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

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

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

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

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

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

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

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

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

end

March 4.2019

Parker City News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kovel declined to comment.

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

-END-

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:

 

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: 6.8559/ 

 

//OFFSHORE YUAN:  6.8618   /shanghai bourse CLOSED UP 69.32 POINTS OR 2.38%

HANG SANG CLOSED UP 348.29 POINTS OR 1.240%

 

2. Nikkei closed UP 129.99 POINTS OR 0.60%

 

 

 

 

3. Europe stocks OPENED ALL GREEN EXCEPT SPAIN/

 

 

 

USA dollar index DOWN TO 96.69/Euro RISES TO 1.1298

3b Japan 10 year bond yield: FALLS TO. –.17/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 108.68/ 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:: 55.30 and Brent: 63.41

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO -.31%/Italian 10 yr bond yield DOWN to 2.03% /SPAIN 10 YR BOND YIELD DOWN TO 0.37%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.34: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 2.40

3k Gold at $1381.00 silver at: 15.35   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 45/100 in roubles/dollar) 63.28

3m oil into the 55 dollar handle for WTI and 63 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 107.81 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 .9864 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.1146 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 yearFALLING to 0.31%

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 2.01% early this morning. Thirty year rate at 2.53%

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

6.  TURKISH LIRA:  UP  TO 5.7438..

 

“Powell Throws In The Towel”: Gold, Global Stocks Soar, S&P At All Time High As Yields Tumble

Risk assets, safe havens? it doesn’t matter: just buy it all as central banks enter the last stretch of the race to the (credibility) bottom.

The global dovish tsunami – still in its jawboning phase – which was started by Mario Draghi on Tuesday and escalated on Wednesday when Fed chair Powell finally threw in the towel and effectively said he would cut rates in July, has resulted in a global scramble for bothrisk assets and safe havens, with global equity markets a sea of green…

… and S&P500 futures at all time high, indicating a record S&P print when the cash market opens…

… even as the 10Y Treasury yield plunged overnight, dropping below 2% for the first time since November 2016 and reaching as low as 1.97% before rebounding.

At the same time, Japan’s 10Y JGB futures hit a new all time high overnight after the central bank telegraphed that it is considering rate flexibility during Kuroda’s press conference following the latest BOJ decision.

Finally, the ultimate safe asset, gold, has surged 1.5% overnight, and has finally broken out above multi-year support as we noted last night.

The rest of the world joined the party, with Europe’s Stoxx 600 Index boosted by gains in technology shares and carmakers. Just like in the US, European stocks and bonds rally simultaneously in the aftermath of the Fed’s dovish tilt yesterday. Euro Stoxx 50 +0.9% to highest since May 6, led by technology, autos and industrials. In rates, Euro-area yields were steady to 4bps lower across the 2-yr through 10-yr tenors, with 10-yr BTPs outperforming bunds by 6bps.

Earlier in the session, Asian stocks also climbed, heading for their best week since January. The MSCI Asia Pacific Index rose for a third day, with communications and finance among the best-performing sectors. Most markets in the region were up, as China and Hong Kong led gains. Chinese stocks rallied the most in Asia with a surge in large caps as risk appetite picked up around the world. Investors adjusted positions before FTSE Russell is set to add A shares to its global indexes for the first time. The Shanghai Composite Index closed 2.4% higher, with Kweichow Moutai and large financial firms offering the biggest boosts, after Chinese President Xi Jinping began a state visit to North Korea. A rally pushed the price of gold surged to the highest level in more than five years, sending shares of gold miners across Asia higher. The Topix gauge advanced 0.3%, driven by SoftBank and Nintendo.

In the latest central bank news:

  • Norges Bank, busy building a reputation as one of the world’s most hawkish central banks , unanimously delivered on the promised 25bps June hike, with the Key Rate now at 1.25%, as expected.” Governor Olsen highlighted that the “assessment of the outlook and balance of risks suggests that the policy rate will most likely be increased further in the course of 2019”, with policy forecasts signalling faster rate rises in the coming years. In-fitting with some of the calls, the rate path was left unchanged from the March release.
  • The Bank of Japan kept monetary policy unchanged Thursday,
  • Indonesia’s central bank signaled it’s ready to cut interest rates.
  • The Philippines central bank kept its key rate unchanged.
  • RBA Governor Lowe said the possibility of lower rates remain on the table and that it is not unrealistic to expect a further reduction in the Cash Rate.  RBA Governor Lowe also commented that recent data suggests we are not making any inroads into the economy’s spare capacity and it is unrealistic to think one 25bps cut can alter the growth path, while he also suggested that it is important to recognize monetary policy is not the only option and that he is very hopeful we will not need to cut as far as some central banks in Europe. (Newswires)
  • The Bank of England kept rates unchanged but warned that the risk of a no-deal Brexit is rising, sending cable sliding.

In FX, the Bloomberg USD index tumbled -0.5%, its biggest drop since March 20, as a fresh round of leveraged and real money selling after the London open kept the greenback under pressure. Norway’s krone rallied as Norges Bank signaled its rate hike Thursday may be followed by a similar move later this year, while sterling rose above $1.27 before the Bank of England policy decision.

In the biggest geopolitical news of the day, the Iranian Revolutionary Guard shot down a US drone according to reports citing the state news agency, although the US military later stated that no US aircraft had operated in Iranian airspace. Iran’s Revolutionary Guard Corp Top Commander Salami says the the downing of the US drone sent a clear message to Washington, according to State TV.

In commodities, both Brent ($63.26) and WTI ($55.21) rally as Mideast tensions ratchet up, with gold jumping to the highest level in more than 5 years.

Market Snapshot

  • S&P 500 futures up 0.8% to 2,957.50
  • STOXX Europe 600 up 0.7% to 387.36
  • MXAP up 1.2% to 159.89
  • MXAPJ up 1.3% to 525.59
  • Nikkei up 0.6% to 21,462.86
  • Topix up 0.3% to 1,559.90
  • Hang Seng Index up 1.2% to 28,550.43
  • Shanghai Composite up 2.4% to 2,987.12
  • Sensex up 0.7% to 39,388.97
  • Australia S&P/ASX 200 up 0.6% to 6,687.41
  • Kospi up 0.3% to 2,131.29
  • German 10Y yield fell 1.8 bps to -0.306%
  • Euro up 0.6% to $1.1290
  • Italian 10Y yield fell 0.6 bps to 1.747%
  • Spanish 10Y yield fell 2.9 bps to 0.374%
  • Brent futures up 2.6% to $63.46/bbl
  • Gold spot up 1.5% to $1,380.15
  • U.S. Dollar Index down 0.4% to 96.73

Top Overnight news

  • Fed Chairman Jerome Powell made clear that uncertainty — primarily about the president’s trade battles — was a major factor behind the central bank’s policy shift, along with weak inflation
  • President Trump told confidants he believes he has the authority to replace Jerome Powell as Fed chairman, according to people familiar with the matter. Powell said he intends to serve his full four-year term
  • Bank of Japan kept monetary policy unchanged, just hours after the Fed became the latest central bank to signal a willingness to cut interest rates in the face of rising threats to economic growth
  • Australia’s central bank chief Philip Lowe reiterated it was “not unrealistic” to expect a further rate cut
  • New Zealand’s economic growth held at a five- year low, leaving the door open for the central bank to cut rates again. GDP rose 2.5% from a year earlier, matching the revised pace for the fourth quarter of 2018
  • Norway’s central bank is set to raise rates again as a boom in oil wealth spending and investments put the economy at odds with a global economic cooling
  • U.K. Conservative members of Parliament will choose the final shortlist of two candidates to succeed Theresa May as prime minister Thursday, a day after the favorite Boris Johnson stretched his lead to 89 votes; U.K. Chancellor Philip Hammond will urge the Tory leadership contenders to consider holding a general election or second referendum in order to break the Brexit impasse, rather than an economically damaging no-deal exit
  • Norges Bank is busy building a reputation as one of the world’s most hawkish central banks as it delivers its third interest- rate hike since September and signals there’s more to come
  • U.K. Conservative members of Parliament will choose the final shortlist of two candidates to succeed Theresa May as prime minister, a day after the favorite, Boris Johnson, stretched his lead to 89 votes. Tory MPs are due to vote twice Thursday, each time eliminating one candidate
  • The Bank of England must decide whether to temper warnings of future interest-rate hikes as investors and other major central banks prepare for more policy easing. While the Monetary Policy Committee is expected to keep the key rate unchanged on Thursday, Citigroup predicts some votes for an immediate increase
  • Iran said it shot down a U.S. spy drone in its airspace, escalating already fierce tensions in the Persian Gulf. The reported drone downing followed a missile strike by Yemeni rebels overnight on Saudi Arabia

Asian equity markets traded mostly positive as the region digested the dovish FOMC. ASX 200 (+0.6%) was led higher by gold names after the precious metal surged to its highest since 2013 but with upside in the broader market capped by weakness in other miners including Rio Tinto after it lowered its iron ore production outlook and with Caltex heavily pressured on disappointing guidance. Nikkei 225 (+0.6%) was also supported in the aftermath of the FOMC although a firmer currency and unsurprising BoJ announcement limited the advances, while Hang Seng (+1.2%) and Shanghai Comp. (+2.4%) outperformed on optimism ahead of the US-China trade talks and as financials surged after continued liquidity efforts by the PBoC. Finally, 10yr JGBs were higher as they tracked the upside in T-notes amid a decline in global yields with the US 10yr yield below 2.00% for the first time since November 2016 and with the 30yr yield also at similar multi-year lows.

Top Asian News

  • Japan Bond Futures Climb to Record as Kuroda Signals Flexibility
  • Philippine Central Bank Holds Key Rate After Inflation Quickens
  • Bank Indonesia Cuts Reserve Ratio for Lenders to Boost Liquidity
  • Malaysia Leader Says ‘No Proof’ Russia to Blame for MH17 Downing

European equities are higher across the board [Eurostoxx 50 +0.8%] as the region carries the FOMC-spark gains from Wall Street and Asia overnight. UK’s FTSE 100 (+0.5%) marginally lags its peers as the index is pressured by a firmer Sterling ahead of the BoE Monetary Policy Meeting. Sectors are also broadly in green, albeit financial names lag amid the post-FOMC yield decline. In terms of individual movers, Dixons Carphone (-13%) sunk to the bottom of the Stoxx 600 after the Co. cut guidance. Meanwhile, Fresenius Medical Care (+2.1%) is supported by a positive Barclays broker move. Finally, more bad news for Deutsche Bank (-1.1%) after NYT reported of a criminal probe over alleged money laundering.

Top European News

  • BOJ Stands Pat as Fed and ECB Signal Possible Rate Cuts Ahead
  • Polish Judges’ Retirement-Age Cut Is Illegal, EU Court Aide Says
  • Guindos Says ECB Is Prepared to Act If Situation Deteriorates
  • Norges Bank Stuns Markets With ‘Sole Hawk in Town’ Performance

In FX, the Dollar is down across the board as the FOMC matched market expectations by shifting further towards a rate cut, while Fed chair Powell delivered an extra dovish snippet in the press conference by revealing that even those not plotting an ease are more prone towards loosening monetary policy if needed. The has now index lost grip of the 97.000 handle and extended losses towards 96.500, with chart support just below (ie the 96.459 post-NFP low) under threat ahead of weekly claims, Philly Fed and the LEI.

  • NOK/NZD/CHF – The G10 outperformers, with the Norwegian Crown benefiting from a hawkish Norges Bank hike on top of the aforementioned Greenback weakness, and also further divergence vs the ECB as the revised rate path pencils in 2 more 25 bp tightening moves (next in September 2019 and 3rd before Summer next year). Usd/Nok and Eur/Nok down to circa 8.5500 and 9.6630 respectively in response. Meanwhile, the Kiwi and Franc drew additional impetus from data in the form of NZ Q1 y/y GDP and Swiss trade, as Nzd/Usd rebounds firmly towards 0.6600 and Usd/Chf retreats sharply through 0.9900, with 0.9850 in sight.
  • EUR/AUD/CAD/GBP – The next best majors in terms of gains relative to the Buck, as the single currency tests 1.1300 and unwinds more post-Draghi declines, while the Aussie pivots 0.6900 even though RBA Governor Lowe underscores room for further OCR cuts and the CBA believes back-to-back easing is in the offing with another ¼ point reduction in July. Elsewhere, the Loonie has built on Wednesday’s strong headline Canadian CPI platform to probe 1.3200 offers and psychological resistance and the Pound has reclaimed 1.2700+ status ahead of the BoE amidst market expectations or perceptions that the outturn might be hawkish on balance – see the headline feed or Research Suite for a more detailed preview. Note, not much reaction in Cable to UK retail sales that were weak and came with back data downgrades as the ONS flagged bad weather impacting clothes and footwear in mitigation.
  • EM – Broad rallies or rebounds at the Dollar’s expense, but the Lira also gleaning impetus to breach 5.7500 via an improvement in Turkish consumer sentiment, while the Rand is testing 14.2000 in anticipation of SA President Ramaphosa’s SOTU address and the Ruble is getting an oil-related boost and rallied to 63.2400 at one stage.

In commodities, WTI and Brent futures extended on gains in early European trade as the upside seen amid the dovish FOMC was exacerbated by reports that Iran shot down a US spy drone over the Strait of Hormuz, as tensions in the region escalates. WTI futures rose to levels just shy of USD 56.00/bbl whilst its Brent counterpart ran out of steam ahead of USD 64/bbl. Both benchmarks have since come off highs but hold onto a bulk of its gains, amid light news flow in the complex. Elsewhere, gold remains closer to the 1400/oz after having experienced a post-FOMC flash spike, with some attributing the move to a breakout from a five year range. Meanwhile, copper is back above the USD 2.70/lb amid a weaker Dollar and upbeat risk sentiment around the market. Finally, Dalian iron ore hit fresh record highs after Rio Tinto yesterday lowered its Pilbara shipment guidance, suggesting that supply could remain tight despite Vale resuming operations at its Brucutu Mine.

US Event Calendar

  • 8:30am: Current Account Balance, est. $124.3b deficit, prior $134.4b deficit
  • 8:30am: Initial Jobless Claims, est. 220,000, prior 222,000, Continuing Claims, est. 1.68m, prior 1.7m
  • 8:30am: Philadelphia Fed Business Outlook, est. 10.4, prior 16.6
  • 9:45am: Bloomberg Consumer Comfort, prior 61.6
  • 10am: Leading Index, est. 0.1%, prior 0.2%

DB’s Jim Reid concludes the overnight wrap

By the time you read this I’ll have just taken off on the last flight out of NY back home. The biggest thing waiting for me on my arrival will be knowing whether my 3.75yr old daughter Maisie managed to be persuaded to sleep without her dummy for the first time ever last night. The dentist last week insisted it went ASAP. As such the reason we bought the dolls house furniture earlier in the week was a bribe. When she’s ready to give the dummy to the dummy fairy, said fairy will give her the furniture. Every night this week my wife has asked her if she’s ready to leave her dummy out for the fairy and every night she’s sobbed that she’s not ready. However last night she reluctantly agreed after seeing some of the furniture. My wife said it had to last through the night for the fairy to do the swap. I’ll wait to see what happens.

In markets, the rate cut fairy arrived overnight after the market figuratively spat out its dummy over recent weeks. The Fed was certainly more dovish than prior expectations with the main manifestation being the -12.8bps drop in two year yields (-1.6bps more in Asia), taking them to a fresh 20-month low. I would say the main success story was that 10 year yields (-3.6bps) didn’t follow the move in full indicating that the market believes that the Fed can sustain the expansion with rate cuts. Had the 10y moved in tandem then it would have implied more doubts over the growth and inflation outlook even as they cut. So 2s10s steepened by +9.1bps to 28.2bps, its sharpest move up since November 9, 2016, the day after the US presidential election. Regular readers will know that I think 2s10s is the most important curve variable and if it can steepen then that’s a positive all other things being equal. It has flattened back a little to 25.9bps in Asia as 10 year yields have caught up a little (-3.9bps) and have traded below 2% for the first time since November 2016. More market reaction later.

In more details on the Fed, the language of the statement and the dot plot moved more than expected in signalling imminent rate cuts, though both stopped short of a truly explicit signal. Eight FOMC members moved their dots lower to endorse cuts this year, with 7 of those now calling for 50bps and 1 pencilling in 25bps. That leaves 8 members predicting no change to policy and just 1 one member assuming a rate hike. That leaves things finely balanced, and indeed if just one more member had moved toward cuts, the median dot would have fallen. For 2020, the median dot did fall by 50bps, to 2.125%, while the long-run forecast fell 25bps to 2.50%, a new record low. On the growth front, the median projection for 2019 stayed steady at 2.1%, while 2020 was revised up by 0.1pp to 2.0%. That likely reflects the assumed impact of rate cuts on the economy from those members who expect cuts.

The policy statement mirrored these new forecasts, highlighting “soft” business fixed investment and noting that “market-based measures of inflation compensation have declined.” They also removed the word “patient” with regards to the committee’s policy stance, and added the recent buzz-phrase that they will “act as appropriate to sustain the expansion.” They also noted that “uncertainties about this outlook have increased.” St. Louis Fed President Bullard dissented in favour of a cut, the first dissent of the Powell era, in line with his prior comments.

In the press conference, Chair Powell mostly avoided saying anything too substantive, though he did reveal that “a number of those that expected flat rates agree that the case for more accommodation has strengthened.” That suggests that even among those who did move their rate forecasts, the case for a rate cut is strengthening. On the hawkish side, he did reiterate that “the baseline outlook has been a good one” and cited the strong labour market, rising wages, and steady consumption growth as key supports for the economy. However, he also said that “the limited evidence available at this time suggests that growth in business fixed income has slowed in the second quarter,” and noted that trade uncertainty is a key factor driving this trend. When asked about planned balance sheet policy, Powell seemed to tacitly indicate that the Fed could end its runoff program at the July meeting alongside a rate cut.

Our economists published their recap of the meeting last night (available here ),where they conclude that the meeting opened the door to rate cuts as early as July, as they expected. They did note that Powell said “there was not much support” for a cut at yesterday’s meeting (excluding Bullard’s dissent), which likely means that they will need to see further deterioration in the data and/or worsening trade conflict to feel fully comfortable cutting in July. Even apart from those conditions, our econ team thinks that Powell’s comments on the ongoing Fed review, plus the persistence of inflation undershooting, potentially signal a willingness to allow for an “opportunistic reflation,” as Governor Brainard has described it. That would argue for a rate cut even if the data and trade talks do not deteriorate. Overall, our econ team expects conditions to evolve sufficiently to warrant a cut in July, and view a 25bps move as more likely than 50bps, and they continue to anticipate a total of three rate cuts this year.

As mentioned, the biggest market reaction came in rates, where short-end treasuries rallied sharply and money markets moved to price in even greater odds of Fed easing. There are now 32bps of cuts priced in for the July Fed meeting; implying a near-certainty of a 25bps cut and some additional chance of a 50bps cut. Beyond that, there are now a full 75bps priced in through end-2019 and 100bps over the next 12 months. Ten-year treasury yields fell -3.6bps even as inflation breakevens rose +4.4bps. The dollar slid -0.54%, with its losses spread evenly across high-yielding EMs (ZAR +1.38%, TRY +0.64%) and developed market havens (CHF +0.63%, EUR +0.29%). US equities had been trading flat into the Fed meeting, but rallied after the statement and dot plot was released, and continued to build on their gains during Powell’s press conference. The S&P 500 ended +0.30% higher, while the NASDAQ and DOW gained +0.42% and +0.15%. Despite the positive headline numbers, there was a defensive tinge to the sectoral moves, with materials, energy, and industrials all lagging. Banks also performed poorly, dropping -0.86% on the lower rates outlook. Despite all the excitement, volatility continued its recent slide, with the VIX down -0.8pts to 14.3.

The central bank baton passed to the BoJ this morning however it’s been much less of a spectacle with no policy announcement nor any change to forward guidance. The statement did include a reference to rising global risks however that was about the only change. Governor Kuroda is yet to speak (07:30 am London time) so it’s worth keeping an eye on his comments. As for markets, the yen is up +0.46% – although that more reflects the post Fed move – while yields on 10yr JGBs are down -1.6bps to -0.160% and the Nikkei is up +0.68%. Markets in the rest of Asia are also trading up with Chinese bourses leading the way – the CSI (+3.29%), Shanghai Comp (+2.58%) and Shenzhen Comp (+2.15%) are all up over 2% while the Hang Seng is also up +1.01% although it’s not entirely clear what is driving the big China outperformance this morning.

As for Europe yesterday prior to the Fed, the rally for rates ran out of steam with yields backing up slightly. Indeed 10y Bunds rose +3.2bps but they still remain -5.2bps down from the pre-ECB levels. OATs rose +3.9bps while BTPs closed flat. The ECB’s Rehn was fairly coy in his comments yesterday in Sintra, only reiterating that the ECB will “consider and discuss and – as appropriate – take decisions on this in our forthcoming meetings”. In equities the STOXX 600 finished flat after an intraday range of just 0.39% which is the 7th lowest this year. The DAX ended -0.19% and CAC +0.16%. HY credit spreads in Europe ended -8bps.

So, just in case you hadn’t had enough of central banks for one week, we’ve still got the BoE meeting today. No change in policy is expected, with the market similarly priced for no change. Our UK economists changed their BoE call a few weeks ago away from a hike this year with rising risks that the Bank Rate has reached its terminal point. They pointed to the deterioration in the global outlook, a demand slowdown from surveys, a longer pass through from wages into inflation and the rising risks of a no deal Brexit. More can be found in their note here .

Staying with the UK, last night’s leadership contest ended with further gains for frontrunner Boris Johnson. He amassed 143 votes in the latest round of voting, as dark horse Rory Stewart was eliminated. That leaves Jeremy Hunt, Michael Gove, and Sajid Javid as the final contenders. The list will be whittled down to the final two candidates in two more votes today. Sterling was up around +0.61% prior to the Fed before ending +0.69% stronger. It’s worth noting that the Telegraph has reported overnight that Chancellor Hammond will use his annual Mansion House speech today to warn Tory leadership contenders to “be honest with the public” and admit that Parliament is likely to reject both the Withdrawal Agreement and no deal. The report went on to add that he is likely to say that a second referendum could be a possible way to break the impasse in the parliament while adding that a general election “could put Jeremy Corbyn in Downing Street”.

It was the May inflation report in the UK yesterday which was the only real data of substance. However, there were no great surprises with the +0.3% mom headline reading matching expectations, putting the annual rate at +2.0% yoy, while the core dipped one-tenth to +1.7% yoy, albeit one-tenth above consensus. That data didn’t really move the dial for the BoE today. The other data was the June CBI survey in the UK which showed total orders of -15 compared to estimates for -11.

Looking at the day ahead, this morning we’ll get the May retail sales report prior to the BoE meeting at midday, before the US data includes jobless claims, the June Philly Fed business outlook and May’s leading index. The June consumer confidence reading for the Euro Area is also out this afternoon. Meanwhile, the ECB’s Rehn and Guindos are due to speak, while we’ve got another Conservative Party leadership ballot to look forward to, while EU heads of state gather for the start of a two-day meeting to discuss the leadership race for the commission and ECB.

Fingers crossed that’s the last of the dummy. Only the twins to deal with at some point in the future.

 

 

3A/ASIAN AFFAIRS

I)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED UP 69.32 POINTS OR 2.38%  //Hang Sang CLOSED UP 348.29 POINTS OR 1.24%   /The Nikkei closed UP 128.99 POINTS OR 0.60%//Australia’s all ordinaires CLOSED UP .59%

/Chinese yuan (ONSHORE) closed UP  at 6.8559 /Oil DOWN TO 52.12 dollars per barrel for WTI and 61.21 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED UP // LAST AT 6.8559 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.8618 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

 

 

 

 

 

b) REPORT ON JAPAN

 

3c China/Chinese affairs

i)China/HONG KONG/

4/EUROPEAN AFFAIRS

 

i)GERMANY/DEUTSCHE BANK

We now have the Fed investigating Deutsche bank for suspected money laundering especially with the Russian mob

(courtesy zerohedge)

Feds Investigating Suspected Money Laundering Violations At Deutsche Bank

Deutsche Bank is so consistently mired in scandal that it’s almost impossible to keep all of the myriad civil lawsuits and criminal investigations straight. And while Congress ramps up its scrutiny of the embroiled German lender and its ties to the Trump family, the New York Times dropped a lengthy report late Wednesday claiming that federal authorities are leading a wide-ranging money laundering probe into the bank.

The NYT report, which cited a whopping seven people familiar with the investigation. And though the report was surprisingly short on details given its length, it did once again familiarize us to a new character in the Washington drama: Whistleblower Tammy McFadden, who publicly criticized the company’s AML systems.

FB

Anybody who has been following the reporting on DB since the beginning of the year is probably already familiar with the allegedly egregious compliance rule, and the fact that most of the bank’s compliance staff were shunted to the Jacksonville Office, where they were treated like they were “one step above custodial staff’.

From what we can tell, McFadden first attracted unwanted attention within the bank when she flagged activity involving Jared Kushner’s family back in 2016. The FBI soon became involved, though federal officials reportedly expanded the probe to cover – that’s right – activity involving Russian money launderers.

Congress is investigating the Trump angle, and right now, it appears the Feds are looking into other alleged ‘misconduct’.

Ms. McFadden, a former compliance specialist at the bank, told The New York Times last month that she had flagged transactions involving Mr. Kushner’s family company in 2016, but that bank managers decided not to file the suspicious activity report she prepared. Some of her colleagues had similar experiences in 2017 involving transactions in the accounts of Mr. Trump’s legal entities, although it was not clear whether the F.B.I. was examining the bank’s handling of those transactions.

The same federal agent who contacted Ms. McFadden’s lawyer also participated in interviews of the son of a deceased Deutsche Bank executive, William S. Broeksmit. Agents told the son, Val Broeksmit, that the Deutsche Bank investigation began with an inquiry into the bank’s work for Russian money launderers and had since expanded to cover a broader array of potential misconduct at the bank and at other financial institutions. One element is the banks’ possible roles in a vast money-laundering scandal at Danish lender Danske Bank, according to people briefed on the investigation.

The Feds have since expanded to cover a broader array of misbehavior – though, again, the exact nature of the investigation isn’t quite clear. Several other DB employees, aside from McFadden, told the NYT that the bank regularly ‘rushed’ them to finish their reports when they flagged suspicious client activity. To be sure, this investigation is literally the last thing DB needs. After its merger with Commerzbank unraveled, DB promised shareholders that it would finally restructure  and move ahead with large cuts, including shuttering most or all of its US equities business, and other trading businesses

The bank is also lumping some €50 billion in toxic assets and businesses into a ‘bad bank’ as a prelude to the inevitable government bailout.

But while DB struggles with investigations in Europe and Frankfurt over money laundering involving shadowy Russians and wealthy clients of the Panama Papers law firm, one thing is becoming increasingly clear: Expect another wave of expensive settlements to destabilize one of the world’s most vulnerable banks.

END
UK
Boris Johnson seems headed for being the next Prime Minister of Great Britain and lead them to ano deal Brexit
(courtesy Mish Shedlock/Mishtalk)

Startling Tory Poll And Leadership Challenge Shrinkage… And Then There Was 4

Authored by Mike Shedlock via MishTalk,

A You-Gov Poll shows some shocking preferences. In the non-news of the day, the Tory leadership challenge is down to 4.

Committed to Brexit

YouGov Poll shows the Tory party wants Brexit even if it would lead to Scotland or Northern Ireland breaking away from the UK.

The only scenario the party fears is Jeremy Corbyn becoming prime minister. However, nearly four in ten (39%) are so committed to Brexit that they would want to see it brought about even if it brought their party’s nemesis came to power.

The next two slides explain the first.

Delivering Brexit

Real Threat

Why Brexit Must Be Delivered (And Johnson Will Do It)

The YouGov poll released today supports my call yesterday: Why Brexit Must Be Delivered (And Johnson Will Do It)

Another One Bites the Dust – Great-Remain-er-Hope Rory Stewart Knocked Out

The leadership race will narrow to two candidates today: Johnson vs Gove or Hunt. It won’t matter. Johnson will win.

The MP process of narrowing down to the final two candidates will be over tomorrow. Boris Johnson will be one, the other is unknown, but it’s between Michael Gove and Jeremy Hunt.

The Guardian Live blog discussed Dark Arts.

Rory Stewart’s bandwagon has been exposed as a lot less sturdy than it looked yesterday. Maybe his performance in the debate did not help (he admitted himself he was lacklustre), maybe the copy-and-paste text messages sent to MPs did not help, but there is also speculation that his total yesterday was inflated by some dark arts Johnson operation intended to push Dominic Raab out of the race.

That’s an interesting idea as Johnson is in a position to decide whom he wants to run against. But again, it will not matter.

Boris Johnson will be the UK’s next Prime Minister

What Does Johnson Want?

That is the question I asked previously and there still is no guaranteed answer.

Four Possibilities

  1. If Johnson’s intent is to deliver a hard-Brexit while avoiding a motion of no-confidence, he succeeded.
  2. If Johnson’s intent is to deliver a repackaged Theresa May deal, he succeeded.
  3. If Johnson’s intent is genuinely to get the EU to negotiate something beyond May’s deal, willing to walk away if he doesn’t, he succeeded
  4. If Johnson genuinely doesn’t know, he successfully bought himself time.

My Vote – Door Three

My votes, in order, are 3, 4, and tossup.

I might be wrong, but I am going by what Johnson says even though he has not been consistent.

Moreover, the polls are clear. The party wants Brexit and wants it on Oct 31.

Theresa’s May’s deal, however rehashed, is simply not Brexit.

Managed WTO Deal

It is in the EU’s best interest as well as the UK’s best interest for a Managed WTO Deal to happen, if that is what Johnson wants (and that is what he should want).

By managed deal, I mean a WTO Brexit with the EU agreeing to some temporary backstop measures or “unicorn” technical solutions to smooth things out in return for Johnson agreeing to pay the Brexit breakup fee and agreeing to legal status for EU citizens living in the UK.

I am taking Johnson at his word, an admittedly risky stance for any politician, but it is also what the Tory membership indicates that it wants.

Either way, the leadership challenge is over. Johnson is in the driver’s seat.

end
The pound slides after the Bank of England keeps rates unchanged. However England seems headed for a no deal Brexit.
(courtesy zerohedge)

Sterling Slides After BOE Keeps Rates Unchanged, Sees Rising No-Deal Brexit Risk

In a break from the global easing tsunami that has swept the world in the past 48 hours, moments ago the Bank of England did not cut rates – as expected – in a unanimous 9-0 decision.

The MPC noted that near-term data has been broadly in-line with projections made in the May report, however, downside risks to growth have increased; the bank also said that global trade tensions and especially the increasing risk of a no deal Brexit:  “Domestically, the perceived likelihood of no-deal Brexit has risen,” the bank said in a summary of monetary policy.

Today’s announcement follow a May report in which the BOE indicated that more rate hikes would be needed over the next few years to keep inflation under control, and said the market curve doesn’t reflect that. Since then investors have increased bets in the other direction, with the market showing a greater likelihood of a cut rather than an increase as the next move.

 

The market moves “highlighted the ongoing tension between the MPC’s forecast conditioning assumption of a smooth Brexit and the assumptions about alternative Brexit scenarios that were priced into the financial market variables,” the minutes said.

While Mark Carney’s central bank said it still sees the need for interest-rate hikes in coming years if the forecasts bear out, they also said that investors are taking a different view than the bank’s assumption of a smooth Brexit. That pressured the pound and market expectations for future interest rates, the Monetary Policy Committee said in the minutes of its June meeting. The pound declined after the report while UK equities jumped.

Some other observations:

  • Rates: Maintains guidance that rates will be raised at a gradual pace and to a limited extent
  • Brexit: Maintains guidance that the monetary policy response to Brexit, whatever form it takes, will not be automatic and could be in either direction
  • Growth: After 0.5% growth seen in Q1, Q2 GDP is expected to be flat (Prev. view of 0.2%); in part reflects an unwinding of stockpiling seen in Q1
  • Inflation: CPI is likely to slip below the 2% target this year amid declines in energy prices
  • Investment: Weak business investment has persisted
  • Labour/wages: Market remains tight and broadly in line with projections made in the May report

The kneejerk reaction in the market was of a dovish report, with cable sliding 30 pips from session highs before stabilizing around 1.2700.

end

FRANCE/NATIXIS
We now have another large bank whose investments are now souring:  there is now panic in an ill named hedge fund called H20 which is now totally illiquid as many are trying to bail out
(courtesy zerohedge)

Natixis Plunges After Its Ill-Named H20 Fund Sparks Panic Over Illiquid Holdings

Step aside Neil Woodford (and your disastrous investments in illiquid assets), and make room for French bank Natixis (and its own disastrous investments in illiquid assets), whose shares plunged 10% to the lowest in three years, after bond rating giant Morningstar suspended its rating on the woefully-named H2O Asset Management’s Allegro Fund yesterday, citing concerns over “the liquidity of certain bonds”.

“H20” fund… lack of liquidity… get it?

The questionable Natixis holdings are linked to debt issued by Lars Windhorst, “a flamboyant German entrepreneur with a history of legal troubles” according to the FT, which first flagged the Allegro fund’s shady holdings.

 

Lars Windhorst

Some history: the London-based H20, which oversees about €30bn of assets, has been a subsidiary of Natixis Investment Managers since it was bought in July 2010. Executives sent a message to clients on Wednesday to reassure them about the liquidity of its investments and that its positions had been “fully disclosed to our clients and auditors”.

“The suspension raises concern about the quality of oversight by Natixis management of its network of asset managers,” KBW analyst Jean-Pierre Lambert told the FT, adding that in the vein of the Woodford fiasco, the €250MM performance fee H20 pays Natixis could be affected, and questions should be raised about the French bank’s flurry of recent asset management acquisitions and stated ambition for more.

In response, Natixis said on Thursday that suspension of the rating has “absolutely no impact on the liquidity and performance of H2O’s funds. H2O will communicate shortly in detail to address all the questions raised by the publication of these elements.” The statement added that “the risk of a potential conflict of interest” raised by Morningstar was “groundless.”

Of course, a few weeks ago, UK “investment legend” Neil Woodford said the same thing when a “fund run” on his assets resulted in an unprecedented gating of investors when the market is trading at all time highs.  Now, it’s Natixis’ turn to discover just why all those warnings written here and elsewhere about illiquid bond investments should have been taken seriously.

According to a previous report by FT Alphaville, H2O’s filings list investments in more than €1.4bn of illiquid bonds linked to Windhorst, across six funds that allow retail investors to withdraw their money on a daily basis.

H2O appears to be by far the biggest investor in many of these bonds. It often holds the majority of the outstanding amount across the firm, according to FT calculations based on each fund’s latest regulatory filings.

Windhorst, once seen as a teenage prodigy and poster boy for entrepreneurship in his native Germany, saw his reputation crater after he presides over several insolvencies, a personal bankruptcy and received a suspended jail sentence in 2009. He relaunched his investment firm last month in an attempt to draw a line under several tricky years, which saw him and his company Sapinda engaged in legal battles involving at least €220m with several investors — including Ukraine-born billionaire Sir Len Blavatnik.

The plot thickened after H2O’s CEO, Bruno Crastes joined a new advisory board of Windhorst’s rebranded Tennor Holding last month, along with fund management heavyweights Martin Gilbert and Avenue’s Marc Lasry, who is also vice-chairman of UK asset manager Standard Life Aberdeen. In all, across these investors, they owns tens of billions in illiquid bonds and may well be engaging in marking-to-myth by occasionally “buying” each other’s bonds at specifics prices just to give the impression of a liquid market across billions in illiquid bond holdings.

Potential collusion aside, Morningstar on Wednesday said that Crastes’s board seat posed “a possible conflict of interest”.

Not everyone was convinced that Natixis is the next Woodford: “In our view, the reaction is overdone as H2O overall represents only 5 to 6 per cent of the group’s net income,” said Jefferies analyst Maxence Le Gouvello Du Timat.

“The structure of the fund has always been disclosed by H2O with 85 to 90 per cent in government bonds and futures and 5 to 15 per cent in illiquid assets.”

Still, even if the “illiquid” H20 fund investments turn out to be a tempest in a teapot, Natixis has many other shady investment problems: the stock has plunged 36% in the past 12 months, even before today’s 10% plunge. In February the bank said its fourth-quarter earnings were cut in half after some Asian derivatives trades went bad, prompting questions about its risk appetite and management.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

i)IRAN/ISRAEL/HEZBOLLAH

Israel holds the largest “Hezbollah War Exercise” as they fear an attack from the Iranians who hold some of the land in the south of Lebanon

(courtesy zerohedge)

Israel Holds Largest “Hezbollah War Exercise” In Years Amid Iran Tensions

Israel conducted the largest military drill it’s held in years during the first half of this week, according to the AP, which described the exercise as intended a simulated “future war” against Hezbollah.

The four-day war games concluded on Wednesday, and though pre-planned, came just days following the tanker attack incident in the Gulf of Oman which has sent tensions between Washington and Tehran soaring. The exercise focused on an Israeli Defense Forces (IDF) multi-pronged all-branch deployment against threats on Israel’s northern border.

 

Israeli military exercises file photo. 

Israeli officials have cited fears that Tehran could mobilize its Lebanese proxy force to mount a major attack on Israel’s north. To simulate a response to such an attack, which is reminiscent to the 2006 Israeli-Hezbollah war which took place in southern Lebanon, the IDF deployed a large fleet of unmanned aircraft and F-35 stealth jets, along with simulating tunnel operations — an infiltration tactic long used by Hezbollah as well as Palestinian Hamas.

According to the AP, statements made by Prime Minister Benjamin Netanyahu as he observed part of the drill didn’t reference Hezbollah by name, though it was clear the Lebanese Shia militant group was being referenced.

“I am very impressed by the improvement in readiness, by the fighting spirit of the soldiers and commanders, and mainly by the destructive power,” Netanyahu said. “I say to our enemies: The (military) has very great destructive power. Don’t test us.”

However on Tuesday Israeli President Reuven Rivlin did single out the “threat” from across the country’s northern border: “We caution Hezbollah not to subordinate Lebanon to Iran’s agenda, and we caution Lebanon not to be used as a launching pad for attacks against Israel,” Rivlin said. “We are not happy to go to war, but the military is fully prepared to respond to any threat and any scenario.”

Israel’s Arrow rocket system was also reported integrated into the drill, which is a multi-layer aerial defense system focused on intercepting the longest range missiles — the type that Iran is able to supply.

One particular observation from the AP report which suggests Israel is likely taking a very active behind-the-scenes roll in lobbying the Trump White House to take greater action against Tehran following last week’s tanker attacks is as follows: “Netanyahu, who has been a vocal critic of Iran over the years, has been uncharacteristically quiet throughout the latest escalation in the Persian Gulf.”

Indeed this means Netanyahu is very likely hard at work ensuring the US “maximum pressure” campaign against Iran ultimately pays off in his favor.

END

IRAN/USA

Iran shoots down a USA drone.  Iran states that the drone was in Iranian airspace..the USA states that it was over the Strait of Hormuz.

Iran states that they are ready for war.

(courtesy zerohedge)

Iran Shoots Down US Drone, Says “Ready For War”

Tensions between the US and Iran flared on Thursday when the Iranian Revolutionary Guard shot down an American drone that was said to have flown into Iranian airspace (the US claims the drone flew over international territory). The drone was reportedly flying over the Strait of Hormuz – that critical chokepoint for the global oil trade – not far from where two oil tankers were recently attacked.

drone

“We will defend Iran’s airspace and maritime boundaries with all our might,” Ali Shamkhani, secretary-general for the Supreme National Security Council was quoted as saying by state-run Islamic Students’ News Agency. “It doesn’t matter which country’s aircraft cross our airspace.

IRGC Commander Hossein Salami said shooting down the drone had sent a clear and strong message for the US: Iran’s borders are ‘red lines’ and though Iran doesn’t seek war, Iran is ready for war. The US, meanwhile, denies that the drone crossed into Iran’s airspace, and says it was in international airspace the whole time.

The news sent oil prices surging, with Brent up as much as 3%. President Trump has been briefed on the incident and the White House is “monitoring the situation.” The US military has branded the shooting “an unprovoked attack.”

 

The shooting follows attacks on six tankers in the region, which Iran has denied responsibility for (including the two from last week). On Wednesday, a news agency operated by Iran-backed Houthi rebels in Yemen said that the rebels had hit a power station in Jazan, Saudi Arabia, with a cruise missile, though these reports weren’t independently verified.

Numerous geopolitical experts warned that Thursday’s incident “significantly raises” the prospects for international conflict.

Particularly after the US dispatched more troops to the region last week, tensions between the US and Iran just won’t subside, with Tehran still furious over US sanctions on oil sales.  With Tehran poised to violate its agreements under the JCPOA on enriched uranium stockpiles, many are fearful that a ‘hot war’ between the US and Iran might erupt.  If it did, some of Washington’s biggest geopolitical adversaries (Russia and China) could get involved, triggering WWIII.

END
Russia/USA/Iran
Russia warns not to attack Iran as the results would be “catastrophic”.  The crash site on that navy drone is in international waters
(courtesy zerohedge)

Putin Warns Attack On Iran Would Be “Catastrophic” As US Navy Deploys To Drone Crash Site

Following China’s warning this week that the United States is poised to open “Pandora’s Box” in the Middle East should it escalate military action against Iran, Russia’s President Vladimir Putin has weighed in, on Thursday saying any American military strike would have “catastrophic” consequences.

Putin warned further that US attack “would trigger a surge in violence and a possible refugee exodus,” according to Reuters. During an annual televised question and answer session hosted by the Russian leader, he reiterated Moscow’s position that Tehran is in full compliance with its nuclear commitments under the 2015 JCPOA. He also slammed the US-imposed sanctions now choking the Iranian economy as “groundless”.

“I want to say at once that this would be a catastrophe for the region” — Putin said.

 

Image source: AP

Meanwhile, President Trump has been briefed on Thursday morning’s dramatic escalation of an already tense stand-off in the Strait of Hormuz which involved Iran’s alleged shoot down of a US drone near entrance to Persian Gulf.

Reports say it was US Navy high-altitude drone taken out by an Iranian surface-to-air missile directly over Strait of Hormuz in what the US says was international airspace, but which Iran claimed was over its sovereign airspace. US Central Command (CENTCOM) identified the drone as one of its RQ-4 Global Hawk aircraft, condemning it as an “unprovoked attack”.

“Iranian reports that the aircraft was over Iran are false. This was an unprovoked attack on a U.S. surveillance asset in international airspace,” CENTCOM spokesman Navy Capt. Bill Urban said following the confirmed drone downing.

And now, in a pattern suggesting significant US military build-up will continue in the Persian Gulf following last week’s tanker attack incident, also blamed on Iran, US naval assets have been dispatched to the “drone debris field in international waters” according to a breaking Reuters report.

Meanwhile, war drums beating, here we go…

Donald J. Trump

@realDonaldTrump

Iran made a very big mistake!

END
TURKEY
The lira flash crashes again after Turkey threatens the uSA with retaliation if the uSA initiates sanctions
(courtesy zerohedge)

Lira Flash Crashes After Turkey Threatens US With Retaliation Against Any US Missile Sanctions

Turkish president Erdogan has decided that the best way to respond to Trump’s threats is with threats of his own, and on Thursday, Erdogan said that Turkey will retaliate against any U.S. sanctions imposed when it takes delivery of the Russian S-400 missile-defense system from Russia, refusing to back down from a dispute that has roiled the NATO alliance.

“We would have our own sanctions against them,” Erdogan said in a meeting with foreign journalists on Thursday, without elaborating. While relations with U.S. President Donald Trump “are really good,” he said, “our ties with people working under him are far more different.”

Additionally, ending any debate over whether Turkey will terminate the deal with Russia as Congress has demanded, he said that delivery of the S-400 missile system to Turkey may start in the first half of July and the Turkish military has already decided where to deploy it.

 

Additionally, Bloomberg quoted two Turkish officials familiar with the deal said the missiles could arrive as early as the first week of July.

The planned purchase has resulted in fresh threats of U.S. penalties that could cripple the ailing Turkish economy similar to what happened last summer, while creating severe strains between Washington and a crucial Middle East partner that relies on it for arms.

The Pentagon has argued that integrating the Russian system into NATO’s second-largest army could help Moscow gather critical intelligence on the stealth capabilities of American F-35 fighter planes, which Turkish manufacturers help to build. Erdogan dismissed the U.S. argument and said Turkish military experts were good at deciding what to purchase. He plans to discuss the S-400 purchase with Trump at the Group of 20 summit in Japan this month, and is counting on their personal rapport to fend off stinging sanctions, despite vigorous opposition to the missile deal in Congress.

Washington has warned that Turkey would be expelled from Lockheed Martin Corp.’s F-35 program and face sanctions under two pieces of legislation that allow the punishment of entities doing business with parts of the Russian state.

Erdogan responded in typical fashion, saying “it’s not the end of the world” if Turkey can’t get F-35 fighter jets from the U.S. “Turkey can purchase similar jets from other countries in the world,” he said, clearly referring to the rising China-Russia axies, while warning that “We will get our money back first through international arbitration.” Turkish companies were set to produce parts worth billions of dollars for the jet, and the air force planned to buy about 100 of the planes. Deliveries of F-35 equipment to Turkey have been suspended.

As Bloomberg notes, Turkey has dug in on buying the Russian missile-defense system because trust in Washington has broken down on multiple fronts in recent years, and because Ankara is convinced the U.S. can’t replace it strategically with another ally, people familiar with official thinking have said. The U.S. views Turkey’s grievances much differently.

News of Turkey’s proposed retaliation did not help risk sentiment, and with the lira trading near session highs on the day following Powell’s dovish reversal, the headline sent the TRY plunging by as much as 14 big figures as a bevy of stops were taken out, sparking a mini flash crash, before stabilizing near 5.78

 

END
SAUDI ARABIA/USA
In a move that will thoroughly infuriate Trump, in a bipartisan vote, the senate blocks the arm sales to Saudi Arabia
(courtesy zerohedge)

6. GLOBAL ISSUES

There is no greater sign that the world is deflating than this: libor tumbles the most since May 2009.  This is why we are witnessing 10 yr yields from all countries collapse under this huge deflationary pressure as growth stymies

(courtesy zerohedge)

Libor Tumbles The Most Since May 2009

Having been headfaked by Powell in the fourth quarter of 2018 – along with every other asset class – when 3M USD Libor rose from 2.300% to 2.800%…

… Libor has staged a dramatic reversal, largely following the path taken by the effective fed funds rate after the Fed’s dovish reversal, and on Thursday it was fixed lower by 4.3bps, the largest drop since May 2009, falling to 2.34313% from 2.38613% on June 19 as the short end of the fixed-income market catches up in pricing Federal Reserve rate cuts. As a result, the Libor-OIS spread, has narrowed to 17.7bps from 20.6bps prior session.

The drop “is a product of the market catching up in pricing for Fed rate cuts,” said Gennadiy Goldberg, a strategist at TD Securities quoted by Bloomberg. “3m OIS also declined by 1.5bp, but you should see Libor also pricing in some cuts, given the Fed’s dovishness yesterday.”

Meanwhile, in the aftermath of the FOMC announcement, October fed funds futures which indicate the expected level of fed funds after the September FOMC meeting, show a rate of 1.81%; that’s 56bp below the current fed effective rate of 2.37%.

Separately, the effective fed funds rate was unchanged at 2.37% on Wednesday with the Fed’s interest on excess reserves (IOER) rate now at 2.35%, that puts the fed funds rate 2bp above IOER. The effective fed funds rate has been higher than IOER since March 20, when a negative spread emerged between the two benchmark rates for the first time since 2008, and it’s stayed above almost every day since.

end

Simon Black gives up a very analysis on the demographics facing the globe.  However the once country that is in severe trouble on that front is Japan.

(courtesy Simon Black/SovereignMan)

Demogrocalypse – Japan Now Has More People Over The Age Of 80 Than Under The Age Of 10

Authored by Simon Black via SovereignMan.com,

Earlier this week the United Nation’s Department of Economic and Social Affairs released its 2019 world population report… and there were a number of very interesting findings:

1) World population continues to grow slightly, but the rate of global population growth is at the lowest level since at least 1950.

2) Global population growth rates are unevenly distributed. Developed nations (including the US, Japan, Western Europe) suffer from alarming declines in fertility rates, while developing countries are experiencing rapid population growth.

The 47 least developed countries in the world (mostly in Africa) are the fastest growing, and just NINE countries are expected to make up HALF of global population growth over the next three decades.

3) Global population is aging at an unprecedented rate. Last year, for the first time in recorded history, people aged 65 and older around the world outnumbered children under the age of 5.

That last point is the one that presents the most immediate concern.

The reality is that, once we reach a certain age, we’re unable to work or take care of ourselves, and most people need some sort of assistance.

Some countries deal with this through national pension and social security programs that provide a monthly stipend to retirees.

Other cultures take a more personal approach and expect elderly parents to be financially supported by their kids.

Either way, the arithmetic is the same: the only credible way to take care of those who cannot take care of themselves is to divvy up that responsibility among several people, i.e. three or four kids each kicking in a portion of their paychecks to take care of Mom and Dad.

It works the same way with social security programs: there needs to be a minimum number of workers paying into the system for each retiree receiving benefits.

This is known as the ‘worker-to-retiree ratio’.

And that minimum number is usually between 2.8 and 3.2, meaning it takes approximately three workers kicking in a portion of their paychecks to pay the benefits for each retiree.

And when it comes to this worker-to-retiree ratio, there are a number of countries that are in terrible condition.

China, for example, spent decades under the one-child policy in an attempt to control the population. And one effect of this policy is that there simply aren’t enough young people to take care of older people.

In the United States, the Social Security Administration has already reportedthat its trust funds will run out of money in 15 years, AND that the worker-to-retiree ratio will fall below its minimum threshold this year.

And with the US grappling with the lowest fertility rate EVER recorded, this trend will only worsen.

Most of Europe is in a similar position, with spiraling costs and record low fertility rates. A number of countries (like Italy, Greece) have already been forced to make substantial pension reforms to avoid insolvency.

Even Russia had to implement an unpopular overhaul of its pension plan last October by raising the retirement age.

But the Grand Prize for insolvent pension funds definitely goes to Planet Japan.

According to the UN report I mentioned earlier, Japan’s worker-to-retiree ratio is just 1.8! Remember, the US is in deep trouble at 2.7 workers per retiree. Japan’s ratio is significantly worse than that.

Infographic: Decline of Working Age Population Concern for Some OECD Countries | Statista

You will find more infographics at Statista

And to drive the point home, just look at some of the numbers:

– Japan has more people over the age of 80 than it has children under the age of 10.

– There are 2.85 million children aged 0 to 3 in Japan. But almost 5.2 million aged 95 or over.

– Japan’s biggest diaper maker (Unicharm) has been selling more adult diapers than baby diapers since 2011.

You don’t need a PhD in statistics to see where this is going: in the very near future there aren’t going to be enough young people to take care of older people. And in many countries that’s already the case.

I’ve written about this issue a LOT since I started Sovereign Man a decade ago. And the problem has become progressively worse.

Ten years ago the US worker-to-retiree ratio was 3.2. And the Social Security Administration projected that its trust funds would remain solvent through 2037. So the crisis point was 28 years away.

Ten years later, the ratio has fallen to 2.7 workers per retiree. And the trust funds are expected to run out of money in 2034. So now the problem is only 15 years away.

The good news is that there’s still time to fix this, regardless of where you’re from.

Every country has different rules. But the basic strategy is to save more for retirement in the most tax-advantaged way possible.

In the US, for example, you could start a side business (like selling products on Amazon or eBay) and put the majority of your profits in a tax-advantaged retirement account.

And a robust retirement structure like a solo 401(k) gives you a lot more investment options, including traditional investments like stocks and bonds, as well as private businesses, foreign real estate, income-producing royalties, etc.

This is definitely an option worth considering no matter what might happen next: it’s hard to imagine you’d be worse off for having more investment options, paying less tax, and setting aside more money for your retirement.

And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide

7. OIL ISSUES

The shooting down of the USA surveillance drone over international waters causes oil to spike the most in 5 months

(courtesy zerohedge)

Oil Prices Spike Most In 5 Months As US-Iran Tensions Soar

WTI and Brent prices spiked overnight on the headlines about a US drone being shot down by Iran, and just legged higher once again following Trump’s tweet warning that “Iran made a very big mistake.”

“Geopolitics is helping oil bulls to make a spectacular come-back after a few days’ of directionless trading,” said Tamas Varga, an analyst at PVM Oil Associates Ltd. in London.

WTI now trades at its highest since May.

This is the biggest one-day jump since the first week of January.

Oil prices are also supported by a slump in the U.S. dollar.

Will this surge in oil prices mess up the goldilocks narrative of lowflation that The Fed is banking on?

END

 

8 EMERGING MARKET ISSUES

 

i)VENEZUELA/

 

 

 

 

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

Euro/USA 1.1298 UP .0063 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 EXCEPT SPAIN

 

 

USA/JAPAN YEN 107.81 DOWN 0.308 (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 1.2718   UP   0.0065  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/BREXIT EXTENDED TO OCT 31/2019//

USA/CAN 1.3199 DOWN .0071 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  THURSDAY morning in Europe, the Euro ROSE BY 16 basis points, trading now ABOVE the important 1.08 level RISING to 1.1219 Last night Shanghai COMPOSITE CLOSED UP 69.32 POINTS OR 2.38% 

 

//Hang Sang CLOSED UP 348.29 POINTS OR 1.240%

/AUSTRALIA CLOSED UP 0,59%// EUROPEAN BOURSES ALL GREEN EXCEPT SPAIN

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL GREEN EXCEPT SPAIN 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 348.29 POINTS OR 1.240%

 

 

/SHANGHAI CLOSED UP 69.32 POINTS OR 2.38%

 

Australia BOURSE CLOSED UP. 59% 

 

 

Nikkei (Japan) CLOSED UP 128.99  POINTS OR 0.60%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1380.30

silver:$15.34-

Early THURSDAY morning USA 10 year bond yield: 2.01% !!! DOWN 1 IN POINTS from YESTERDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 2.53 DOWN 0  IN BASIS POINTS from YESTERDAY night.

USA dollar index early THURSDAY morning: 96.69 DOWN 3 CENT(S) from  YESTERDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing THURSDAY NUMBERS \12: 00 PM

Portuguese 10 year bond yield: 0.54% UP 1 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.17%  DOWN 4   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.39%//DOWN 0 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD: 2.15 UP 3 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 176 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: FALLS –.32% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.47% 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 THURSDAY

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

Euro/USA 1.1286  UP    .0051 or 51 basis points

USA/Japan: 107.39 DOWN .718 OR YEN UP 72  basis points/

Great Britain/USA 1.2694 UP .0041 POUND UP 41  BASIS POINTS)

Canadian dollar UP 68 basis points to 1.3202

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY: AT 6.8506    0N SHORE  (UP)..

 

THE USA/YUAN OFFSHORE:  6.8616  (YUAN UP)..

 

TURKISH LIRA:  5.7772 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.17%

 

Your closing 10 yr US bond yield DOWN 3 IN basis points from YESTERDAY at 1.99 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.53 DOWN 1 in basis points on the day

Your closing USA dollar index, 96.67 DOWN 44  CENT(S) ON THE DAY/1.00 PM/

 

Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates for THURSDAY: 12:00 PM

London: CLOSED UP 20,90  0.28%

German Dax :  CLOSED UP 46.86 POINTS OR .35%

 

Paris Cac CLOSED UP 17.12 POINTS 0.31%

Spain IBEX CLOSED DOWN 22.70 POINTS or 0.25%

Italian MIB: CLOSED UP 140.06 POINTS OR 0.66%

 

 

 

 

 

WTI Oil price; 56.72 12:00  PM  EST

Brent Oil: 64.20 12:00 EST

USA /RUSSIAN /   ROUBLE RISES:    62.96  THE CROSS LOWER BY 0.77 ROUBLES/DOLLAR (ROUBLE HIGHER BY 77 BASIS PTS)

 

TODAY THE GERMAN YIELD RISES  TO –.32 FOR THE 10 YR BOND 1.00 PM EST EST

END

 

This ends the stock indices, oil price, currency crosses and interest rate closes for today 4:30 PM

Closing Price for Oil, 4:00 pm/and 10 year USA interest rate:

WTI CRUDE OIL PRICE 4:30 PM :  56.65//

 

 

BRENT :  64.51

USA 10 YR BOND YIELD: … 2.00…   VERY DEADLY//

 

 

USA 30 YR BOND YIELD: 2.52..VERY DEADLY/

 

 

 

 

 

EURO/USA 1.1294 ( UP 58   BASIS POINTS)

USA/JAPANESE YEN:107,32 DOWN .792 (YEN UP 79 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 96.62 DOWN 49 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2705 UP 52  POINTS

 

the Turkish lira close: 5.7605

 

 

the Russian rouble 62.91   UP 0.83 Roubles against the uSA dollar.( UP 83 BASIS POINTS)

Canadian dollar:  1.3192 UP 79 BASIS pts

USA/CHINESE YUAN (CNY) :  6.8506  (ONSHORE)/we need to watch these levels/anything greater than 6.95 will be deadly./

 

USA/CHINESE YUAN(CNH): 6.8570 (OFFSHORE) we need to watch these levels/anything greater than 6.95 will be deadly/

German 10 yr bond yield at 5 pm: ,-0.32%

 

The Dow closed  UP 249.17 POINTS OR 0.94%

 

NASDAQ closed UP 127.40 POINTS OR 0.98%

 


VOLATILITY INDEX:  14.76 CLOSED UP .43

LIBOR 3 MONTH DURATION: 2.386%//libor dropping like a stone

 

 

 

FROM 2.388

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

TRADING IN GRAPH FORM FOR THE DAY//

Markets Turmoil On Downed-Drone, Powell-Promises, & Trump-Tweets

Stocks up to record highs (Fed and Energy stocks), Bonds (price) up (Fed and Iran safe-haven), Gold up (Fed and Iran safe-haven), VIX up (hedging melt-up gains or levered longs), Dollar down hard (Fed uber-easy and no safe-haven bid?), and Rate-Cut Expectations soared

 

Chinese stocks exploded higher overnight  in the morning session (as policymakers hinted at more potential easing) but were flat in the afternoon session…

Notably, China’s bond yields are the only ones that are not making new cycle lows…

 

European markets opened exuberantly but faded for most of the day (Spain was red on the day)…

German bund yields fell back to record lows (-32bps) and most of Europe is now in a negative yield

And as yields tumbled, so did European bank stocks…

 

US Equities surged overnight, opened at record highs (S&P), but were sold from the cash open, accelerating close to unchanged when Trump warned Iran “made a very bid mistake”… then after he seemed to walk back the event, stocks recovered some of their gains…

NOTE – remember tomorrow is a quad witch

“We are inclined to believe it has more to do with tomorrow’s quadruple expiry in futures and options markets than a true shift in investor sentiment,” said Russ Visch, a technical analyst with BMO Capital Markets.

“The quality of the rally since late May (narrow participation, extremely light volume) suggest it’s nothing more than a relief rally within an ongoing medium-term downtrend,” he said.

The S&P 500 hit a new all-time intraday high at the open…

NOTE – Previous S&P intra high 2954.13, close high 2945.8)

Late-day buying panic was sparked by all that pre-expiration gamma again…

 

Cylicals were bid today, catching up to yesterday’s defensive-driven outperformance…

 

US Bank stocks continue to notably underperform as yields collapsed…

 

 

Slack slumped…

 

 

TSLA stalled at key downtrend despite market strength…

 

 

Despite the equity gains, VIX ended the day higher…

 

The jaws of death widen…

 

Treasury yields tumbled…

 

With 10Y Yields plunging below 2.00%…

 

And 2Y yields failed to bounce at all today…

 

The dollar was dumped – the biggest two-day drop since Feb 2018…and DXY back below the 97.00 level…

 

Yuan has strengthened notably, trading stronger than the CNY fix for the first time since April

 

Cryptos were mixed with Bitcoin gains, Litecoin and Ripple fading…

 

Bitcoin surged back up toward $9500 (highest since May 2018)

 

Commodities were all higher on the day but Iran downing a US drone sparked a huge spike in oil…

 

Gold soared up near $1400 overnight, fell back, then accelerated higher once again as US-Iran headlines hit…

This was Gold’s biggest day since Oct 2018, spiking to its highest since 2013…

Gold in Yuan is at its highest since April 2013…

 

Oil prices exploded higher (biggest day since 2018) on the US-Iran headlines… (this is the biggest 3-day spike since Dec 2016)

 

Finally, US (and Europe) markets’ expectations for central bank rate-cuts have collapsed to cycle lows (52bps of cuts in 2019 and 86bps of cuts by the end of 2020)…

Since The S&P 500 record high in September 2018, gold is up 15% and 10Y bonds total return is almost 11% (with stocks unch)…

And in case you’re wondering what’s driving stocks back to record highs… Simple – global money supply has surged once again to rescue markets…

 

end

 

i) Market trading/

 

MARKET TRADING/LATE MORNING

 

end

 

LATE AFTERNOON

Trump: “You’ll Soon Find Out” If US Attacks Iran; Stocks Slide

Update 2: In his clearest threat yet, President Trump replied “you’ll soon find out” when asked whether the US would attack Iran.

In remarks to the press, Trump reiterated that Iran made a “very bad” mistake, and insisted that the drone was in international waters.

That remark sent stocks spiraling lower as the prospect of renewed war in the Middle East weighs on markets.

Stocks

Stocks have come off their highs of the session after the S&P 500 opened at fresh record highs.

STocks

The dollar weakened on the headline while gold climbed.

Gold

The main US benchmarks have now erased nearly all of their gains from earlier in the session.

Two

If Jerome Powell has to cut rates 2-3 times to ‘offset’ the trade war with China, how many cuts will we need to counterbalance a ‘hot war’ with Iran? Whatever happens, Trump said he’s sure Powell will “do what’s right.”

* * *

Update: After reportedly being briefed on the attack, President Trump has weighed in on Twitter to warn Iran that it made a “very big mistake” by shooting down the American drone.

The US Navy is sending ships to where debris from the downed drone is reportedly floating (in international waters, according to reports).

The US has been increasing the number of military assets in the region as tensions with Iran have flared. The USS Abraham Lincoln is stationed nearby with a full carrier strike group.

With all the tools for escalation present in the region, is it possible that we could be at war with Iran by the end of the day? Trump started what wounded like a walk-back, saying that the incident was probably a “mistake” made by an individual soldier. However, he followed that up by insisting that his  administration wasn’t pushing him toward conflict, and that, some times, it was the other way around.

* * *

Tensions between the US and Iran flared on Thursday when the Iranian Revolutionary Guard shot down an American drone that was said to have flown into Iranian airspace (the US claims the drone flew over international territory). The drone was reportedly flying over the Strait of Hormuz – that critical chokepoint for the global oil trade – not far from where two oil tankers were recently attacked.

drone

“We will defend Iran’s airspace and maritime boundaries with all our might,” Ali Shamkhani, secretary-general for the Supreme National Security Council was quoted as saying by state-run Islamic Students’ News Agency. “It doesn’t matter which country’s aircraft cross our airspace.

IRGC Commander Hossein Salami said shooting down the drone had sent a clear and strong message for the US: Iran’s borders are ‘red lines’ and though Iran doesn’t seek war, Iran is ready for war. The US, meanwhile, denies that the drone crossed into Iran’s airspace, and says it was in international airspace the whole time.

The drone reportedly was shot down over a village called Kuhmobarak in Iran’s Hormozgan province.

Map

The news sent oil prices surging, with Brent up as much as 3%. President Trump has been briefed on the incident and the White House is “monitoring the situation.” The US military has branded the shooting “an unprovoked attack.”

The shooting follows attacks on six tankers in the region, which Iran has denied responsibility for (including the two from last week). On Wednesday, a news agency operated by Iran-backed Houthi rebels in Yemen said that the rebels had hit a power station in Jazan, Saudi Arabia, with a cruise missile, though these reports weren’t independently verified.

Numerous geopolitical experts warned that Thursday’s incident “significantly raises” the prospects for international conflict.

Particularly after the US dispatched more troops to the region last week, tensions between the US and Iran just won’t subside, with Tehran still furious over US sanctions on oil sales.  With Tehran poised to violate its agreements under the JCPOA on enriched uranium stockpiles, many are fearful that a ‘hot war’ between the US and Iran might erupt.  If it did, some of Washington’s biggest geopolitical adversaries (Russia and China) could get involved, triggering WWIII.

end

ii)Market data/

Philly Fed slumps in June as outgoing prices plunge putting massive pressures on margins

 

(courtesy zerohedge)

Philly Fed Slumps In June As Price Plunge Pressures Margins

Seemingly confirming the collapse in Empire Manufacturing ‘soft’ survey data, The Philly Fed Business Outlook plunged from 16.6 to just 0.3 in June (well below the 10.4 expectation).

While not as big a drop as in February, the slump from the dead-cat-bounce hopes of the last few months is very telling…

 

Under the hood was a more mixed picture with ‘hope’ rebounding… Employees, workweek, new orders, and prices all weakened, but the six-month outlook rose to 21.4 vs 19.7.

However, the shift in prices paid and prices received (dropped from 17.5 to 0.6, the lowest since October 2016) is crushing margins…

Of course, none of this matters if The Fed cuts rates and sends stocks to record-er highs, right?

Overall, ‘soft’ survey data has crashed to levels not seen since before Brexit…

iii)USA ECONOMIC/GENERAL STORIES

this is big!! we are now witnessing a complete collapse in the USA trucking industry

(courtesy Michael Snyder)

They’re Calling It A “Bloodbath” For The $800 Billion Trucking Industry As US Economy Collapses

Authored by Michael Snyder via The Economic Collapse blog,

The U.S. trucking industry has not experienced a downturn of this magnitude since the last financial crisis, and this is one of the clearest signs yet that the U.S. economy is steamrolling into a severe economic downturn

When economic activity is increasing, the trucking industry sees rising demand for their services and freight rates tend to go up.  That is precisely what we witnessed in 2018, and truckers were hoping for more of the same in 2019.  But when economic activity is on the decline, the trucking industry sees decreasing demand for their services and freight rates tend to go down.  Unfortunately, the numbers that the U.S. trucking industry is reporting right now are absolutely abysmal.  Freight rates have now fallen for six months in a row on a year-over-year basis, and according to Business Insider during the month of May loads on the spot market fell “by a chilling 62.6%” compared to last year…

This year has been rocky for the $800 billion trucking industry.

After a raucous 2018, 2019 has seen retailers and manufacturers moving less, according to the Cass Freight Index. Freight rates have dipped year-over-year for six months straight. Loads on the spot market, in which retailers and manufacturers buy trucking capacity as they need it rather than through a contract, have fallen by a chilling 62.6% in May year-over-year.

The spot market is where we see the marginal changes in demand most clearly, and what this is telling us is that we are already in a transportation recession.

Of course that is almost certainly putting it too nicely.  According to one owner-operator, what we are witnessing right now is nothing short of a “bloodbath”

The earnings of big and small players alike are getting hit as factory activity continues to decline. The Lexington, Kentucky-based owner-operator Chad Boblett said some truck drivers are seeing a “bloodbath.”

There has been a spate of trucking companies declaring bankruptcy this year, too. The largest was New England Motor Freight, which was No. 19 in its trucking segment. Falcon Transport also shut down this year, abruptly laying off some 550 employees in April.

If demand does not start rebounding really soon, we are going to see many more trucking companies go bankrupt.

And of course it isn’t just trucking companies that are licking their wounds right now.  All modes of transportation are down compared to last year, and that is a clear indication that big trouble is ahead for the U.S. economy.  According to Wolf Richter, the Cass Freight Index just suffered it’s largest drop “since November 2009″…

Freight shipment volume in the US dropped 6.0% in May compared to May last year, the sixth month in a row of year-over-year declines, and the sharpest year-over-year drop since November 2009, according to the Cass Freight Index for Shipments.

The index tracks shipments of goods for consumer and industrial sectors across all modes of transportation – truck, rail, air, and barge.

What a difference one year can make.

Last year at this time we were in the midst of a trucking boom, and as a result orders for heavy trucks surged to record highs

In late 2017 and through summer of 2018, freight rates had been driven up by a capacity crunch in the trucking industry, and a panic amid shippers – such as big retailers or industrial companies that need to get their merchandise across the country – that trucking companies won’t be able to keep up with demand.

To meet that demand, truckers went on a buying binge, ordering a record number of Class-8 trucks that now have entered service.

But now that the trucking boom has turned into a trucking bust, we are watching orders for heavy trucks absolutely collapse.

In fact, according to Zero Hedge the number of new orders for heavy trucks in May was down a whopping 70 percent compared to a year ago…

Preliminary North America Class 8 net order data from ACT Research shows that the industry booked just 10,800 units in May, down 27% sequentially, but also lower by an astonishing 70% year-over-year. YTD orders are down 64% compared to the first five months of 2018.

This would not be happening if we had a “booming” economy.

Last year, the Cass Freight Index was showing robust increases month after monthbecause economic activity was definitely rising.

But now the Cass Freight Index has fallen on a year-over-year basis for six months in a row because U.S. economy activity is dropping.

As I noted yesterday, nobody should be attempting to claim that the U.S. economy is in good shape at this point.  All of the numbers are definitely pointing in the other direction.

So what does all of this mean for average U.S. consumers?

What it means is that we should all be getting ready to go through another brutal economic downturn.  I personally know some people that have already lost their jobs, and a lot more job losses are coming.  It doesn’t matter if you have worked your tail off for years and have been the most loyal employee in America.  When it comes time for heads to roll, it won’t be the corporate executives with the fat paychecks that are let go.

Someday soon you may be called into the manager’s office without any warning whatsoever and be escorted out of the building 15 minutes later.

That is literally how fast it can happen.

When things started to go bad in 2008, the economic dominoes began to fall very quickly.

We should probably expect a similar scenario this time around.

The “next economic downturn” is already here, and the months ahead promise to be quite “interesting” indeed.

END
USA farmers are now calling for a 3rd farm bailout as the trade war intensifies
(courtesy zerohedge)

US Farmers Call For Third Farm Bailout If Trade War Intensifies: Lobby

This year’s corn crop has been absolutely decimated by constant rain and unseasonably cold weather. Trade wars have collapsed American exports of soybeans to China, as foreclosures and bankruptcies are now rippling through the Midwest’s agricultural sector at disturbing speeds.The US farm lobby said Tuesday that a third farm bailout would be needed if Washington grinds to a halt during the 2020 US election cycle limits President Trump from closing trade deals and reopening top export markets, reported Reuters.

American Farm Bureau Federation President Zippy Duvall said if Congress fails to approve the United States-Mexico-Canada Agreement (USMCA), then other trade deals between the European Union and Japan could remain unresolved.

Farmers have already felt a tremendous loss of momentum in exports to China. They’re now hoping countries like Europe and Mexico can purchase additional agriculture products.

“The deeper we get into this campaign season, the more difficult it might become” to get USMCA ratified or any trade deals done, Duvall said in an interview.

“Not because of the treaty itself, not because of the need itself, but just because of the rhetoric around the election,” Duvall said.

Democratic lawmakers seized the House of Representatives during the 2018 midterm election – as they have routinely demanded changes to the USMCA trade deal.

Duvall said the Farm Bureau has indicated that key export markets have been disrupted at a time when low spot prices, high inventory levels, slowing economic outlook, and damaging weather across the Midwest, could culminate into a full-blown farm crisis on par to the 1980s.

President Trump has promised about $28 billion in farm bailouts in two separate rounds to farmers, who many are his base, to compensate for the loss of sales.

“If we’re not going to get USMCA finished, if we’re not going to get the solution to our problems in China or Japan, then we need to be talking about another payment to try to hold farmers over until that gets done,” Duvall said.

The bailouts came from the Commodity Credit Corporation (CCC), established in the Great Depression, was created to compensate farmers during periods of economic stress.

President Trump’s command and control economic style of overseeing the economy has resulted in a trade war where the government picks winners and losers. As a result of government intervention, there is always an unintended consequence, and that one for the trade war happens to be the downfall of American farmers. So it’s very likely a third bailout to farmers will be issued as the trade war shows no signs of abating.

END

Gundlach warns the Fed not to do what the bond market wants…it will not halt the recession
(courtesy Gundlach/zerohedge)

Gundlach Warns Fed “Doing What The Bond Market Says”, Insurance Cut Won’t Halt Recession

John Williams suggested a few weeks ago that the Fed wouldn’t be beholden to bond markets. As Bloomberg’s Cameron Crise noted earlier, Williams “was wrong.”

The ultimate justification for the change in tune looks to be a downgrade to the inflation profile, even though just six weeks ago the inflation shortfall was deemed to be “transitory.”

It’s hard to escape the notion that the Fed was dragged into this shift by market pricing; it seems as if bond traders are running policy now.

And that is exactly what Jeffrey Gundlach, chief executive of Doubleline Capital, said to Reuters tonight:

…the Federal Reserve is doing “what the bond market says – with a lag.”

“The bond market definitely helped to encourage the ‘Fed pivot’.”

The bond king went further during a discussion on Fox Business, suggesting:

“The bond market has been saying that the Fed’s policy is too tight by a very large amount for the past several weeks, if not few months, and the Fed simply cannot ignore that.

But, as Gundlach went on, the stock market’s belief that The Fed will hold back the recession (as opposed to the bond market’s much more worrisome outlook), is wrong…

“The three-month bill yield compared to the 10-year Treasury yield has every bit the look of a recession coming within 12 months and maybe within six months because that rate is inverted,” Gundlach said.

“Ironically, a lot of people think if the Fed eases it’ll be an insurance policy against recession. But if past patterns are prologue, if we actually start steepening out the yield curve from an inversion three months to 10 years, that’s actually highly coincidental with the coming recession.”

And tweeted a concise and ominous statement of his thoughts…

Jeffrey Gundlach

@TruthGundlach

Fed message today was essentially: the case for easing has strengthened, we hope that changes soon, if it doesn’t we’re behind the curve.

As Crise concludes, the ultimate justification for the change in tune looks to be a downgrade to the inflation profile, even though just six weeks ago the inflation shortfall was deemed to be “transitory.”

It’s hard to escape the notion that the Fed was dragged into this shift by market pricing; it seems as if bond traders are running policy now.

END

Goldman Sachs now capitulates: sees rate cuts in both  Juoly and September

 

(courtesy zerohedge)

Goldman Finally Capitulates, Sees Rate Cuts In July And September

Three weeks ago, at the start of June, we mocked Goldman’s economics team for having come up with “Schrodinger’s Fed Funds”, when with Powell telegraphing an imminent easing cycle, the team of Jan Hatzius et al refused to throw in the towel and change its long-running forecast of no rate cuts in 2019 and one rate hike in 2020 even though at the same time it said that its “modal path” called for at least one rate cut by 2020. In other words, Goldman – which last December predicted 4 rate hikes in 2019 – was hoping to have its cake and eat it too.

zerohedge@zerohedge

Schrodinger’s Fed Funds: Goldman expects both 2 more rate hikes (modal path) and 1 more rate cut (expected path) at the same time

This followed just one month after Goldman, whose predictions in recent years have been absolutely disastrous, said that “the next move is more likely to be a hike than a cut, with the next rate increase coming after  the election in 2020Q4, followed by  another hike in 2021.”

 

Goldman: “the next move is more likely to be a hike than a cut, with the next rate increase coming after the election in 2020Q4, followed by another hike in 2021.”

And so, with Powell dropping hint after hint that the hawkish Fed chair of 2018 is no more, and has been replaced with Trump’s spineless footstool, we predicted two weeks ago, on June 7, that Goldman would finally capitulate as the Fed made clear that it is only a matter of time before rate cuts begin.

zerohedge@zerohedge

Goldman will capitulate today and project rate cuts

We were wrong… but by only 12 days because moments ago following today’s capitulation by Powell, Goldman has similarly capitulated and in the latest humiliation for the predictive abilities of Goldman’s economics team, which is now competing with Gartman for batting -1.000, Goldman writes that it now “expects cuts in July and September, as well as an end to balance sheet runoff in July. Our base case is for moves in 25bp increments, but a 50bp cut is possible if the news flow disappoints and/or Fed officials feel compelled to get ahead of bond market pricing (which currently implies a 32bp cut in July). Conversely, the hurdle appears to be very high for the committee to forego a cut in July”

Admitting that its weekend analysis that the Fed would disappoint the market was dead wrong, Hatzius writes that “the Fed… delivered a dovish message, even relative to market expectations” as “seven of the 19 participants projected 50bp of easing  this year, and the statement provided an unqualified “will act as appropriate” signal that cuts are now likely.”

Separately, with Powell “strongly suggesting” that runoff will conclude as soon as the Fed delivers a rate cut, Goldman now expects that “the end of balance sheet runoff will be moved forward by two months, with an announcement at the July meeting that halts runoff in early August.”

While it is hardly relevant, considering just how gruesomely wrong Goldman has been about, well, everything, here is Goldman’s take on “what were the most important takeaways from today’s meeting” starting with…

1. The magnitude of the declines in the dots, the starkness of the change in Chair Powell’s tone relative to the May press conference, and the unqualified “will act as appropriate” phrase in the statement. First, eight participants projected at least one cut in 2019, including seven who saw a 50bp move, and the majority of the Committee now projects a cut by 2020 (see Exhibit 1).

And while this would imply a divided committee, in the press conference Powell suggested that there was a broader consensus moving in the direction of rate cuts and did nothing to discourage the interpretation that his own dot is calling for lower rates this year.

2. Second, the tone of the June press conference was much more dovish relative to the May press conference, at which Powell refused to discuss cases in which the Fed might cut rates and did not express immediate concern about downside risks to inflation expectations. As shown in Exhibit 2, Powell offered quite a different take today on several central issues.

What is bizarre, as we noted earlier, is that despite the sharp divergence in the dot “camps”, most of the changes in the Summary of Economic Projections were similar to our expectations, with the exception of lower projected core inflation next year (-0.1pp to 1.9%) and a surprising upgrade to the GDP projection (+0.1pp to 2.0% for 2020 growth).  In other words, the Fed is cutting even with the economy firing on all 8 cylinders.

3. Third, when comparing the Fed’s statement to his redline, Hatzius points out that the phrase “will act as appropriate” was not qualified by the words “as always,” as it had been in Chair Powell’s speech at the Fed conference in Chicago on June 4. This kind of language, unless qualified, usually presages policy action Hatzius writes.

* * *

Here Goldman makes an interesting observation, asking why the Fed would cut rates if its baseline outlook remains “favorable”?  The answer, according to Hatzius, is that growth concerns are the primary justification, with low inflation lowering the hurdle required for Fed action.

After all, Powell kicked off the press conference by emphasizing the Committee’s “overarching goal” of sustaining the expansion. Powell also offered a list of uncertainties that could warrant accommodative policy, ranging from global growth and trade policy to relatively minor headwinds such as the grounding of the Boeing 737 MAX and the drop in oil prices (-$10 since the May meeting).

As Goldman concludes, the statement and press conference strongly suggest that at least part of the Fed leadership believe rate cuts are appropriate. As shown in Exhibit 2, the Treasury market now views even larger cuts as likely.

So now that even Goldman accepts a rate cut is coming, the next question is whether it will be a single (25bps) or double (50bps) in July. Here Goldman predicts just one cut (so bet it all on 50bps) , as “Insurance cuts” that are more preemptive in nature “tend to be 25bp”, with larger cuts saved for circumstances in which the economy already appears at risk of sliding into recession. According to Hatzius, the rationale is that providing accommodation gradually in small doses “seems more natural when the motivation is to provide insurance against ongoing uncertainty rather than to provide a large immediate boost to growth.”

The punchline? Goldman’s admission that the Fed has not only capitulated, but also abdicated its role of being ahead of the market instead of being dictated to by it. Case in point, “the results of today’s meeting suggest that many FOMC participants are increasingly influenced by the expectations embedded in bond market pricing and other outside influences.”

This means that any time the bond markets wishes to, it can force the Fed’s hand from now on… even if it results in making the biggest cheap liquidity-driven asset bubble of all time even bigger.

So with the bond market already discounting a 32bp rate cut at the July meeting, and if expectations continue to creep toward 50bp, “the FOMC might well deliver a 50bp cut for fear of disappointing the market, even if the economic data do not paint a particularly worrisome picture.”

For those who still don’t get the picture.

The apparent influence of the bond market recalls the well-known comment by political strategist James Carville: “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody.” Carville spoke in the 1990s when the bond market worried about upside inflation risk, but the same basic logic might apply today.

And…

… if it is true that the Fed’s decisions have become increasingly responsive to bond market expectations, it might prove hard to stop cutting. The bond market might continue to price cuts even if downside risks merely linger, the White House is likely to continue calling for lower interest rates, and the idea that “an ounce of prevention is worth a pound of cure” when the effective lower bound limits the ability to respond to recessions might continue to gain popularity in monetary policy discussion. This creates a risk that easing will remain the path of least resistance beyond September.

Translation: the bond vigilantes are back, only this time it is not to push rates higher, but to make sure the Fed wins the race to the bottom, even as the biggest asset bubble of all time gets even bigger, creating a “huge risk” that in just a few months the Fed will be forced to intervene and to stop the ensuing melt up or risk losing all credibility.

end
A good commentary from Michael Every as he explains in detail what is going throughout the globe.  As interest rates plummet to zero and below zero it will not help countries respective economies…the world is rapidly deflating…
(courtesy zerohedge|)

Michael Every: “Are You Sitting Uncomfortably? Then I’ll Begin”

Submitted by Michael Every of Rabobank

Fed-y Tales

Are you sitting uncomfortably? Then I’ll begin.

Once upon a time in a land far away there was a happy kingdom. The King did kingly things in the court, with the best interest of his people in mind; the land was rich and the peasants grew more food each year; the cloth-makers made finer cloth each year; the shoe-makers made finer shoes; the merchants traded the surplus with other lands, and all was well. When the economy ran too hot and wages began to go up too fast, the wise Master of Coin would raise interest rates to keep things cool; and when the economy was too cool, the wise Master of Coin would lower interest rates to warm things up; and all was well.

Then one day an evil giant stomped down from the hills, squashed the King’s brave guards in their shiny armour, and then the King, and made himself ruler instead. Everyone had to work for the giant. And he was hungry: most of the food that was grown went to feed his voracious appetite, and the peasants only had gruel no matter how hard they worked the land; all the cloth that was spun was used to make giant garments; and the shoe-makers had to make giant shoes while their own feet were bare. The merchants were now bringing goods in to feed the giant, and the kingdom was deeper and deeper in debt, which the giant made the people responsible for.

The wise Master of Coin–who was wise enough to have kept his job through fulsome praise of the new ruler–noted that production was still running hot on the surface: all had jobs and much was being produced! So he raised interest rates. This did not bother the giant one bit,…but it did not help the struggling people at all. They groaned under the strain.

So the wise Master of Coin then realised that the actual economy was running cold, not hot! He cut interest rates: down and down and down they went, even to less than zero. (Which was dark magic, some muttered.) Again, the giant wasn’t interested – he just wanted to be fed and clothed and shod. And again, the people who were forced to serve him and hand over the fruit of their clever hands, didn’t benefit at all.

The Master of Coin simply didn’t understand that what had worked so well under the King didn’t work when a giant was holding the people under his control. Of course, he was living well as the giant gave him all his leftovers and old handkerchiefs. But everyone else lived unhappily ever after.

The End

Yes, children, the Fed has just held rates, as expected, and it has shifted towards a more dovish tone consistent with a 25bp rate cut next month, if needed, and perhaps even more before the end of the year, though they are obviously keeping their options open. (Please see herefor more details from Philp Marey.)

In short, last meeting the Fed was “patient” and now suddenly it’s not. What is the creative excuse for this U-turn? “Uncertainties”. Well, there’s a fairy tale for you! The only uncertainty out there relative to six or seven months ago is the US-China trade situation, and for now things are looking up (relative to a few days ago anyway): perhaps if the G20 goes well rates won’t be cut? What the wise Master of Coin fails to recognise, of course, is that when major structural changes in the economy occur, like a giant, monetary policy no longer works as it once did:indeed, we believe that even if the Fed does move, it still won’t be enough to prevent a downturn in 2020.

From a US rates perspective consider this: if the Fed do cut ahead then yields fall, more so at the shorter end; but if they don’t cut then yields still fall, but more so at the longer end (now around 2.02%). Either way US (and global) yields are going to fall – which tells its own sad story.

In a related fairy tale, social media is buzzing with “the end of the US Dollar!” memes after Facebook announced that it will be launching its own electronic currency, the Libra. Personally I think they missed a trick and it should have been Virgo (Virtual and Go); or Capricoin. Yet when one looks at the proposed structure–the Libra is backed by actual currency like USD and to be run by unaccountable techno-wizards–perhaps Crapricorn would be more appropriate. As someone noted yesterday, in the old days one deposited money in a regulated bank and expected interest; now we are supposed to deposit money in an unregulated website and get no interest. Yay disruption! Indeed, for a company that has been publicly accused of not looking after private data, it’s brave to claim they are ready to look after cash. Furthermore, with the political winds already blowing against Facebook anyway on other fronts for being too powerful–and money BEING power–isn’t this Libra issue likely to create even more problems for it?

In short, the shift in Fed tone–and geopolitics, as Bloomberg reports White House officials are briefing there are links between Iran and Al Qaeda, a fairy tale last used in 2003 before the Iraq war–is creating talk about a weaker USD. Yet we are not there yet, not by a long way, and especially not for EM FX.

That particular green giant is still sitting on them all, and the US will no doubt do all it can to make sure it stays like that, happily ever after or not.

end
Los Angeles area has been receiving a huge number of quakes in this last month.
We must pay close attention to this.
(courtesy Michael Snyder)

1,000 Quakes In 3 Weeks In Key SoCal Seismic Zone: “We’re Watching This Activity Closely”

Authored by Michael Snyder via The End of The American Dream blog,

In a key seismic zone approximately 40 miles east of downtown Los Angeles, there have been more than 1,000 earthquakes since May 25th. 

Needless to say, it would be quite alarming for the entire state of California to experience more than 1,000 significant earthquakes in just 3 weeks, but in this case we are talking about an area that is “less than a square mile” in size.

And what makes this even more concerning is that all of these earthquakes are happening in a location that is very close to the San Andreas Fault.  Could it be possible that the San Andreas Fault is about to wake up in a major way?  I don’t know about you, but if I was living in southern California right now I would find this sort of news to be extremely unsettling

A flurry of more than 1,000 small earthquakes has rattled Southern California over the past three weeks.

The quakes have occurred in an area covering less than a square mile in San Bernardino and Riverside counties roughly 40 miles east of downtown Los Angeles.

The United States Geological Survey map depicting the uptick in seismic activity shows a thick collection of dots, a rather unsettling sight.

Of course it is perfectly normal for California to experience earthquakes.  They happen on a daily basis, and normally they aren’t anything to be too concerned about.

But to have this many earthquakes concentrated in an extremely limited area is definitely unusual.  According to USGS science advisor Ken Hudnut, this current earthquake swarm is “a little different than what we’ve seen before”

“In detail, if you zoom in on it and look at the pattern and how it’s evolving in time, it’s a little different than what we’ve seen before,” he says. “We get these swarms, but we don’t see exact repeats. Obviously, it’s very disruptive to the people who are feeling these earthquakes. We’re watching this activity closely.”

Normally, earthquake swarms subside after a certain period of time.  But so far there are no signs that this swarm is going to end.  Instead, we just keep seeing quake after quake.

That doesn’t mean that a major event is imminent, but without a doubt there are good reasons to be concerned about what is happening.  As geophysicist Andrea Llenos recently explained, every small earthquake increases the likelihood that there will be more seismic activity, and she stressed that we “do know a big earthquake is going to happen” someday…

But “any time you have an increase in the number of small earthquakes,” according to Andrea Llenos, a research geophysicist with the US Geological Survey, “you’re likely to increase the likelihood of a slightly larger earthquake happening.”

“I would redefine normal as: You should still be prepared for a large earthquake,” Llenos told the paper. “We do know a big earthquake is going to happen.”

Californians have been hearing that the “Big One” is going to hit the San Andreas Fault for a very long time.

We even had a major Hollywood movie starring the Rock made about such a quake, but it still hasn’t happened yet.

But one day it will.  In fact, the chair of UCLA’s Civil and Environmental Engineering department insists that such a quake is “an existential threat to our economy, our ability to live here”

“There is no fault that is more likely to break [in California] than the San Andreas Fault,” says Jonathan P. Stewart, professor and chair of UCLA’s Civil and Environmental Engineering department and an expert in earthquakes. “Small local earthquakes—the Northridge earthquake, the San Fernando earthquake—they can kill people in the dozens, they can have freeways coming down, they can affect dams, and all of that is bad,” he says.

“But it doesn’t really pose an existential threat to our economy, our ability to live here.” A large earthquake on the San Andreas Fault, on the other hand, he says, could create a devastating threat to humanity, infrastructure, and the economy, with implications that extend nationally and even globally.

As ominous as that sounds, the truth is that Stewart may actually be understating the threat that Californians are facing.

A few years ago, a team of scientists conducted a major study which found that major quakes in the distant past had caused “part of the coastline south of Long Beach to drop by one-and-a-half to three feet”

Scientists from California State University Fullerton and the United States Geological Survey found evidence the older quakes caused part of the coastline south of Long Beach to drop by one-and-a-half to three feet.

Today that could result in the area ending up at or below sea level, said Cal State Fullerton professor Matt Kirby, who worked with the paper’s lead author, graduate student Robert Leeper.

“It’s something that would happen relatively instantaneously,” Kirby said. “Probably today if it happened, you would see seawater rushing in.”

In other words, scientists are telling us that if such a quake happened today we could see areas along the California coastline go into the ocean permanently.

I don’t know how much clearer I can make it.

We have entered a time when dramatic changes are happening to our planet, and this is something that I have been writing about for a long time.  And even though much of the rest of the Ring of Fire is shaking like a leaf right now, most of those living along the California coastline have been lulled into a false sense of security because there has not been a massive quake on the west coast for many, many years.

But scientists assure us that the San Andreas Fault is loaded and ready to spring at any moment, and they have also warned us that the entire fault zone “could unzip all at once”.

Let’s hope that day is delayed for as long as possible, but if the hundreds of earthquakes that have happened in recent weeks are any indication, time could be running out a lot faster than most of us had anticipated.

SWAMP STORIES

More shenanigans from the FBI as they totally ignored repeated warnings that the Manafort Black Ledger might be a fake

(courtesy zerohedge)

FBI Ignored Repeated Warnings That Manafort ‘Black Ledger’ Might Be Fake

Just when you thought the Steele dossier was the only piece of “garbage” intel the FBI relied on in its efforts against the Trump campaign, The Hill‘s John Solomon reveals that Ukrainian officials thought Paul Manafort’s “black cash ledger” was likely a fake which should not be relied on.

The ledger, which was reported in 2016 and resulted in Manafort’s resignation from the Trump campaign, purported to show $12.7 million in undisclosed cash payments designated for Manafort from former Ukrainian President Viktor Yanukovych’s political party between 2007 and 2012.

The FBI relied on this ledger to obtain search warrant affidavits “months after the feds were warned repeatedly that the document couldn’t be trusted and was likely a fake,” according to Solomon, who cites documents and over a dozen interviews.

For example, Ukraine’s top anticorruption prosecutor, Nazar Kholodnytsky, told me he warned the U.S. State Department’s law enforcement liaison and multiple FBI agents in late summer 2016 that Ukrainian authorities who recovered the ledger believed it likely was a fraud. –The Hill

It was not to be considered a document of Manafort. It was not authenticated. And at that time it should not be used in any way to bring accusations against anybody,” said Kholodnytsky, who says he told FBI agents the same thing.

Manafort’s Ukranian business partner, Konstantin Kilimnik – a longtime State Department informant – told the US government that the ledger was probably a fake shortly after an August 2016 article about it appeared in the New York Times.

Kilimnik said in an August 2016 email to a senior US official that Manafort “could not have possibly taken large amounts of cash across three borders. It was always a different arrangement — payments were in wire transfers to his companies, which is not a violation,” adding “I have some questions about this black cash stuff, because those published records do not make sense. The timeframe doesn’t match anything related to payments made to Manafort. … It does not match my records. All fees Manafort got were wires, not cash.”

What’s more, Mueller’s team and the FBI had copies of Kilimnik’s warning according to the report.

Solomon points out that the FBI may have violated its own rules by knowingly submitting false or suspect evidence in a federal court proceeding. According to the FBI operating manual, “To establish probable cause, the affiant must demonstrate a basis for knowledge and belief that the facts are true.”

WTF?

While neither Mueller nor the FBI cited the actual ledger, they cited media reports about it, and relied on those stories as sources.

For example, agents mentioned the ledger in an affidavit supporting a July 2017 search warrant for Manafort’s house, citing it as one of the reasons the FBI resurrected the criminal case against Manafort.

“On August 19, 2016, after public reports regarding connections between Manafort, Ukraine and Russia — including an alleged ‘black ledger’ of off-the-book payments from the Party of Regions to Manafort — Manafort left his post as chairman of the Trump Campaign,” the July 25, 2017, FBI agent’s affidavit stated.

Three months later, the FBI went further in arguing probable cause for a search warrant for Manafort’s bank records, citing a specific article about the ledger as evidence Manafort was paid to perform U.S. lobbying work for the Ukrainians.

“The April 12, 2017, Associated Press article reported that DMI [Manafort’s company] records showed at least two payments were made to DMI that correspond to payments in the ‘black ledger,’ ” an FBI agent wrote in a footnote to the affidavit. –The Hill

According to liberal law professor, Alan Dershowitz, citing news articles is almost never done. “They are supposed to cite the primary evidence and not secondary evidence,” he said, adding “It sounds to me like a fraud on the court, possibly a willful and deliberate fraud that should have consequences for both the court and the attorneys’ bar.”

What’s more, Solomon reports that both the FBI agent cited in the the AP article failed to disclose to FBI officials and DOJ prosecutor Andrew Weissman – later Mueller’s ‘legal pit bull’ – that he met with the AP reporters the day before the story was published, and that he assisted with the story.

According to FBI records of the April 11, 2017 meeting, the AP reporters “were advised that they appeared to have a good understanding of Manafort’s business dealings” in Ukraine.

So, essentially, the FBI cited a leak that the government had facilitated and then used it to support the black ledger evidence, even though it had been clearly warned about the document.

Secondly, the FBI was told the ledger claimed to show cash payments to Manafort when, in fact, agents had been told since 2014 that Manafort received money only by bank wires, mostly routed through the island of Cyprus, memos show.

During the 2014 investigation, Manafort and his partner Richard Gates voluntarily identified for FBI agents tens of millions of dollars they received from Ukrainian and Russian sources and the shell companies and banks that wired the money. “Gates stated that the amounts they received would match the amounts they invoiced for services. Gates added they were always paid late, and in tranches,” FBI memos I obtained show. –The Hill

The best evidence that the FBI knew the black ledger was a sham? They never presented it in Manafort’s trial.

On Wednesday night, Rep. Mark Meadows (R-NC) told Solomon that he is asking the DOJ’s Inspector General to investigate the Manafort warrants, including media leaks and whether evidence exists that the government knew the black ledger was unreliable evidence.

Manafort was sentenced to 7.5 years in prison by two different judges on eight charges of tax and bank fraud, and admitted to ten more charges related to work in Ukraine.

END
the left is slamming Biden and his son????
(courtesy zerohedge)

‘Good Morning America’ Slams Biden For Dodging Nepotism Questions Over Ukraine, China Dealings

Joe Biden is looking more and more like damaged goods, after Good Morning America couldn’t get a straight answer out of the beleaguered former Vice President regarding accusations of rampant nepotism with his son Hunter in both Ukraine and China.

Hunter – who is now being sued by an Arkansas woman claiming he fathered her child while also plowing his late brother’s widow, and who was recently accused of returning a rental car to an Arizona Hertz location with a used crack pipe and two DC driver’s licenses – was given a sweetheart seat on the board of Ukrainian gas giant Burisma, despite having zero experience in Ukraine or the energy industry. During this time, his father Joe Biden used his position as Vice President to pressure Ukraine into firing its top prosecutor who was investigating the company.

Questionable dealings were also uncovered in China after journalist and Clinton Cash author Peter Schweizer revealed that in 2013, the father-son duo flew to China on Air Force Two. Two weeks later, Hunter’s firm inked a private equity deal for $1 billion with a subsidiary of the Chinese government’s Bank of China, which expanded to $1.5 billion, according to an article by Schweizer in the New York Post.

And while these allegations had remained largely in the realm of conservative news outlets, Good Morning America just amplified it to their diverse audience of more than 3.7 million viewers (according to Nielsen).

Watch:

Andrew Surabian

@Surabees

In fairness to Joe, having to explain how his son ended up with 1.5 billion dollars from China while he was VP would be a nearly impossible job for anyone.

The Biden’s must have taken “ethics” lessons from the Clinton’s because they clearly learned a thing or two from them. https://twitter.com/Santucci/status/1141642730990444549 

John Santucci

@Santucci

NEW – Biden sidesteps questions about his son’s foreign business dealings but promises ethics pledge – More to come from @ABCInvestigates on @GMAhttps://abcnews.go.com/Politics/biden-sidesteps-questions-sons-foreign-business-dealings-promises/story?id=63820806 

2,023 people are talking about this

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

KING REPORT JUNE 19

@ecb: In his speech at the #ECBForum, President Mario Draghi… The recent ruling of the European Court of Justice emphasised the broad discretion of the ECB in using all our tools in a necessary and proportionate way to achieve our objective…

    In the coming weeks, the Governing Council will deliberate how our instruments can be adapted commensurate to the severity of the risk to price stability.  In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required

Full Speech at: https://www.ecb.europa.eu/press/key/date/2019/html/ecb.sp190618~ec4cd2443b.en.html

@realDonaldTrump: Mario Draghi just announced more stimulus could come, which immediately dropped the Euro against the Dollar, making it unfairly easier for them to compete against the USA. They have been getting away with this for years, along with China and others.

    European Markets rose on comments (unfair to U.S.) made today by Mario D!

ECB’s Draghi hits back at Trump: ‘We don’t target the exchange rate’

He iterated that the euro zone’s central bank is “ready to use all the instruments that are necessary to fulfil this mandate.” “And we don’t target the exchange rate,” he said to applause from the crowd.

https://www.cnbc.com/2019/06/18/ecbs-draghi-hits-back-at-trump-we-dont-target-our-exchange-rate.html

Die Welt’s @Schuldensuehner: Donald Trump takes aim at #ECB President Mario Draghi over ‘unfair’ interest rates. And Trump has a point as Euro is undervalued and Draghi has spoken on his own authority and without the consensus of the ECB Governing Council.

Die Welt: Trump’s frontal attack on Draghi leaves a deep impression

With his anger at Draghi’s new promise, Trump proves once again that he has the right feel for important issues. Even before many a professional ECB observer, the US President realized very shortly after Draghi’s speech very clearly that this time it was not just a normal conference speech, but commitments, with which Draghi once again pretty much leaned out of the window…

    That certainly has an impact on the euro. Measured by fundamentals, the common currency against the dollar is heavily undervalued. According to the purchasing power model of the OECD, the common currency would have to be one-fifth more expensive, that is, more than $ 1.30…

https://www.welt.de/wirtschaft/article195526955/Donald-Trumps-Frontalattacke-auf-Mario-Draghi-laesst-tief-blicken.html

@realDonaldTrump: Had a very good telephone conversation with President Xi of China. We will be having an extended meeting next week at the G-20 in Japan. Our respective teams will begin talks prior to our meeting.

    “ECB officials see Rate Cut as primary tool for any new stimulus.”  @business [BBG]

     German DAX way up due to stimulus remarks from Mario Draghi. Very unfair to the United States!

Globally, bonds yields declined smartly.  German bonds have negative yields out to 17 years.  The 10-year bund hit a record low yield of -0.327%.  That’s a wealth tax of 0.327%.

We said it before and we will say it again.  NIRP is DELATIONARY; it’s wealth tax.  By cannibalizing capital and interest income, it forces retirees and savers to reduce spending and hoard capital – and it induces people that should NOT being taking risks to indulge in high risks.

The rally ended on this: White House Explored Legality of Demoting Fed Chairman Powell – BBG

Uncle Lar quickly surfaced to deny that the WH is looking to demote Powell.  Was the BBG headline a purposeful leak to nudge Powell to cut rates?

The retreat lasted until 13:00 ET.  ESUs and stocks then traded sideways into the close.  Stocks and ESUs peaked at 11:00 ET.  The remainder of the session was listless because organic buying remained muted.

Trump on demoting Fed Chair Jerome Powell: ‘Let’s see what he does’ [15:12 ET] https://t.co/B74eWpsGe4

There is more to Trump’s incessant acrimony for the Fed and Powell than rate cuts or hikes.

During the 2016 Campaign, Trump regularly slammed the Bernanke/Yellen Fed for QE and NZIRP.  Trump stated several times that the Fed is propping up the economy for Obama.  Trump believes the Fed kowtowed to Obama; so, he doesn’t buy the independent Fed BS.  Furthermore, Bernanke announced QE 3 at the end of August 2012.  He implemented it weeks later.  This is unprecedented Fed meddling in a presidential election.  The unwritten rule is that the Fed does NOTHING in the six months before an election.  Bernanke, for no solid reason, interfered in the Election of 2012.

Trump: The Fed Keeping Interest Rates Artificially Low So the Economy Doesn’t Go Down [9/16]

“They’re keeping the rates artificially low so the economy doesn’t go down,” Trump said in response to a question about a potential rate hike by the Federal Reserve this month. “So that Obama can say he did a good jobThat’s the only reason that the rates are so lowThey’re keeping the rates artificially low so that Obama can go out and play golf after January and say that he did a good job. But it is a very, a very false economy. So [Obama] can leave office and say: See I told you.”  “We have a very false economy… So far, I think she’s done a political job,” he said about Fed chair Janet Yellen

https://www.realclearpolitics.com/video/2016/09/06/trump_the_fed_keeping_interest_rates_artificially_low_so_the_economy_doesnt_go_down.html

In July 2012, Romney was leading Obama.  If fact, Obama’s political brain, David Axelrod reportedly told Obama at the time that he was going to lose to Romney.  Obama asked what they should do.  Axelrod recommended that they go negative in a big way on Romney.  Mitt took it without a beef.

Trump at his kickoff for the 2020 Campaign last night: “This was our chance to reclaim our government from a permanent political class that enriched itself at your expense. We did not merely transfer power from one party to another. We transferred power back to you, the proud citizens of the United States of America… It’s a verdict on the un-American conduct of those who tried to undermine our great democracy and undermine you… The only collusion was committed by the Democrats, the fake news media, their operatives and the people who funded the phony dossier, crooked Hillary Clinton and the DNC. It was all an illegal attempt to overturn the results of the election They went after my family, my employees, my business, my finances…but really, they were after you…

Apparently, Trump will again run against the Swamp.  This time he has the added benefit of playing the victim of a nefarious Deep State/Swamp smear and frame scheme.

Dems are livid that Trump included a citizenship question in the US Census.  The NY Post’s John Crudele notes that the US government has been asking citizenship questions each month for a long time.

Citizenship questions are nothing new for the census

Each and every month, the US Census Bureau conducts at least one survey that includes a question about citizenship.  One of those surveys is the Current Population Survey (CPS), which the Census Bureau conducts monthly on behalf of the US Labor Department. The CPS is used to determine the nation’s unemployment rate, among other things.

    That’s why the current heated controversy over including a citizenship question in the constitutionally mandated 2020 Decennial Census, in my opinion, is nonsense…

   “In my 19 years of experience at Census, I have never had anyone refuse to answer the citizenship question,” says Stefani Butler, who worked at the bureau until she resigned in 2017. Butler was my whistleblower for several stories about Census wrongdoing…

https://nypost.com/2019/06/17/citizenship-questions-are-nothing-new-for-the-census/

@GeorgePapa19: America: do not forget that that current CIA director, Gina Haspel, was running the CIA desk in London in 2016while Alexander Downer (Australia) Joseph Mifsud (Italy) Stefan Halper (CIA), Azra Turk (CIA) and the US embassy were spying on me and trying to sabotage Donald Trump.

King Report for Thursday 6/20

 

The King Report June 20, 2019 Issue 6031                                                                                  Independent View of the News

 

The Fed did not cut rates; but, as we guessed, it issued a dovish FOMC Communique that was interpreted as an indication that it would cut rates in July.  Maybe we don’t understand Fed Speak; but we cannot see the extremely dovish message that numerous pundits and the fin media find in the FOMC Communique or the promise of a rate cut in July.

 

The Federal Reserve holds interest rates steady and signals a cut is coming

In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion,”… St. Louis Federal Reserve President James Bullard dissented from the June decision, voting to move to a target range of between 2% and 2.25%. Seven members predicted interest rates would be slashed by a half a percentage point in 2019…

https://markets.businessinsider.com/news/stocks/fed-meeting-june-officials-expected-to-hold-interest-rates-steady-2019-6-1028292399

 

Fed Scraps ‘Patient’ Rate Approach in Prelude to Potential Cut

https://finance.yahoo.com/news/fed-leaves-rates-unchanged-scraps-180001903.html

 

FOMC Communique: Information received since the Federal Open Market Committee met in May indicates that the labor market remains strong and that economic activity is rising at a moderate rate.  Job gains have been solid, on average, in recent months, and the unemployment rate has remained low.  Although growth of household spending appears to have picked up from earlier in the year, indicators of business fixed investment have been soft.  On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent.  Market-based measures of inflation compensation have declined; survey-based measures of longer-term inflation expectations are little changed… https://www.federalreserve.gov/monetarypolicy/files/monetary20190619a1.pdf

 

Stock market bulls and the fin media want us to ignore the comments: “The labor market remains strong and that economic activity is rising at a moderate rate… The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes” and place all attention and focus on: but uncertainties about this outlook have increased, and the dropping of “patient” in regard to policy.

 

We are troubled about the new emphasis on the Fed DOTS.  Last week, the fin media reported that Powell and the Fed want to junk the DOTS because the predictive value stinks and it has become an instrument to mock Fed officials.  With the DOTS showing seven members projecting 50bps in rate cuts this year, which has been in the market for months, Street pundits and the media now see the DOTS as infallible.

 

From Wednesday’s King Report: If the Fed does NOT cut rates, it is likely to issue a dovish communique.  The headline of no rate cut will induce selling.  However, a dovish communique should limit the downside… Ergo, it is likely that ESUs and stocks will trade volatilely until a critical mass of traders, or investors, create a sustainable trend.

 

It was not difficult to forecast extreme ESU volatility after the FOMC Communique was released.  This is usually what happens when there is a mixed message from the Fed.  ESUs tumbled to a session low of 2915.25 on the headline of no rate cut.  They jumped to 2934.50 six minutes later.  They then vacillated in a 12-handle range until the final 15 minutes of trading.  The late manipulation pushed ESUs to a session high of 1936.50.  However, selling appeared near the close.  So, despite expiry upward bias, the dovish Fed communique and a dovish Powell comment or two, stocks could muster only a modest rally.

 

Powell helped generate an ESU rally when he spoke 45 minutes after the communique’s release.

Because there are no definitive measures of inflation expectations, we must rely on imperfect proxies… our deliberations made clear that a number of those who wrote down a flat rate path agree that the case for additional accommodation has strengthened since our May meeting…”

 

Powell Says He Plans to Serve Full Fed Term Amid Trump Pressure

“I think the law is clear that I have a four year term, and I fully intend to serve it,” Powell said… In addition to Powell, Trump has picked three of the other four current members of the Fed Board inWashington. They all voted in favor of the Fed’s last interest-rate increase in December….

https://finance.yahoo.com/news/powell-says-plans-serve-full-185905208.html

 

Transcript of Chair Powell’s Press Conference Opening Remarks

https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20190619.pdf

 

When the WSJ’s Nick Timiraos asked Powell, “…Is the committee considering moving — given all of the uncertainty you addressed, moving its — changing its policy before the next meeting?”

Powell responded: “…We’re going to be monitoring the cross currents and the other items that we’ve mentioned, but that we’d like to see more going forward”  This doesn’t sound like a rate cut certainty.

 

@Schuldensuehner: Markets now price 100% probability of Fed rate cut by July, and 80% probability of another cut in Sep and 41% probability of a 3rd cut in Dec.

 

ESUs opened lower on Tuesday night but they steadily rallied, hitting a high of 2930.50 at the end of the Nikkei’s first session.  Then, they declined during the second session.  We have noted this trading pattern is increasingly occurring.  JGB yields fell to -0.15%, a three-year low, due to Draghi and expectations that the BoJ would increase asset buying.  After a modest rally into the European open, ESUs fell to a session low of 2921.75 at 4:54 ET.  The usual rally before the NYSE open produced a seven-handle rally.  The rally was abetted by this:

 

ECB’s Weidmann appears to drop opposition to OMT amid race to succeed Draghi 

Weidmann, head of the German Bundesbank, was the sole opponent on the ECB’s Governing Council to the Outright Monetary Transactions (OMT) programme, which he saw as financing governments. In 2013, Weidmann testified against the ECB in a German court case over the OMT…

    His position on the OMT had not been legally based, Weidmann said. “It was driven by the concern that monetary policy could get caught in the wake of fiscal policy,” he said.  “Of course, a central bank must act decisively in the worst-case scenario, but given its independence, there should be no doubt that it is acting within the framework of its mandate,” Weidmann said…

https://uk.reuters.com/article/uk-ecb-policy-weidmann/ecbs-weidmann-appears-to-drop-opposition-to-omt-amid-race-to-succeed-draghi-idUKKCN1TK1M3

Ex-Dallas Fed analyst Danielle DiMartino Booth echoes our long-held view that CPI understates inflation and induces the Fed to be more promiscuous than warranted.

 

There’s not much the Fed can do to address a liquidity crisis

Danielle DiMartino Booth, CEO of Quill Intelligence and former analyst at the Federal Reserve Bank of Dallas, talks with «Finanz und Wirtschaft» about the current problems of monetary policy.

 

Ms. DiMartino Booth, why is the Federal Reserve bad for America?

Because of its intellectual dishonesty. The Fed noticed around 2009 that if they had had a more reliable and realistic inflation gauge on which to set policy, they would have seen the crisis coming. But despite that recognition, they chose to do nothing about it…

    The underlying inflation gauge from the New York Fed for example also includes asset price inflation. And it runs about one percentage point higher than what the Fed measure is – they prefer the core Personal Consumption Expenditures Price Index, the core PCE…

    Former Fed Chair Janet Yellen led the slowest rate hiking campaign in the history of the Fed. Had she been using a more realistic inflation gauge, she would not have left current Chair Jay Powell with having to play catch-up…

 

So, why is the Fed aiming for 2%?

When Stanley Fisher was vice chair, he asked the same question during his first Federal Reserve meeting. He said, why do you insist on using this antiquated broken method? One of the staffers raised his hand and said if we didn’t use it, then the models would not work

    

Why has the Fed become more dovish recently?

Some weeks ago the issuance in the junk bond market dried up for an entire week. After that, Powell had his Draghi moment at the Chicago Fed conference, saying the Fed would do whatever it takes to sustain the economic expansion… There is so much debt. They have created debt in order to resolve an over-indebtedness problem. So it’s the policy makers themselves that have made the situation that much worse… https://www.fuw.ch/article/theres-not-much-the-fed-can-do-to-address-a-liquidity-crisis/

Trump Believes He Has the Authority to Replace Powell at the Fed

(Could demote… to be a board governor… not planning to demote now…)

https://www.bloomberg.com/news/articles/2019-06-20/trump-believes-he-has-the-authority-to-replace-powell-at-fed

Today – The S&P 500 Index could only best Tuesday’s top by 0.95 on Wednesday.  Despite expiry upward bias, the dovish Fed communique and a dovish Powell comment or two, stocks could muster only a modest rally.  This strongly suggests that stocks are extremely overbought and tired.

With the Fed out of the way and the expiry upside squeeze exhausted, the stock market is now beholden to the Trump-Xi trade talks at the G20 in Tokyo next week.

Traders will react in the early going to the BoJ’s policy decision.  We erred by saying the BoJ meeting was on Tuesday and Wednesday.  It was on Wednesday and Thursday Japan time.  The BoJ Communique and briefing arrive tonight in the US.  Usually stocks rally late on the day before futures’ expiration on expectation that holder of expiring futures contract will buy stocks on the NYSE open to replace expiry futures contracts.

John Solomon: FBI, warned early and often that Manafort file might be fake, used it anyway

Ukraine’s top anti-corruption prosecutor, Nazar Kholodnytskyy, told me he warned the U.S. State Department’s law enforcement liaison and multiple FBI agents in late summer 2016 that Ukrainian authorities who recovered the ledger believed it likely was a fraud…

   But with Manafort, the FBI and Mueller’s office did not cite the actual ledger — which would require agents to discuss their assessment of the evidence — and instead cited media reports about it. The feds assisted on one of those stories as sources… the FBI went further in arguing probable cause for a search warrant for Manafort’s bank records, citing a specific article about the ledger as evidence Manafort was paid to perform U.S. lobbying work for the Ukrainians…

    The agent failed to disclose that both FBI officials and Department of Justice (DOJ) prosecutor Andrew Weissmann, who later became Mueller’s deputy, met with those AP reporters one day before the story was published and assisted their reporting

    So, essentially, the FBI cited a leak that the government had facilitated and then used it to support the black ledger evidence, even though it had been clearly warned about the document…

https://thehill.com/opinion/white-house/449206-fbi-warned-early-and-often-that-manafort-file-might-be-fake-used-it-anyway#.XQpHrxhuK4U.twitter

@KassyDillon: First day fundraising amount for Presidential candidates: Warren: $300,000; Bullock: $1 million; Harris: $1.5 million; Sanders: $5.9 million; O’Rourke: $6.1 million; Biden: $6.3 million; Trump: $24.8 million

 

Well that about does it for tonight

I will see you on FRIDAY night

H

 

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