APRIL 21//TURMOIL CONTINUES IN THE OIL PATCH TODAY//GOLD CLOSED DOWN $21.60 YO $1674//SILVER IS DOWN 60 CENTS TO $14.72..GOLD TONNAGE STANDING FOR DELIVERY AT THE COMEX: 95 TONNES// CORONAVIRUS UPDATES FROM AROUND THE GLOBE// STATE OF MISSOURI SUES CHINA OVER THE COVID 19 PANDEMIC//SWAM STORIES///

GOLD:$1674  DOWN $21.60   The quote is London spot price

 

 

 

 

 

Silver:$14.72  DOWN 60 CENTS

 

Closing access prices:  London spot

 

i)Gold : $1686.00  LONDON SPOT  4:30 pm

 

ii)SILVER:  $14.87//LONDON SPOT  4:30 pm

CLOSING FUTURES PRICES:  KEY MONTHS

APRIL comex gold price CLOSE 1.30 PM:  $1673.60

MAY COMEX GOLD:  1674.90 1:30 PM

JUNE GOLD:  $1684.40  CLOSE 1.30 PM//   SPREAD SPOT/FUTURE JUNE: $10.40//PREMIUMS COMING DOWN

 

CLOSING SILVER FUTURE MONTH

SILVER APRIL COMEX CLOSE: XXX

SILVER MAY COMEX CLOSE;   $14.80-…1:30 PM.//SPREAD SPOT/FUTURE MAY:  8 CENTS  PER OZ//PREMIUMS COMING DOWN

 

 

the gold market continues to be broken as future prices are much higher than spot prices.  The comex is desperate to fix things but they have no available gold.

If one is to buy gold and or gold coins, the price is around $2800. usa per oz

and silver; $31.00 per oz//

 

LADIES AND GENTLEMEN: YOU ARE NOW WITNESSING FIRST HAND THE DIFFERENCE BETWEEN PAPER GOLD/SILVER AND THE REAL PHYSICAL STUFF!!

DO NOT PAY ANY ATTENTION TO WHAT THE CROOKS ARE DOING AT THE COMEX AND LONDON LBMA..PHYSICAL IS THE NAME OF THE GAME AND NOTHING ELSE

 

COMEX DATA

 

 

 

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

today RECEIVING: 1/8

DLV615-T CME CLEARING
BUSINESS DATE: 04/20/2020 DAILY DELIVERY NOTICES RUN DATE: 04/20/2020
PRODUCT GROUP: METALS RUN TIME: 20:26:47
EXCHANGE: COMEX
CONTRACT: APRIL 2020 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,701.600000000 USD
INTENT DATE: 04/20/2020 DELIVERY DATE: 04/22/2020
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
657 H MORGAN STANLEY 7
661 C JP MORGAN 1
690 C ABN AMRO 8
____________________________________________________________________________________________TOTAL: 8 8
MONTH TO DATE: 29,749

NUMBER OF NOTICES FILED TODAY FOR  APRIL CONTRACT: 8 NOTICE(S) FOR 800 OZ (0.0248 tonnes)

 

TOTAL NUMBER OF NOTICES FILED SO FAR:  29,749 NOTICES FOR 2,974,900 OZ  (92.531 TONNES)

 

 

SILVER

 

FOR APRIL

 

 

0 NOTICE(S) FILED TODAY FOR  nil  OZ/

total number of notices filed so far this month: 806 for 4,025,000 oz

 

BITCOIN MORNING QUOTE  $6807 DOWN  35 

 

BITCOIN AFTERNOON QUOTE.: $6875 UP $31

 

GLD AND SLV INVENTORIES:

WITH GOLD DOWN $21.60: AND NO PHYSICAL TO BE FOUND ANYWHERE:

WITH ALL REFINERS CLOSED//MEXICO ORDERING ALL MINES SHUT:   WHERE ARE THEY GETTING THE “PHYSICAL”?

SURPRISINGLY A HUGE 7.9 TONNES OF GOLD IS ADDED TO THE GLD//THE ADDITION IS NOTHING BUT A PAPER TRANSACTION//NO PHYSICAL GOLD ENTERED.//

 

GLD: 1,029.59 TONNES OF GOLD//

 

 

WITH SILVER DOWN 60 CENTS TODAY: AND WITH NO SILVER AROUND

 

 

A HUGE CHANGE IN SILVER INVENTORY AT THE SLV

 

A PAPER DEPOSIT OF 1.398 MILLION OZ FROM THE SLV..

 

RESTING SLV INVENTORY TONIGHT:

SLV: 412.639  MILLION OZ./

 

 

 

 

XXXXXXXXXXXXXXXXXXXXXXXXX

Let us have a look at the data for today

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI ROSE  BY A GOOD SIZED 968 CONTRACTS FROM 141,181 UP TO 142,149 AND CLOSER TO OUR NEW RECORD OF 244,710, (FEB 25/2020. THE GOOD SIZED GAIN IN OI OCCURRED WITH  OUR CONSIDERABLE 16 CENT GAIN IN SILVER PRICING AT THE COMEX. IT SEEMS THAT THE TINY GAIN IN COMEX OI IS DUE TO SOME  BANKER SHORT COVERING PLUS A CONSIDERABLE EXCHANGE FOR PHYSICAL ISSUANCE, ZERO LONG LIQUIDATION ALONG WITH OUR ZERO GAIN IN SILVER OZ STANDING. WE HAD A SMALL NET GAIN IN OUR TWO EXCHANGES OF 1318 CONTRACTS  (SEE CALCULATIONS BELOW).

 

 

 

WE HAVE ALSO WITNESSED A STRONG AMOUNT OF PHYSICAL METAL STAND FOR COMEX DELIVERY AS WELL WE ARE WITNESSING CONSIDERABLE LONGS PACKING THEIR BAGS AND MIGRATING OVER TO LONDON IN GREATER NUMBERS IN THE FORM OF EFP’S.  WE WERE  NOTIFIED  THAT WE HAD A  STRONG SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:   MARCH:  00 AND MAY: 334 AND JUNE: 0 ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  334 CONTRACTS. WITH THE TRANSFER OF 334 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 334 EFP CONTRACTS TRANSLATES INTO 6.590 MILLION OZ  ACCOMPANYING:

1.THE 16 CENT GAIN IN SILVER PRICE AT THE COMEX AND

2. THE STRONG AMOUNT OF SILVER OUNCES WHICH STOOD FOR DELIVERY IN THE LAST 12 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.

2.660 MILLION OZ STANDING FOR SILVER IN JUNE//

22.605 MILLION OZ  STANDING FOR JULY

10.025   MILLION OZ INITIAL STANDING IN AUGUST.

43.030   MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)

7.32     MILLION OZ INITIALLY STANDING IN OCT

2.630     MILLION OZ STANDING FOR NOV.

20.970   MILLION OZ  FINAL STANDING IN DEC

5.075     MILLION OZ FINAL STANDING IN JAN

1.480    MILLION OZ FINAL STANDING IN FEB

23.005  MILLION OZ FINAL STANDING FOR MAR

4.145  MILLION OZ INITIALLY STANDING FOR APRIL

 

MONDAY, AGAIN OUR CROOKS USED COPIOUS PAPER IN ORDER TO LIQUIDATE SILVER’S PRICE…AND THEY WERE UNSUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT ROSE 16 CENTS).. BUT, OUR OFFICIAL SECTOR/BANKERS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO FLEECE SOME  SILVER LONGS FROM THEIR POSITIONS, AS WE DID HAVE A GOOD NET GAIN OF 1302 CONTRACTS OR 6.51 MILLION OZ ON THE TWO EXCHANGES! YOU CAN BET THE FARM THAT OUR BANKER  ARE DESPERATE TO LIQUIDATE THEIR HUGE SHORT POSITIONS IN SILVER

 

OUR SPREADING OPERATION HAS NOW SWITCHED INTO SILVER…..

SPREADING OPERATION FOR OUR NEWCOMERS:

WE HAVE NOW COMMENCED IN SILVER THE ILLEGAL SPREADING OPERATION \ FOR NEWCOMERS, HERE ARE THE DETAILS:

 

SPREADING LIQUIDATION HAS NOW STOPPED IN GOLD AS THEY NOW BEGIN TO MORPH INTO SILVER AS WE HEAD TOWARDS THE NEW FRONT MONTH WILL BE MAY.

 

 

FOR THOSE OF YOU WHO ARE NEW, HERE IS THE MODUS OPERANDI OF THE SPREADERS AND THE CRIMINAL ELEMENT BEHIND IT:

 HERE IS A BRIEF SYNOPSIS OF HOW THE CROOKS FLEECE UNSUSPECTING LONGS IN THE SPREADING ENDEAVOUR;

 

THE SPREADING LIQUIDATION OPERATION IS NOW OVER FOR GOLD..AND WE WILL NOW MORPH INTO AN ACCUMULATION PHASE OF SPREADING CONTRACTS FOR SILVER.  THEY WILL ACCUMULATE CONSIDERABLE AMOUNT OF THE CONTRACTS AND THEN LIQUIDATE ONE WEEK PRIOR TO FIRST DAY NOTICE

 

MODUS OPERANDI OF THE CORRUPT BANKERS AS TO HOW THEY HANDLE THEIR SPREAD OPEN INTERESTS:

.

 

 

AS I HAVE MENTIONED IN PREVIOUS COMMENTARIES:

 

 

“AS YOU WILL SEE, THE CROOKS WILL NOW SWITCH 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 NOW INTO THE NON ACTIVE DELIVERY MONTH OF APRIL HEADING TOWARDS THE  ACTIVE DELIVERY MONTH OF MAY FOR SILVER:

 

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

 

 

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

13,461 CONTRACTS (FOR 13 TRADING DAYS TOTAL 13,461 CONTRACTS) OR 67.305 MILLION OZ: (AVERAGE PER DAY: 1035 CONTRACTS OR 5.177 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF APRIL: 67.305 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 9.38% 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 2020 TO DATE SILVER EFP’S:          960.80 MILLION OZ.

JANUARY 2020 EFP TOTALS SO FAR: 181.61 MILLION OZ

FEB 2020 EFP’S TOTAL :  ……     259.600 MILLION OZ

MARCH EFP’S …..                     452.280 MILLION OZ  //TOTALS//AND A NEW RECORD FOR THE MONTH)

APRIL EFP SO FAR                   67.305 MILLION OZ.  (EX. FOR PHYSICALS BECOMING A LOT LESS)

EXCHANGE FOR PHYSICAL ISSUANCE THIS MONTH IS A LOT LESS.  NO DOUBT THAT THE COST TO CARRY THESE THINGS HAS EXPLODED AND AS SUCH CANNOT BE DONE AS FREUENTLY AS BEFORE.

 

RESULT: WE HAD A GOOD SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 968, WITH THE CONSIDERABLE 16 CENT GAIN IN SILVER PRICING AT THE COMEX /MONDAY THE CME NOTIFIED US THAT WE HAD A  SMALL SIZED EFP ISSUANCE OF 334 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

 

TODAY WE GAINED A SMALL SIZED OI CONTRACTS ON THE TWO EXCHANGES:  1318 CONTRACTS (WITH OUR 16 CENT GAIN IN PRICE)

 

THE TALLY//EXCHANGE FOR PHYSICALS

i.e 334 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH A GOOD INCREASE OF 968 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 16 CENT GAIN IN PRICE OF SILVER/ AND A CLOSING PRICE OF $15.32 // MONDAY’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 UNDER 1 BILLION oz i.e. 0.7050 BILLION OZ TO BE EXACT or 100.7% of annual global silver production (ex Russia & ex China).

FOR THE NEW  MAR DELIVERY MONTH/ THEY FILED AT THE COMEX: NOTICE(S) FOR   nil OZ OF SILVER.

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 244,196 CONTRACTS ON AUG 22.2018. AND AGAIN THIS HAS BEEN SET WITH A LOW PRICE OF $14.70//TODAY’S RECORD OF 244,705 IS SET WITH A PRICE OF: 18.91 (FEB 25/2020)

 

.

 

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 2.660 MILLION OZ//JULY 22.605 MILLION OZ; AUGUST 10.025 MILLION OZ/ SEPT 43.030 MILLION OZ//OCT: 7.665 MILLION OZ//   NOV: 2.630 MILLION OZ//DEC:  20.970 MILLION OZ; JAN:  5.075 MILLION OZ.//FEB 1.480 MILLION OZ//MAR: 23.005 MILLION OZ/APRIL 4.145 MILLION OZ//
  2. THE  RECORD PRIOR TO TODAY WAS SET IN FEB 25/2018:  244,710 CONTRACTS,  WITH A SILVER PRICE OF $18.90//.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017 RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  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)

 

GOLD

 

IN GOLD, THE COMEX OPEN INTEREST ROSE BY A GOOD SIZED 4173 CONTRACTS TO 496,671 AND CLOSER TO OUR NEW RECORD (SET JAN 24/2020) AT 799,541 AND  PREVIOUS TO THAT: (SET JAN 6/2020) AT 797,110.

THE GAIN OF COMEX OI OCCURRED DESPITE OUR COMEX GAIN IN PRICE  OF $10.00 /// COMEX GOLD TRADING// MONDAY// WE  HAD CONSIDERABLE BANKER SHORT COVERING , A GOOD INCREASE IN GOLD OZ STANDING AT THE COMEX, ALONG WITH ZERO LONG LIQUIDATION ACCOMPANYING A GOOD  EX. FOR PHYSICAL ISSUANCE. THIS ALL HAPPENED WITH  OUR STRONG GAIN IN THE PAPER PRICE OF GOLD.

WE HAD NO ISSUANCE OF OUR NEW 4 GC CONTRACT

 

WE GAINED A GOOD 6220 CONTRACTS  (19.34 TONNES) ON OUR TWO EXCHANGES.

 

E.F.P. ISSUANCE

 

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A FAIR SIZED 2047 CONTRACTS:

CONTRACTS, FEB>  CONTRACTS; MARCH 00 APRIL: 0. MAY: 0, AND JUNE 2047.; DEC 0 AND ALL OTHER MONTHS ZERO//TOTAL: 2047.  The NEW COMEX OI for the gold complex rests at 496,671. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A GOOD SIZED INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 6220 CONTRACTS: 4173 CONTRACTS INCREASED AT THE COMEX AND 2047 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 6173 CONTRACTS OR 19.34 TONNES. MONDAY, WE HAD CONSIDERABLE GAIN OF $10.00 IN GOLD TRADING……

AND WITH THAT  GAIN IN  PRICE, WE  HAD A GOOD SIZED GAIN IN  TOTAL/TWO EXCHANGES GOLD TONNAGE OF 19.34 TONNES!!!!!! THE BANKERS/OFFICIAL SECTOR WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER WITH RECKLESS ABANDON. THE BANKERS WERE UNSUCCESSFUL IN THEIR ATTEMPT TO LOWER GOLD’S PRICE (ROSE $10.00). AND IT ALSO SEEMS THAT THEIR ATTEMPT TO FLEECE ANY GOLD LONGS FROM THE GOLD ARENA WERE UNSUCCESSFUL  (SEE BELOW).

4 GC ISSUANCE:  ZERO

 

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES:

WE HAD  A GOOD SIZED INCREASE IN EXCHANGE FOR PHYSICALS  (2047) ACCOMPANYING THE GAIN IN COMEX OI  (4173 OI): TOTAL GAIN IN THE TWO EXCHANGES:  6220 CONTRACTS.  WE NO DOUBT HAD 1 )HUGE BANKER SHORT COVERING, 2.)A STRONG INCREASE IN  STANDING AT THE GOLD COMEX FOR THE FRONT APRIL MONTH,  3) ZERO LONG LIQUIDATION AND  …ALL OF THIS WAS COUPLED WITH THAT STRONG GAIN IN GOLD PRICE TRADING//MONDAY

 

 

 

HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS IN 2020 INCLUDING TODAY

 

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF APRIL : 58,529 CONTRACTS OR 5,852,900 oz OR 182.04 TONNES (13 TRADING DAYS AND THUS AVERAGING: 4502 EFP CONTRACTS PER TRADING DAY

 

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 13 TRADING DAY(S) IN  TONNES: 182.04 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2019, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES

THUS EFP TRANSFERS REPRESENTS 182.04/3550 x 100% TONNES =5.12% OF GLOBAL ANNUAL PRODUCTION

ISSUANCE OF EXCHANGE FOR PHYSICAL GOLD HAS DISSIPATED THIS MONTH…THE COST TO THE BANKERS TO CARRY THESE CONTRACTS IN LONDON IS BECOMING TOO GREAT FOR THEM.

 

 

ACCUMULATION OF GOLD EFP’S YEAR 2020 TO DATE   2504.94  TONNES

JANUARY 2220 TOTAL EFP ISSUANCE; : 570.19 TONNES

FEB 2020 TOTAL EFP ISSUANCE :            653.78 TONNES

 

MARCH TOTAL EFP ISSUANCE                1,098.93  TONNES  (*AND A NEW ALL TIME RECORD ISSUANCE//22 DAYS)

APRIL TOTAL EFP. ISSUANCE:               182.04  TONNES  (EFP ISSUANCE BECOMING A LOT LESS)

 

 

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

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

1.Today, we had the open interest at the comex, in SILVER, ROSE BY A GOOD SIZED 968 CONTRACTS FROM 141,181 UP TO 142,149 AND CLOSER TO OUR COMEX RECORD //244,710(SET FEB 25/2020).  THE LAST RECORDS WERE SET  IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD TO THAT 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  2 3/4 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.

ALL OF THE TINY GAIN IN COMEX OI WAS DUE TO 1) SOME BANKER SHORT COVERING , 2) THE ISSUANCE OF A FAIR SIZED NUMBER OF EXCHANGE FOR PHYSICALS (SEE BELOW), 3) A ZERO INCREASE IN SILVER OZ STANDING AT THE COMEX FOR APRIL AND 4) ZERO LONG LIQUIDATION

 

 

EFP ISSUANCE 290 CONTRACTS

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

 FOR FEB. 0; FOR MAR  0:  AND MAY: 334; JUNE: 0 CONTRACTS   AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 334 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE GOOD COMEX OI GAIN  OF 968 CONTRACTS TO THE 334 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A GOOD GAIN OF 1302 OPEN INTEREST CONTRACTS. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES  6.51 MILLION  OZ!!! WITH THE STRONG GAIN IN PRICE///

 

 

RESULT: A GOOD SIZED INCREASE IN SILVER OI AT THE COMEX WITH THE 16 CENT GAIN IN PRICING THAT SILVER UNDERTOOK IN PRICING// MONDAY. WE ALSO HAD A SMALL SIZED 334 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)TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED DOWN 25.54 POINTS OR 0.90%  //Hang Sang CLOSED DOWN 536.47 POINTS OR 2.20%   /The Nikkei closed DOWN 388.34 POINTS OR 1.97%//Australia’s all ordinaires CLOSED DOWN 2.51%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0928 /Oil DOWN TO -3.23 dollars per barrel for WTI and 20.73 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.0928 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1049 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY PAST 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED//CORONAVIRUS  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

COMEX DATA//AMOUNTS STANDING//VOLUME OF TRADING/INVENTORY MOVEMENTS

GOLD

LET US BEGIN:

THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY A STRONG 4173 CONTRACTS TO 496,671 MOVING CLOSER  TO OUR  RECORD THAT WAS SET IN JANUARY/2020: {799,541  OI(SET JAN 16/2020)} AND  PREVIOUS TO THAT: 797,110 (SET JAN 7/2020).  AND THIS STRONG COMEX OI GAIN WAS SET WITH OUR GOOD GAIN OF $10.00 IN GOLD PRICING //MONDAY’COMEX TRADING//). WE ALSO HAD A GOOD EFP ISSUANCE (2047 CONTRACTS),.  THUS WE HAD 1) HUGE BANKER SHORT COVERING AT THE COMEX AND 2)   ZERO LONG LIQUIDATION AND 3)  ANOTHER STRONG INCREASE IN GOLD OZ STANDING AT THE COMEX WITH THAT HUGE STANDING  APRIL/GOLD…  AS WE ENGINEERED A GOOD GAIN ON TWO EXCHANGES OF 5899 CONTRACTS.

WE AGAIN HAD ZERO 4- GC CONTRACT ISSUANCE

 

 

EXCHANGE FOR PHYSICAL ISSUANCE

WE ARE NOW IN THE  ACTIVE DELIVERY MONTH OF APRIL..  THE CME REPORTS THAT THE BANKERS ISSUED A GOOD SIZED  TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 2047 EFP CONTRACTS WERE ISSUED:

 FEB: 0; MARCH 00 AND APRIL: 0, MAY: 0  JUNE : 2047 AND 0 FOR DEC AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE: 2047 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:  6220 TOTAL CONTRACTS IN THAT 2047 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A STRONG SIZED 4173 COMEX CONTRACTS.  THE BANKERS PROVIDED ALL THE NECESSARY SHORT PAPER TO WHICH OUR LONGS DUTIFULLY ACCEPTED AS THEY GOBBLED UP A GOOD AMOUNT OF EXCHANGE FOR PHYSICALS WITH A HUGE BANKER SHORT COVERING, ACCOMPANYING OUR STRONG COMEX GOLD TONNAGE STANDING FOR DELIVERY……

 

THE BANKERS WERE UNSUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT ROSE BY A CONSIDERABLE $10.00).  AND, THEY WERE UNSUCCESSFUL IN FLEECING ANY LONGS, AS THE TOTAL GAIN ON THE TWO EXCHANGES REGISTERED 19.34 TONNES.

 

 

NET GAIN ON THE TWO EXCHANGES :: 6220 CONTRACTS OR 622,000 OZ OR 19.34 TONNES. 

 

COMMODITY LAW SUGGESTS THAT COMMODITY FUTURES OPEN INTEREST SHOULD APPROXIMATE 3% OF TOTAL PRODUCTION.  IN GOLD THE WORLD PRODUCES AROUND 3500 TONNES PER YEAR BUT ONLY 2200 TONNES ARE AVAILABLE FROM THE WEST (THUS EXCLUDING RUSSIA, CHINA ETC..WHO KEEP 100% OF THEIR PRODUCTION)

THUS IN GOLD WE HAVE THE FOLLOWING:  496,671 TOTAL OI CONTRACTS X 100 OZ PER CONTRACT = 49.67 MILLION OZ/32,150 OZ PER TONNE =  1545 TONNES

THE COMEX OPEN INTEREST REPRESENTS 1545/2200 OR 70.22% OF ANNUAL GLOBAL PRODUCTION OF GOLD.

Trading Volumes on the COMEX TODAY: 242,951 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY201,850 contracts//

APRIL 21

APRIL GOLD CONTRACT MONTH

 

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
319,268.332 oz
JPMORGAN
JPMORGAN (ENHANCED LEVEL REMOVAL)
Deposits to the Dealer Inventory in oz  138,521.802 oz

Brinks

Manfra

 

 

 

Deposits to the Customer Inventory, in oz  

571,860.733

OZ

BRINKS

JPMORGAN

LOOMIS

INCLUDES

17,000 KILOBARS

JPMORGAN

AND 106 KILOBARS LOOMIS

 

 

 

No of oz served (contracts) today
8 notice(s)
 80000 OZ
(0.0248 TONNES)
No of oz to be served (notices)
769 contracts
(76900 oz)
2.3919 TONNES
Total monthly oz gold served (contracts) so far this month
29749 notices
2,974,900 OZ
92.531 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 2 deposits into the dealer

I) Into the dealer Brinks:  44,949.759 oz

ii) Into the dealer Manfra:  93,572.043 oz

total dealer deposits: 138,521.802  oz

total dealer withdrawals: NIL oz

we had 3 deposit into the customer account

i) Into Brinks:  21,894.833 oz

 

ii) Into JPMorgan: 546,567.000 oz (17,000 kilobars)

iii) into Loomis:  3407.900 oz (106 kilobars)

 

 

 

 

total deposits:  571,869.733   oz

 

 

we had 2 gold withdrawals from the customer account:

i) Out of jPMorgan: 99.982 oz

ii)  Out of JPMorgan Enhanced:  319,168.35 oz

 

total gold withdrawals; 319,268.332   oz

We had 2  kilobar transactions

 

We had zero  4 KC bar transaction

 

ADJUSTMENTS: 0

 

 

The front month of APRIL saw its open interest register 777 contracts for a LOSS of 74 contacts. We had 106 notices filed yesterday so we GAINED A VERY STRONG 32 contracts or AN ADDITIONAL 3200 oz will  stand at the comex as these guys refused to morph into London based forwards and they also negated a fiat bonus

 

 

May saw its ANOTHER GAIN of 126 contracts to stand at  6287.

June saw a  LOSS OF 86 contracts  UP to 341,357

 

 

We had 8 notices filed today for 800 oz

 

FOR THE  APRIL 2020 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 8 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 1 notice(s) was (were) stopped/ Received) by j.P.Morgan customer account and 0 notices by the squid  (Goldman Sachs)

To calculate the INITIAL total number of gold ounces standing for the APRIL /2020. contract month, we take the total number of notices filed so far for the month (29,749) x 100 oz , to which we add the difference between the open interest for the front month of  APRIL. (777 CONTRACTS ) minus the number of notices served upon today (8 x 100 oz per contract) equals 3,051,800 OZ OR 94.923 TONNES) the number of ounces standing in this  active month of APRIL

thus the INITIAL standings for gold for the APRIL/2020 contract month:

No of notices served (29,749)x 100 oz + (xx OI) for the front month minus the number of notices served upon today -(8) x 100 oz which equals 3,051800 oz standing OR 94.923 TONNES in this active delivery month which is  a great amount for gold standing for a APRIL. delivery month.

THIS GREATLY SURPASSES THE PREVIOUS RECORD OF 42. TONES OF GOLD STANDING IN ANY MONTH

We gained 32 contracts OR an additional 3200 OZ WILL  STAND AT THE COMEX as these guys decided it best to look for metal on the this side of the pond, first before travelling to London..

NEW PLEDGED GOLD:  BRINKS

3027.500 OZ  REMOVED TO THE PLEDGED ACCOUNT JAN 10.2020/Brinks

176,211.457 oz NOW PLEDGED  JAN 21.2020/HSBC  5.4807 TONNES

322,144.443 oz PLEDGED  MARCH 2020  JPMORGAN:  10.02 TONNES

42,548.308.00 PLEDGED  APRIL 3/2020: SCOTIA:            1.3234 tonnes

TOTAL PLEDGED GOLD NOW IN EFFECT:  540,194.208  OZ OR 16.824  TONNES

SURPRISINGLY WE HAVE BEEN WITNESSING NO REAL PHYSICAL GOLD ENTERING THE COMEX VAULTS FOR THE PAST YEAR!! ..ONLY PHONY KILOBAR ENTRIES…. WE HAVE 131.553 TONNES OF REGISTERED GOLD WHICH CAN SETTLE UPON LONGS

CALCULATION OF REGISTERED GOLD THAT CAN BE SETTLED UPON:

total registered or dealer  4,770,350.000 oz or 148.368  tonnes
which  includes the following:
a) pledged gold held at HSBC   which cannot settled upon   176,211.457 oz x ( 5.4807 TONNES)//
b) pledged gold held at JPMorgan (added March 2020) which cannot be settled upon:  322,144.443 oz (or 10.0200 tonnes)
total pledged gold:
c)  pledged gold at Scotia: 1.3234 tonnes or 42,548.308 oz which cannot be settled  (1.3234 tonnes)
total weight of pledged:  540,904.208 oz or 16.824 tonnes
thus:
registered gold that can be used to settle upon: 4,229445.8  (131.553 tonnes)
true registered gold  (total registered – pledged tonnes  4,229445.8 (131.553 tonnes)
total eligible gold:  14,289,658.320 oz (444.46 tonnes)

total registered, pledged  and eligible (customer) gold;   19,312.609.721 oz 600.703 tonnes (INCLUDES 4 GC GOLD)

total 4 GC gold:   138.03 tonnes

total gold net of 4 GC:  462.673 tonnes

 

THE GOLD COMEX SEEMS TO BE  UNDER SEVERE ASSAULT FOR PHYSICAL

END

April 21/2019

And now for the wild silver comex results

Total COMEX silver OI ROSE BY A GOOD SIZED 968 CONTRACTS FROM 141,181 UP TO 142,149 (AND CLOSER TO   OUR NEW ALL TIME RECORD OI FOR SILVER SET ON FEB 25.2020(244,710) ECLIPSING OUR PREVIOUS RECORD, AUGUST 25/2018 RECORD (244,196).  THE PREVIOUS RECORD TO THAT WAS SET ON APRIL 9.2018/ 243,411 CONTRACTS) . OUR GOOD OI COMEX GAIN TODAY OCCURRED WITH OUR CONSIDERABLE 16 CENT INCREASE IN PRICING/MONDAY.  THE GAIN IN TOTAL OI (TWO EXCHANGES) OCCURRED WITH 1)  A SMALL ISSUANCE OF EXCHANGE FOR PHYSICALS 2) ZERO INCREASE IN SILVER OZ STANDING AT THE COMEX, 3)  SOME BANKER SHORT COVERING AND ZERO LONG LIQUIDATION OCCURRING WITH OUR CONSIDERABLE SILVER GAIN IN PRICE. 

WE ARE NOW INTO THE  ACTIVE DELIVERY MONTH OF APRIL

.APRIL ACTIVE DELIVERY MONTH.

 

THE FRONT MONTH OF APRIL HAS A TOTAL OPEN INTEREST OF 23 CONTRACTS, AND AS SUCH WE LOST 0 CONTRACTS.  WE HAD 0 NOTICES SERVED UPON YESTERDAY SO WE GAINED 0 CONTRACTS OR 0 ADDITIONAL OZ WILL STAND AT THE COMEX AS THEY REFUSED TO MORPH INTO LONDON BASED CONTRACTS AS THEY LOOK FOR METAL ON THIS SIDE OF THE POND.

 

THE BIG CONTRACT OF MAY SAW ITS OI FALL  BY 1478  DOWN TO 42179.

JUNE SAW A LOSS OF 12 CONTRACTS FALLING TO 102.

 

 

We, today, had  0 notice(s) FILED  for NIL, OZ for the APRIL, 2019 COMEX contract for silver

April 21/2019

Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 xxx oz
cme
not reporting

 

 

Deposits to the Dealer Inventory
xx oz

 

Deposits to the Customer Inventory
xxx oz
cme
not reporting
No of oz served today (contracts)
0
CONTRACT(S)
(NIL OZ)
No of oz to be served (notices)
23 contracts
 115,000 oz)
Total monthly oz silver served (contracts)  806 contracts

4,025,000 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

for the 2nd day in a row:  the CME is not reporting silver inventory changes.

total dealer deposits: xx oz

total dealer withdrawals: x oz

i)we had xx deposits into the customer account

into JPMorgan:   0

ii)into everybody else;  xx

 

 

 

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

JPMorgan now has 160.819 million oz of  total silver inventory or 50.04% of all official comex silver. (160.819 million/321.170 million

 

total customer deposits today: xxx   oz

we had x withdrawals:

 

 

 

total withdrawals;  xxx   oz

We had x adjustments: and all from the dealer to the customer:

i

 

total dealer silver:  81.788 million

total dealer + customer silver:  317.926 million oz

 

 

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The total number of notices filed today for the APRIL 2020. contract month is represented by 0 contract(s) FOR nil oz

 

To calculate the number of silver ounces that will stand for delivery in APRIL we take the total number of notices filed for the month so far at 806 x 5,000 oz = 4,025,000 oz to which we add the difference between the open interest for the front month of APRIL.(23) 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 APRIL/2019 contract month: 806 (notices served so far) x 5000 oz + OI for front month of APRIL (23)- number of notices served upon today (0) x 5000 oz of silver standing for the APRIL contract month.equals 4,145,000 oz.

WE GAINED 0 CONTRACTS OR AN ADDITIONAL NIL OZ OF SILVER WILL STAND AT  THE COMEX.

 

TODAY’S ESTIMATED SILVER VOLUME: 84,609 CONTRACTS //

 

 

 

 

FOR YESTERDAY:  48,469 CONTRACTS..,CONFIRMED VOLUME

 

 

 

 

YESTERDAY’S CONFIRMED VOLUME OF 48,469 CONTRACTS EQUATES to 242 million  OZ  34.6% OF ANNUAL GLOBAL PRODUCTION OF SILVER..

 

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

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

end

 

NPV for Sprott

1. Sprott silver fund (PSLV): NAV RISES TO +0.75% ((APRIL 21/2020)

2. Sprott gold fund (PHYS): premium to NAV  RISES TO +0.91% to NAV:   (APRIL 21/2020 )

Note: Sprott silver trust back into POSITIVE territory at +%-/Sprott physical gold trust is back into POSITIVE/ 0.75%

(courtesy Sprott/GATA

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

NAV 15.38 TRADING 15.26///DISCOUNT 0.81

END

 

 

And now the Gold inventory at the GLD/

APRIL 21/WITH GOLD DOWN $21.60 TODAY: A HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A MONSTROUS ADDITION OF 7.9 PAPER TONNES TO THE GLD INVENTORY//INVENTORY RESTS AT 1029.59 TONNES

APRIL 20//WITH GOLD UP $10.00 TODAY; NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1021.69 TONNES

APRIL 17/WITH GOLD DOWN $27.80 TODAY: SURPRISINGLY NO CHANGES IN GOLD INVENTORY AT THE GLD///INVENTORY RESTS AT 1021.69 TONNES TONNES..THE STRING OF 12 STRAIGHT STRONG DEPOSITS ENDS..

APRIL 16/WITH GOLD DOWN $4.50 TODAY: ANOTHER HUGE CHANGE IN GOLD INVENTORY: A STRONG DEPOSIT OF 4.10 TONNES WAS ADDED TO THE GLD INVENTORY//INVENTORY RESTS AT 1021.69 TONNES/12TH STRAIGHT STRONG DEPOSIT

APRIL 15//WITH GOLD DOWN $19.10 TODAY; ANOTHER HUGE CHANGE IN GOLD INVENTORY; A STRONG 7.89 TONNES WAS ADDED TO THE GLD INVENTORY//INVENTORY RESTS AT 1117.59 TONNES.//11TH STRAIGHT STRONG DEPOSIT

APRIL 14/WITH GOLD UP $23.55 TODAY: ANOTHER HUGE CHANGE IN GOLD INVENTORY: A STRONG 15.51 TONNES WAS ADDED TO THE GLD INVENTORY/INVENTORY RESTS AT 1009.70 TONNES//THIS IS THE 10TH STRAIGHT STRONG DEPOSIT//THIS IS A FRAUDULENT VEHICLE..THEY HAVE NO PHYSICAL GOLD IN THE TRUST..

APRIL 13//WITH GOLD UP $27.65 TODAY: ANOTHER HUGE CHANGE IN GOLD INVENTORY: A STRONG 5.36 TONNES WAS ADDED TO THE GLD//INVENTORY RESTS AT 994.19 TONNES

APRIL 9 WITH GOLD UP $37.30 TODAY: ANOTHER HUGE CHANGE IN GOLD INVENTORY: A STRONG 2.92 TONNES WAS ADDED TO THE GLD//GOLD INVENTORY RESTS TONIGHT AT..988.63 TONNES

APRIL 8/WITH GOLD DOWN $.60//ANOTHER HUGE CHANGE IN GOLD INVENTORY/;; A STRONG 1.45 TONNES WAS ADDED TO THE GLD/GOLD INVENTORY RESTS AT 985.71 TONNES

APRIL 7/WITH GOLD UP $.30: ANOTHER HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 5.27 TONNES OF GOLD INTO THE GLD INVENTORY//INVENTORY RESTS AT 984.26 TONNES

APRIL 6//WITH GOLD UP $32.00//ANOTHER STRONG DEPOSIT INTO THE GLD; A HUGE 7.02 TONNES OF GOLD INTO THE GLD////INVENTORY RESTS AT : 978.99 TONNES

APRIL 3//WITH GOLD UP $7.80 TODAY//ANOTHER STRONG DEPOSIT OF 3.22 TONNES INTO THE GLD/INVENTORY RESTS AT 971.97 TONNES

APRIL 2//WITH GOLD UP $31.80 TODAY: ANOTHER STRONG DEPOSIT OF 1.75 TONNES INTO THE GLD//INVENTORY RESTS AT 968.75 TONNES

APRIL 1/WITH GOLD DOWN $7.70 TODAY: ANOTHER CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 2.62 TONNES OF GOLD INTO THE GLD////INVENTORY RESTS AT 967.00 TONNES

MARCH 31//WITH GOLD DOWN $32.70//A MONSTROUS PAPER DEPOSIT OF 10.84 TONNES INTO THE GLD//INVENTORY RESTS AT 964.38 TONNES

MARCH 30/WITH GOLD DOWN $6.10 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 953.54 TONNES

MARCH 27.WITH GOLD DOWN $16.40: A BIG  CHANGE IN GOLD INVENTORY AT THE GLD  A HUGE DEPOSIT OF 4.39 TONES INTO THE GLD/INVENTORY RESTS AT 953.54 TONES

MARCH 26//WITH GOLD UP $24.00 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 13.17 TONNES INTO THE GLD/INVENTORY RESTS AT 949.15 TONNES

MARCH 25/WITH GOLD DOWN $11.40 TODAY//A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 11.99 TONES INTO THE GLD INVENTORY////INVENTORY RESTS AT 935.98 TONNES

MARCH 24//WITH GOLD UP $67.00 TODAY: A HUGE  CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 15.80 TONNES OF GOLD INTO GLD////INVENTORY RESTS AT 923.99 TONNES..THIS PROVES THAT THE GLD IS A FRAUD AS LONDON SUSPENDED DELIVERY AS WELL AS ALL REFINERS.  THEY HAD NO WAY OF GETTING ANY PHYSICAL OZ INTO ITS INVENTORY//

MARCH 23//WITH GOLD UP $76.00 TODAY: A  HUGE PAPER WITHDRAWAL OF 21.50 TONNES FROM THE GLD////INVENTORY RESTS AT 908.19 TONNES

MARCH 20//WITH GOLD UP $5.50//A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 7.46 TONNES FROM THE GLD////INVENTORY RESTS AT 922.23 TONNES

MARCH 19/WITH GOLD DOWN 90 CENTS: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 929.84 TONNES

MARCH 18/WITH GOLD DOWN $48.00: NO CHANGES IN GOLD INVENTORY AT THE GLD////INVENTORY RESTS AT 929.84 TONNES

MARCH 17/WITH GOLD UP $37.60: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.75 TONNES FROM GLD INVENTORY//INVENTORY RESTS AT 929.84 TONNES

MARCH  16/WITH GOLD DOWN $30.00/ A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER WITHDRAWAL OF 12.59 TONNES/INVENTORY RESTS AT 931.59 TONNES

MARCH 13//WITH GOLD DOWN $73.60: A HUGE WITHDRAWAL OF 9.02 TONNES OF PAPER GOLD FROM THE GLD//

INVENTORY RESTS AT 944.18 TONNES

MARCH 12/WITH GOLD DOWN $55.05 TODAY:  NO CHANGE IN GOLD INVENTORY AT THE GLD/953.26 TONNES

 

MAR 11/WITH GOLD DOWN $14.95?/A HUGE WITHDRAWAL OF 10.53 TONNES//INVENTORY RESTS AT 953.26 TONNES

MARCH 10/WITH GOLD DOWN $14.25//A HUGE 8.00 TONNES OF PAPER GOLD DEPOSIT INTO THE GLD//INVENTORY RESTS AT 963.79

MARCH 9//WITH GOLD UP $1.50 : NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 955.60 TONNES

March 6/WITH GOLD UP $6.25 A MASSIVE 21.37 PAPER TONNES OF GOLD INTO THE GLD INVENTORY//INVENTORY RESTS AT 955.60 TONNES

MARCH 5/WITH GOLD UP $25.40//NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS TONIGHT AT 934.23 TONNES

MARCH 4//WITH GOLD DOWN 1 DOLLAR: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 934.23 TONNES//

MARCH 3//WITH GOLD UP 48.55 TODAY; NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 934.23 TONNES

MARCH 2//WITH GOLD UP $27.00// no change in gold inventory at the gld//inventory remains  at 934.23 tonnes

FEB 28/WITH GOLD DOWN $73.00 WE LOST NO GOLD FROM THE GLD/INVENTORY REMAINS 934.23 TONNES

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Inventory rests tonight at

APRIL 21/ GLD INV 1029.59 tonnes*

IN LAST 803 TRADING DAYS:   +83.25 NET TONNES HAVE BEEN REMOVED FROM THE GLD

 

LAST 703 TRADING DAYS;+258.23  TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

end

 

 

Now the SLV Inventory/

APRIL 21//WITH SILVER DOWN 60 CENTS TODAY; A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER ADDITION OF 1.398 MILLION OZ INTO THE SLV INVENTORY//INVENTORY RESTS AT 412.639 MILLION OZ//

APRIL 20//WITH SILVER UP 16 CENTS TODAY: A BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.797 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 414.038 MILLION OZ//

APRIL 17/WITH SILVER DOWN 24 CENTS TODAY; A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.3999 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 415.437 MILLION OZ//

APRIL 16/WITH SILVER UP 5 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV////INVENTORY RESTS AT 415.437 MILLION OZ//

APRIL 15//WITH SILVER DOWN 45 CENTS TODAY: TWO HUGE CHANGES IN SILVER INVENTORY AT THE SLV TWO HUGE DEPOSITS: A DEPOSIT OF 1.679 MILLION OZ AND ANOTHER 5.222 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 415.437 MILLION OZ//

APRIL 14./WITH SILVER UP 51 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV//A MASSIVE PAPER DEPOSIT OF XXX MILLION OZ//INVENTORY RESTS AT 408.536 MILLION OZ//

APRIL 13//WITH SILVER DOWN 29 CENTS TODAY;  A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A MASSIVE PAPER DEPOSIT OF 6.155 MILLION OZ////INVENTORY RESTS AT 408.536 MILLION OZ//

APRIL 9/WITH SILVER UP 60 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A HUGE DEPOSIT OF 1.84 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 402.381 MILLION OZ.

APRIL 8//WITH SILVER DOWN 21 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 401.541 MILLION OZ///

APRIL 7/WITH SILVER UP 26 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 5.766 MILLION OZ INTO THE SLV..//INVENTORY RESTS AT 395.826 MILLION OZ

APRIL 6/WITH SILVER UP 50 CENTS TODAY: ANOTHER BIG CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 395.826 MILLION OZ.

APRIL 3//WITH SILVER DOWN 15 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 746,000 OZ INTO THE SLV//INVENTORY RESTS AT 395.826 MILLION OZ

APRIL 2/WITH SILVER UP 65 CENTS;  A SMALL CHANGE TODAY..A WITHDRAWAL OF .335 MILLION OZ TO PAY FOR FEES//INVENTORY RESTS AT 394.826 MILLION OZ/

APRIL 1/WITH SILVER DOWN 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 395.181 MILLION OZ//

MARCH 31/WITH SILVER UP 2 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY: A DEPOSIT OF 1.679 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 375.181 MILLION OZ//

MARCH 30/WITH SILVER DOWN 44 CENTS TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 393.502 MILLION OZ.

MARCH 27/WITH SILVER DOWN 5 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A MONSTROUS PAPER DEPOSIT OF 8.115 MILLION OZ INTO THE SLV../INVENTORY RESTS AT 393.502  MILLION OZ//

MARCH 26/WITH SILVER DOWN 11 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 385.387 MILLION OZ///

MARCH 25/WITH SILVER UP 44 CENTS TODAY: TWO HUGE CHANGES IN SILVER INVENTORY AT THE SLV: TWO DEPOSITS OF 7.369 MILLION OZ AND 2.239 MILLION OZ OF PAPER SILVER INTO THE SLV////INVENTORY RESTS AT 385.387 MILLION OZ//

MARCH 24//WITH SILVER UP 100 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 375.779 MILLION OZ///

MARCH 23//WITH SILVER UP 70 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV; A DEPOSIT OF 2.332 MILLION OZ OF SILVER INTO THE SLV////INVENTORY RESTS AT 375.779 MILLION OZ

MARCH 20//WITH SILVER UP 39 CENTS TODAY: 2 HUGE CHANGES IN SILVER INVENTORY AT THE SLV; A PAPER WITHDRAWAL OF 1.026 MILLION OZ FROM THE SLV AND THEN A PAPER ADDITION OF 3.638 MILLION OZ INTO THE SLV.////INVENTORY RESTS AT 373.447 MILLION OZ//

MARCH 19/WITH SILVER UP 38 CENTS TODAY//A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: ANOTHER 5.597 MILLION OZ OF SILVER VAPOUR ADDED TO THE SLV INVENTORY//INVENTORY RESTS AT 370.835 MILLION OZ/

MARCH 18//WITH SILVER DOWN 75 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A MONSTROUS 12.035 MILLION PAPER OZ ADDED INTO INVENTORY//INVENTORY RESTS AT 365.238 MILLION OZ//

MARCH 17/WITH SILVER DOWN 20 CENTS TODAY; A BIG CHANGES IN SILVER INVENTORY AT THE SLV; A WITHDRAWAL OF 3.735 MILLION OZ FROM THE SLV INVENTORY: INVENTORY RESTS AT 353.203 MILLION OZ///

MARCH 16/WITH SILVER DOWN 177 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESETS AT 356.938 MILLION OZ//

MARCH 13//WITH SILVER DOWN 155 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.893 MILLION OZ FROM THE SLV///INVENTORY RESTS AT 356.938 MILLION OZ;

MARCH 12/WITH SILVER DOWN 77 CENTS TODAY: A BIG CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.119 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 359.828 MILLION OZ

MARCH 11/SILVER DOWN 16 CENTS:  A SMALL WITHDRAWAL OF .467 MILLION OZ AT THE SLV/INVENTORY RESTS AT 360.947 MILLION OZ//

MARCH 10/WITH SILVER DOWN 10 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 361.414 MILLION OZ//

MARCH 9/NO CHANGE IN INVENTORY LEVELS: SLV INVENTORY RESTS AT 361.414 MILLION OZ//

MARCH 6//WITH SILVER DOWN 10 CENTS: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 361.414 MILLION OZ

MARCH 5//WITH SILVER UP 15 CENTS TODAY; A SMALL WITHDRAWAL DUE TO FEES ETC//INVENTORY RESTS TONIGHT AT 361.414 MILLION OZ..

MARCH 4/SILVER SILVER UP 3 CENTS TODAY: NO CHANGE IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 361.880 MILLION OZ//

MARCH 3/WITH SILVER UP 44 CENTS//A HUGE CHANGE IN SILVER INVENTORY AT THE SLV/: A LOSS OF 5.75 MILLION OZ FROM THE SLV../INVENTORY RESTS AT 361.880 MILLION OZ

MARCH 2//WITH SILVER UP 18 CENTS//NO CHANGE IN SILVER INVENTORY AT THE SLV..INVENTORY RESTS AT 367.632 MILLION OZ//

 

FEB 28/ WITH SILVER DOWN 18 CENTS: a loss of 1.867 million oz//inventory rests at 367.632 million oz

 

 

APRIL 21.2020:

SLV INVENTORY RESTS TONIGHT AT

412.639 MILLION OZ.

END

 

 

 

 

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 1.96/ and libor 6 month duration 1.08

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

G0LD LENDING RATE: – 1.88

GOLD SCARCE//WITH NEGATIVE GOLD LEASE RATES, CENTRAL BANKS ARE CALLING IN ALL OF THEIR GOLD LEASES

 

XXXXXXXX

12 Month MM GOFO
+ 1.12%

LIBOR FOR 12 MONTH DURATION: 0.98

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = -.14

GOLD LENDING RATE NEGATIVE AS CENTRAL BANKS CALL IN THEIR GOLD LEASES

end

 

 

PHYSICAL GOLD/SILVER STORIES
i) GOLDCORE BLOG/Mark O’Byrne

 

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

iii) Other physical stories:

BILL HOLTER INTERVIEW:

Bill Holter

12:23 AM (7 hours ago)

to Bill
Attachments area

Preview YouTube video COMEX Oil Longs Eviscerated (Interim Call)

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

* * *

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

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 7.0728/ GETTING VERY DANGEROUSLY CLOSE TO 7:1

//OFFSHORE YUAN:  7.1049   /shanghai bourse CLOSED DOWN 25.54 POINTS OR 0.90%

HANG SANG CLOSED DOWN 536.47 POINTS OR 2.20%

 

2. Nikkei closed DOWN 388.34 POINTS OR 1.97%

 

 

 

 

3. Europe stocks OPENED ALL RED/

 

 

 

USA dollar index UP TO 100.44/Euro FALLS TO 1.0831

3b Japan 10 year bond yield: RISES TO. +.02/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 107.41/ 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:: -3.23 and Brent: 20.73

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO -.48%/Italian 10 yr bond yield UP to 1.99% /SPAIN 10 YR BOND YIELD UP TO 0.90%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.47: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 2.19

3k Gold at $1668.40 silver at: 14.78   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 189/100 in roubles/dollar) 77.14

3m oil into the -3 dollar handle for WTI and 20 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 107.41 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 .9707 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0514 well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.

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

3r the 10 Year German bund now NEGATIVE territory with the 10 year FALLING to 0.48%

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 0.58% early this morning. Thirty year rate at 1.16%

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

6.  TURKISH LIRA:  UP  TO 6.9786..

Futures, Oil Plunge As Crude Contagion Spreads To All Markets

The experts said ignore the May WTI meltdown – it is irrelevant and is only confined to the deliverable contract. The experts were wrong.

Not only was the Monday May WTI meltdown not contained,  with the contract still trading negative after closing down nearly $40 on Monday in their first ever sub-zero dive as traders realized Cushing was on the out of storage space, but overnight it spread to the more-active June contract which crashed almost 50% plunging to the low teens, before stabilizing down 23.5%, to $15.64 a barrel. June trading volumes were roughly 80 times those of the expiring May contract.

…. with Brent also dragged in, dropping as low as $18/barrel and last trading down $5.25, or 21% at $20.32 per barrel…

… as the world’s oil benchmark dropped below $20. And as the oil meltdown accelerated, it inflicted huge losses sweeping through markets as the world runs out of places to store unwanted crude and grapples with negative pricing.

The plunge in oil is taking place even as President Trump said late on Monday that he is looking at putting as much as 75mln bbls into SPR which would top it out and that the oil price drop is short-term in which a lot of people got caught out and was largely a financial squeeze. Furthermore, Trump suggested oil producers need to do more by the market in terms of output cuts and that the administration will either ask permission from Congress to buy oil or we will store it, while he also responded we will look at it when questioned about stopping shipments of oil from Saudi Arabia.

If the oil crash wasn’t enough, overnight we also got unconfirmed reports that North Korea’s Kim Jong Un was in critical condition (and may have contracted the coronavirus) after a surgery, which slammed Korean assets, and sent the dollar sharply higher, while hitting global stocks and S&P futures, even as traders continued to follow the impact of the ongoing coronavirus epidemic and plunging corporate earnings.

Exxon Mobil dropped 3.7% in premarket trading and Chevron slipped 4.0% as the front month May WTI contracts continued to trade below $0 on Tuesday. Other oil-related companies including Apache, Halliburton, ConocoPhillips, Schlumberger and Occidental Petroleum all tumbled between 6.3% and 11%. Coca-Cola Co provided the latest evidence of the damage wrought by the pandemic, saying its current-quarter results would take a severe hit from low demand for sodas. IBM was also sharply lower after the company reported its lowest revenue in the 21st century and withdrew guidance.

As Bloomberg writes, mystery surrounded Kim Jong Un’s health after U.S. and South Korean officials gave differing accounts of the North Korean leader’s condition. The risk of instability in the region adds to a host of market headaches, including the gut-wrenching oil slump and concerns about the outlook for the global economy.

“The uncertainty about who succeeds him in North Korea is the great unknown,” said Jeffrey Halley, senior market analyst at Oanda Asia Pacific, conjecturing about a potential worst-case scenario for Kim. “That’s what is making markets nervous.”

Meanwhile, President Donald Trump said he’ll sign an executive order temporarily suspending immigration into America as the country tries to contain the spread of the coronavirus. The news came even amid more signs that the outbreak is slowing in hard-hit areas.

In Europe, all markets and industry sectors were in the red as the Stoxx Europe 600 index declined as much as 2.1%, dropping for the first time in 4 days, with energy companies dragging on the gauge despite a sharp rebound in Germany’s ZEW index, which soared from -49.5 to +28.2, smashing expectations. In retrospect, this jump may prove to be premature.

Asian stocks also fell, led by energy and IT; all Asian markets in the region were down, with India’s S&P BSE Sensex Index dropping 3.6% and Taiwan’s Taiex Index falling 2.8%. The Topix declined 1.2%, with IBJ and Asteria falling the most. The Shanghai Composite Index retreated 0.9%, with Shangying Global and Beijing Vantone Real Estate posting the biggest slides.

In FX, the Bloomberg Dollar Spot Index advanced a second day as the dollar climbed against most major currencies, with the won and ruble tumbling and the yen edging up. amid losses in Japanese stocks while EUR/USD traded within recent ranges.  The slump in Brent dragged down the Norwegian krone, as the sterling reached a near two-week low, weighed down by renewed Brexit concerns and wider unease on global markets after the rout in the U.S. oil. The kiwi fell versus all its Group- of-10 peers and NZD/USD slid as much as 1% after Reserve Bank of New Zealand Governor Adrian Orr said the central bank was open- minded on direct monetization of government debt.

In rates, the Bund and Treasury curves steepened somewhat while yields plunged, the 10Y yield sliding to the lowest since April 3, while the 5Y TSY yield plunged to an all time low.

Investors will be looking to corporate earnings for more insight on the impact of the coronavirus pandemic, with almost one-fifth of S&P 500 companies reporting this week. Looking at the day ahead, we get March existing homes sales is expected. Coca-Cola, Lockheed Martin, Philip Morris, Chipotle, and Netflix are among companies reporting earnings

Market Snapshot

  • S&P 500 futures down 0.6% to 2,790.75
  • STOXX Europe 600 down 1.7% to 330.00
  • MXAP down 1.8% to 141.46
  • MXAPJ down 2.3% to 455.77
  • Nikkei down 2% to 19,280.78
  • Topix down 1.2% to 1,415.89
  • Hang Seng Index down 2.2% to 23,793.55
  • Shanghai Composite down 0.9% to 2,827.01
  • Sensex down 3.7% to 30,468.34
  • Australia S&P/ASX 200 down 2.5% to 5,221.30
  • Kospi down 1% to 1,879.38
  • Brent futures down 21% to $20.29/bbl
  • Gold spot down 0.4% to $1,688.44
  • U.S. Dollar Index up 0.2% to 100.20
  • German 10Y yield fell 0.9 bps to -0.457%
  • Euro down 0.3% to $1.0833
  • Italian 10Y yield rose 14.4 bps to 1.763%
  • Spanish 10Y yield fell 1.2 bps to 0.879%

Top Overnight News from Bloomberg

  • The world’s biggest independent oil storage company said that space for traders to store crude and refined fuels has all but run out as a result of the fast-expanding glut that’s been caused by Covid-19
  • President Donald Trump said he’ll sign an executive order temporarily suspending immigration as the country tries to contain the spread of the coronavirus; Italy will present a plan this week to ease its rigid lockdown, joining Germany, France and Austria in pursuing a gradual return to normality as coronavirus infection rates fall and pressure mounts to reopen businesses
  • Central-bank balance sheets are expanding to record levels amid their latest buying spree, raising questions about how big they can get and whether those assets can ever be sold back to markets
  • More signs emerged that the coronavirus outbreak is slowing in hard-hit areas, with the U.S., Italy and U.K. showing smaller gains in new cases. China reported its sixth straight day without a fatality. Hong Kong extended social distancing measures, even as infections have dropped off
  • Southern U.S. states moved to open their economies, though the nation’s top infectious disease expert warned that relaxing restrictions too soon could cause even more harm
  • The U.S. is seeking details about Kim Jong Un’s health after receiving information that the North Korean leader was in critical condition after undergoing cardiovascular surgery last week, a U.S. official said. CNN had earlier reported, citing a U.S. official with direct knowledge of the matter, that Kim may be in “grave danger” after the surgery
  • The Reserve Bank of Australia said it’s likely smaller and less frequent purchases of government bonds would be required if economic and market conditions continued to improve, according to minutes of its April 7 meeting
  • South Korea’s exports plunged this month so far, underscoring the hit to global trade caused by lockdowns to combat the global coronavirus pandemic. Exports slid 27% during the first 20 days of April from a year earlier, the Korea Customs Service said in a statement Tuesday. Shipments to the country’s biggest trading partner, China, dropped 17%. Semiconductor sales fell 15%
  • President Donald Trump said he wants to add as much as 75 million barrels of oil to the nation’s Strategic Petroleum Reserve, taking advantage of record low prices for crude, and that he’ll consider blocking imports of crude from Saudi Arabia
  • President Donald Trump said he’ll sign an executive order temporarily suspending immigration into the United States as the country tries to contain the spread of the coronavirus

Asian equity markets were negative across the board following the weak handover from Wall St where sentiment was subdued. Oil markets drew a lot of attention after WTI crude futures plunged and the May contract turned negative for the first time in history, briefly resulting to losses of over 300% and lows of around USD -40/bbl. This was due to the ongoing supply glut and filling storage culminating to a lack of buying interest on a contract which is due for settlement today. Note, the more widely-traded June contract remained above USD 20/bbl throughout the chaos and the May contract gradually returned to positive territory. ASX 200 (-2.5%) weakened with focus on corporate updates including mixed quarterly production numbers from BHP which subsequently weighed on the mining giant and with Virgin Australia going into voluntary administration in an effort to recapitalize amid the government’s refusal for a bailout. Nikkei 225 (-2.0%) was pressured by the flows into the currency and the KOSPI (-1.0%) was initially among the worst hit amid uncertainty regarding the geopolitical climate for the Korean peninsula after reports that North Korea leader Kim was in grave danger following cardiovascular surgery which boosted defence stocks, although South Korea have denied the reports of Kim’s condition. Elsewhere, Hang Seng (-2.1%) and Shanghai Comp. (-0.9%) also traded lower with underperformance in Hong Kong after social distancing restrictions were extended for 14 days and after the recent sovereign rating downgrade by Fitch. Finally, 10yr JGBs were choppy with initial gains seen amid the risk averse tone and similar upside in T-notes but with price action only mild as participants also digested mixed results from the 20yr JGB auction which saw a lower b/c and wider tail in price.

Top Asian News

  • Genting Plans Unprecedented Pay Cut as Virus Shuts Casinos
  • Oil’s Slide Favors India’s Bonds Versus Indonesia, JPMorgan Says
  • Debt Monetization Is Creeping Closer by the Day in New Zealand
  • Virgin Australia Becomes First Asia Airline to Fail After Virus

Europe has latched onto the downbeat lead from the Asia-Pac session (Euro Stoxx 50 -2.1%), as oil markets continue to crater whilst stock also weighs the COVID-19 impact on large-cap earnings. US equity futures fare slightly better than its counterparts across the pond – with the prospect of another State-side stimulus package potentially providing some support. Broader sectors are lower across the board and point towards risk aversion. Energy underperforms amid the depressing performance in the crude complex, whilst the breakdown has Oil & Gas as the marked laggard, closely following by Basic Resources and Banks. In terms of individual movers, SAP (-2.3%) fell post earnings after cutting its FY total revenue guidance alongside its FCF guidance, adding to the woes for the IT sector after IBM earnings overnight. The company expects a deterioration in Q2 before gradual improvement in Q3 and Q4. PSA (-0.5%) remains subdued by its respective update in which it sees European car sales -25% and China -10% in FY20. Richemont (-3.0%) and Swatch (-2.9%) bear the brunt of Swiss watch sales slumping over 20% YY.

Top European News

  • Italy Vows to Reopen as Europe Takes Steps to Ease Virus Curbs
  • U.K. Takes Heart on Slowing Death Toll With Parliament Returning
  • SAP Ends Co-CEO Role After Virus Brought Leadership Problem

In FX, it remains to be seen whether the Kiwi and Aussie fall prey to the phenomenon of ‘turnaround Tuesday’, but for now the tide has certainly changed markedly as RBNZ Governor Orr reiterated dovish guidance overnight and the option of more stimulus at the May policy meeting, while his RBA counterpart delivered a daunting economic outlook to compound a sharp decline in wages and the stats bureau publishing figures for March 14-April 4 revealing a 6% drop in employment. In response, Nzd/Usd is back below 0.6000 and Aud/Usd is under 0.6300 again, while the Aud/Nzd cross pivots 1.0500. For the record, RBA minutes did not really impact even though scaling back QE was mentioned if conditions improve. Elsewhere, Loonie losses are accumulating almost in lock-step with oil prices, as WTI and Brent lose grip of Usd12 and Usd19/brl handles respectively in the June contracts after Monday’s May capitulation, with Usd/Cad up through 1.4200 and eyeing 1.4250 ahead of Canadian retail sales data.

  • USD/JPY – The Yen is marginally eclipsing the Dollar as safe-haven currency of choice amidst renewed risk-off positioning and the ongoing rout in crude markets, as Usd/Jpy edges towards 107.00 and the DXY tests resistance above 100.00 around 100.300 again that has been rejected a couple of times in recent sessions.
  • NOK/GBP/SEK/CHF/EUR – No shock that the Norwegian Krona, Russian Rouble and Mexican Peso are all underperforming alongside oil, but broader risk asset contagion is also weighing heavily on the likes of the Swedish Crown, British Pound and even Swiss Franc. Indeed, better than expected jobs data and a wider trade surplus have been largely ignored, while the Euro has only derived partial encouragement from the latest German ZEW survey showing some signs of improvement in sentiment to counter the steep deterioration in current conditions. Eur/Nok has been up above 11.5900, Usd/Rub as high as 77.2400+, Usd/Mxn over 24.3000, while Eur/Sek straddles 10.9000, Cable gives up another big figure at 1.2400 and breaches the 21 DMA (1.2357), Usd/Chf rebounds from sub-0.9700 to circa 0.9715 and Eur/Usd rotates either side of 1.0850.
  • EM – Contrasting fortunes for the Zar and Hkd as the Rand weakens on more SA financial strain given a missed loan payment by the Land and Agricultural Development Bank, while the HKMA has sold Hong Dollars to maintain the peg for the first time in over 4 years despite yesterday’s ratings downgrade by Fitch.

In commodites, WTI and Brent June contracts are posting unprecedented losses. Attention remains on the oil market since yesterday WTI May crude futures plunged to negative territory for the first time in history, briefly resulting to losses of over 300% and lows of around USD -40/bbl. This was sparked by the ongoing supply glut and filling storage culminating to a lack of buying interest on the contract which is due for expiry later today. The volatile price action followed through to today’s trade with WTI June contracts -42% at one point, and Brent down over 25% – with the former dipping below USD 12/bbl, to trigger a 2-minute circuit breaker and the latter residing sub-20/bbl. Russia’s Kremlin emerged amid the volatile action and downplayed the moves in the oil market, stating that its speculation sparked the movements. Kremlin also stated talks between OPEC+ members can be set up if needed; Moscow has all reserves it needs to offset weak oil prices. Meanwhile yesterday, WSJ citing sources noted that Saudi is mulling applying the agreed-upon oil cuts as soon as possible instead of waiting until May 1st. Elsewhere, today will see the second official Texas Railroad Commission (RRC) meeting, where the Texas regulatory agency is expected today to provide more colour on its stance regarding potential oil production curtailment in the state. However, the RRC is reportedly unlikely to vote on a plan to mandate oil production cuts for Texas at the Tuesday meeting, according to Energy Intel citing sources. As a reminder, the meeting last week saw disagreement on whether cuts should be implemented or not, with larger producers mostly arguing for market-driven declines, and smaller players supportive of cuts. Elsewhere, spot gold trades relatively flat and meanders just south of USD 1700/oz. Copper prices meanwhile track sentiment and the downside in stocks, with the red metal now below USD 2.25/lb.

US Event Calendar

  • 10am: Existing Home Sales, est. 5.25m, prior 5.77m
  • 10am: Existing Home Sales MoM, est. -9.01%, prior 6.5%

DB’s Jim Reid concludes the overnight wrap

One of the great things about working through several cycles is that you can recycle old research. Yesterday we updated and republished a chart (originally from 2010) looking at the biggest bailouts in history. Back then we highlighted how ever increasing debt had meant the bailout currency had needed to be inflated perhaps 10 fold in the GFC relative to the past. 10 years and even more debt later and we’ve perhaps had to inflate the bailout currency by an additional 10 times. While we have sympathy for current policy makers given the nature of this shock, the reason the numbers are so big today is due to a 20-30 year “bailout first, ask questions later” approach which has left the world with ever higher debt. See the short note here for more. I look forward to republishing it in another 10 years.

Also a reminder of our April investor survey results ( link here ) from yesterday where we showed the usual market related answers plus people’s views on WFH and when the world will be back to normal post covid-19. We also asked whether people were eating, drinking and exercising more or less during the lockdown.

Yesterday I talked about how I had a gushing flow of water in my garage after a stopcock failed. If you want an image of what it looked like picture one of those movies where you see someone successfully striking oil. However given the current price of oil this leak is potentially more profitable than had we actually struck oil in our back garden. Indeed yesterday this was the main theme in markets as we saw one of the more remarkable moments in financial history and that is a deeply negative oil price – that is paying someone to take delivery. The May contract for WTI, which started the day at $17.85, traded at -$39.55 at one point and in negative territory for a total of about six hours before popping back to $1.43 this morning. This move is all about supply and demand. American energy users and refiners do not have the storage capacity given all that is going on.

This decimation comes ahead of today’s contract expiration, a culmination of sorts for an asset that’s been under immense pressure all year, with WTI and Brent having already lost nearly two-thirds of their value in Q1. According to our colleague Michael Hsueh, the fact that June is currently still trading $21 per barrel should not be seen as a guarantee that this sort of price action could not happen again upon June’s expiry if demand hasn’t increased over the next 2 months. Even prior to the move lower on WTI, lower quality runs of crude were near to or in negative territory, with Wyoming Asphalt Sour – a landlocked stream with higher associated costs than WTI – traded at negative 19 cents a barrel last month.

The moves for oil had knock-on effects in equity markets. By the close the S&P 500 had fallen -1.79% with the Energy industry group a relatively measured -3.30% given the carnage in May WTI. Every sector in the S&P 500 ended the day lower though as the large index moves continue. Yesterday’s move means that the index has only had 3 days under 1% in either direction since the start of March. In Europe the STOXX 600 managed to pare back its losses to record a +0.70% gain, putting the index in a technical bull market, up +20.04% since the March lows. It closed before the US sunk back towards the lows for the session at the final bell.

After the bell IBM announced earnings at $1.84 per share, compared to consensus of $1.81, but posted lower revenues on the quarter compared to a year ago. Also the firm pulled its year-long profit guidance on concerns that the virus outbreak makes it hard for the company to roll out its cloud computing transition. Today the main earnings highlights are from The Coca-Cola Company, Netflix, Philip Morris International, Lockheed Martin and Texas Instruments.

Before we get to that though there’s a couple of overnight stories to report. The first came from CNN who reported that the US is monitoring the health of North Korean leader Kim Jong Un after receiving information that he may be in “grave danger” following cardiovascular surgery last week. Yonhap reported that South Korea has denied the news. Meanwhile, US House Speaker Pelosi has said that the negotiations on an emergency stimulus package of as much as $500bn are “down to the fine print.” She added that the Senate can vote on the measure today and then it can move to the House on Wednesday for vote. The legislation would add funds to the tapped-out Paycheck Protection Program for small businesses and would also provide money for coronavirus testing and overwhelmed hospitals. Staying with the US, President Trump has said that he’ll sign an executive order temporarily suspending immigration as the country fights off the spread of the virus. No further details were mentioned.

Asian markets are following Wall Street’s lead this morning with the Nikkei (-2.17%), Hang Seng (-2.29%), Shanghai Comp (-1.35%), ASX (-1.83%) and Kospi (-1.68%) all down. In FX, the New Zealand dollar has weakened -0.66% after RBNZ Governor Adrian Orr said that he was open to the idea of directly monetizing sovereign debt or buying bonds straight from the government. He also said that the central bank would assess the need for additional stimulus at its May review. Elsewhere, futures on the S&P 500 are down -0.60% while yields on 10y USTs are down –1bp to 0.597%.

Back to yesterday, there was further pressure on European sovereign bonds ahead of Thursday’s pivotal European Council videoconference, with spreads widening across the continent to their highest level in over a month. The spread of yields on 10yr Italian debt over bunds ended the session up +12.2bps at 239bps, while those on Spanish (+5.0bps), Portuguese (+6.0bps) and even French (+1.6bps) debt also widened to one-month highs. So keep an eye out for any further widening of spreads over the next couple of days going into that meeting, and whether the calls for joint debt issuance manage to get any more traction. Assuming not how will they fudge the rescue packages.

On similar lines, we did get some news yesterday from Bloomberg, who reported that the idea of an EU-wide bad bank that we mentioned yesterday had run into resistance from Germany. According to the report, they’re resistant to the idea that they and other northern countries would have to see their taxpayers on the hook for losses accumulated elsewhere, which pretty much echoes the objections made to the idea of ‘coronabonds’.

It was a different story over in the US, where 10yr Treasury yields fell -3.6bps. On the subject of US debt, our economists put out a note yesterday where they forecast that debt-to-GDP ratio is likely to rise to 100% this year, a level not seen since the mid-1940s. Under their base case, the ratio will rise to nearly 125% by the end of the decade, with the possibility of even steeper increases if the pandemic lasted longer than anticipated. In reading through their piece it echoes a lot of what we said in last year’s long term study in that you can control the rise in debt/GDP if you can successfully keep yields notably below nominal GDP. Obviously that won’t happen this year but will likely in the years ahead if the economy gets back to some normality and the Fed control yields. The alternative scenario of yields mean reverting back to their long-term trend is a scary prospect for debt sustainability. Link here.

There wasn’t much in the way of economic data, though we did get the Chicago Fed’s National Activity index, which fell to -4.19 in March (vs. -3.00 expected), its lowest level since January 2009. Meanwhile in Hong Kong, the unemployment rate rose to 4.2% in the January-to-March period, its highest level in over 9 years, while the Spanish central bank predicted that country’s economy could contract by between 6.8% and 12.4% this year.

To the day ahead now, and data releases include UK employment data for February, the German ZEW survey for April, Canada’s retail sales for February, and US existing home sales for March. From central banks, the ECB’s Stournaras will speak, while earnings releases out include The Coca-Cola Company, Netflix, Philip Morris International, Lockheed Martin and Texas Instruments.

 

3A/ASIAN AFFAIRS

TUESDAY MORNING/ MONDAY NIGHT: 

SHANGHAI CLOSED DOWN 25.54 POINTS OR 0.90%  //Hang Sang CLOSED DOWN 536.47 POINTS OR 2.20%   /The Nikkei closed DOWN 388.34 POINTS OR 1.97%//Australia’s all ordinaires CLOSED DOWN 2.51%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0928 /Oil DOWN TO -3.23 dollars per barrel for WTI and 20.73 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.0928 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1049 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY PAST 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED//CORONAVIRUS  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

 

3 a./NORTH KOREA/ SOUTH KOREA

NORTH KOREA

Rumours abound that North Korea’s Kim is in critical condition

(zerohedge)

Futures Whipsaw After Conflicting Reports That North Korea’s Kim Is In Critical Condition

Update (2252ET): Futures rebounded sharply after South Korea’s Yonhaprefuted reports that Kim Jong Un is seriously ill.

Sam Kim

@samkimasia

Yonhap cites an official as saying there’s no particular sign pointing to Kim Jong Un being in grave danger. The Korean rumor about a coma is exactly the same as one from 2014. While it’s indeed odd Kim didn’t show up on April 15, we should calm down. https://www.yna.co.kr/view/AKR20200421073800504?section=politics/all 

Embedded video

Update (2240ET): Bloomberg is now reporting that Kim is in a ‘critical state,’ according to a US official speaking on condition of anonymity.

US officials are now studying the North Korean line of succession.

Jennifer Jacobs

@JenniferJJacobs

NEW: Trump admin received information that Kim Jong Un had heart surgery last week and if he’s alive, his health is poor, I’m told. KJU hasn’t been seen at key events in recent days. It’s unclear to US officials if he’s dead or alive. (CNN 1st reported his condition’s grave.)

Jennifer Jacobs

@JenniferJJacobs

Trump administration officials are looking into who would be in the line of succession if Kim Jong Un dies or is already dead, I’m told.

S&P futures are sliding on the reports.

Update (2215ET): NBC’s Katy Tur was quick to respond to being scooped by CNN and tweeted the following:

“@KatyTurNBC

🚨 North Korean leader Kim Jong Un is brain dead, according to two US officials. He recently had cardiac surgery and slipped into a coma, according to one US current and one former US official.

@NBCNews confirms and adds to CNN scoop from me, @ckubeNBC @carolelee”

Only to delete it shortly after:

Katy Tur

@KatyTurNBC

I’ve deleted that last tweet out of an abundance of caution. Waiting on more info. Apologies.

*  *  *

South Korea’s KOSPI stock market index and the Won are tumbling as uncertainty grows over the health of their northern neighbor’s leader.

Earlier headlines from Daily NK – a website run mostly by North Korean defectors – reported that North Korean leader Kim Jong Un recently had cardiovascular surgical procedure and is now mostly recovered, citing unidentified sources inside the isolated state saying Kim is recovering at a villa in the Mount Kumgang resort county of Hyangsan on the east coast after getting the procedure on April 12 at a hospital there.

However, CNN  has upped the ante and reported that the US is monitoring intelligence that North Korea’s leader, Kim Jong Un, is in grave danger after a surgery, according to a US official with direct knowledge.

Kim last appeared in North Korean state media on April 11. April 15 – North Korea’s most important holiday, the anniversary of the birth of the country’s founding father, Kim Il Sung – came and went without any official mention of Kim Jong Un’s movements or explanation of his absence.

CNN notes that Kim Jong Il’s absence from a parade celebrating North Korea’s 60th anniversary in 2008 was followed by rumblings that he was in poor health.

So who to believe – “mostly recovered” from NK defectors or “in grave danger” from CNN’s intel sources.

As Seoul Bureau Chief for VOA, William Gallo tweeted:

Bottom line: there is a hell of a difference between “US officials think Kim Jong Un is in grave danger” and “US officials have read unconfirmed media reports about Kim Jong Un being in grave danger.” We need to know which this is.

The market for now appears to be erring on the side of CNN’s warnings as stocks tumble…

And Korea’s Won hits a two-week low…

We wonder, of course, if President Trump will send Kim a “Get Well Soon” card (and we note that Kim Jong Un is only ~36. His father lived to be 82).

end

 

b) REPORT ON JAPAN

 

3 C CHINA

This ought to be fun:  Missouri sues China over the Wuhan lab viral escape

(zerohedge)

Missouri Sues China, Wuhan Lab Over COVID; Says ‘Deceit, Malfeasance, And Inaction Unleashed This Pandemic’

The state of Missouri became the first in the nation to file a lawsuit against China over their role in the coronavirus pandemic. Also named in the suit are the Communist Party of China, the government of Wuhan City, and the Wuhan Institute of Virology, along with the Chinese Academy of Sciences.

Filed on Tuesday in the Eastern District of Missouri, Missouri Attorney General Eric Schmitt accuses China of knowing that “COVID-19 was dangerous and capable of causing a pandemic, yet slowly acted, proverbially put their head in the sand, and/or covered it up in their own economic self-interest,” according to Fox News.

During the critical weeks of the initial outbreak, Chinese authorities deceived the public, suppressed crucial information, arrested whistleblowers, denied human-to-human transmission in the face of mounting evidence, destroyed critical medical research, permitted millions of people to be exposed to the virus, and even hoarded personal protective equipment—thus causing a global pandemic that was unnecessary and preventable. -State of Missouri v. The People’s Republic of China et al.

According to the complaint, the defendants are responsible “for the enormous death, suffering, and economic losses they inflicted on the world,” and “should be held accountable.”

“When their actions began to kill hundreds of thousands of people across the globe, Defendants sought to minimize the consequences, engaging in a coverup and misleading public relations campaign by censoring scientists, ordering the destruction and suppression of valuable research, and refusing cooperation with the global community, all in violation of international health standards,” the complaint continues.

Missouri cites a Fox News report that the US is currently conducting “a full-scale investigation into whether the novel coronavirus, which went on to morph into a global pandemic that has brought the global economy to its knees, escaped from” the Wuhan Institute of Virology (WIV). The complaint also notes that an emerging theory states that WIV was “studying the virus as part of a commercial activity.”

Fox News has reported that sources have increasing confidence that the coronavirus escaped from a Wuhan laboratory, not as a bioweapon but as part of China’s attempt to demonstrate that its efforts to identify and combat viruses are equal to or greater than the capabilities of the United States. The U.S. is conducting a full-scale investigation into whether that’s the case.

But U.S. officials and the intelligence community have confirmed to Fox News that they have taken the possibility of the coronavirus being man-made or engineered inside China as some sort of bioweapon off the table and have ruled it out at this point. –Fox News

It also states that “on or around Late December 2019, healthcare professionals in Wuhan were reporting infections indicating human-to-human transmission” of the disease.

According to Chinese sources cited in the National Review, on December 25, 2019, “Chinese medical staff in two hospitals in Wuhan [were] suspected of contracting viral pneumonia and [were] quarantined. This is additional strong evidence of human-to-human transmission.” This was corroborated by the Wall Street Journal.

According to the South China Morning Press, “On December 27, Zhang Jixian, a doctor from Hubei Provincial Hospital of Integrated Chinese and Western Medicine, told China’s health authorities that the disease was caused by a new coronavirus. By that date, more than 180 people had been infected, though doctors might not have been aware of all of them at the time.

China is also accused of allowing the virus to spread by knowingly letting approximately 175,000 individuals leave Wuhan on January 1 to travel for the Lunar New Year. In mid-January, Wuhan leaders hosted a potluck dinner for 40,000 residents, “increasing the potential spread of the virus.”

The coverup

According to the suit, “On December 30, 2019, the Wuhan Municipal Health Commission released a notice to medical institutions that patients visiting the Wuhan Seafood Market had contracted a pneumonia-like illness.” The notice warned medical professionals that “Any organizations or individuals are not allowed to release treatment information to the public without authorization.”

Researchers at the University of Toronto observed China “censoring key words about the virus on Chinese social media platforms,” including WeChat, which “has become increasingly popular among [Chinese] doctors who use it to obtain professional knowledge from peers. Because of social media’s integral role in Chinese society and its uptake by the Chinese medical community, systematic blocking of general communication on social media related to disease information and prevention risks substantially harming the ability of the public to share information that may be essential to their health and safety.

Meanwhile, authorities in China were physically cracking down against dissidents.

On January 1 or 2, the Wuhan police stated that they had “taken legal measures” against eight people who “published and shared rumors online,” and one of them is believed to be Dr. Wenliang.

According to CNN, “The police announcement [against the eight people] was broadcast across the country on CCTV, China’s state broadcaster, making it clear how the Chinese government would treat such ‘rumormongers.’”

The message reportedly said, “The internet is not a land beyond the law … Any unlawful acts of fabricating, spreading rumors and disturbing the social order will be punished by police according to the law, with zero tolerance.

As described by the St. Louis Post-Dispatch, “The punishment of eight doctors for ‘rumor-mongering,’ broadcast on national television on Jan. 2, sent a chill through the city’s hospitals,” and suppressed information from reaching the rest of the world.

The suit also accuses China of misleading the World Health Organization (WHO) as part of a coverup – delaying reporting on COVID-19 to the organization for weeks after the outbreak was identified within the Chinese medical community. When the CCP finally did inform the WHO, they denied human-to-human transmission, “despite having significant evidence to the contrary.”

This “induced the WHO to also deny or downplay the risk of human-to-human transmission in the critical weeks while the virus was first spreading.”

Missouri’s complaint also alleges that China worked to hoard personal protective equipment (PPE) in dire need by healthcare workers around the world in the treatment and handling of coronavirus patients.

end

4/EUROPEAN AFFAIRS

PARIS, FRANCE

PARIS on fire as minorites riot

(zerohedge)

Paris Police Fire Tear Gas As Minorities Riot Over “Racist” Lockdown Treatment

Lockdown protests across the Western world have become more widespread. Economies have crashed, unemployment is soaring, and people are losing their minds in quarantine.

France is the latest country to observe social unrest, more specifically in Paris, as the second night of riots unfolded across the capital.

Riots broke out in the suburbs of Villeneuve-la-Garenne and Aulnay-sous-Bois, northern Paris, over the weekend, and continued through Monday, the Daily Mail reports.

The spark that lit the powder keg was due to an incident involving an Arab Muslim male on a motorcycle who was critically injured in a collision with an unmarked police car on Saturday in Villeneuve-la-Garenne.

Ruptly

@Ruptly

Overnight riots in suburb after motorcycle incident involving police

Embedded video

Residents claim this is the latest example of “racist” police and their “heavy-handed” treatment of ethnic minorities during the coronavirus lockdown.

Heavily armed riot police used batons, rubber bullets, and tear gas to suppress protesters.

 

French police officers holding tear gas gun (Monday night). Credit: AFP & Daily Mail 

 

Chaos unfolds during Paris protest (Monday morning). Credit: AFP & Daily Mail 

 

Police officer firing rubber bullets (Monday night). Credit: AFP & Daily Mail 

However, protesters fought back with rocks and fireworks and transformed the streets into a warzone.

 

A protester shooting fireworks at police (Monday night). Credit: AFP & Daily Mail 

 

Trash burning via protesters (Monday night). Credit: AFP & Daily Mail 

The Daily Mail quoted a local police spokesman who said: “Police and their reinforcements have been the target of rioters, who have thrown stones and fireworks.”

“The violence started in Villeneuve-la-Garenne and has spread to other towns and estates nearby.”

 

Police clash with protesters (Monday morning). Credit: AFP & Daily Mail 

French journalist Taha Bouhafs tweeted the destruction on Monday night.

“Lots of fireworks fire this evening at #VilleneuveLaGarenne, tensions underway in several neighborhoods, notably in the northern suburbs,” he wrote.

Taha Bouhafs@T_Bouhafs

En direct depuis le quartier du Luth à une voiture de la bac prise pour cible par des tirs de feux d’artifices.

Embedded video

Taha Bouhafs@T_Bouhafs

Dispositif policier important à / c’est le jeu du chat et la souris. Plusieurs départs de feu.

Embedded video

Police claim they were “ambushed” by protesters in the nearby suburb of Aulnay-sous-Bois.

Le Parisien

@le_Parisien

Aulnay-sous-Bois et Saint-Denis ont été le théâtre de violences urbaines dans la nuit de lundi à mardi
➡ Des tirs de mortier et de projectiles ont visé des pompiers et policiers, sans faire ni blessé, ni interpellation > http://www.leparisien.fr/seine-saint-denis-93/deuxieme-nuit-de-violences-urbaines-dans-plusieurs-villes-de-seine-saint-denis-21-04-2020-8303130.php 

View image on Twitter

Rouen dans la rue@Rouendanslarue

❤️ – Ambiance tendue

Embedded video

French President Emmanuel Macron announced last week that he was extending lockdowns across the country through mid-May, saying the fight against the virus is progressing, but the battle is far from over.

With millions of people in quarantine across the country and escalating riots in northern Paris, authorities fear widespread social unrest could be imminent.

We warned three weeks ago that a “social bomb” was set to detonate over major Western cities. And here we are…

END

With news that S and P is reviewing the status of Italy(sovereign) and they may knock them down to junk.  Now the ECB is discussing accepting junk bonds as collateral.

If Italy goes to junk then the ECB will be covered.

(zerohedge)

ECB To Discuss Accepting Junk Bonds As Collateral

Now that the Fed has opened the pandora’s box of moral hazard by purchasing select junk bonds, every other central bank would like a piece of the action. And sure enough, as Bloomberg reports, on Wednesday evening the ECB will hold a call where they may discuss whether to accept junk-rated debt as collateral from lenders.

Translation: the ECB is about to announce it will accept junk bonds as eligible collateral, and why not: the Fed is doing so, so it makes sense for everyone else to pile on.

According to Bloomberg, in a step similar to the Fed’s backstopping of fallen angel high yield paper, the ECB’s conference could be “intended to head off concerns that some sovereign and corporate bonds will soon be downgraded to non-investment grade because of the cost of fighting the coronavirus pandemic.”

Already a storm is brewing: on Friday S&P is set to review credit rating, which it currently ranks two notches above investment grade with a negative outlook. A downgrade would be a step toward potentially excluding the euro zone’s third-largest economy from the ECB’s refinancing and asset-purchase programs, precipitating a crisis.

Yields on Italian debt have risen in recent days. The premium investors demand to hold 10-year Italian debt over Germany’s soared 25 basis points on Tuesday to 263 basis points, despite the country managing a successful bond sale. In raising more than 110 billion euros ($119 billion), it reminded investors just how much it needs the cash. Barclays Plc sees outflows of as much as 200 billion euros if the nation’s rating is cut below investment grade.

As we discussed over the weekend, ratings have become a pressing concern in markets as lockdowns spark the biggest recession in decades. Moody’s Investors Service, which will review Italy in May, rates the nation at its lowest investment grade. While the ECB’s current rules mean Italy would have to be cut to junk by each of S&P, Moody’s Investors Service, Fitch Ratings and DBRS to be excluded from its operations, the prospect of downgrades is unnerving investors. A cut in the sovereign would flow through to the corporate bonds and commercial paper that the ECB also buys and takes as collateral.

Last week, Moodys reported that its “B3 Negative and lower list” soared to its highest tally ever — 311 companies. That tops a former peak of 291 companies, reached during the credit crisis of 2009 and the commodity-related downturn in April 2016. At 20.7% of the total rated spec-grade population, the list also shot up above its long-term average of 14.8%, and closing in on its all-time high of 26.1%. This spike is the result of the confluence of a coronavirus outbreak, plunging oil prices, and mounting recessionary conditions, which created severe and extensive credit shocks across many sectors, regions and markets, the effects of which are unprecedented.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

TURKEY/CORONAVIRUS UPDATE

Turkey Overtakes China & Iran In Total COVID-19 Cases But Still Resists Lockdown

For the first time going back to February 25 when Iranian leaders first publicly admitted they had a serious outbreak on their hands, and with the country establishing itself with the grim distinction of remaining the Middle East epicenter, another regional country now leads in total infection numbers outside the US and Europe. As of Monday morning, Turkey has 86,306 cases, surpassing China’s 83,817 and Iran’s 83,505 reported cases.

Turkey on Saturday confirmed that its numbers had risen to over 82,000 – a jump of nearly 4,000 cases from Friday, surpassing Iran for the first time ever, making it the new regional epicenter.

 

Line outside of Istanbul market, AFP via Getty.

Like Iran before, Turkey is another country which has come under scrutiny and criticism for not only its slow response since cases began growing last month, but lack of testing and under-reporting numbers as well.

 

Over the weekend the Interior Ministry announced it was extending travel ban orders between 31 major cities for at least 15 more days.

Ankara has still held out against ordering a nationwide lockdown like other countries with its high numbers of cases, only opting to close schools and bars and imposing a weekend curfew only. It’s also imposed various age-restricted curfews.

“At [Turkey’s] level, most countries are implementing a full lockdown,” one virology expert was quoted in CNN as saying. “A partial lockdown can be good, it can balance keeping some of the economy functioning while still trying to contain the outbreak.”

The government has maintained its hospitals and heath care system is still functioning optimally and is nowhere near capacity, as Foreign Policy describes:

As the number of coronavirus cases has increased, Turkish Health Minister Fahrettin Koca has sought to allay fears of an overwhelmed health system. Speaking on Friday, Koca said that unlike Western nations, Turkey’s hospitals still hold excess capacity and that intensive care units were not exceeding 60 percent occupancy. A licensed physician, Koca’s daily briefings have made him a star on social media over the course of the pandemic; he has gained over 4 million followers on Twitter since the beginning of the year.

“Turkey’s problems with containing the virus came into focus on April 10, when a late announcement of a weekend curfew led to panic buying across the country,” FP adds.

The already battered Turkish economy looks to be pummeled further by the crisis, as the Turkish lira’s recent plummet to a near-historic low of 6.95 lira to the dollar demonstrates.

Recall too this report from ten days ago: “Turkey has held talks with the United States about possibly securing a swap line from the U.S. Federal Reserve and has discussed other funding options to mitigate fallout from the coronavirus outbreak, Turkish officials said on Friday.”

As recently as Sunday Presidents Trump and Erdogan spoke on the phone and agreed to continue pursuing “close cooperation” to contain the pandemic.

END

6.Global Issues

SINGAPORE/THE GLOBE/CORONAVIRUS UPDATE

Singapore Imposes Longest Lockdown In The World As Outbreak Comes Roaring Back: Live Updates

Summary:

  • Singapore extends lockdown until end of June, longest in the world
  • Demonstrators fill the streets of Paris
  • Yonhap denies reports that NK’s KJU is dying
  • Georgia, Tennessee & South Carolina unveil plans to start reopening economies by Tuesday
  • Gottlieb says true # of US cases likely “10x higher” than official total
  • Global case total hovering just below 2.5 million
  • US cases near 800k, with deaths passing 170k

*     *      *

Update (0730ET): Last night, just as Georgia Gov Brian Kemp was beginning his Monday press briefing, the conservative Republican made an announcement that instantly horrified the mainstream media: The state would begin loosening some lockdown restrictions on Friday, and that by Monday, businesses from gyms to beauty salons in his state would be allowed to reopen.

Hundreds of talking heads immediately pointed out that the state is hardly on track to meet the guidelines set out by the White House. But by Tuesday morning, several additional states, including Tennessee and South Carolina, had joined Georgia in planning to begin lifting restrictions before May 1.

As new hotspots continue to form across the country, including in Ohio, Michigan and other states that appear to be headed toward reopening in a few weeks, these states have made the calculation that the damage to their economies simply isn’t worth the risk to life and health. Georgians will be able to dine in restaurants again by the end of the day on Monday.

Some states are flinging the doors back open. In Tennessee, Gov. Bill Lee said he had opted not to extend his “safer-at-home” order that is set to expire on April 30. According to Lee, “the vast majority of businesses in 89 counties” will be allowed to reopen on May 1. Businesses in Ohio are expected to reopen on that date as well.

Others are taking a slightly more measured approach. In South Carolina, Gov. Henry McMaster will allow some retail businesses, including department stores, that had previously been labeled “nonessential” would be allowed to reopen on Tuesday. But even after opening, they must abide by social distancing guidelines, the governor said. Residents will also be able to access the state’s beaches on Tuesday.

Ohio Gov.Mike DeWine said on “Meet the Press” that he would move to “try and open this economy…[without getting] a lot of people killed,” though he didn’t give an exact date, it has been reported that the process will begin next month.

While the global case total hovered slightly below 2.5 million, as of 8amET, Johns Hopkins had tallied 787,960 cases of the virus in the US (while some estimates have put the true total infected at closer to 5 million). As we pointed out Sunday night, recent signs suggest that the lockdowns have worked to flatten the curve: In the US, daily new cases are down 33% from the peak 10 days ago. 6% of the US counties have reported zero new cases in the past 7 days. And 7 states have announced plans to start reopening in the next two weeks, equivalent to roughly one-fifth of GDP.

Speaking on “Squawk Box” Tuesday morning, former FDA Director Scott Gottlieb said “it might be possible” that 1 million people have been exposed to the virus in metro New York (meaning NYC alone; that’s roughly 1/9 people), the latest suggestion that the US mortality rate is much lower than the official numbers reflect – one more reason for governors to move ahead with reopening.

If you’re wondering what the situation is in your state, here’s a roundup of what

Before we go, we just wanted to highlight this tweet from the Federalist’s Sean Davis.

Sean Davis

@seanmdav

Democrats and media aren’t demanding indefinite lockdowns for public health reasons. Democrats know the booming economy was Trump’s biggest political advantage, so they made the deliberate decision to destroy tens of millions of jobs and livelihoods for their own political gain.

Just some food for thought.

*     *      *

After a day of historic insanity in the American oil market, the Brent international oil benchmark is down more than 40% already Tuesday morning as investors continue to digest reports from late last night that North Korean leader Kim Jong Un might be in critical condition (a Trump Administration source said ‘yes’ while South Korea’s Yonhap said ‘no’) and a Tweet from President Trump that he would be “suspending” immigration into the US due to the coronavirus. The news prompted a whipsaw in equity futures late last night.

While liberals lose their minds, it’s worth remembering that immigration into the US is already effectively shut down. Refugee resettlement has been put on hold, visa offices have been shuttered, and citizenship ceremonies have been put on hold. CNN said it’s unclear how this will impact green-card holders.

Donald J. Trump

@realDonaldTrump

In light of the attack from the Invisible Enemy, as well as the need to protect the jobs of our GREAT American Citizens, I will be signing an Executive Order to temporarily suspend immigration into the United States!

Meanwhile, in the latest indication that nobody really knows what’s going to happen with this outbreak, Singapore announced just minutes ago that it will extend its mandatory stay-at-home order until June, making Singapore’s lockdown the longest currently on record.

Singapore’s Straits Times reported that, in a televised national address, Singapore’s leader PM Lee Hsien Loong said that after yet another record jump in new cases – an outbreak that has been tied to camps of migrant workers who represent a ‘forgotten class’ in Singapore society – his government has decided to extend the densely-populated city-state’s lockdown for another month until June, making Singapore’s the longest lockdown extension in the world.

In addition to extending the lockdown, Singapore is paring down the number of ‘essential’ businesses allowed to remain open, in effect ratcheting up the pressure on its economy.

The city-state reported another 625 new cases on Tuesday, bringing its total case number to 7,213 according to BNO News, in a country of 5.7 million.

While Lee insisted that Singapore’s ‘circuit breaker’ – don’t call it a lockdown – has been effective at suppressing the spread, Lee stressed that Singapore cannot be complacent, and that the number of “unlinked” cases has been stubbornly high, suggesting a “hidden reservoir” of cases in the community still.

Singapore was praised for its rapid and intense methods to combat the outbreak, rolled out back in February when the virus first started to spread outside Wuhan and mainland China. Among its toolkit was a protocol that required a team of investigators to trace contacts of newly positive patients within 2 hours to prevent further spread.

If you’re curious about how Singapore went from poster-child of effective virus response to one of the worst-hit countries in Asia ex-China, the WSJ can explain.

The virus found a blind spot: migrant workers. Hundreds of thousands of workers from Bangladesh, India and other countries live in dormitories, often 10 to 20 people to one roomThey climb into packed vans on their way to build the city’s gleaming office towers and condominiums.

More than three-quarters of Singapore’s 9,125 cases now come from dormitories. Prime Minister Lee Hsien Loong said in an address Tuesday that the clusters in these facilities had remained “largely contained” and not spread to the wider community. Authorities were working to detect any transmission from dormitories to populations outside them early, he said.

Mr. Lee said Singapore’s lockdown – which began earlier this month and was intended to last four weeks – would be extended by four weeks beyond that, until June 1. The list of essential services allowed to remain open would be pared down, he said, to further reduce the risk of transmission among workers who keep these going.

But the big flaw was that Singapore overlooked the densely populated camps of migrant workers who typically fill the lowest level of jobs in Singaporean society. The second round of Singapore’s outbreak has been largely centered around these camps, with thousands of migrant workers becoming infected.

During Lee’s fourth national address to the nation since the virus emerged, the PM explained that the current measures would remain in place until May 4, at which time the city-state will start trying to slowly reopen society, using some of the same cautious criteria adopted by New Zealand and Germany.

To accomplish this, workplaces will be closed to further reduce the number of workers keeping essential services going. Some hot spots, such as popular wet markets, remain a problem, as large groups of people continue to congregate there, Lee said.

Lee noted that while there will be some “privacy concerns”, ramping up contact tracing via the “TraceTogether” contact tracing app – which all residents of Singapore have been asked to download – is a critical priority for the government as it moves to stamp out the virus.

“There will be some privacy concerns, but we will have to weigh these against the benefits of being able to exit from the circuit breaker and stay open safely.”

And as far as migrant workers are concerned, Lee promised that “we will take care of you like we take care of Singaporeans.”

Roughly one-fifth of the world, led by India, is starting the painful process of reopening. And countries that are refusing to start lifting some restrictions are facing growing unrest, including in France, where protesters poured into the streets of Paris to protest the lockdown and alleged mistreatment of minorities under lockdown conditions.

END

MEXICO

Oil producing Mexico cuts its interest rate by one half point to 6%

(zerohedge)

Mexico Cuts Rates 50bps In Surprise Move, Warns Of GDP Plunge

In a unanimous decision, Banxico’s board surprised the market and lowered the reference rate by 50bps to 6% in the face of a widely-expected recession in the country this year (which it now expects to be a 1H 2020 drop of more than 5% YoY).

“It is estimated that the negative effects on domestic economic activity resulting from the pandemic may lead to an important contraction of economic activity in Mexico during the first half of the year. Although the magnitude and duration of the effects of the pandemic are still unknown, and since available information is still limited, initial estimates suggest that during the first half of 2020 GDP could fall more than 5% as compared to the same period of the previous year. It is clear that slack conditions are widening considerably, in a context in which the balance of risks for growth is significantly biased to the downside

 

According to the statement.

“Considering the risks resulting from the COVID-19 pandemic for inflation, economic activity and financial markets, major challenges arise for monetary policy and for the economy in general.”

Very little reaction for now in the peso…

Though warnings of “implementing additional measures for orderly markets” may prompt some more selling soon…

“The Governing Board also decided to implement additional measures to foster an orderly behavior of financial markets, strengthen the credit channels and provide liquidity for the sound development of the financial system.”

end

7. OIL ISSUES

OIL/MONDAY NIGHT

Inexperienced retail traders not understanding that they must take possession of oil contracts at Cushing OK of which there was no room.  Thus the reason for oil trading in negative territory

(zerohedge)

Who Was Panic Selling Oil Today? Goldman Answers

In the annals of market history, April 20, 2020 will be forever remembered the day when, for the first time ever, the deliverable WTI future contract plunged 50%, 60% – the drop accelerating – then 70%, 80%, 90%, 99%, … and then the unthinkable happened: after the May WTI contract dropped to $0.00, meaning it was free to get delivery of oil, it proceeded to slide into negative territory – a never before seen event in market history –as oil producers were paying their customers to take delivery of physical oil in a world in which oil storage has essentially run out. 

And so the price of oil tumbled, dropping further into negative territory, before finally stopping at -$40.32, the lowest price ever recorded for a barrel of WTI.

In many ways, the move was a mirror image of what happened during the legendary Volkswagen short squeeze, when countless shorts found out there were not enough freely floating shares to cover all existing short positions, unleashing a scramble to buy shares at any price and avoid being the last man standing, as the alternative was – in theory – a stock price hitting infinity (it almost did: very briefly, Volkswagen became the world’s most valuable company destroying dozens of iconic shorts in the process and leading to the suicide of one of Germany’s richest people). Today’s move was similar, as many inexperienced traders suddenly realized that instead of an asset, oil had become a liability, having only hours to find a place where to receive delivery of physical barrels of oil, and failing to do that, finding a greater fool to dump the deliverable obligation to. Only it wasn’t so easy.

As a result, a game of explosive hot potato (or rather highly flamable black gold) ensued around noon, when the deliverable WTI contract hit $10, its drop accelerating in an increasingly bidless market, before triggering hundreds of $0.01 stops, at which point oil plunged vertically, crashing $40 dollars in minutes.

As Roger Diwan explained in further detail, “speculators found themselves unable to resell the WTI contract, and have no storage booked to get delivered the crude in Cushing, OK, where the delivery is specified in the contract. This means that all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires.”

So what happens now?

Well, some stability appears to have been restored, because since its settlement close around -$37, May WTI has recovered all its losses for the day and was last trading just above $0.

But don’t count on the relative stability lasting into tomorrow’s contract expiration – or the next month – because as Goldman’s commodity strategist, Damien Courvalin, who first predicted one month ago that negative oil prices are coming for landlocked producers, warns of “potential further distress ahead of the settlement window” tomorrow for the May WTI contract.

It gets worse from there because as we discussed earlier, the pain will then shift to the June contract, which expires on May 19:

The June contract will then become the prompt contract until its expiration on May 19. While it has outperformed significantly today, down only $4.60 to $+20.43/bbl, it will nonetheless likely see downward pressure in coming weeks

In other words, there will be more fireworks tomorrow for the May future, for the simple reason that there are likely still tens of thousands of maturing May contracts that need to find a literal home, which – with Cushing effectively full – is a problem, to wit:

The May CME WTI contract expires tomorrow, April 21. Any holder of a long position going into settlement would then be obligated to take delivery of crude in Cushing during the month of May (either by transfer into a designated pipeline or storage facility or by in-tank transfer). This means that an investor long a WTI May contract would be forced to sell out of this position (at any price) before tomorrow’s settlement to avoid being stuck having to find room for barrels in the Cushing storage hub which will likely be completely full by then (it is 77% full as of last Friday with the last 2-week builds pointing to stock-out by the first week of May).

Goldman then lists the following three reasons why the June future will be crushed next:

  1. the potential exit of spooked long retail investors given the violence of today’s move (and the negative carry incurred at each contract roll),
  2. the negative impact of investors rolling their long positions from the June to the July contract in early May (the USO rolls on May 5-8), and ultimately
  3. the still unresolved market surplus that will hit binding storage capacity in coming weeks.

Finally, here is Goldman’s answer to the question on everyone’s lips: who was left long heading into today’s record price drop, and who was selling at any price?

Given the difficulty and costs of storing oil (even in normal times), investors typically never keep positions into expiration. The size of the long positions in May WTI had therefore already shrunk significantly as all the major commodity indices and ETFs rolled earlier this month into the June contract. Illustrating that point, the unprecedented collapse in May WTI prices occurred with only 100k contracts trading today, a tenth of the June contract volumes.

In terms of holders, the surge in retail interest in recent weeks — as illustrated by the USO ETF which now represents 30% of the June WTI contract open interest — suggests that retail positions (in outright WTI contracts rather than systematically rolling products) were likely still long May WTI contracts into this week and now forced sellers (consistent with the sell-off accelerating in the 30 minutes ahead of the close and the sharp rebound that followed).

And so it was once again the mom and pop daytraders and r/wallstreebets amateurs, who however have felt quite professional if not invincible, thanks to the Fed’s constant market manipulation and bailout out of every crash… but not in the commodity sector. It was they that suffered unprecedented losses having held on to a contract they did not understand, and without realizing that they faced not only a total wipe out, but a wipe out more than 100% of their invested capital, a privilege traditionally only reserves for short sellers.

And while we agree with Goldman that retail was the biggest victim of today’s crash, we doubt it’s the only one, because if there is one thing this market has created – if not real value (sorry but rising nominal stock prices due to printing money is the opposite of value creation) – it is an army of professional money-managing idiots who think they are geniuses whenever they are not on CNBC declaring how brilliant they are. And in the next few days we will find out not only just how many of them were wiped out, but also the names of all those “pros” who at the end of the day were as clueless as 23-year-old reddit discussion board “traders.”

end
OIL/MONDAY NIGHT

Oil Producers Will Pay You $54/Barrel To Take South Texas Sour Off Their Hands

All day long we have been told, “ignore the price collapse in the May WTI futures contract,” look over here instead at how well stocks have rebounded…

Excuses vary from “it’s purely technical” to “a fund or twelve probably blew up, it’s not fundamental” to “ahh, it’s just the roll” but as it becomes clearer and clearer that the world is coming to terms with what Goldman called “The Largest Economic Shock Of Our Lifetimes“, and the record surge in excess oil output amounting to a mindblowing 20 million barrels daily or roughly 20% of global demand.

Besides that simple supply/demand imbalance,  we explained here in great detail exactly what drove today’s move:

all the storage in Cushing is booked, and there is no price they can pay to store it, or they are totally inexperienced in this game and are caught holding a contract they did not understand the full physical aspect of as the time clock expires.

Or, put another way, today’s negative prices are the reflection of dire market conditions for producers, and as the following price sheet from Plains Marketing LP notes, producers are paying up massively for you to take crude off their hands…

As Elisabeth Murphy, an analyst at consultant ESAI Energy previously noted, these are landlocked crude with just no buyers. In areas where storage is filling up quickly, prices could go negative. Shut-ins are likely to happen by then.”

And it’s not about to get better anytime soon as oil demand has been so battered by global government lockdowns to stop the spread of the coronavirus (that are being reinstated amid secondary waves of infection or delayed for fear of such) that any conceivable oil production cut is a drop in the ocean.

Yes, the crude futures curve offers hope but that contango is supported by the ETF as much as anything else and given spot deliverable prices above, rolling down that curve of pain, just as May contract longs did today, to converge with spot will come very soon for June… and as Kyle Bass explained this afternoon, there is little expectation that the Saudis and Russians will take their foot off the throat of US shale anytime soon…

 

 

 

end

 

OIL TUESDAY MORNING

Oil continues to falter as Cushing is fully booked: nowhere to put the plunging oil!

(zerohedge)

Crude Crash Spreading: June WTI Contract Plunges 42%, Brent Dips Below $20

When recapping yesterday’s day of devastation for oil prices – and amateur oil traders – we quoted from the latest Goldman report (the bank’s strategist Damien Courvalin has been spot on and well ahead of the curve in predicting the drop to negative prices as far back as a month ago), who said that a similar “price dynamic could play out again tomorrow, the last trading day of the May contract. After that, the physical reality of a still massively oversupplied oil market will likely exert downward pressure on the June WTI contract (currently still trading at +$21/bbl).”

He was spot on, because on Tuesday morning, the panic selling that originated in the May contract, which expires today at 230pm and which settled at just shy of -$38 yesterday, has spread to the June contract – just as we warned would happen yesterday – which briefly dropped as much as 42% to $11.79 a barrel, and was last trading just above $16 even as the May contract remains deep in negative territory.

More ominously, Brent – which is not landlocked and thus not subjected to the same (excess) supply/(zero) demand dynamics as landlocked WTI, also dipped below $20 briefly, sliding as low as $18.10 before recovering to $21.26

Echoing what we said yesterday, Bloomberg writes today that “the widening of the price collapse to futures that aren’t close to expiry underscored the severity of the crisis in the oil market. Storage tanks, pipelines and tankers are rapidly being overwhelmed by a vast oversupply caused by slumping fuel demand as countries are locked down to slow the spread of the coronavirus.”

Overnight, Morgan Stanley joined Goldman in warning that with current total usable capacity is around 79MM bbls, the remaining storage capacity will probably be exhausted in 4 weeks, “this puts ‘tank tops’ in the middle of May, after that, there is probably no more storage capacity available.”

While negative prices should prove fleeting as WTI for May delivery expires on Tuesday, their psychological impact will endure, according to Olivier Jakob, managing director at Petromatrix GmbH. Plunging June contracts for both the U.S. and international crude benchmarks show producers will feel severe pain for some time to come.

“Once you have negative prices in crude oil, the limits change totally,” said Jakob. “What happened yesterday was extremely bad for the confidence in the futures market. It’s not just back to normal trading anymore. It’s a confidence breaker.

END

OIL/CANADA/IRINA SLAV

The low oil price is forcing Canada to shut down its oil sands production

(Irina Slav/OilPrice.com)

$0 Oil Forces Canada To Shut Down Crude Production

Irina Slav – Apr 20, 2020, 9:00 AM CDT

Canadian oil companies have begun shutting down steam-driven oil sands production projects as prices continue to fall, Reuters reports, noting the move could have dire long-term consequences for the production facilities.

Steam-driven oil sands production, also called steam-assisted gravity drainage, involves injecting steam into an oil sands deposit to melt the bitumen and make it flow up the well. To ensure long-term production, the temperature and pressure at such sites must be maintained at a certain level. Disruption, Reuters explains, could result in permanent damage, which would translate into a permanent loss of production.

Yet Western Canadian Select, the heavy oil benchmark of Canada, has been trading below $10 for about ten days now, with a temporary spike to $10.13 a barrel last Thursday. At the time of writing, WSC was trading at $-0.01 a barrel.

As a result, producers are being forced to cut. Husky Energy cut its oil sands output by 15,000 bpd. Cenovus reduced its production by 45,000 bpd and said it could raise this further to 100,000 bpd, nothing a cut of this size wouldn’t damage the bitumen reservoirs. ConocoPhillips last week said it would cut its oil sands output by as much as 100,000 bpd.

Earlier this month, ahead of a meeting between Alberta government officials and OPEC, the chief executive of Enbridge said oil producers in Western Canada could shut down as much as 20-25 percent of production in response to the price slide, brought about by the coronavirus outbreak that exacerbated the situation with the supply overhang.

A cut of 20-25 percent translates into 1.1-1.7 million bpd. According to TD Securities, 135,000 bpd of this has already been cut, all in the oil sands, as of April 7. Now, the consultancy says that total production cuts in the oil sands amount to 300,000 bpd and could rise further to 1.5 million bpd.

By Irina Slav for Oilprice.com

end

Oil expert Nick Cunningham explains what will happen next in the oil price debacle
(Nick Cunningham/oilPrice.com)

What’s Next For Oil As Prices Go Negative?

Authored by Nick Cunningham via OilPrice.com,

Oil prices crashed through zero, closing out the day at -$37 per barrel, an unprecedented meltdown (only to rip back to zero tonight)…

 

There are mitigating circumstances to these insane numbers. The prices for WTI reflect the contract for May, which expires this week. The collapse is a reflection of traders abandoning the May contract, and moving on to June. The thinly-traded May contract loses some relevance, and analysts say that the June contract – trading at $20 per barrel as of Monday – now becomes the important number to watch.

 

But now June is collapsing too…

Nevertheless, it is hard to ignore the historic numbers flashing across the screen. As futures contracts expire, they tend to converge with the realities of the physical market. Prices went negative because the physical market in Oklahoma and Texas is so overwhelmed. OPEC+ did agree to historic production cuts, but not for April. In any event, the cuts pale in comparison to the decline in demand. But taken together, the effects of the price war on the supply side are colliding against the depths of demand destruction at the same time.

The result is really ugly. Nobody wants physical delivery of WTI for May, and with storage options dwindling in some places, traders liquidated their positions, selling contracts at crazy discounts. With the contract expiring on Tuesday, nobody wanted to be left holding the bag. Unable to actually accept physical delivery, traders ended up paying someone to take oil off of their hands. Surely, some fascinating reportage will be written about the last guy that got stuck with an unwanted May contract.

“The intraday WTI destruction today is certainly epic in scale, which is largely a case of jitters ahead of the WTI May 2020 futures contract expiring tomorrow and storage fears finally materializing,” Louise Dickson, Oil Market Analyst at Rystad Energy, said in a statement.

“But if you have been watching the physical spot prices in the North Sea, currently trading in the $15-18 range, this drop in WTI May 2020 futures isn’t as shocking.”

On the one hand, the negative pricing will be chalked up to a weird one-off glitch, a confluence of historic firsts due to a price war, pandemic and downward economic spiral. The bizarre development may quickly be forgotten as traders move on to the June WTI contract, which is trading at $20 per barrel. But while June doesn’t appear quite as catastrophic, oil at $20 is not a price at which most oil companies can survive for any lengthy period of time. Moreover, there is no reason to think that $20 is the floor.

The second quarter is “likely to be the most uncertain and disruptive quarter that the industry has ever seen,” Schlumberger CEO Olivier Le Peuch, said on the company’s earnings call last week.

On Monday, Halliburton also offered a grim outlook for the oil market.

“We expect activity in North America land to sharply decline during the second quarter and remain depressed through year-end, impacting all basins,” Halliburton’s Chief Executive Officer Jeff Miller said in a statement. The oilfield services giant reported a net loss of $1 billion in the first quarter.

The oil rig count dropped by another 66 last week, another steep reduction. The Permian basin lost 33 rigs. Production declines have already started, but more shut ins are necessary in the short run as spot prices come under tremendous pressure.

Ultimately, the market continues to be at the mercy of the pandemic. Several billion people are living under some version of a lockdown. The hits keep on coming. Demand for road fuels in India has plunged by 50 percent, for instance. Analysts have repeatedly revised oil forecasts, with an increasing recognition that the shock to demand will be lengthier than previously expected. In April, at least, demand will be down by 29 million barrels per day (mb/d).

Those staggering figures may not be quite as large in May and beyond, but there is little chance that global demand bounces back to 100 mb/d anytime soon, if ever.

Mark Lewis, global head of sustainability research at BNP Paribas Asset Management, argues in the FT that we may have just witnessed the permanent peak in oil demand.

Greater efficiency, more EVs and also permanent changes in behavior stemming from the pandemic could add up to a peak in consumption.

end

USA OIL ETF USO

USA;S HUGE USO ETF HALTED!!

expectations are it may be dissolved

(zerohedge)

USO Halted Amid Speculation World’s Biggest Oil ETF May Be DIssolved

Update (0855ET): Is something big brewing?

  • U.S. OIL FUND HALTED FOR PENDING NEWS

* * *

After posting his best month ever in March (up 63.5%), Pierre Andurand – manager of The Andurand Commodities Master Fund, considered by many to be the world’s largest oil hedge fund – is someone worth listening to when it comes to the oil markets.

After yesterday’s catastrophe in oil markets exposed the farcical and fragile relationships between physical and paper oil markets, today’s price action in the ‘out’ futures…

… and the ETFs…

Have destroyed all the bullshit comments yesterday that this was all technical and be reassured that this is not a reflection of reality. It is!

The oil curve just got hammered all the way out, as “cash and carry” arb goes “out of business” along with likely basis-traders blow-outs – but, as Nomura’s Charlie McElligott warned this morning, retail investors (who pumped a record $1.4B into USO last week) are also experiencing the pain of negative carry.

USO is trading at a massive premium to NAV…

Remember, USO ETF represents 30% of the June WTI contract open-interest now (CL2 down -20% right now), while any other systematic roll products were likely still long May contracts, judging from forced-selling over the final 30 minutes of the day closing-trade.

And this is what Pierre Andurand is most concerned about – that the link between the massively dominant Oil ETF and the actual underlying markets is about to snap and leave a gaping hole at CME…

I think the CME might have no other choice but to close out the ETFs positions. It cannot take the risk to have negative prices before the roll and be on the hook.

This shock is real. Be very careful out there. We are going to hear about crazy losses in the days and weeks to come

Nomura’s McElligott goes a little further than Andurand in his questioning of the paper oil markets.

The entire strip for both WTI- and Brent- Crude are collapsing lower today in unison, because yes, there is nowhere to put the stuff (storage tanks, pipelines, supertankers are all full), but also because market participants believe things won’t be getting much better into the future either, as “nobody needs it,” and without storage since you cannot take physical delivery – then what is the “utility” of the futures contract itself?

As far as USO is concerned, despite there not being a redemption mechanism…

Luke Kawa@LJKawa

Apropos of nothing, circumstances that would constitute a “Termination Event” for USO are as clear as mud

(in stark contrast to XIV)

View image on TwitterView image on Twitter

Josh Brown summed things up well…

USO will hold something like 30% of June futures at the open today because retail traders have poured money into it, thinking it was a long-term bet on oil. It’s turning into one of the great incinerations of retail money of all time.

Nomura notes that there is certainly a scenario where if June futures were to also go negative, then USO would be “lights out” as a partnership and could actually “owe” money.

endNow the 3rd largest Oil ETF is liquidating:  Barclay’s ETN(zerohedge)

The Third Largest Oil ETN Is Liquidating

Having seen its share of gratuitous use over the years, now may be the best time ever to pull up the infamous Martha Stewart tweet:

Martha Stewart

@MarthaStewart

OiI

The reason is that while the largest crude oil ETF, the USO, which had just over $4.2 billion in assets as of yesterday has avoided liquidation for now, and instead converted itself into a close-end fund by suspending the sale of creation baskets, one of its biggest peers failed to avoid collapse after oil prices plunged to negative for the first time ever, and on Tuesday morning, Barclays announced that it would “exercise its issuer call option” and redeem in full the “OIL” Crude Oil ETN, which is the third largest oil-related ETF (second if one ignores the UCO which is a 2x levered USO).

Needless to say, the fund has seen better days…

… and now all those who lost about 80% of their investment in the past few weeks, well they are now getting a few pennies on their dollar.

So what happens next? Barclays – who suckered in thousands of retail investors and is now giving them a small portion of their investment as it closes up OIL shop – explains.

Holders of the ETNs on the Redemption Date will receive a cash payment per ETN equal to the closing indicative value of the ETNs (as defined in the prospectus relating to the ETNs) on April 23, 2020 (the “Valuation Date”), the fifth business day prior to the Redemption Date.

Additionally, Barclays announces that it will suspend any further sales and issuance of the ETNs, effective today, April 20, 2020. This suspension may cause fluctuations in the trading value of such ETNs. Daily redemptions at the option of the holders of the ETNs will not be affected by this suspension. Barclays’ lending activities from the existing inventory with respect to the ETNs will also not be affected by this suspension.

And to think that all of this could have been avoided if only the Fed would purchase OIL, not the commodity but the ETN. Powell, are you listening, because if not soon every single investment will end like this:

endThis will depress oil prices more as Trump seeks an executive order to fund oil and gas companies(zerohedge)

8 EMERGING MARKET ISSUES

 

INDIA/CORONAVIRUS UPDATE

India Reports Record Spike In Coronavirus Cases Just As It Starts Reopening Economy

With increasingly politicized debates raging across developed countries whether or not to reopen economies as new coronavirus cases and deaths appear to be plateauing, India has made the decision to ease one of the world’s strictest lockdowns to allow some manufacturing and agricultural activity to resume after the economy suffered a sharp slowdown in recent weeks.

 

Homeless people wait for free food during a nationwide lockdown to curb the spread of new coronavirus in Gauhati, India, Sunday, April 19, 2020.

India’s shelter-in-place orders were imposed on March 24 and halted all but essential services, sparking an exodus of migrant workers and people who survive on daily wages out of India’s cities and toward villages in rural areas. Authorities picked up travelers in a fleet of buses and quarantined many of them in empty schools and other public buildings for 14 days. An even  bigger problem, however, was the freefall in the Indian economy.

Here is why India is in a rush: according to Goldman’s current activity indicator (CAI), growth in India was reported at 2.8% in March, a 4.2% plunge relative to February, and the slowest uptick since the financial crisis. The sharp fall in March, is driven by both industrial and services, with the decline in exports, imports, auto sales, and PMI services being the biggest drivers.

Goldman also gathered a variety of high-frequency economic indicators, similar to how the banks looked at China’s economy in February to gauge the slowdown. Here are some of the findings across various sectors:

Industrial:

  • Daily electricity consumption collapsed in March (-30% yoy on March 27), and remains at low levels since then. (Exhibit 4).
  • The relative usage of coal also fell sharply in March. The fraction of total electricity generation through coal declined by almost 10 percentage points between 1st and 31st March 2020. Our rough estimate showed coal consumption was almost 11% weaker in the last week of March and first 12 days of April, relative to last year (Exhibit 5).

  • Air pollution, which is an indicator of industrial activity, has fallen in several cities. The Air Quality Index (AQI) (which is positively related to air pollution; higher values for the AQI indicate greater air pollution) decreased in April for major Indian cities such as Bengaluru, Chennai, Kolkata and New Delhi, as per the data from the Central Pollution Control Board.

Services:

  • Railway transportation: Railway passenger volume contracted by 7.4% in the first 10 days of March 2020, according to the Indian Railways data, and is expected to decrease for the rest of March and April.
  • Traffic congestion data shows that congestion has reduced to very low levels in three major Indian cities, indicating reduction in movement (Exhibit 6).

  • Mobility tracker from Apple. Mobility trend reports from Apple are based on changes in routing requests of ~12 mn Iphone users in India. Based on the latest reported data, walking and driving mobility have contracted by 73% and 81% between January 13 and April 14, 2020 (Exhibit 7).
  • Daily unemployment and labor force participation rates from the Center for Monitoring Indian Economy. Daily unemployment shows a sharp spike since March 29th, driven by both rural and urban areas. Not only has unemployment (defined as the number of people, 15 years of age or more, who are part of the labor force but unemployed) spiked, but labor force participation rates (number of people, 15 years of age or more, employed or actively seeking employment as % of total working age population) has also collapsed (see Exhibit 8).

In other words, just like in China in February and early March, much of India has shut down, and just like China, India is now scrambling to reboot its economy, as the alternative for the country with a population of 1.4 billion is a social upheaval that would likely be far worse than letting the coronavirus run rampant.

However, unlike China which largely reopened only after the number of reported new cases had collapsed, India is starting to ease its lockdown just as the number of single-day new cases spiked the most yet, as an additional 1,553 cases were reported over 24 hours compared with 1,334 reported on Sunday morning, raising the national total to 17,265, potentially resulting in an even faster breakout in new cases in the world’s most densely-populated nation.

As AP further adds, at least 543 people died from the Wu-Flu and epidemiologists forecast the peak may not be reached before June.

And while New York City has emerged as the global case study for rampant disease spread so far, skeptics warn that a full blown pandemic in India would be orders of magnitude more catastrophic.

However, starting Monday, limited industry and farming were allowed to resume where employers could meet social distancing and hygiene norms, and migrant workers were allowed to travel within states to factories, farms and other work sites.

This is taking place even as government surveys in the central Indian state of Maharashtra, the worst-hit by the virus, have suggested few companies eligible to restart operations can do so because they are required to transport and shelter workers as a virus-prevention measure.

“In the event a group of migrants wish to return to their places of work within the state where they are presently located, they would be screened and those who are asymptomatic would be transported to their respective places of work,” India’s home ministry said in a letter to state governments.

While a partial lifting of a curfew permitted the restart of coal plants and oil refineries, animal feed and agro-industry, and other labor-intensive manufacturing such as brick kilns, much of the country remained under lockdown.

 

A group of Indians distribute free food and water to homeless people during a nationwide lockdown to curb the spread of new coronavirus in Gauhati, India, Sunday, April 19, 2020.

Additionally, India’s airspace was closed to commercial traffic, its passenger rail system, buses and metros were halted, e-commerce was restricted to food and other essentials, and schools, stadiums and houses of worship remained closed until May 3.

In hopes of preventing an even faster breakout, India is also continuing to ramp up testing, build up stocks of ventilators and personal protective equipment and prepare makeshift isolation wards and dedicated COVID-19 hospitals.

Yet one difference between India and the rest of the world that may help India contain the pandemic is that in Mumbai, the capital of Maharashtra and home to Asia’s largest slum, city authorities were planning to administer hydroxycloroquine to thousands of slum-dwellers over 14 days to gauge whether the drug helped to slow the spread of the disease in a place where social distancing norms aren’t possible to achieve. It was unclear how many people would participate in the experiment, or when it would begin.

END

 

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

Euro/USA 1.0831 DOWN .0033 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS//CORONAVIRUS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /ALL RED

 

 

USA/JAPAN YEN 107.41 DOWN 0.268 (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 1.2303   DOWN   0.01370  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/

 

USA/CAN 1.4436 UP .0105 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  TUESDAY morning in Europe, the Euro FELL BY 33 basis points, trading now ABOVE the important 1.08 level FALLING to 1.1219 Last night Shanghai COMPOSITE CLOSED DOWN 25.54 POINTS OR 0.90% 

 

//Hang Sang CLOSED DOWN 536.47 POINTS OR 2.20%

/AUSTRALIA CLOSED DOWN 2,51%// EUROPEAN BOURSES ALL RED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL RED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 536.47 POINTS OR 2.20%

 

 

/SHANGHAI CLOSED DOWN 25.54 POINTS OR 0.90%

 

Australia BOURSE CLOSED DOWN  2.51 % 

 

 

Nikkei (Japan) CLOSED DOWN 388.34  POINTS OR 1.97%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1668.50

silver:$14.80-

Early TUESDAY morning USA 10 year bond yield: 0.58% !!! DOWN 3 IN POINTS from MONDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 1.16 DOWN 4  IN BASIS POINTS from MONDAY night.

USA dollar index early TUESDAY morning: 100.44 UP 38 CENT(S) from  MONDAY’s close.

This ends early morning numbers TUESDAY MORNING

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And now your closing  TUESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 1.13% up 9 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: +.02% UP 1   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.99%//UP 9 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:2.16 UP 17 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 118 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: FALLS TO –.49% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.66% 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 TUESDAY

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

Euro/USA 1.08644  UP     .0001 or 1 basis points

USA/Japan: 107.54 DOWN .143 OR YEN UP 14  basis points/

Great Britain/USA 1.2295 DOWN .01446 POUND DOWN 145  BASIS POINTS)

Canadian dollar DOWN 68 basis points to 1.4198

 

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The USA/Yuan,CNY: AT 7.0716    ON SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  7.1020  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  6.9950 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at +.02%

 

Your closing 10 yr US bond yield DOWN 6 IN basis points from MONDAY at 0.55 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 1.13 DOWN 6 in basis points on the day

Your closing USA dollar index, 100.16 UP 20  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED DOWN 149.58 OR  2.57%

German Dax :  CLOSED DOWN 378.88 POINTS OR 3.56%

 

Paris Cac CLOSED DOWN 147.68 POINTS 3.26%

Spain IBEX CLOSED DOWN 170.10 POINTS or 2.49%

Italian MIB: CLOSED DOWN 491.48 POINTS OR 2.88%

 

 

 

 

 

WTI Oil price; 5.78 12:00  PM  EST

Brent Oil: 19.64 12:00 EST

USA /RUSSIAN /   RUBLE FALLS:    77.21  THE CROSS HIGHER BY 1.96 RUBLES/DOLLAR (RUBLE LOWER BY 196 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.49 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 :  10.01//

 

 

BRENT :  19.58

USA 10 YR BOND YIELD: … 0.57…down 4 basis points

 

 

 

USA 30 YR BOND YIELD: 1.16..down 6 basis points/

 

 

 

 

 

EURO/USA 1.0858 ( DOWN 6   BASIS POINTS)

USA/JAPANESE YEN:107.75 DOWN .076 (YEN DOWN 8 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 100.21 UP 25 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2296 DOWN 143  POINTS

 

the Turkish lira close: 6.9774

 

 

the Russian rouble 77.08   DOWN 1.84 Roubles against the uSA dollar.( DOWN 184 BASIS POINTS)

Canadian dollar:  1.4204 DOWN 71 BASIS pts

 

German 10 yr bond yield at 5 pm: ,-0.49%

 

The Dow closed DOWN 631.56 POINTS OR 2.67%

 

NASDAQ closed DOWN 297.50 POINTS OR 3.48%

 


VOLATILITY INDEX:  45.41 CLOSED UP 1.58

LIBOR 3 MONTH DURATION: 1.097%//libor dropping like a stone

LIBOR-OIS:  1.033//DROPPING AS WELL

 

USA trading today in Graph Form

TSY Yields Hit Record Lows, Stocks Slammed As Crude Carnage Spreads

The market… everywhere right now…

Great news (wel not really)… the May WTI contract exploded higher today…

 

Terrible news… the rest of the paper oil market was utterly destroyed.

As May expired, the rest of the front-months were clubbed like baby seals…

As USO was total chaos…

And the Futures prompt spread screamed back up to zero as the out-month crashed down to May…

Source: Bloomberg

Remember – tonight API gives us a first glimpse at what inventories are doing in this chaos.

As Bloomberg’s Javier Blas noted:

“Yesterday was scary. Today is a lot more scary. The whole oil market is screaming oversupply simultaneously. “

And that fear spilled over into stocks (S&P’s biggest drop since April 1st)…

 

The Dow was unable to hold its 50% retracement level of the Feb-Mar crash…

The Nasdaq touched its 100DMA, and fell back below its 200- and 50-DMA…

FANG Stocks dared to slide today…

Source: Bloomberg

Bank stocks fell for the 2nd day…

Source: Bloomberg

For a brief moment near the open, AMZN overtook Apple in market cap…

Source: Bloomberg

And sparked a bid at the long-end of the bond curve…

Source: Bloomberg

5Y Yields hit a new record low intraday, highlighting the decoupling between the bond market and the stock market’s rebound…

Source: Bloomberg

Meanwhile, in Europe, Italian bond spreads are blowing out as redenomination risks re-emerge…

Source: Bloomberg

Worryingly, given the Powell Put, HYG prices are erasing all of The post Fed gains…

Source: Bloomberg

The dollar rallied out of its recent range back to two week highs…

Source: Bloomberg

Cryptos slipped lower today but Ethereum is holing on to weekly gains (barely)

Source: Bloomberg

Gold was down on the day as the dollar gained but did push back up towards $1700 (futures) into the close..

With oil dominating the headlines recently, no one has noticed the collapse in Copper…

Gold is back at record highs against the Yuan…

Source: Bloomberg

Finally, just in case you thought stocks were cheap… and this 2-day drop is a dip to buy…

Source: Bloomberg

As US Macro data collapses to its worst sine Lehman…

Source: Bloomberg

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

MARKET TRADING//USA

a)Market trading/LAST NIGHT/USA

 

b)MARKET TRADING/USA/AFTERNOON

Black Gold Bloodbath – USO & June/July WTI Futures Are Collapsing

Forget Turnaround Tuesday…

Oil is a “dangerous market to trade in right now,” said Pierre Andurand, founder of Andurand Capital Management LLP, in a Bloomberg TV interview. The market needs shutins to happen now, he said.

This has changed everything,” said Monica Malik, chief economist at Abu Dhabi Commercial Bank.

“So much of the recent recovery was based on the fact that the oil price had been above $50-$60, providing support to economic activity, and that’s just been decimated.”

This “price slump was psychologically very important,” said Eugene Weinberg, Commerzbank AG’s head of commodity research.

“There is a possibility it will change perceptions forever.”

*  *  *

Update (1345ET): Here we go again. June WTI is now crashing – trading below $7 – down over 65% on the day...

And July is crashing, down over 30%, below $18…

Remember the settle occurs at 14;30ET (and the expiry of the May contract).

USO is also testing pre-market lows as retail and the roll panic out…

A lot of retailer investors are looking at it and realizing that they are losing money hand over fist,”  Tariq Zahir, commodity fund manager at New York-based Tyche Capital Advisors LLC said.

“It’s undeniable that the USO is having a having a very big effect on the June contract and it wouldn’t be surprising if we go substantially lower.”

*  *  *

Forget Turnaround Tuesday, paper oil markets are collapsing once again with USO halted numerous times, OIL liquidated, and June futures puking hard in a repeat of yesterday’s May contract bloodbath…

May is rallying here as June crashes… (we suspect more ETF rolls)…

Sending the prompt spread soaring back…

But June is now down a shocking 45% to a $10 handle… and there is still 90 minutes until settlement.

Yesterday, the break of $10 was what sparked the waterfall in the May contract.

USO is down 30%…

Here are five analysts’ views on what’s happening in the world’s largest oil ETF…

Dave Lutz, macro strategist at JonesTrading:

“Retail investors should have a way to trade the price of oil, but USO has such problems with the roll effect that I’m not sure that’s the best vehicle. Problem is, it’s really the only one,” he said. In addition, “the fact that creations are suspended means that this is no longer going to track properly.”

Joseph Saluzzi, Themis Trading LLC partner and co-head of equity trading:

Some ETFs are not exactly what you think they are — the rule for any investor is to know what you own. Some folks may have thought that USO was simply a proxy for the current oil price, and they didn’t really understand the mechanics of the oil futures market.

Matt Maley, equity strategist at Miller Tabak + Co.:

“There is no question that this is a tool for investors of all sizes to bet on the price of oil. Many of these investors — again, of all sizes — have tried to pick the bottom in oil several times over the past week or two and they’ve all gotten burned. This has caused these buyers on weakness to become forced sellers. When the dust settles, it’s going to create an unbelievable opportunity for buyers. Until we get a better feeling of when the demand side of the supply/demand equation is going to improve, it tells me that the risks are still much too high compared to the potential rewards,” said Maley.

“I worry that it’s going to have a negative impact on liquidity in the oil markets, and thus have a negative impact on confidence in that market.”

Jeremy Senderowicz, a partner at law firm Dechert:

“Once creations are suspended then the arbitrage process cannot work as normal, as new shares cannot be created to meet increased demand,” he said.

“The 8-K says they are suspending creations because they’ve used up all the shares they’ve registered (they filed yesterday to register more shares but the SEC needs to declare it effective and they haven’t done so yet). That indicates that demand for the shares was quite high. If that demand continues, then until new shares can be created you can fill in the blank as to what might happen in trading…(which may be why they had the trading halt). That seems like the big takeaway to me.

Dan Genter, CEO of RNC Genter Capital Management:

“The ETFs that are dealing with the contracts in the commodities are never going to take physical delivery, they can’t take it. There’s not a doubt the oil ETFs distorted the market. It was across the board but the ETFs, in our opinion, were the biggest problem,” he said. “The panic is because there are people invested in that commodity and in the contracts that not only have no intention of taking delivery, they have no capacity for taking delivery. All of a sudden, you’re up against a wall. They call it a contract for a reason.”

But, don;t worry, because President Trump will take the pain way… right?

ii)Market data/USA

Treasury Yields Are Tumbling… 5Y Just Hit Record Lows

As commission-rakers and asset-gatherers cheer the rebound in stocks as if it means anything – remember, stocks are a discounting mechanism (like they were in February?) – bond markets are saying this is far from over.

5Y Treasury yields are now at record lows…

10Y yield is back within a few bps of the record low plunge…

And bonds and stocks are completely decoupled…

 

Who do you think will be right when this is all over?

end
As expected, existing home sales tumble in March
(zerohedge)

Existing Home Sales Tumble In March, Face 40% Collapse, NAR Warns

Sales of previously owned U.S. homes dropped in March by the most since November 2015, representing weaker demand that likely is going to get much worse in coming months as the pandemic bears down on the economy.

Contract closings declined 8.5% from the prior month to an annualized 5.27 million, the slowest since April 2019, from a downwardly revised 5.76 million in February,

The first half of the month “held up reasonably well, but it was the second half of March where we are seeing a measurable decline in activity,” Yun said.

Many potential home sellers are delaying listing their properties in the current economic environment, he noted.

This is the first of the housing data for March and does not bode well…

Business closures and stay-at-home orders that began taking effect mid-month have led to listing delays and caused buyers to postpone purchases, but median home price rose 8% from last year to $280,600 (but the low end is sliding)…

Remember, these are contract closing for sales that were signed late Jan, early Feb and so there could be significantly worse to come.

“Based on what we are seeing at the moment, don’t be surprised if the sales activity could be down as much as 30% or even 40% in the next couple of months,” Lawrence Yun, NAR’s chief economist, said on a call with reporters.

Housing inventory picked up a little in March but remains down 10.2% YoY and at the lowest level for March in history.

end

iii) Important USA Economic Stories

Good luck to this democratic hopelessly bust state asking for a Federal bailout.

(Glennon/Dabrowski/Wiurepoints)

Illinois Senate Democrats Seek Massive Federal Bailout for State, Going Far Beyond Coronavirus Impact

Submitted by Mark Glennon and Ted Dabrowski of Wirepoints

Wirepoints has obtained a copy of a letter detailing a federal bailout request sent by Illinois Senate President Don Harmon (D-Chicago) in substantially similar form to all members of the Illinois Congressional Delegation. The letter, which is reproduced below, was sent on April 14 on behalf of Harmon’s 40-member Democratic caucus, which holds a majority in the Illinois Senate.

The requested bailout is galling in scope and shameless in purpose – a clear attempt to use the pandemic as cover to get federal money to pay for Illinois’ pre-pandemic fiscal mismanagement, particularly of its pensions.

The Democratic caucus seeks well over $41.6 billion, including important crisis-related relief such as $1 billion in public-health aid to minority communities and unspecified amounts for increased Medicaid reimbursements and hardship payments to health care facilities.

But the vast majority of their request amounts to a national bailout of Illinois’ pre-pandemic failures. It includes:

  • $15 billion for a no-strings-attached block grant;
  • $6 billion for the state’s unemployment trust fund;
  • $10 billion for the state’s pension funds; and,
  • $9.6 billion in unrestricted aid to Illinois municipalities, again for pensions.

The $15 billion for the state is more than double the state’s projected losses caused by the pandemic and downturn, depending on how you count it. Gov. J.B. Pritzker released estimates on Wednesday. Pritzker said total budget shortfalls for this year and next total $6.2 billion, assuming the state’s pending constitutional amendment to allow for a progressive tax increase passes in November. Harmon’s letter claims revenue losses could exceed $14.1 billion, without explanation for the difference with Pritzker’s numbers.

Also notable is that the $6 billion bailout for Illinois’ unemployment trust fund stems from the state’s comparatively poor management of it. Illinois, prior to the pandemic, had the fourth-worst funding level for that state fund.

The new bailout would be in addition to federal assistance already authorized by Congress and the Federal Reserve Bank. They include, for Illinois, approximately $4.9 billion under the new CARES Act and about $9.6 billion in a new Federal Reserve facility to purchase municipal bonds.

Chicago may also be seeking its own federal bailout money separately.

The biggest intended beneficiary of the requested bailout is obvious from the letter: pensions.

Harmon and the Democratic caucus admit that even in a normal year pension costs at the state level are crowding out funding for services and programs, yet they show no intention whatsoever of making reforms to correct preexisting problems. Instead, they seek $10 billion for state pensions alone. And the rationale for the $9.6 billion sought for municipalities is clear. Revenue losses resulting from the pandemic, their letter says, “will dramatically impact municipalities’ abilities to fund retirement systems.”

Illinois government spent the last three decades creating the nation’s worst pension crisis. Now it wants taxpayers across the nation to bail it out.

*  *  *

UPDATE: The response by Republican members of the Illinois Congressional delegation is linked here.

Read more about how Illinois politicians created the nation’s worst pension crisis:

The letter to Illinois Congressional delegation:

end
Boeing

Trouble again for this beleaguered company as more and more cancel Max 737 contracts: this time China leasing operation, China Development Bank

(zerohedge)

Cancellation Wave Continues, China Leasing Firm Scraps Boeing 737 MAX Order

As thousands of Boeing employees head back to work in the Puget Sound region over the last week, the Washington-based aircraft manufacturer has noticed a string of recent cancellations of the grounded 737 MAX jet.

Last Tuesday (April 14), Boeing announced a total of 150 MAX cancellations in March, including 75 previously reported from Irish leasing company Avolon. Cancellations also came from other buyers, including 34 of 135 aircraft ordered by Brazil’s GOL.

Now on Monday morning (April 20), China Development Bank Financial Leasing Co. (CDB) has joined the cancellation party, slashing 29 MAX planes from its order, worth about $2.9 billion, reported Bloomberg.

The MAX jet has been grounded globally for a little more than a year after two deadly crashes in Indonesia and Ethiopia.

“In light of evolving aviation market dynamics, we’ve been working together with Boeing over many months to re-calibrate our MAX order book to be in line with our long-term view of the market and related opportunities,” Xuedong Wang, chairman of CDB Financial unit CDB Aviation, said in a statement to the Hong Kong stock exchange Monday.

The statement says CDB’s outstanding MAX order is now 70 after the adjustment.

The coronavirus pandemic coupled with MAX groundings, has crushed Boeing. CEO Dave Calhoun recently warned that the commercial jet market could take years to recover.

Boeing published a statement on Monday outlining how it continues to partner with CDB amid challenging times.

“As we work to return the 737 MAX to service, our focus remains on addressing our customers’ fleet needs while optimizing the delivery of the more than 4,000 airplanes in our 737 backlog,” it said.

“As market conditions normalize, Boeing anticipates that lessors who have restructured or reduced their order books will continue to add MAX aircraft to their portfolios through sale-leaseback agreements with airlines,” Boeing said. “Longer term, we expect these lessors will again place orders for direct MAX purchases.”

Boeing suspended MAX production in January, and it plans a phased restart by the end of April. We noted last month how the struggling company drew down a $13.8 billion revolver and is also seeking billions of dollars in bailouts from the US government.

Boeing shares are down several percent on Monday morning (April 20) following the news of more cancellation orders.

end
If the Government retroactively legislates business interruption insurance for all USA businesses due to the pandemic…then that will wipe them all out. Then they will all need a bailout as well causing trillions of dollars to be spent saving firms..
(Simon Black/Sovereign Man)

Is This The Next Giant Industry In Need Of A Bailout?

Authored by Simon Black via SovereignMan.com,

Well this is starting to become a trend.

Over the past few weeks, state governments across the Land of the Free have been feverishly proposing new legislation that will virtually guarantee the entire insurance industry is wiped out.

The root of the issue has to do with something called business interruption insurance.

Business interruption is a pretty common type of insurance that’s designed to protect business owners against a number of risks.

For example, let’s say you own a restaurant and you have a bad kitchen fire that forces you to shut down for a month.

You’d most like have a fire insurance policy to cover the direct damage of the fire. And a lot of companies would also have a business interruption policy to help them stay afloat during that one-month period while the business is closed for repairs.

But business interruption insurance has certain exclusions. It’s just like any other policy, and the insurers are very clear about what risks they do/do not cover.

A typical homeowner’s insurance policy, for example, covers your home against risks like theft, fire, and vandalism.

But most homeowner’s policies specifically exclude flooding. So any homeowner who wants to protect their homes from the risk flood damage can purchase a separate flood insurance policy.

Many insurance plans, including business interruption policies, also tend to exclude things like damage caused by war, government action, and “acts of God”.

But again, any business that wants to insure against those risks is free to seek additional coverage.

That’s the whole idea of insurance: customers are able to pick and choose which risks they want to insure against, and which risks they’re willing to take.

It’s fair to say that most business interruption policies don’t cover a worldwide pandemic that shuttered the entire global economy.

But there’s a growing trend now where state governments are proposing new legislation that would RETROACTIVELY force insurance companies to protect their policyholders against Covid.

This is totally nuts. The state governments are the ones that forced businesses to shut down.

Now they expect the insurance companies to pay for the consequences, even though the policies specifically state that they don’t cover this type of risk.

They might as well demand pay for every other uninsured hazard. Did your house flood and you didn’t have flood insurance? Well let’s retroactively force the insurance companies to pay for that too.

Pennsylvania, New York, Illinois, New Jersey, and several other states have proposed similar legislation, or threatened regulatory action.

(This trend is also picking up steam overseas; in the UK, for example, lawsuits are already pending against insurance companies for not paying out Covid-related claims.)

And given that just about EVERY business would qualify for this retroactive Covid coverage, there’s simply no way that the insurance industry would be able to afford such an indemnity.

Think about it– the federal government made $350 billion worth of loans available to small businesses earlier this month, and that money was 100% used up in about 2 weeks. And they just agreed on another $300 billion this morning.

So most insurance companies would be wiped out if this legislation passes… i.e. CUE THE GOVERNMENT BAILOUT of the insurance industry.

Just like airlines, hotels, hospitals, etc., the insurance company would be standing in line to suckle on that sweet taxpayer bailout teet, probably to the tune of another half-trillion dollars.

Of course, it goes without saying that the government doesn’t have the money for any this.

We’ve explored the government balance sheet many times in the past: Uncle Sam is already in the hole by MINUS $23 trillion according to the Treasury Department’s most recent financial statements.

And, over the last few years, even when the economy was incredibly strong, the federal government still managed to lose more than a trillion dollars a year.

Now that they have a real crisis to contend with, the deficit is going to swell to an unimaginable figure.

Frankly it doesn’t matter whether or not the insurance companies end up footing the bill.

If the insurance companies re forced to pay up, the government will likely bail them out. Otherwise the government will bail out businesses directly.

Either way, it’s pretty obvious the government is going to spend an unbelievable amount of money they don’t have… which means the central bank (Federal Reserve) will keep printing more money.

That’s how the system works: whenever the government wants to bail someone out, the Federal Reserve first conjures the bailout money out of thin air, and then ‘loans’ it to the Treasury Department.

Crazy, right?

The Federal Reserve has already printed trillions of dollars since this crisis started, and that may only be the warm-up round.

The longer this lasts, the more money they’re going to print… and the more they’ll end up debasing the currency.

We are obviously living in extraordinary times, and it’s perfectly reasonable to hope for the best.

But it would be irresponsible to willfully ignore what the government and central bank are doing here.

Conjuring infinite amounts of money out of thin air could have incredibly destructive consequences on the currency.

And that’s why, as I’ve written before, it’s definitely time to consider owning some real assets.

*  *  *

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.

end
The battle: Business interruption insurance.
Is the interruption the Pandemic or is it by order of government
You decide….

The Next Major Battle Pits Restaurants Against Insurers

Authored by Mike Shedlock via MishTalk,

A big lobbyist fight is underway in Congress. It pits restaurants against insurers.

Hard-hit restaurants press business-interruption claims even on policies that excluded pandemics.

For example, Wolfgang Puck does not have a pandemic policy.

It expects Congress to take care of it.

The Wall Street Journal reports Restaurants vs. Insurers Shapes Up as Main Event In D.C. Lobbying Fight

Restaurants and their allies are lobbying President Trump and Congress to press insurance companies to cover “business interruption” claims stemming from the coronavirus, even where restaurants have policies that exclude losses from pandemics.

While insurers do offer coverage, those policies are significantly more expensive than standard business-interruption policies, and few restaurants carry them, industry representatives said. But restaurants and some U.S. lawmakers say the business-shutdown orders in states and cities should constitute business interruptions under their existing policies.

Insurers are pushing back hard with the help of some Republican senators and conservative groups, saying retroactive changes to coverage policies and threats of lawsuits from restaurants could undermine the nation’s insurance system.

“Big” Bedfellows

Cheatsheet reports Celebrity chef Wolfgang Puck has joined fellow renowned chefs Thomas Keller, Daniel Boulud, Jean-Georges Vongerichten, and Dominique Crenn to form BIG, (Business Interruption Group), a new national legal, political, and communications campaign launched in partnership with an industry-savvy insurance attorney.

The group has spoken by phone to President Trump for his assistance in communicating with insurance companies, who have, for the most part, denied restaurants assistance during the pandemic. Specifically, they are requesting the U.S. president to step in on their behalf. And it looks like Mr. Trump is sympathetic.

Puck said, “We were encouraged by our conversation with the president about the urgent need to help the restaurant industry. All of us paid business interruption insurance for years to protect the livelihood of our employees. If the restaurant industry collapses, it has a massive effect on the entire economy. . .”

Understanding the Legal Battle

  • Those with no business interruption policy have no claim.
  • Restaurants that do have business interruption policies ought to be covered unless the policy specifically excludes pandemics.
  • Policies cannot be changed after the fact by Congress or anyone else, except by universal agreement of all of those who the policy covers.

The disagreement is whether the shutdown is pandemic-related or government-related.

Lobbyists have taken sides.

I believe this should be up to a court of law with the decision depending on specific policy language.

It should not be up to Congress to interpret law, nor to make businesses whole for those companies with inadequate insurance, nor insurance companies who go burnt by offering pandemic insurance.

end
this ought to be fun: another one million homeowners just applied for Covid 19 forbearance
(zerohedge)

Another Million Homeowners Just Applied For COVID-19 Forbearance In The Past Week

Last week we reported that the number of Americans applying for the government’s mortgage forbearance program had spiked to 3.74%, up from 2.73% the week before.

One week later, total home loans in pandemic-induced forbearance stand at 5.95%, an increase of 60% on the week as roughly a million more homeowners applied for help – bringing the total number of distressed borrowers under the program to roughly 3 million, according to the new Forbearance and Call Volume Survey published by the Mortgage Bankers Association.

Of those, Ginnie Mae loans grew the most week-over-week, from 5.89% to 8.26%, while the share of Fannie Mae and Freddie Mac loans grew from 2.44% to 4.64%.

For reference, total loans in forbearance were just 0.25% the first week in March, according to HousingWire.

In terms of servicing portfolio volume, independent mortgage bank servicers reached 5.69% as of April 12, compared to 4.17% one week earlier, an increase of 36%. Depository servicers ended the week with 6.57% of forbearance shares, up from 3.63% one week earlier, an increase of 80%.

In terms of call volume, the MBA survey found the percentage of servicing portfolio volume calls dropped from 14.4% to 8.8% while hold times decreased from 10.3 minutes to 4.9 minutes and abandonment rates declined from 17.0% to 9.7%. The average call length inched up slightly from 7.5 minutes to 7.6 minutes. –HousingWire

“With over 22 million Americans filing for unemployment over the past month, homeowners are contacting their mortgage servicers seeking relief, leading to a sharp increase in the share of loans in forbearance across all loan types,” said MBA’s senior VP and chief economist, Mike Fratantoni. “Mortgage servicers continue to receive a very high level of forbearance requests, but volumes were down somewhat compared to the prior week.”

The spike in distressed homeowners comes as existing home sales tumbled at the fastest rate in over four years.

Sales of previously owned homes, which make up most of the U.S. housing market, dropped 8.5% last month from February, the National Association of Realtors said Tuesday. The fall was deeper than expected economists polled by the Wall Street Journal expected a 7.5% decline. –Barrons

With no end in sight to the COVID-19 pandemic and the unprecedented economic fallout which has followed, Fratantoni thinks that forbearance requests “will likely rise again as we approach May payment due dates.”

 

He also advocated for a federal liquidity vehicle which would assist servicers dealing with the surge in forbearances.

“Mortgage servicers are performing an essential function of the housing finance system by continuing to advance funds to investors at a time when roughly 3 million homeowners are now in forbearance,” he said. “To ensure market stability during these challenging times for consumers and the entire industry, servicers need access to interim financing so that they can continue to play this critical role.”

Other key findings from the BA’s llatest Forbearance and Call Volume Survey (via MBA):

  • Forbearance requests as a percent of servicing portfolio volume (#) dropped relative to the prior week: from 2.43% to 1.79%.
  • Weekly servicer call center volume:
    • As a percent of servicing portfolio volume (#), calls dropped from 14.4% to 8.8%.
    • Hold times decreased from 10.3 minutes to 4.9 minutes.
    • Abandonment rates declined from 17.0% to 9.7%.
    • Average call length rose from 7.5 minutes to 7.6 minutes.
  • Loans in forbearance as a share of servicing portfolio volume (#) as of April 12, 2020:
    • Total: 5.95% (previous week: 3.74%)
    • IMBs: 5.69% (previous week: 4.17%)
    • Banks: 6.57% (previous week: 3.63%)
end
No idea what is going on here, but I am reporting on it:  GC rates for repo has gone negative by a huge 1/4 point
(zerohedge)

It’s Not Just Oil: Another Critical Index Turns Negative, Hinting Funding “Crisis” Has Returned

It’s not the WTI May contract that shocked investors when it traded as far negative as -$40 on the historic date of April 20: also dipping into negative territory was another benchmark indicator, arguably far more important than an oil future contract: General Collateral.

As Curvature’s Scott Skyrm writes, Repo GC rates began trading in the negatives in the morning [on Monday] and traded as low as -.25% [on Monday] afternoonUnless there is a crisis or it’s quarter-end, it’s very rare for Repo rates to trade this negative.

So maybe there is a crisis but with equities now directly backstopped by the Fed, nobody told stock traders?

Anyway Skyrm continues:

RP operations are declining, so that means less Fed cash in the market, but with rates near zero, money funds are now giving their cash to the Fed again with $31 billion in RRP volume today. Private cash that was on the sidelines must have come back into the market over the past couple of days.

With all of the Cash Management Bill issuance, you would thing there’s plenty of short-term paper available for cash investors. However, maybe QE is starting to impact the market? Maybe the impact of QE combined with increased investor cash is what’s driving rates lower?

And visually:

While the underlying reasons for GC repo’s slide into negative remain unclear, we will remind readers that just a few days ago, repo guru Zoltan Pozsar warned that the surge in Bill issuance could become the next crisis, warning that the only way to control the short-end would be to launch yield curve control for the entire yield curve:

The Fed has done a lot and yield curve control where they peg three month Treasury bill yields at OIS rates and is the only thing the Fed has not done yet, but soon will have to. The target range for overnight rates and the OIS curve – the bottom layer of the money market cake – are the Fed’s monetary sanctum. Everything the Fed does is priced based on variables within that sanctum: the top of the band, IOR, IOR plus a spread and OIS plus a spread.

As we responded to this proposal, which we are confident will be implemented shortly, “the only thing that experts agree will avoid another crisis in the bond – and funding – markets is if the Fed effectively takes over the entire yield curve, ending capital markets as we know them, and launching “price discovery” by decree. While we have no doubt that the Fed will go the length, we can’t help but remember that such terminal central planning did not have a happy ending for the USSR.”

The drop in GC repo to negative just brought the US one step closer to attaching an SR to its name.

 

iv) Swamp commentaries)

This ought to be fun:  Barr states that the Dept of Justice might join lawsuits against the states that do not re open fast enough

(zerohedge)

Barr Says DoJ Might Join Lawsuits Against States That Don’t Reopen Fast Enough

During an interview with conservative radio host Hugh Hewitt, Attorney General William Barr, who has heretofore enjoyed a reputation as one of the cagiest members of the cabinet, has just made a massive political blunder. Whether he did it at the best of his boss remains unclear.

President Trump’s tweets about “liberating” Democratic-led states has enraged certain conservatives who recognize that Trump has just accepted blame for the handling of the coronavirus response. Delegating to the states was a brilliant move because it meant that no matter what, Trump would be praised for doing the ‘smart’ thing and handing the reins to the states, something that, in theory, also goes against the president’s “authoritarian” nature, which would earn him extra political cred.

By baiting the thousands of Americans willing to go out and join protests demanding an immediate reopening of the economy, Trump is inviting citizens to break the law during an unprecedented crisis when public resources are already strained. If nothing else, it will under mine moderates’ faith in Trump’s ability to make ‘responsible’ choices, likely costing him critical votes in the swing states.

Now, AG Barr has taken Trump’s embrace of the ‘reopen now’ movement to the next level by claiming the DoJ might join lawsuits filed by businesses and citizens against various states over the shutdown orders.

“We have to give businesses more freedom to operate in a way that’s reasonably safe,” Barr said. “To the extent that governors don’t and impinge on either civil rights or on the national commerce – our common market that we have here – then we’ll have to address that.”

The move comes as more conservative groups reportedly heap pressure on the administration to do more to stop governors like Gavin Newsom from keeping their states closed until the summer, according to BBG.

But the last thing states need right now is another reason to blame the White House for meddling in their reopening planning…

One way the Justice Department might act against state or local officials is by joining lawsuits brought by citizens or businesses over restrictions, Barr said. He acknowledged that state governments are at “a sensitive stage,” as they try to balance health and safety against pressure to reopen.But he said that “as lawsuits develop, as specific cases emerge in the states, we’ll take a look at them.”

“We’re looking carefully at a number of these rules that are being put into place,” Barr said. “And if we think one goes too far, we initially try to jawbone the governors into rolling them back or adjusting them. And if they’re not and people bring lawsuits, we file statement of interest and side with the plaintiffs.”

…and Barr just gave it to them on a silver platter.

end

v) King report/Courtesy of Chris Powell of GATA which includes the major swamp stories.

Oil, oil toil and trouble!

The May WTI [West Texas Intermediate] oil contract crashed a record 321%, to a low of -40.32.  The contract closed at 18.27 on Friday; it settled at -$37.63 on Monday.  Holders of the May WTI contract had to pay someone to take the contract from them!  This is an extremely disturbing travesty that should force the Street, regulators & Congress to reform derivative & ETF [exchange-traded fund] trading.

When oil was crashing early in the morning, a reporter from a great metropolitan newspaper asked us how far could May oil fall.  We said theoretically the contract could go negative because holders might have to pay someone to take the contract.  But, that has never occurred and is extremely unlikely.

We warned that the lack of oil storage would pressure WTI lower into the expiration of its May future contract, which is today.  Technically, today is the last trading day for May WTI oil.  First notice (of delivery) is Thursday.  First delivery (of oil) is Friday, May 1, 2000; last delivery is May 31, 2020.

People that were long May WTI oil had three choices: sell the contract, prepare to take delivery or roll the contract (sell May) into the (buy) June contract.  This dynamic pushed June oil to a record premium.

June WTI oil declined as much as 19% and hit a low of 20.19.  The big question for WTI oil: With the end of May trading, will oil rally or will June WTI oil now get slammed on delivery fears next month?

What occurred in oil yesterday is the product of too much leverage and the abolition of reasonable position limits.  Where is Congress?  Too busy taking donations from financial system exploiters?

For decades, we have screamed that Congress should do something about derivatives.  There is too much leverage and exposure in the derivative market.  We thought the 2008 Crisis would force Congress to reform the derivative market.  However, financial industry donations (bribes?) carry the most weight.

@LukeGromen: 1) Does today’s oil action hint at the extent to which oil mkts were financialized (& therefore possibly manipulated) against the interests of actual oil producers?  2) If so, is this the beginning of the end of the hyperfinancialization of commodities dating bk to the early 80s?

Long-time readers might recall that we have long maintained that real estate was A problem in the 2008 Crisis, but derivatives were THE problem.  Regulators and legislatures have NOT done anything about this problem because about 5 big banks hold an estimated 95% of the $640 Trillion (BIS estimate as of June 30, 2019) derivative market.  WHY is this abuse allowed?  Banks generate and CRAFT a huge chunk of earnings on derivatives.  Sometimes, a bank might be tempted to fudge the ‘marks’ on positions that have NO public market.  Ergo, there is no accurate way to know the value.  This is when a bank can ‘mark by model’ and manufacture mythical profits.

The looming derivative crisis – According to the Bank for International Settlements, in mid-June last year all global OTC contracts outstanding were still unimaginably large at $640 trillion, a massive sum in anyone’s book… Deutsche Bank’s 2019 balance sheet… conceals derivative exposure under the headings “Trading assets” and “Trading liabilities” on the balance sheet. You have to go into the notes to discover that under Trading assets, derivative financial instruments total €80.848bn, and under Trading liabilities, derivative financial instruments total €81.910bn, a difference of €1.062bn This is relatively trivial for a bank with a balance sheet of €777bn.  But wait, there is another table that breaks derivative exposure down even further into categories, and it turns out the earlier figures are consolidated totals. The true total of OTC derivatives and exchange traded derivatives to which the bank is exposed is €37.121 trillion. That is nearly thirty-five thousand times the €1.062bn netted difference in the balance sheet. And when you bear in mind that valuing OTC derivatives is somewhat subjective, or as the cynics say, mark to myth, it invalidates the valuation exercise…

     Not only is there the emergence of counterparty failures to deal with, but there are ever-changing fair values, which will particularly reflect interest rate spreads increasing for Deutsche Bank’s €30.25 trillion interest rate-linked derivatives…

      Gold derivatives in crisis – The Comex contract, which anchors itself to physical gold through the option of physical delivery at expiry, will face enormous challenges when the active June contract expires at the end of next month. At expiry, the speculators have a chance to obtain delivery…

    Many central banks who have stored their earmarked gold at the Bank of England will be unhappy as well, having leased their gold in the expectation it would stabilise the bullion market. They will not do it again for an interesting reason: gold leasing rates have turned strongly negative, with the two-month rate currently minus 3.7%.[ii] No sensible entity is going to pay a lessor to lease its gold and will want leased gold returned instead. Therefore, the availability of gold for leasing is now cut off and gold already leased will need to be returned if delivered to the lessors, or unencumbered if it remained in the Bank of England’s vaults as is the normal leasing practice… Bullion banks run their books in dollars, not gold. This gives rise to relationships between Libor, lease rates and the gold forward rate. From a dollar-centric point of view this means a negative lease rate for gold cannot happen. However, if a bullion bank or leasing bank recorded its accounts in gold, it would become obvious that the problem is one of dollar interest rate suppression.  https://www.goldmoney.com/research/goldmoney-insights/the-looming-derivative-crisis

Historically, central banks have capped gold, or driven it down, by leasing bullion to gold dealers.  As the above story illustrates, that scheme is blowing up due to historic central bank monetary promiscuity.

Central banks created negative interest rates, and indirectly, negative oil prices.  What else can go negative?  Any deliverable commodity contract; debt can go to zero

Central bank QE, NIRP (negative interest rates) and ZIRP (zero interest rates) have induced and forced people to buy assets for over a decade.  But, the global economic collapse due to Covid-19 is immensely deflationary.  Central banks know this – and they know it could unleash the dreaded debt deflation and wide-spread debt defaults.  So, central banks are trying to reflate to avoid a global debt debacle.

The oil debacle is Mother Nature exerting her hand in the markets on the side of deflation.  Mother Nature, AKA economic and systemic fundamentals, destroyed the people who bought oil for investment, speculation or as store of value.  There is no storage for your oil and the Fed can’t save you.

Oil is a warning to central banks and asset holders of what happens when systemic deflation exerts itself.

Equities soared to a series of all-time high in January and February on the notion that the Chinese virus was spreading; economic activity was ebbing and central banks were increasing credit – so buy stocks.

The reality of a collapsing global economy produced the historic equity collapse in March.  The Fed and other central banks then went nuclear to save financial markets.  However, this has pushed asset prices excessively above economic or utility value.  Due to central bank and government intervention, the markets are artificial and capricious.  If underlying fundamentals don’t improve significantly soon, another deflationary wave could hit the markets.  Then the Fed has to cross the Rubicon or else.

The WTI crash forced ESMs to tumble during early European trading.  After trading at a Sunday night high of 2875.50, ESMs plunged to 2808 at 7: 53 ET.  But traders are conditioned to play for a Monday rally.  So, the usual suspects started to get long for the NYSE open.  After the NYSE open, day traders and lemmings poured into ESMs and stocks.  ESMs hit 2859 eleven minutes after the European close.

Sweden Says Controversial Covid-19 Strategy Is Proving Effective

Sweden has left its schools, gyms, cafes, bars and restaurants open throughout the spread of the pandemic. Instead, the government has urged citizens to act responsibly and follow social distancing guidelines…As of Sunday, Sweden had reported 1,540 deaths tied to Covid-19, an increase of 29 from Saturday… Sweden’s Covid-19 strategy may ultimately result in a smaller — albeit historically deep — economic contraction than the rest of Europe is now facing…

https://www.bloomberg.com/news/articles/2020-04-19/sweden-says-controversial-covid-19-strategy-is-proving-effective

Hundreds of thousands in L.A. County may have been infected with coronavirus, study finds

The initial results from the first large-scale study tracking the spread of the coronavirus in the county found that 2.8% to 5.6% of adults have antibodies to the virus in their blood, an indication of past exposure. That translates to roughly 221,000 to 442,000 adults who have recovered from an infection…The findings suggest the coronavirus is far more widespread than originally known, and that its fatality rate is much lower…  https://www.latimes.com/california/story/2020-04-20/coronavirus-serology-testing-la-county

@julie_kelly2: On January 9, Cuomo activated emergency plan for health care system bc hospitals were already overwhelmed with flu-associated hospitalizations…There has been a total of 32,848 lab-confirmed cases reported this season, with one flu-associated pediatric death… [As of Jan. 9, 2020]

https://www.governor.ny.gov/news/governor-directs-state-health-department-activate-enhanced-preparedness-monitoring-healthcare

Farm says [NJ] state shut down drive-thru tulip festival due to coronavirus gathering rules

As of 7 pm we were ordered to cease all operations by an Assistant Prosecutor from the State of New Jersey…  https://www.nj.com/coronavirus/2020/04/farm-says-state-shut-down-drive-thru-tulip-festival-due-to-coronavirus-gathering-rules.html

Ex-NSC official @RichHiggins_DC: Any media not discussing economic consequences of virus response is missing/neglecting biggest story of past 80 years.  This virus is not and never was a true strategic security threat……the economics of the response and the derivative human and political costs are.

Hundreds of protesters defy coronavirus lockdown orders in Pennsylvania https://trib.al/HEUBoqM

Mark Zuckerberg: Lockdown Protests Are ‘Misinformation,’ Facebook Will Ban Organizers

[Is crystal clear who Big Brother is and who his allies are.]

https://www.breitbart.com/tech/2020/04/20/mark-zuckerberg-lockdown-protests-are-misinformation-facebook-will-ban-organizers/

With warmer weather coming, protests and social unrest will increase greatly in the US over shutdowns.

IBM Q1 EPS $1.84 Adj. vs. $1.80 Est.; Q1 Revs. $17.57B vs. $17.62B Est.  https://cnb.cx/2VMvIDF

IBM pulled its 2020 guidance and declined to provide a projection on Q2 results.  It fell 4 points.

Fox’s @ChadPergram: GOP ND Sen Cramer: Today’s collapse poses a devastating threat to our oil and gas sector… the highest number of Saudi oil tankers in years is on its way to our shores. Given today’s news, I call on President Trump to prevent them from unloading in the United States

After the close, Trump said: “We’re filling up our national petroleum reserves — you know, the strategic reserves [SPR] — and we’re looking to put as much at 75 million barrels into the reserves themselves — that would top it out…. I hope the Senate will vote on a relief loan tomorrow…”

https://www.cbsnews.com/live-updates/coronavirus-covid-19-news-2020-04-20/

The Times’ Lucy Fisher@LOS_Fisher: Britons taking hardline attitude on China over Covid-19, finds new poll: 83% want UK to push for intl inquiry into China’s handling of outbreak; 74% think Chinese gvt to blame for disease spread; Survation poll (April 15-16) commissioned by @HJS_Org

GOP @RepAndyBiggsAZ: Speaker Pelosi has chosen to side with the communists in China in her latest endeavor to undermine America’s duly elected president. History will harshly judge her actions and statements throughout this entire pandemic.  I strongly support President Trump’s efforts to hold the WHO and China accountable for this pandemic.

GOP Rep. Paul Gosar: Imagine if Pelosi was as focused on helping America’s small businesses rather than a global organization who kowtowed to China and failed to prepare the world for this pandemic.

https://dailycaller.com/2020/04/16/house-republicans-slam-pelosi-for-trumps-world-health-organization-cuts-are-illegal/

Pompeo, Barr slam China over arrests of protest organizers in Hong Kong https://trib.al/eaIjr8K

China’s latest thuggery is bad news for its US apologists & payees, including a passel of Republicans.

Democrats lay out rebuttal to Trump attacks on Biden over China [

Trump’s campaign this month released a controversial digital ad bashing Biden as overly friendly and deferential to Beijing…The DNC’s War Room writes in the memo that it’s an understatement to call Trump weak on China and that he “rolled over in a way that has been catastrophic for our country” and “put himself and his political fortunes first.”… “They are only doing this because Joe Biden has a big China problem,” Trump campaign communications director Tim Murtaugh told Axios in an email…

    “Joe Biden called the President’s travel restrictions on China ‘xenophobic’ and ‘reactionary.’ All this memo does is prove that Joe Biden and his Democrat allies are not serious people.”

https://www.axios.com/dnc-memo-trump-biden-china-f914e9d1-37fd-48d0-b579-4f94d0e72b69.html?

60% of Democratic voters now blame Trump not China for coronavirus crisis says Rasmussen Poll

https://www.washingtontimes.com/news/2020/apr/20/60-of-democratic-voters-now-blame-donald-trump-not/

Frankly, we’re stunned that more Dems aren’t blaming DJT instead of China.  This is bad for Biden.

Tucker Carlson: The NYT Knew about the Origins of Virus, But Has Yet to Report [Why?]

“In recent weeks analysts from the CIA, the NSA and others have briefed staff at The New York Times about the origins of this virus, but the newspaper has still not reported their findings.”

https://amp.dailycaller.com/2020/04/18/tucker-carlson-report-new-york-times-knew-origin-of-virus-yet-to-write

Inmates committing crimes after coronavirus release ‘unconscionable’: De Blasio

[This is NOT a parody!  The NYC mayor is shocked that criminals commit crimes] https://trib.al/TqfdAOb

A sizable number of Trump voters/supporters don’t like him or his snark; but they like his unusual candor on political and other matters.  On Sunday, a reporter noted that Romney is the only GOP Senator that is not on the Reopen America committee.  The scribe asked DJT is he held a “grudge” against Romney.  Trump responded, “Yeah…“I’m not a fan of Mitt Romney. I don’t really want his advice…”

Well that is all for today

I will see you WEDNESDAY night.

 

2 comments

  1. Hello Harvey,

    Why do you say ‘phony kilo bar entries’ for gold in the COMEX warehouses?
    What makes you think they are phony entries?

    Like

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