MAY 4//GOLD UP $12.00 TO $1705//SILVER DOWN 5 CENTS TO $14.81//A HUGE 25.6 TONNES OF GOLD IS STANDING IN THIS NON ACTIVE MONTH OF MAY//46 MILLION OZ OF SILVER STANDING//KEY FINDINGS FROM THE 5 I’S WITH RESPECT TO THE ORIGINS OF THE CORONAVIRUS//CORONAVIRUS UPDATES//THE GLOBE STATES THAT CHINA MUST PAY FOR THE RELEASE OF THE VIRUS//MICHAEL EVERY…WE MUST WATCH THE VALUE OF THE YUAN (CNH)//SPAIN SEEKS BAILOUT MONEY (ALSO ITALY)//HUGH SMITH..WHY ASSETS MUST FALL IN PRICE//PETER NAVARRO..CHINA PRODUCES 80% OF STUFF WHICH MAKES UP THE AMERICAN POWER GRID: THIS IS DANGEROUS!!/MORE SWAMP STORIES FOR YOU TONIGHT//

GOLD:$1705.65  UP $12.00   The quote is London spot price

 

 

 

 

 

Silver:$14.81  DOWN 5 CENTS

Closing access prices:  London spot

 

i)Gold : $1702.20  LONDON SPOT  4:30 pm

 

ii)SILVER:  $14.78//LONDON SPOT  4:30 pm

CLOSING FUTURES PRICES:  KEY MONTHS

 

MAY COMEX GOLD:  1698.80 1:30 PM

JUNE GOLD:  $1713.10  CLOSE 1.30 PM//   SPREAD SPOT/FUTURE JUNE: $7.60.//PREMIUMS WENT UP AGAIN

 

CLOSING SILVER FUTURE MONTH

SILVER APRIL COMEX CLOSE: XXX

SILVER MAY COMEX CLOSE;   $14.81…1:30 PM.//SPREAD SPOT/FUTURE MAY:  0 CENTS  PER OZ//PREMIUMS UP AGAIN

 

 

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:  88/216

DLV615-T CME CLEARING
BUSINESS DATE: 05/01/2020 DAILY DELIVERY NOTICES RUN DATE: 05/01/2020
PRODUCT GROUP: METALS RUN TIME: 20:47:14
EXCHANGE: COMEX
CONTRACT: MAY 2020 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,694.500000000 USD
INTENT DATE: 05/01/2020 DELIVERY DATE: 05/05/2020
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
072 C GOLDMAN 2
099 H DB AG 6
118 H MACQUARIE FUT 25
152 C DORMAN TRADING 1
323 H HSBC 6
355 C CREDIT SUISSE 20 6
435 H SCOTIA CAPITAL 115
624 C BOFA SECURITIES 4
657 C MORGAN STANLEY 12
657 H MORGAN STANLEY 45
661 C JP MORGAN 88
686 C INTL FCSTONE 5
690 C ABN AMRO 19 44
732 C RBC CAP MARKETS 2
737 C ADVANTAGE 12 4
800 C MAREX SPEC 5 2
905 C ADM 9
____________________________________________________________________________________________

TOTAL: 216 216
MONTH TO DATE: 3,103

NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT: 216 NOTICE(S) FOR 21600 OZ (1.6718 tonnes)

 

TOTAL NUMBER OF NOTICES FILED SO FAR:  3103 NOTICES FOR 310,300 OZ  (9.6516 TONNES)

 

 

SILVER

 

FOR MAY

 

 

18 NOTICE(S) FILED TODAY FOR  90,000  OZ/

total number of notices filed so far this month: 5507 for 27,535,000 oz

 

BITCOIN MORNING QUOTE  $8674 DOWN  222 

 

BITCOIN AFTERNOON QUOTE.: $8851 DOWN $44

 

GLD AND SLV INVENTORIES:

WITH GOLD UP $12.00: AND NO PHYSICAL TO BE FOUND ANYWHERE:

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

 

A BIG CHANGE IN GOLD INVENTORY//

 

A HUGE DEPOSIT OF 11.40 TONNES OF GOLD INTO THE GLD//

 

GLD: 1,067.90 TONNES OF GOLD//

 

 

WITH SILVER DOWN 5 CENTS TODAY: AND WITH NO SILVER AROUND

TWO BIG TRANSACTIONS:

 

A)A HUGE 1.399 MILLION OZ OF PAPER SILVER  WAS REMOVED FROM THE SLV.

B) A BIG 1.647 MILLION OZ OF PAPER SILVER ADDED TO THE SLV…..

 

 

 

RESTING SLV INVENTORY TONIGHT:

SLV: 413.124  MILLION OZ./

 

 

 

 

XXXXXXXXXXXXXXXXXXXXXXXXX

Let us have a look at the data for today

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

IN SILVER THE COMEX OI FELL  BY A HUGE SIZED 2554 CONTRACTS FROM 134,672 DOWN TO 132,118 AND FURTHER FROM OUR NEW RECORD OF 244,710, (FEB 25/2020. THE HUGE SIZED LOSS IN OI OCCURRED WITH  OUR 0 CENT LOSS IN SILVER PRICING AT THE COMEX. IT SEEMS THAT THE LOSS IN COMEX OI IS DUE TO STRONG  BANKER SHORT COVERING PLUS A SMALL EXCHANGE FOR PHYSICAL ISSUANCE, CONSIDERABLE LONG LIQUIDATION, ACCOMPANYING  A SMALLER SILVER OZ STANDING AT THE COMEX FOR MAY. WE HAD A NET LOSS IN OUR TWO EXCHANGES OF 2231 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  SMALL SIZED NUMBER OF COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:   MARCH:  00 AND MAY: 0 AND JULY: 308  AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  308 CONTRACTS. WITH THE TRANSFER OF 308 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 308 EFP CONTRACTS TRANSLATES INTO 13.56 MILLION OZ  ACCOMPANYING:

1.THE 0 CENT LOSS 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

4.660  MILLION OZ FINAL STANDING FOR APRIL

46.670 MILLION OZ INITIALLY STANDING FOR MAY

 

FRIDAY, 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 FELL 0 CENTS).. AND, OUR OFFICIAL SECTOR/BANKERS  WERE SOMEWHAT SUCCESSFUL IN THEIR ATTEMPT TO FLEECE SOME AMOUNT OF SILVER LONGS FROM THEIR POSITIONS. THE LOSS AT THE COMEX WAS DUE TO: i)  A SMALL ISSUANCE OF EXCHANGE FOR PHYSICALS 2) A SMALL LOSS OF SILVER OZ STANDING FOR MAY, HUGE BANKER SHORT COVERING  AND 4) SOME LONG LIQUIDATION AS  WE DID HAVE A  NET LOSS OF 2246 CONTRACTS OR 11.23 MILLION OZ ON THE TWO EXCHANGES! YOU CAN BET THE FARM THAT OUR BANKER  ARE DESPERATE TO LIQUIDATE THEIR HUGE SHORT POSITIONS IN SILVER

 

 

 

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

3020 CONTRACTS (FOR 2 TRADING DAYS TOTAL 3020 CONTRACTS) OR 15.100 MILLION OZ: (AVERAGE PER DAY: 1510 CONTRACTS OR 7.55 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF APRIL: 15.10 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 2.15% 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:          1,003.945 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                               95.355 MILLION OZ.  (EX. FOR PHYSICALS BECOMING A LOT LESS)

MAY EFP SO FAR:                   15.10 MILLION OZ

EXCHANGE FOR PHYSICAL ISSUANCE FOR THE PAST 30 DAYS IS A LOT LESS.  NO DOUBT THAT THE COST TO CARRY THESE THINGS HAS EXPLODED AND AS SUCH CANNOT BE DONE AS FREQUENTLY AS BEFORE.

 

RESULT: WE HAD A HUGE SIZED DECREASE IN COMEX OI SILVER COMEX CONTRACTS OF 2554, WITH OUR 0 CENT LOSS IN SILVER PRICING AT THE COMEX ///FRIDAY THE CME NOTIFIED US THAT WE HAD A SMALL SIZED EFP ISSUANCE OF 308 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 LOST A STRONG SIZED OI CONTRACTS ON THE TWO EXCHANGES:  2246 CONTRACTS (WITH OUR 0 CENT LOSS IN PRICE)

 

THE TALLY//EXCHANGE FOR PHYSICALS

i.e 308 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH A HUGE SIZED DECREASE OF 2546 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 0 CENT LOSS IN PRICE OF SILVER/ AND A CLOSING PRICE OF $14.86 // FRIDAY’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: 18 NOTICE(S) FOR  90,000 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 4.660 MILLION OZ//MAY  46.810 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 SMALL SIZED 674 CONTRACTS TO 489,877 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 SMALL SIZED LOSS OF COMEX OI OCCURRED WITH OUR CONSIDERABLE COMEX GAIN IN PRICE  OF $8.45 /// COMEX GOLD TRADING// FRIDAY// WE  HAD CONSIDERABLE BANKER SHORT COVERING , A VERY STRONG 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 GAIN IN THE PAPER PRICE OF GOLD.

WE HAD 3 ISSUANCE OF OUR NEW 4 GC CONTRACT

 

WE GAINED A FAIR SIZED 1755 CONTRACTS  (6.458 TONNES) ON OUR TWO EXCHANGES.

 

E.F.P. ISSUANCE

 

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 2429 CONTRACTS:

CONTRACTS, FEB>  CONTRACTS; MARCH 00 APRIL: 0. MAY: 0, AND JUNE 2429.; DEC 0 AND ALL OTHER MONTHS ZERO//TOTAL: 2429.  The NEW COMEX OI for the gold complex rests at 489,877. 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 FAIR SIZED INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 1755 CONTRACTS: 674 CONTRACTS INCREASED AT THE COMEX AND 2429 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 1755 CONTRACTS OR 6.458 TONNES. FRIDAY, WE HAD A  GAIN OF $8.45 IN GOLD TRADING……

AND WITH THAT GAIN IN  PRICE, WE HAD A CONSIDERABLE SIZED GAIN IN  TOTAL/TWO EXCHANGES GOLD TONNAGE OF 6.458 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 (IT ROSE $8.45). AND IT ALSO SEEMS THAT THEIR ATTEMPT TO FLEECE ANY GOLD LONGS FROM THE GOLD ARENA WAS UNSUCCESSFUL  (SEE BELOW).

4 GC ISSUANCE:  THREE

 

END

 

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES:

WE HAD  A GOOD SIZED INCREASE IN EXCHANGE FOR PHYSICALS  (2429) ACCOMPANYING THE SMALL LOSS IN COMEX OI  (674 OI): TOTAL GAIN IN THE TWO EXCHANGES:  1755 CONTRACTS.  WE NO DOUBT HAD 1 )HUGE BANKER SHORT COVERING, 2.)A STRONG INCREASE IN OUNCES STANDING AT THE GOLD COMEX FOR THE FRONT MAY MONTH,  3) ZERO LONG LIQUIDATION AND  …ALL OF THIS WAS COUPLED WITH THAT GOOD GAIN IN GOLD PRICE TRADING//FRIDAY

 

SPREADING OPERATIONS

 

OUR SPREADING OPERATION HAS NOW SWITCHED INTO GOLD…..

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 SILVER AS THEY NOW BEGIN TO MORPH INTO GOLD AS WE HEAD TOWARDS THE NEW FRONT MONTH WILL BE JUNE.

 

 

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 SILVER..AND WE WILL NOW MORPH INTO AN ACCUMULATION PHASE OF SPREADING CONTRACTS FOR GOLD.  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 GOLD 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 MAY HEADING TOWARDS THE  ACTIVE DELIVERY MONTH OF JUNE FOR GOLD:

 

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

 

 

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 MAY : 5365 CONTRACTS OR 536,500 oz OR 16.1687 TONNES (2 TRADING DAYS AND THUS AVERAGING: 2683 EFP CONTRACTS PER TRADING DAY

 

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 2 TRADING DAY(S) IN  TONNES: 16.1687 TONNES

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

THUS EFP TRANSFERS REPRESENTS 16.1687/3550 x 100% TONNES =0.455% OF GLOBAL ANNUAL PRODUCTION

ISSUANCE OF EXCHANGE FOR PHYSICAL GOLD HAS DISSIPATED THIS MONTHTHE 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   2582.19  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:               243.45  TONNES  (EFP ISSUANCE BECOMING A LOT LESS)

MAY TOTAL EFP ISSUANCE:                     16.1687 TONNES

 

 

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

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

1.Today, we had the open interest at the comex, in SILVER, FELL BY A HUGE SIZED 2554 CONTRACTS FROM 134,672 DOWN TO 132,118 AND FURTHER FROM 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 LOSS IN COMEX OI WAS DUE TO 1) STRONG BANKER SHORT COVERING , 2) THE ISSUANCE OF A SMALL SIZED NUMBER OF EXCHANGE FOR PHYSICALS (SEE BELOW), 3) A SMALL DECREASE IN SILVER OZ STANDING AT THE COMEX FOR MAY  4) SOME LONG LIQUIDATION 

 

EFP ISSUANCE 308 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: 0 JULY: 2539 CONTRACTS   AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 2539 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  COMEX OI LOSS  OF 2554 CONTRACTS TO THE 308 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG LOSS OF 2346 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES. THUS IN OUNCES, THE LOSS ON THE TWO EXCHANGES 11.23 MILLION  OZ!!! WITH THE 0 CENT LOSS IN PRICE///

 

 

RESULT: A HUGE SIZED DECREASE IN SILVER OI AT THE COMEX DESPITE THE 0 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// FRIDAY. WE ALSO HAD A SMALL SIZED 308 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR THIS MONTH, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

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

(report Harvey)

 

 

2 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED UP 37.64 POINTS OR 1.33%  //Hang Sang CLOSED DOWN 1,029.79 POINTS OR 4.18%   /The Nikkei closed DOWN 574.34 POINTS OR 2.84%//Australia’s all ordinaires CLOSED UP 1.21%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0624 /Oil DOWN TO 18.79 dollars per barrel for WTI and 25.85 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.0624 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1256 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED//CORONAVIRUS//FALLOUT!  : /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 FELL BY A SMALL 674 CONTRACTS TO 489,877 MOVING FURTHER FROM  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 SMALL COMEX OI LOSS WAS SET WITH OUR STRONG GAIN OF $8,45 IN GOLD PRICING /FRIDAY’S COMEX TRADING//). WE ALSO HAD A GOOD EFP ISSUANCE (2429 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 //  APRIL/GOLD…  AS WE ENGINEERED A CONSIDERABLE GAIN ON TWO EXCHANGES OF 1755 CONTRACTS.

WE AGAIN HAD 3    4 -GC 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 2429 EFP CONTRACTS WERE ISSUED:

 FEB: 0; MARCH 00 AND APRIL: 0, MAY: 0  JUNE : 2429 AND 0 FOR DEC AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE: 2429 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:  1755 TOTAL CONTRACTS IN THAT 2429 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A SMALL SIZED 674 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  STRONG INCREASE IN COMEX GOLD TONNAGE // STANDING FOR DELIVERY……(SEE CALCULATIONS BELOW). ALL OF THE ABOVE OCCURRED WITH A CONSIDERABLE RISE IN PRICE

 

THE BANKERS WERE UNSUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT ROSE BY $8.45).  BUT, THEY WERE UNSUCCESSFUL IN FLEECING ANY LONGS, AS THE TOTAL GAIN ON THE TWO EXCHANGES REGISTERED 6.458 TONNES.

 

 

NET GAIN ON THE TWO EXCHANGES :: 1755 CONTRACTS OR 175,500 OZ OR 6.458 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:  489,877 TOTAL OI CONTRACTS X 100 OZ PER CONTRACT = 48.98 MILLION OZ/32,150 OZ PER TONNE =  1523 TONNES

THE COMEX OPEN INTEREST REPRESENTS 1523/2200 OR 69.22% OF ANNUAL GLOBAL PRODUCTION OF GOLD.

Trading Volumes on the COMEX TODAY: 154,025 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY185,501 contracts// volumes very low

MAY 4/2020

MAY GOLD CONTRACT MONTH

 

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
11,783.725 oz
HSBC ENHANCED
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

Deposits to the Customer Inventory, in oz  

64,225.875

OZ

HSBC

HSBC ENHANCED

SCOTIA

 

1500

KILOBARS

No of oz served (contracts) today
216 notice(s)
 21600 OZ
(1.6718 TONNES)
No of oz to be served (notices)
5132 contracts
(513200 oz)
15.96 TONNES
Total monthly oz gold served (contracts) so far this month
3103 notices
310,300 OZ
9.6516 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

We had 0 deposits into the dealer

 

 

 

total dealer deposits: 0   oz

total dealer withdrawals: NIL oz

we had 3 deposit into the customer account

i) Into HSBC:  32,151.000 oz  1,000 KILOBARS

ii) Into HSBC ENHANCED: 15,999.875 oz//a fraudulent entry

 

iii)  Into SCOTIA:  16,075.000 oz  (500 kilobarS)

 

 

 

 

 

 

total deposits:  64,225.875   oz

 

 

we had 1 gold withdrawals from the customer account:

i) Out of HSBC ENHANCED: 11,783.725 oz

 

 

 

total gold withdrawals; 11,783.725   oz

We had 2  kilobar transactions  +

 

We had 3  4 KC bar transaction

 

 

 

ADJUSTMENTS: 2  

i) Out of Brinks:  100.049 oz was adjusted out of the dealer and this lands into the customer of Brinks

ii)  Out of Scotia:  20,139.330 oz was adjusted out of the customer account of Scotia and this lands into the dealer Scotia

 

 

The front month of May registered a GIGANTIC total of 5348 oi contracts for a loss of 953 contracts. We had 1054 notices filed upon yesterday so we gained 101 contracts or an additional 10,100 oz will stand as these guys refused to morph into London based forwards and thus negate a fiat bonus.

The next delivery month after May is the huge delivery month of June.  Here June saw a  loss OF 1119 contracts DOWN to 325,093 contracts. July has ANOTHER GAIN OF 70 OI contracts gain and thus 77 contracts  outstanding.  Next comes August another strong delivery month and here the OI ROSE by 1540 contracts up to 78,180 contracts.

 

 

We had 216 notices filed today for 21600 oz

 

FOR THE  MAY 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 216 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 88 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 MAY /2020. contract month, we take the total number of notices filed so far for the month (3103) x 100 oz , to which we add the difference between the open interest for the front month of  May. (5348 CONTRACTS ) minus the number of notices served upon today (216 x 100 oz per contract) equals 823,500 OZ OR 25.614 TONNES) the number of ounces standing in this  non active month of May

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

No of notices served (3103)x 100 oz + 5348 OI) for the front month minus the number of notices served upon today (216) x 100 oz which equals 823,500 oz standing OR 25.614 TONNES in this non active delivery month. This is  a record amount for gold standing for any May delivery month or any non active delivery month.

We gained a 101 contracts or an additional 10,100 oz will seek out metal on this side of the pond.

 

NEW PLEDGED GOLD:  BRINKS

3027.500 OZ  REMOVED TO THE PLEDGED ACCOUNT JAN 10.2020/Brinks

144,088.952 oz NOW PLEDGED  JAN 21.2020/HSBC  5.4807 TONNES

3,468,643.910 oz PLEDGED  MARCH 2020  JPMORGAN:  10.788 TONNES

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

TOTAL PLEDGED GOLD NOW IN EFFECT:  528,072.303  OZ OR 16.147  TONNES

SURPRISINGLY WE HAVE BEEN WITNESSING NO REAL PHYSICAL GOLD ENTERING THE COMEX VAULTS FOR THE PAST YEAR!! ..ONLY PHONY KILOBAR ENTRIES…. WE HAVE 170.817 TONNES OF REGISTERED GOLD WHICH CAN SETTLE UPON LONGS ie. 25.614 tonnes

CALCULATION OF REGISTERED GOLD THAT CAN BE SETTLED UPON:

total registered or dealer  6,019,850.253 oz or 187.24  tonnes
which  includes the following:
a) pledged gold held at HSBC   which cannot settled upon   144,088.952 oz x ( 4.4817 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:  528,072.303 oz or 16.147 tonnes
thus:
registered gold that can be used to settle upon: 5,491,777.9  (170.817 tonnes)
true registered gold  (total registered – pledged tonnes  5,491,777.9 (170.817 tonnes)
total eligible gold:  14,398,965.515 oz (447.868 tonnes)

total registered, pledged  and eligible (customer) gold;   20,593,036.030 oz 640.529 tonnes (INCLUDES 4 GC GOLD)

total 4 GC gold:   127.79 tonnes

total gold net of 4 GC:  512.739 tonnes

 

end

 

I have compiled  data with respect to registered (or dealer) gold taken on first day notice for each of the past 24 months

The data begins on first day notice for the May month taken on the last day of April 2018. and it continues to present day.  Thus 24 data entry points.

 

I then took, how many deliveries were recorded by the CME for each and every month.  I also included for reference the price of gold on first day notice.

 

The first graph is a logarithmic  graph and the second graph, linear.

You can see the huge explosion of registered gold at the comex along with deliveries.  Gold owners are very clear people.  They would know full well that

the gold at the comex is unallocated and that they would not be stupid enough to keep their gold at the comex especially in the registered category once deliveries are asked upon. If physical gold was present it would be have removed from the comex… It shows there is no gold at the comex.  They are just trading in sticky paper.

 

 

THE GOLD COMEX SEEMS TO BE  UNDER SEVERE ASSAULT FOR PHYSICAL

 

END

 

MAY 4/2020

And now for the wild silver comex results

Total COMEX silver OI FELL BY A HUGE SIZED 2554 CONTRACTS FROM 134,672  DOWN TO 132,118(AND FURTHER 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) . THE STRONG  OI COMEX LOSS TODAY OCCURRED WITH OUR 0 CENT GAIN IN PRICING//FRIDAY.  THE LOSS IN TOTAL OI (TWO EXCHANGES) OCCURRED WITH 1)  A SMALL ISSUANCE OF EXCHANGE FOR PHYSICALS 2) A SMALL DECREASE IN SILVER OZ STANDING AT THE COMEX, 3)  HUGE BANKER SHORT COVERING , 4)SOME LONG LIQUIDATION, AND ALL OF THIS OCCURRED WITH OUR 0 CENT LOSS IN PRICE 

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF MAY

THE FRONT DELIVERY OF MAY SAW A HUGE 3845 OPEN INTEREST CONTRACTS STANDING  AND THUS WE HAD A LOSS OF 1847 CONTRACTS.  We had 1819 notices filed yesterday so we LOST 28 contracts or an additional 140,000 oz will NOT stand at the comex as these guys morphed into London based forwards and received a fiat bonus for their efforts. It sure looks like we have a Harlem Globetrotter vs Washington Generals game on our hands.

 

AFTER MAY WE HAVE THE NON ACTIVE MONTH OF JUNE.  HERE JUNE SAW A GAIN OF 37 CONTRACTS FALLING TO 282.

AFTER JUNE COMES THE VERY BIG DELIVERY MONTH OF JULY AND HERE THE OI LOST 1277 CONTRACTS DOWN TO 98,129 CONTRACTS

 

 

We, today, had  18 notice(s) FILED  for 90,000, OZ for the APRIL, 2019 COMEX contract for silver

 

MAY 4/2020

MAY SILVER COMEX CONTRACT MONTH

Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 22,107.400 oz
Delaware
HSBC

 

 

Deposits to the Dealer Inventory
nil oz

 

Deposits to the Customer Inventory
nil oz
No of oz served today (contracts)
18
CONTRACT(S)
(90,000 OZ)
No of oz to be served (notices)
3827 contracts
 19,135,000 oz)
Total monthly oz silver served (contracts)  5507 contracts

27,535,000 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

 

total dealer deposits: nil oz

total dealer withdrawals: nil oz

i)we had 0 deposits into the customer account

into JPMorgan:   0

ii)into everybody else:  0

 

 

 

 

 

 

 

*** 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 50.78% of all official comex silver. (160.819 million/316.64 million

 

total customer deposits today: nil    oz

we had 2 withdrawals:

i) Out of Delaware:  2094.700 oz

 

ii) Out of HSBC:  20,012.700 oz

 

 

total withdrawals;  22,107.400    oz

We had 2 adjustments:  customer to dealer:

i)from Delaware:  14,851.077 oz

ii) Out of Loomis:  625,657.780 oz

 

 

total dealer silver:  89.460 million

total dealer + customer silver:  314.852 million oz

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The total number of notices filed today for the MAY 2020. contract month is represented by 18 contract(s) FOR 90,000 oz

 

To calculate the number of silver ounces that will stand for delivery in MAY we take the total number of notices filed for the month so far at 5507 x 5,000 oz = 27,535,000 oz to which we add the difference between the open interest for the front month of MAY.(3845) and the number of notices served upon today 18 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAY/2019 contract month: 5507 (notices served so far) x 5000 oz + OI for front month of MAY (3845)- number of notices served upon today (18) x 5000 oz of silver standing for the MAY contract month.equals 46,670,000 oz.

We lost 28 or an additional 140,000 oz will seek out metal on the London side of the pond.

 

TODAY’S ESTIMATED SILVER VOLUME: 38,705 CONTRACTS //

 

 

FOR YESTERDAY: 37,381 CONTRACTS..,CONFIRMED VOLUME//extremely low volume

 

 

YESTERDAY’S CONFIRMED VOLUME OF 37,381 CONTRACTS EQUATES to 186 million  OZ 26.7% 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 +1.30% ((MAY 4/2020)

2. Sprott gold fund (PHYS): premium to NAV  FALLS TO +0.18% to NAV:   (MAY 4/2020 )

Note: Sprott silver trust back into POSITIVE territory at +%-/Sprott physical gold trust is back into POSITIVE/ 1.30%

(courtesy Sprott/GATA

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

NAV 15.45 TRADING 15.43///POSITIVE 0.15

END

 

 

And now the Gold inventory at the GLD/

MAY 4//WITH GOLD UP $12.00 TODAY//A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A MASSIVE PAPER DEPOSIT OF 11.4 TONNES INTO THE GLD////GOLD INVENTORY RESTS AT 1067.90 TONNES

MAY 1/WITH GOLD UP $8.45 NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1056.50 TONNES

APRIL 30/WITH GOLD DOWN $15.95 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1056.50 TONNES

APRIL 29/WITH  GOLD DOWN $7.65/A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 8.19 TONNES OF GOLD INTO THE GLD////INVENTORY REST AT 1056.50 TONNES//

APRIL 28/WITH GOLD DOWN $4.50//NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1048.31 TONNES

APRIL 27/WITH GOLD DOWN $12.75//A HUGE  CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER DEPOSIT OF 5.85 TONNES INTO THE GLD////INVENTORY RESTS TONIGHT AT 1048.31 TONNES

APRIL 24/WITH GOLD DOWN $4.90 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS TONIGHT AT 1042.46 TONNES

APRIL 23/WITH GOLD UP $10.00 TODAY:  NO CHANGES IN GOLD INVENTORY AT THE GLD///INVENTORY RESTS TONIGHT AT 1042.46 TONNES

APRIL 22/WITH GOLD UP $40.75 TODAY:; TWO HUGE CHANGES IN GOLD INVENTORY AT THE GLD//A)A MONSTROUS  3.8 PAPER TONNES WERE ADDED TO THE GLD INVENTORY AND B) ANOTHER HUGE 9.07 TONNES OF PAPER GOLD ADDED LATE IN THE DAY//INVENTORY RESTS AT 1042.46 TONNES

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//

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Inventory rests tonight at

MAY 4/ GLD INVENTORY 1056.50 tonnes*

IN LAST 812 TRADING DAYS:   +121.6 NET TONNES HAVE BEEN REMOVED FROM THE GLD

 

LAST 712 TRADING DAYS://+296.74  TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

end

 

 

Now the SLV Inventory/

MAY 4//WITH SILVER DOWN 5 CENTS TODAY:2 HUGE PAPER CHANGES IN SILVER INVENTORY AT THE SLV.i).A  LARGE 1.399 MILLION OZ OF PAPER SILVER REMOVED FROM THE SLV//..//INVENTORY RESTS AT 411.427 MILLION OZ and ii) A LARGE 1.647 MILLION OZ OF PAPER SILVER ADDED TO THE SLV//  INVENTORY RESTS AT 413.124 MILLION OZ//


MAY 1/WITH SILVER FLAT IN PRICE: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 412.826 MILLION OZ///

APRIL 30/WITH SILVER DOWN 26 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 412.826 MILLION OZ//

APRIL 29/WITH SILVER DOWN ONE CENT TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 412.826 MILLION OZ//

APRIL 28 /WITH SILVER DOWN 2 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 412.826 MILLION OZ..

APRIL 27/WITH SILVER UP ONE CENT TODAY: TWO SMALL  CHANGE IN SILVER INVENTORY AT THE SLV: a) A WITHDRAWAL OF 373,000 OZ FORM THE SLV// b) A SECOND WITHDRAWAL OF 466,000: ////INVENTORY RESTS AT 412.826 MILLION OZ//

APRIL 24//WITH SILVER UP 3 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 413.665 MILLION OZ

APRIL 23/WITH SILVER UP 0 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.891 MILLION OZ INTO THE SLV/////INVENTORY RESTS AT 413.665 MILLION OZ//

APRIL 22/WITH SILVER UP 42 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY: A PAPER WITHDRAWAL OF 1.865 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 410.774 MILLION OZ//

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///

 

 

MAY 4.2020:

SLV INVENTORY RESTS TONIGHT AT

413.124 MILLION OZ.

END

 

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.08/ and libor 6 month duration 0.71

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

GOLD LENDING RATE: – 1.37

GOLD LENDING RATE NEGATIVE//CENTRAL BANKS CALLING IN ALL GOLD LEASES

GOLD SCARCE.

 

XXXXXXXX

12 Month MM GOFO
+ 1.33%

LIBOR FOR 12 MONTH DURATION: 0.84

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = -.49

NEGATIVE GOLD LEASE RATE//CENTRAL BANKS CALLING IN ALL GOLD LEASES

GOLD VERY SCARCE!

end

 

 

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

 

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

Barrick welcomes Papua New Guinea court decision ordering negotiations over mine

 Section: 

From Reuters
Friday, May 1, 2020

SYDNEY — Barrick Gold Corp. said today it welcomed a court ruling ordering the Papua New Guinea government to negotiate over a lease extension for the Porgera gold mine.

PNG Prime Minister James Marape said last week that the country would not grant the mine a 20-year operating extension due to environmental damage and social unrest.

… 

The move came as the Pacific nation reviews the terms of resources projects in the country with a view to enlarging its share of the profit from its mineral riches.

Barrick suspended mining operations last weekend, saying it needed to keep workers safe and did not have any formal notification of the decision or details around any transition.

PNG’s National Court on Thursday ordered both parties to negotiate before returning to court in a week on May 8, to report on the progress of talks, Barrick (Niugini) Ltd. said in a statement and local media reported. …

… For the remainder of the report:

https://www.reuters.com/article/us-barrick-gold-png/barrick-welcomes-cou…

END

Bill Stack: The gold vs. paper breakout

 Section: 

By Bill Stack
U.S. Gold Bureau, Leander, Texas
Thursday, April 30, 2020

Gold seems to be breaking away from what has held it back for years — its lighter, paper cousin.

There has been a developing disconnect lately between the price of actual gold (atomic symbol Au), and the price of paper that represents gold.

… 

One of the reasons for this is that there is a limited supply of actual gold available vs. a nearly inexhaustible supply of paper or digital gold normally used to suppress the price of gold.

Pressures have been building to the point that some banks that were the largest lenders and traders in the gold sphere are shutting down their precious metals operations. One of the most significant players in this space to do so, with history going back to the 17th century, is Scotiabank. …

… For the remainder of the commentary:

https://www.usgoldbureau.com/news/gold-vs-paper

END

Britain is facing a gold rush as the price doubles in five years

 Section: 

By Tom Ball
The Times, London
Saturday, May 2, 2020

When gold was first found in California it provoked a frenzy that pushed avaricious Americans to abandon their families and reshaped the United States.

Now, in rural parts of northern Wales and Scotland, a new gold rush is causing a stir as a growing number of amateur prospectors chase the precious metal that officially belongs to the Queen. Thousands more are taking to Britain’s rivers in the hope of cashing in on a new gold rush even though they could be breaking the law.

… 

The doubling in price over the past five years, from about L700 per ounce to L1,400, has renewed interest in UK gold, which is among the rarest in the world. In three years Original Gold Panning UK, the country’s biggest amateur prospector group, has gone from being a collective of 40 niche-interest hobbyists to a society of more than 2,000 members, and growing.

Commercial mining companies are also moving in, with several having gained exploratory licences in Scotland and north Wales, where nearly all British gold is to be found. …

… For the remainder of the report:

https://www.thetimes.co.uk/article/britain-is-facing-a-gold-rush-as-the-…

END

Gold bars fight with Covid kits for space on planes

(Bloomberg/GATA)

Gold bars fight Covid kits for space on the plane

 Section: 

By Elena Mazneva, Justina Vasquez, and Ranjeetha Pakiam
Bloomberg News
Sunday, May 3, 2020

Swiss refiner Valcambi SA tried for five straight days last month to move a shipment of gold out of Hong Kong. Twice the metal was packed carefully onto a plane, only to be offloaded again.

After daily attempts and numerous arguments, the gold suddenly arrived in Switzerland without warning, said Chief Executive Officer Michael Mesaric. “We had not even asked for a slot,” he said.

… 

The coronavirus crisis has shone a light on a corner of precious metals markets that usually draws little attention: the logistics of transporting gold, silver, and other metals across the world. The business is dominated by companies including Brink’s Co., G4S Plc, Loomis AB, and Malca-Amit, which link miners and refiners with gold trading and consumption hubs around the world. …

… For the remainder of the report:

https://www.bloomberg.com/news/articles/2020-05-03/gold-bars-fight-covid…

* * *

iii) Other physical stories:

An excellent presentation:  Jan tells exactly why the New York price (futures) is higher than London spot

Jan Nieuwenhuijs
APRIL 30, 2020

What Caused the New York vs. London Gold Price Spread and Why it Persists

The spread between the New York futures and London spot gold price was initially caused by logistics and manufacturing constraints, and likely persists because of credit restrictions.

If you read into the economics of commodities, much of it is about geography. The Corona crisis and its effects on global aviation has disrupted large shipments of gold, and created price discrepancies geographically. Normally, bullion is transported in passenger planes, but as those have stopped flying, there is more friction in bullion logistics. Partially, this created the spread between the futures gold price in New York and the London spot price. In my view, the spread persists because arbitragers don’t have enough access to funding, and demand in New York remains elevated.

How it Started

On March 14, 2020, President Trump started curbing passenger flights between Europe and the US. Including those from Switzerland, where the four largest gold refineries of the world are located. This didn’t happen in isolation. Passenger flights all over the world were being curbed. One of the most important airports in London—home of the largest gold spot market by trading volume—is Heathrow. Since March 10, 2020, arrivals at Heathrow started declining from 600 flights per day, to 250 two weeks later.

On March 23, 2020, three refineries in Switzerland where temporarily shut down due to the coronavirus. Reuters reported:

Three of the world’s largest gold refineries said on Monday they had suspended production in Switzerland for at least a week after local authorities ordered the closure of non-essential industry to curtail the spread of the coronavirus.

The refineries – Valcambi, Argor-Heraeus and PAMP – are in the Swiss canton of Ticino bordering Italy, where the virus has killed more than 5,000 people in Europe’s worst outbreak.

Normally, airlines transporting gold and refineries manufacturing small bars from big bars, or vice versa, keep the price of gold products across the globe in sync. If supply and demand for gold in one region is out of whack relative to another, arbitragers step in (buy low, sell high). But with planes not flying and refinery capacity crippled, everything changed.

Making delivery at the New York futures market, the COMEX, wasn’t that simple anymore. As we all know, shorts and longs on the COMEX are mostly naked. They either don’t have the metal to make delivery (shorts), or don’t have the money to take delivery (longs). In normal circumstances this isn’t a problem because neither shorts or longs are interested in physical delivery. They trade futures to hedge themselves or speculate. However, when sourcing small bars from Switzerland—only 100-ounce and kilobars are eligible for delivery of the most commonly traded COMEX futures contract—became “more difficult,” the shorts became nervous.

Likely, after the refineries closed, shorts wanted to close their positions as soon as possible to avoid making delivery. Closing a short position is done by buying long futures to offset one’s position. These trades were driving up the price in New York, and the spread was born.

1

The white line is London spot, blue is New York futures. Normally, the spread is close to $1.5 dollars; on March 25, 2020, the spread was $60 dollars per troy ounce. 

Usually, such a spread is closed by arbitragers (often banks). They buy spot (London) and sell futures (New York) until the gap is closed. If necessary, these arbitragers hold their position until maturity of the futures contracts, and make delivery to lock in their profit. But because flights were cancelled and refineries were shut down, the “arb” was risky and the spread didn’t close.

So you mean the gold futures market “freaks out” exactly at the moment when refineries are shut down and airplanes stop flying? What coincidence. Maybe this market had something to with physical supply and demand after all 😉

— Jan Nieuwenhuijs (@JanGold_) March 26, 2020

Bullion Banks Losing Money Through EFPs

Bullion banks often have a long spot position in London and are short futures on the COMEX. When a refinery in Switzerland, for example, casts big bars (400-ounce) and sells them to a bullion bank in London, the bank hedges itself on the COMEX. This makes the bank long spot and short futures.

Exchange For Physical” (EFP) is an OTC swap. On the COMEX website it reads:

Exchange For Physical (EFP) allows traders to switch Gold futures positions to and from physical [spot], unallocated accounts. Quoted as dollar basis, relative the current futures prices, EFP is a key component in pricing OTC spot gold.

(The London Bullion Market is an OTC market.)

An EFP is usually a swap between a futures and a spot position. In banking jargon the word “EFP” also refers to, (i) having a position in both markets, and (ii) the spread in general (because the price of the EFP is equal to the difference in price between New York futures and London spot). A bullion bank that is “short EFP” is long spot and short futures.

As mentioned, banks are most of the time short EFP.  When the spread widened their short EFP starting bleeding. To avoid further losses, some banks “were forced to cover,” which added fuel to the fire. (It can also be the banks themselves started the spread to widen.) Many banks suffered severe losses.

Currently, most refineries in Switzerland have reopened. So, why does the spread persist? After all, arbitragers can hire planes to transport gold to wherever. On April 30, 2020, the spread was still $15 dollars per troy ounce.

Because I couldn’t figure this out myself, I asked John Reade, Chief Market Strategist of the World Gold Council, and Ole Hansen, Head of Commodity Strategy at Saxo Bank, for their views.

Reade wrote me:

I guess for two reasons: firstly, banks and traders probably still have large EFP positions that they haven’t been able to cover. And secondlyI doubt that risk officers and banks are prepared to allow large EFP positions to be run, so the usual arbitragers of this market cannot add to their positions, flattening the spread.

Which is in line with what Hansen wrote me:

While COMEX has now allowed the delivery of 400oz bars (the most popular bar size in London) and raised spot positions limits the problem has not gone away. This means that the mechanism that should balance the gold market still isn’t functioning correctly despite improving underlying physical conditions.

Market makers [banks] have suffered major losses last month and as they tend to natural short the EFP (long OTC, short futures) the risk appetite and ability to drive it back to neutral has for now been disrupted.

Banks lost so much money, they are cautious not to lose more. They don’t access funds to close the spread.

Conclusion

Generally, just the threat of delivery keeps markets in line as well. Any trader that sees an arbitrage opportunity can take position without the intention of making/taking delivery, in the knowledge that New York futures and London spot will converge. Now this certainty doesn’t prevail, traders are cautious. If they take positions but the spread widens, they lose.

Another reason why the spread can persist, is because of strong demand in New York. Speculators that reckon the price of gold will go up will buy long futures, increasing the spread. Normally, this type of demand is smoothly translated into the spot market by arbitragers without increasing the spread. But not now.

In a nutshell, I think that logistics and credit restrictions prevent the spread to close. However, if anyone has a better analysis please comment below.

Addendum

It can be, as John Reade wrote me, “banks and traders probably still have large EFP positions that they haven’t been able to cover.” I noticed on Nick Laird’s website Goldchartrus.com that EFP volume cleared through CME’s ClearPort is decreasing since early March, to levels not seen in a long time.

EFP

Perhaps this is a reflection of a market that is slowly trying to heal itself. Perhaps when all losses have been crystalized, banks, or other financial entities with sufficient firepower to hire planes etc., will close the spread.

Another possibility is that when the new COMEX futures contract—that can be delivered in 400-ounce bars—becomes active, the spread closes. At the time of writing, the open interest of this contract is virtually zero. Time will tell.

end

A super summary of events this past month explaining the use of helicopter money by central banks

(Bullionstar)

QE Defender – Stop The QE Insanity: Helicopter Money And The Risk Of Hyperinflation

Submitted by BullionStar.com,

In 2016 at FreedomFest in Las Vegas, BullionStar first launched the QE Defender game.

With the central banks going all in on debasement of money by all means of quantitative easing and money printing, the QE Defender Game is more relevant than ever. We have therefore updated the characters of the game which can be played for free without registration here.

There’s an infinite amount of cash in the Federal Reserve” – Minneapolis Fed President Neel Kashkari, March 23

When it comes to this lending, we’re not going to run out of ammunition, that doesn’t happen” – Federal Reserve Chairman Jerome Powell, March 26

QE COVID

Over the last two months, major central banks and governments across the globe have unleashed a series of monetary and fiscal interventions on markets and economies which are unprecedented in their magnitude and which are bordering on the destruction of the current financial system.

While the global spread of coronavirus COVID-19 provided the trigger and the pretext for the current full-spectrum quantitative easing, money printing, asset purchases and economic bailouts, the size and scope of the current assault on free markets makes all previous central bank and government interventions look insignificance in comparison.

Markets are now officially broken. In some cases, the US Federal Reserve and the European Central Bank have become the markets, such is the scale of their asset buying, and their actions are making the bailouts of 2008 and 1998’s Long Term Capital Management (LTCM) look like a walk in the park.

From quantitative easing to zero bound interest rate cuts and beyond, from helicopter money to economy wide bailouts, the combined monetary and fiscal interference in markets and economies over recent weeks has now distorted everything from market prices to risk preferences to the time value of money, while shattering the concept of freely trading markets and free enterprise.

All of this in an environment of locked down economies, minimal economic activity, huge job losses, shrinking tax revenue and economic stagnation, as well as the impending approach of an unprecedented global recession, that if long lasting, will become a depression.

On the monetary side, the renewed and limitless quantitative easing – with central banks creating money out of thin air to buy up financial assets across all risk categories – combined with interest rate distortions, is both prolonging the very asset bubbles that the same central banks themselves created, while also leading to explosive increases in money supply. This in turn is leading to the destruction of currency values, and most worryingly, setting the scene for the real possibility of hyperinflation.

On the fiscal side, government stimulus packages of direct payments and loan and tax write-offs across vast swathes of economic sectors is not only creating a future dependence on income support and a pretext for the introduction of direct transfers to individuals, but is burdening the very same workforces with future tax burdens and even more debt.

Helicopter Drops

In this scenario, helicopter money, analogous to a helicopter dropping cash directly to the population, comes into play. Essentially helicopter cash represents direct methods of boosting consumer demand by the distribution of currency directly to the public into their bank accounts and into their pockets. Like quantitative easing, direct cash drops pave the way for destruction of currencies and can be the touch-paper to trigger hyperinflation.

Importantly, on both the monetary and fiscal fronts, the sheer flood of official interventions across markets and economies is now creating the largest moral hazard problem the world has ever seen, with investors and economic actors being conditioned to the expectation that central banks and governments will always come to the rescue by propping up asset prices and bailing out entire sectors (think banks, airlines and real estate), thus creating an environment that encourages a lack of individual consequences for future risky behavior, but at the same time creating dire consequences for the collective financial and economic system.

While the scale of what is happening right is daunting and difficult to keep track of, a ballpark estimate suggests that the total size of interventions from just some of the world’s largest monetary and fiscal authorities is currently more than US $10 trillion and counting. For a taste for how uncharted and dangerous this QE is becoming, a quick look at the US and Europe is instructive.

Quantifying QE – USA: Whatever it takes

After cutting interest rates to zero via two emergency decisions during March (March 3 here and March 15 here), the US Federal Reserve then announced on 15 March that over the coming months it would ramp up QE by buying at least $500 billion of US Treasury securities and at least $200 billion of agency mortgage-backed securities.

That’s $700 billion of Fed debt buying from banks and the Treasury across a cross section of widening of risk categories. At the same time, the Fed begun flooding the Fed system with credit in an attempt to boost liquidity, including $1 trillion in repurchase operations per day.

When this didn’t placate markets, the Fed then went ‘all in’ on 23 March and announced the start of open-ended quantitative easing (QE) in unlimited amounts, to buy an even wider range of debt from low to much higher risk classes, promising to:

 “purchase Treasury securities and agency mortgage-backed securities in the amounts needed…including purchases of corporate and municipal bonds.”

The Fed then also established swap lines with a whole range of major central banks around the world, providing these central banks with dollar funding in exchange for US Treasuries. This in essence expands the money supply of US dollars all over the world.

Then on 9 April the Fed was back, announcing another $2.3 trillion in QE, in the form of $600 billion purchases of bank loans of individuals and businesses, $500 billion buying of municipal bonds and loans (states, cities etc), and $850 billion in QE related to credit facilities of US corporates and asset-backed vehicles. Incredibly, this includes junk bonds and junk bond ETFs, with such market euphemisms as high yield, extended yield, and beyond investment grade. There is therefore, it seems, no limit to the depths the US Fed will go in its quest to prop up prices, bail out Wall St banks and hedge funds, and destroy financial markets.

Not surprisingly, this new unprecedented and unlimited QE by the Fed over March and April can already be seen in the huge explosion in US money supply, where the monetary aggregate measure M2 (which includes cash, demand deposits, time deposits and money market mutual funds) has rocketed higher from the new money “out of thin air” that has no bearing on underlying economic growth. This can be seen in the below Federal Reserve chart. As a closely watched indicator in forecasting future inflation, this M2 chart speaks volumes.

 

M2  – A broad money supply measure –  Date range 2016 -2020 – To infinity and beyond Q 1 2020. Source – Fed St Louis

In the same vein, as architect of this rampant QE, the money out of thin air hits the Fed’s bottom line,showing up in the rapid expansion of the Fed’s balance sheet, which has ballooned from $ 4.17 trillion at the end of February to $6.4 trillion now. That’s an insane $2.2 trillion added since the start of March, or in other words, a 50% expansion in the Fed’s balance sheet since the end of February. This is neatly illustrated in the blow out of the Fed’s total assets since early March.

 

Balance sheet (total asset) of the US Federal Reserve – last 5 years. Source: Fed St Louis

Turning to US fiscal interventions, at the end of March the US federal government pushed through a staggering $2.2 trillion economic bailout package titled the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), an intervention so large that it’s equivalent to 10% of US GDP. This CARES Act (which was ready and waiting in the wings) covers everything from loans to large and small corporations ($750 billion), the bailout of the US airline industry ($26 billion), loans to states and local governments ($340 billion), and most controversially, direct payments to individuals ($300 billion).

This last category is literally ‘helicopter money’, with every taxpayer in the US set to receive a $1200 payment, plus an additional $500 per child, with the transfers being made via stimulus checks (cheques) and direct deposits to bank accounts. The US IRS calls these Economic Impact Payments, but they are really direct cash injections, literally the long predicted helicopter cash drops. This money is printed out of thin air, directly distributed to the population, and most importantly raises the money supply while diluting the purchasing power of all existing currency.

An image from the original version of BullionStar’s “QE Defender’ video game launched in 2016 and featuring the Fed chairs Ben Bernanke and Janet Yellen 

 

Quantifying QE: Europe – ECB

After cutting one of its key refinancing rates to -0.75% in early March, the European Central Bank (ECB) then announced new monetary QE interventions on 12 March in the form of €120 billion of bond buying (quantitative easing) to complement its existing bond buying programme. On the same day, the ECB also announced an intent to flood cheap liquidity to European banks using longer-term refinancing operations (LTROs).

A week later on 18 March, the ECB ramped up the QE and went practically unlimited, announcing an enormous €750 billion Pandemic Emergency Purchase Programme (PEPP), a fancy name for even more QE that aims to buy government and corporate bonds (debt), including non-financial commercial paper (short-term loans). In total, that’s €870 billion in monetary QE interventions from the ECB.

On the fiscal side, Europe is leading the way with the largest fiscal bailout by any economic bloc so far,  totaling a massive €3.2 trillion in fiscal bailouts across the continent. This includes emergency packages of individual European countries such as Germany, Spain and France,  but also an EU wide bailout fund of €540 billion to which the European Union has agreed, consisting of €240 billion in credit for Eurozone countries via the European Stability Mechanism (ESM), €200 billion in loans for small businesses via the European Investment bank, and €100 billion in loans for job support.

The sheer scale and unprecedented nature of these European union interventions motivated one of its countless bodies, the European Economic and Social Committee, to proudly comment on 16 April that:

“In less than 4 weeks, the EU has done more than in the four years following the 2008 crisis, with interventions already decided that are estimated at over EUR 3 trillions.”

As to how the EU will pay for all of these bailouts, the EU Commission claims to have the answer, saying that it will, surprise, surprise, “propose borrowing to finance the recovery plan“.

With the US government introducing helicopter money, can Europe be far behind? While the European Central Bank claims that helicopter money is not an option that’s being considered, would you believe them? In a recent letter responding to a member of the European Parliament (dated 21 April), the ECB’s Christine Lagarde avoids the question of whether helicopter money is a fiscal or monetary in nature, only saying that it has never been discussed by the ECB’s Governing Council. But in the infamous words of another fellow Europhile Jean-Claude Juncker, “When it becomes serious you have to lie.

 

Helipad – Letter dated 21 April 2020 from Christine Lagarde, president of the European Central Bank, about helicopter money

Beyond the Fed and the ECB, all other major monetary authorities and governments around the globe are also engaging in massive QE and economic bailouts, from the Bank of Japan and Bank of England to the Chinese and the International Monetary Fund (IMF), from Australia to Brazil and from South Korea to Singapore.  For example, the Bank of England has its own £645 billion QE programme buying UK government bonds and sterling corporate bonds, and has now moved to directly finance the spending the UK Treasury, a form of helicopter money.

Meanwhile, the Bank of Japan has just announced that it will now consider unlimited bond buying of government and corporate bonds – “Bank of Japan mulling unlimited bond buying at next meeting: Nikkei“. Everywhere one looks, the evidence is there, it’s QE to infinity, buying up all debt of all types and all risk categories at any price, in the process destroying the financial system and setting the scene for hyperinflation.

 

100 trillion Zimbabwean dollars

Hyperinflation

In an interview in 2010, then Fed chairman Ben Bernanke tried to dissuade concerns over Fed money printing, QE and market interventions, saying that:

This fear of inflation I think is way overstated …What we’re doing is lowering interest rates by buying Treasury securities. And by lowering interest rates, we hope to stimulate the economy to grow faster.

The trick is to find the appropriate moment when to begin to unwind this policy.And that’s what we’re going to do.

Fake words then from Bernanke, fake words now. There was no real unwind. Tapering was trick and a distraction. This is the same Bernanke who explained how the Fed’s lending is merely electronic printing, creating money out of thin air, and in so doing, inflating the money supply.

Quantitative easing, despite the complicated name, is a simple case of massively expanding the money supply. Helicopter money ditto, is also a simple case of massively expanding the money supply.

By artificially boosting demand in a scenario of lower production and constrained supply using the printing press and its electronic equivalent (QE and helicopter money), more fiat currency is entering the existing system. This can lead to product shortages, hoarding, and higher consumer prices, i.e. rising inflation, which is the economic textbook situation of too much money chasing too few goods.

Rising inflation in turn leads to lower purchasing poor and eroding value for a paper currency, loss of confidence in that currency, and in a downward spiral, faster spending to get rid of the increasingly worthless currency, which in turn leads to even higher prices, hoarding and inflation. And all this in an environment of economic stagnation and recession. This then leads to higher inflation expectations, and ultimately hyperinflation.

And what are we seeing right now in the global economy, led by the large central banks and the largest economies? Explosions in money supply brought on by quantitative easing. Increasing experiments of directly transferred helicopter money to artificially boost consumer demand. Supply side shortages and hoarding. Economic turmoil and economies in stagnation due to covid-19 lock downs with massive unemployment and economies slipping into recession and possible depression.

Hyperinflation is essentially a rapid and accelerating inflation amid a collapsing currency value, and it can arrive rapidly in an environment where frequent price rises have already begun to take hold.  In such scenarios, national cash becomes worthless and precious metals and reserve currencies become stores of values. For some of the more prominent hyperinflationary events in recent times just look at the hyper inflationary experiences of Argentina, Zimbabwe and Venezuela. See “The Power of Gold in Times of Crisis” for details.

For example, in 1989, prices in Argentina rose by an annualized 500 percent. In 2008, Zimbabwe’s annual inflation rate at one point reached 231 million percent. Annual inflation in Venezuela, which is still in the midst of hyperinflation, is currently over 2300%.

But what if hyperinflation hits major economics such as the US and Europe and their  ‘strong’ fiat currencies in the form of the US dollar and Euro? In the current environment of full-scale quantitative easing and the emerging popularity of helicopter money, this is something which populations may soon be about to find out.

Under this possible scenario, physical gold will become one of the few trusted assets to remain a secure store of value and wealth preservation when paper currencies crash and burn. Universally trusted as a safe harbor in times of crisis and emergency, physical gold is both the proven last man standing and the go to asset in a world at risk of hyperinflation.

This article was originally published on the BullionStar.com website under the same title “QE Defender – Stop the QE Insanity | Helicopter Money and the Risk of Hyperinflation”

end

J Johnson..

Posted  at 9:54 AM (CST) by  & filed under General Editorial.

Great and Wonderful Monday Morning Folks,

We hope you had a great weekend enjoying the sunshine. We sure did, we’re even enjoying this morning’s pre-sunrise movements in the markets with June Gold up $14.80 at $1,715.70 after reaching up to $1,726.00 with the low at $1,700.30. Silver is up as well with the July contract at $15.10 up 16.2 cents after hitting a high of $15.225 with the low at $14.78. The US Dollar is under support as well this morning with its trade, following the precious metals, at 99.52 up 42 points and right beside its high at 99.54 with the low at 99.09. Of course, all this happened already, before 5 am pst, the Comex open, the London close, and after Governor Gavin Newsome attempted to threaten Californians with prison time, for going to the beach, and was almost completely ignored.

Gold under the Venezuelan Bolivar regained 249.68 over the weekend with the price now at 17,135.55 Bolivar with Silver at 150.811 Bolivar a gain of 0.998. Argentina’s Currency now has Gold valued at 114,272.54 Peso’s showing a 1,452.66 gain with Silver now valued at 1,005.80 Peso’s regaining 4.88 over the weekend. Gold under the Turkish Lira gained 193.54 with the starting price for the week at 12,066.77 Lira with Silver at 106.200 gaining back 0.88 T-Lira’s. The future question we have is; How will these emerging currency’s respond when the Dollar loses its value in the weeks and months to come? Are not all currencies trading against Silver and Gold? Let us find out what the ratios will be like as time unwinds the crimes … Stay Tooned!

While that question festers, we continue to observe the demands for physical at the Comex with today’s delivery requests for the May trade at 3,845 fully paid for 5,000-ounce contracts waiting for receipts and with a trading range between $15.06 and $14.695 with the last 1 lot swap, at $15.015 and with a Volume of 179 posted up on the board, so far today. This proves a drop of 1,847 in deliveries, after Friday’s trading range between $15.045 and $14.855 with the last registered trade at $15.025 and with that magically adjusted close at $14.863. Silver’s Overall Open Interest continues to drop with the total now at 132,134 Overnighters still in the trade, as another 2,733 Algo controlled short trades leave, giving us old school traders the idea that things are going to actually show a corrected (and much higher) value, sooner than later. All we have to do is wait for it. That shouldn’t be too hard anymore.

May Gold’s Delivery Demands are now at 5,348 fully paid for contracts waiting for receipts and with the early morning trading range between $1,709.00 and $1,702.60 with the last single lot order at $1,708.30 and with a Volume of 271 up on the board so far today. Friday’s trades had a Volume count of 337 swaps inside a trading range between $1,701.50 and $1,670.50 with the last buy/sell at $1,698.80 with the usual adjusted low close at $1,694.50. Gold’s Overall Open Interest is now at 491,760 Overnighters proving 1,816 Algo controlled short contracts exited the t

 

Jrade as things start to unwind in the world markets.

The Retail World is going thru more changes as J. Crew files for bankruptcy, with the blame directly placed on the CCP19. The Retail Industry was changing before this bug which reminds me of the time when Zody’s and Montgomery Ward’s lost their foot traffic to the malls back in the early 80’s, and now it’s the malls turn as more and more people buy online and stay away from each other. It will be interesting to see what happens next as it is apparent, everything has changed but the prices of precious metals. Now we are led to believe there is a currency shortage after 2.2 trillion was created out of thin air and pushed into the markets and, it’s still not enough.

The days, weeks, and months, of sharply higher precious metals prices is upon us. Not even in the central banks fantasy collection, can they hold onto their ill-gotten gains as the buyers of physicals continue to remove what they can from the controller’s hands. At the same time, the controllers try their best to sway nations loyalties by using their levels of held (and uncollectable) debt. They’re doing this even when there is more debt than dollars, and no taxable income to pay off the debt. Oh yeah, let us not forget this is now a global issue too. Now that we’re all used to staying in place, with some of us having to restrict movement for over 2 months, the future banker’s holiday will be a breeze once we get to that point, as the clock keeps ticking and the debt keeps rising, with no way to pay except print.

We’ll sit right here, as the world continues to turn, even without the issues of debt or a BioBug, as precious metals history proves, those that hold the Gold set the rules. So, keep the faith, have a smile on your face and enjoy the Sun, it’s what the medical industry won’t talk about because it prevents the problem which means no profits. As always …

Stay Strong!

Jeremiah Johnson

Dave Kranzler and Chris Marcus…

 

Why Did The CME Secure A $10 Billion Credit Facility?

The credit facility was put in place in November 2017. It was brought to the public’s attention when Marketwatch picked up on an SEC filing which renewed the credit facility.  I don’t know if there’s any correlation per se, but the credit facility was established after it was clear that the price of gold and silver had started their next big bull market move with several Comex clearing member banks potentially catastrophically short gold and silver futures contracts.

Ultimately, the CME has 2 or 3 “safety nets” to guard against a default from any one CME clearing member from disrupting the entire CME house of cards. The fact the CME was compelled to establish another $7-10 billion “cushion” tells me that the central counterparties should be held responsible for their trading decisions by putting up a much bigger performance bond. Chris Marcus of Arcadia Economics and I discuss what’s going with the CME, Comex and precious metals market:

 

end

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

71671201

Spencer Platt | Getty Images

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

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

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

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

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

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

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

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

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

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

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

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

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

end

March 4.2019

Parker City News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kovel declined to comment.

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

-END-

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

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

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

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

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

… 

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

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

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

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

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

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

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

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

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

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

* * *

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

i) Chinese yuan vs USA dollar/CLOSED / LAST AT: 7.0634/ GETTING VERY DANGEROUSLY CLOSE TO 7:1

//OFFSHORE YUAN:  7.1256   /shanghai bourse CLOSED UP 37.64 POINTS OR 1.33%

HANG SANG CLOSED DOWN 1,029.79 POINTS OR 4.18%

 

2. Nikkei closed DOWN 574.34 POINTS OR 2.84%

 

 

 

 

3. Europe stocks OPENED ALL RED/

 

 

 

USA dollar index UP TO 99.42/Euro FALLS TO 1.0936

3b Japan 10 year bond yield: FALLS TO. –.02/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.81/ 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:: 18.79 and Brent: 25.85

3f Gold UP/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 RISES TO -.56%/Italian 10 yr bond yield UP to 1.79% /SPAIN 10 YR BOND YIELD UP TO 0.78%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.35: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 2.16

3k Gold at $1707.90 silver at: 15.01   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 4/100 in roubles/dollar) 75.32

3m oil into the 18 dollar handle for WTI and 25 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 106.81 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF. It is not working: USA/SF this morning .9644 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0547 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 0.56%

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 0.60% early this morning. Thirty year rate at 1.23%

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

6.  TURKISH LIRA:  UP  TO 7.0318..

Global Stocks Tumble On Renewed US-China Tensions; US Airlines Plunge On Buffett Exit

US equity futures, European stock markets and oil prices all fell on Monday as an escalating war of words between top U.S. officials and China over the origin of the coronavirus fuelled fears of a new trade war, derailing a rebound in global markets, while Buffett’s admission he had liquidated all his airline stocks sent the sector tumbling.

European shares – which were closed on Friday – slumped 2.5% in mid-morning trading, catching up to the Friday drop in the US with sectors sensitive to economic growth including oil and gas, automakers and banks falling between about 4% and 5.5%. Volatility gauges for European and American blue-chip stocks shot up to a two-week high while U.S. stock futures were about 1% in the red.

Delta Air Lines, American Airlines Group and United Airlines Holdings are among the biggest pre-market decliners after Warren Buffett said over the weekend Berkshire Hathaway sold out of the four top U.S. airlines, opining that the business has “changed in a very major way.”  The JETS airline ETF tumbled -10%.

In Europe, the Stoxx Europe 600 slumped, with all 19 industry sectors in the red and Ireland’s Ryanair Holdings Plc sinking as much as 11%. Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 2.5%, pulled down by Hong Kong where the Hang Seng returned from a two-session holiday with its biggest drop in six weeks as traders caught up after a long weekend. China and Japan were closed for their own holidays. The Chinese yuan held most of Friday’s slide in offshore trading amid concern tensions with the U.S. would increase.

Emerging-market stocks suffered the biggest decline in six weeks as an increase intension between the U.S. and China dented demand for riskier assets.

U.S. Secretary of State Mike Pompeo said on Sunday there was “a significant amount of evidence” that the novel coronavirus emerged from a laboratory in the central Chinese city of Wuhan. An editorial in China’s Global Times said he was “bluffing” and called on the United States to present its evidence.

“Concern on the potential for another flare up between the U.S. and China is dominating price action,” RBC strategist Adam Cole said in a morning note. Simon Black, head of investment management at wealth management firm Dolfin said investors were also adjusting their forecasts for the depth of the economic damage the pandemic will inflict. “It’s also the economic reality sinking in,” he said, adding that a rebound by global equities of over 20% from lows hit in March was not likely to be sustainable.

President Donald Trump also renewed criticism of China for its handling of the coronavirus outbreak is raising concern over the future of the two countries’ trade deal, another potential risk for emerging markets already facing dwindling demand for exports.

This renews concerns on the trade war and the hegemonic dispute between the two countries, which we have been expecting to last for many months and to be a structural factor for EMs in the long run,” said Guillaume Tresca, a senior strategist at Credit Agricole SA in Paris. “Attention is now refocusing on the economic impact of the Covid crisis and the weak stance of many emerging-market countries.”

Elsewhere, companies listed on the pan-European STOXX 600 are currently expected to report a 40% decline in earnings in the second quarter. Manufacturing activity in the euro zone collapsed last month as government-imposed lockdowns to stop the spread of the new coronavirus forced factories to close and consumers to stay at home, a survey showed on Monday.

“We’ve just come off a rally of hopes, not a rally on fundamentals”, Black said, pointing to the massive monetary and fiscal stimulus pledged by governments and central banks around the world.

Recent economic data paints a dire picture of the global economy after weeks of lockdowns. In the United States, manufacturing plunged to an 11-year low last month and consumer spending collapsed. Some 30.3 million Americans have filed unemployment claims.

In FX, the US dollar rose against most major currencies amid fears that last year’s U.S.-China dispute would be reignited, this time over the origins of the pandemic that has stalled economies around the world. The euro was down 0.37% at $1.0933 and the pound retreated 0.72% to $1.2407.  EM currencies weakened, while sovereign bond yields were little changed. The Russian ruble, Indonesian rupiah and South Korean won led the currency declines as haven demand bolstered the U.S. dollar. With China’s onshore markets closed for a holiday, the yuan weakened as much as 0.3% against the dollar in offshore trading, before regaining ground.

In commodities, oil prices fell again, paring last week’s gains, on worries a global oil glut may persist even as lockdowns start to ease. West Texas Intermediate crude futures fell 5.5% to $18.69 a barrel while Brent crude futures were down 2.8% at $25.70. Spot gold was up 0.4% at $1,706.78 per ounce.

Expected data include factory orders and durable goods orders. Ferrari, Tyson, and AIG are among companies reporting earnings

Market Snapshot

  • S&P 500 futures down 1% to 2,794.00
  • STOXX Europe 600 down 2.5% to 329.09
  • MXAP down 1.6% to 142.99
  • MXAPJ down 2.6% to 459.62
  • Nikkei down 2.8% to 19,619.35
  • Topix down 2.2% to 1,431.26
  • Hang Seng Index down 4.2% to 23,613.80
  • Shanghai Composite up 1.3% to 2,860.08
  • Sensex down 5.6% to 31,835.04
  • Australia S&P/ASX 200 up 1.4% to 5,319.85
  • Kospi down 2.7% to 1,895.37
  • German 10Y yield rose 1.7 bps to -0.569%
  • Euro down 0.4% to $1.0938
  • Italian 10Y yield rose 0.6 bps to 1.589%
  • Spanish 10Y yield rose 6.1 bps to 0.784%
  • Brent futures down 2.7% to $25.72/bbl
  • Gold spot up 0.3% to $1,705.39
  • U.S. Dollar Index up 0.3% to 99.35

Top Overnight News from Bloomberg

  • A recovery from Europe’s factory shutdowns will be “frustratingly slow,” IHS Markit said in its monthly report. Markit’s index showed confidence dropped to a record low in April, and job cuts were the sharpest since 2009. The headline measure of euro-area activity fell to 33.4 — the lowest since the series began in 1997 — from 44.5 in March
  • The trade agreement President Donald Trump signed with China less than four months ago is falling short on a number of fronts, including Beijing’s promises of large agriculture and energy purchases. But the Trump administration so far has been hesitant to ramp up the pressure or back away from the deal altogether, even as the rhetoric on both sides heats up
  • Congress turns its attention this week to negotiations over another round of economic stimulus, with battle lines drawn over more than $1 trillion in additional spending floated by Democrats amid objections from Republicans and demands from President Donald Trump
  • Germany needs several more weeks to decide on a cash-for- clunkers program to counter a slump in car sales, according to Finance Minister Olaf Scholz
  • German’s top court will decide on Tuesday whether the nation can continue to participate in the ECB’s Public Sector Purchase Program, under which the central bank buys bonds of euro zone governments
  • Factory output across several Asian countries slumped to record lows in April, signaling a deeper contraction in the world’s manufacturing hub even as China begins restarting some operations
  • Japanese Prime Minister Shinzo Abe said he has decided to extend a nationwide state of emergency until May 31 to combat the spread of the coronavirus, in comments aired live by national broadcaster NHK
  • Researchers continue to debate how fast a coronavirus vaccine may be available as states and nations look for a fast track to recovery from the pandemic’s economic toll, with January or even the fall now on the timetable

Asian equity markets began the week mostly lower amid several holiday closures in the region and cautiousness ahead of this week’s risk events, with sentiment also dragged by a flare up at the inter-Korean border and as US-China trade tensions simmered with President Trump stating that tariffs would be the ultimate punishment for China and warned to end the trade deal if China doesn’t buy US goods. ASX 200 (+1.4%) was choppy with notable weakness in energy as crude prices resumed the rout brought on by oversupply concerns and with banking names initially pressured after Westpac reported a 62% drop in H1 net, although the big 4 bank eventually reversed its losses which helped the turnaround in the largest weighted financials sector and the index as a whole. KOSPI (-2.6%) gapped lower by over 2% at the open on geopolitical concerns after South Korea and North Korea exchanged gunfire at the demilitarized zone for the first time since 2014 which comes a day after North Korea Leader Kim made his first public appearance since rumours circulated that he may have died or was incapacitated, although the index is off its lows as reports also noted there were no casualties from the incident which could have been accidental. Hang Seng  (-4.2%) slumped as it played catch up from the extended weekend and ahead of today’s GDP which could show the largest contraction on record with Financial Services Secretary Chan suggesting GDP data could be worse than the GFC and Asian Financial Crisis which saw economic contractions of 7.8% and 8.3% respectively. The lack of participants added to the uninspired mood for Hong Kong and the region, with markets in mainland China to reopen on Wednesday due to Labor Day holidays and with Japanese participants returning on Thursday after Golden Week. Finally, Indian markets were the worst performers with the NIFTY and SENSEX both collapsing by as much as 5% after the government extended the nationwide lockdown for two weeks but will permit “considerable relaxations” in certain districts.

Top Asian News

  • Mainland Chinese Buyers Disappear From Hong Kong Real Estate
  • Japan Moves to Extend State of Emergency Until May 31
  • Time Runs Out on Shaky Hong Kong Businesses as Court Reopens

European equities opened with significant losses [Euro Stoxx 50 -3.3%], as the region catches up to Friday’s developments, namely on the US-China trade front, after its Labor Day holiday. US equity futures also post losses of ~1%, with the contracts pressured by a potential rollback in the US-China Phase One trade deal should China not adhere to purchases. UK’s FTSE 100 (-0.2%) index outperforms the region having had its Friday session whilst some downside could be cushioned by a softer Sterling. Sectors are lower across the board – with IT and Consumer Discretionary the laggards, albeit most of this overall downside would be on account of a chunk of Europe catching up to Friday’s trade. In terms of individual movers, BT (-1.4%) opened softer (but nursed some losses) amid reports Telefonica (+3.4%) is said to be in discussions with Liberty Global to combine their UK assets, O2 and Virgin Media, in a joint venture to challenge BT and Sky in the UK – Telefonica states that the Cos are in a negotiating phase and the group is currently not able to guarantee either the terms or probability of its success. Sources added that Liberty Global also reportedly approached Vodafone (-1.1%) regarding a merger, but talks are not currently active. Meanwhile, Fincantieri (+15.8%) was halted limit up after receiving a US Navy contract valued at USD 5.5bln. SocGen (-6.2%) shares see extra pressure as it expects to have provisions of EUR 3.5-5bln this year amid losses caused by the pandemic. CEO also sees CET1 ratio to drop to between 11-15%. Similarly, Thyssenkrupp (-14.5%) plumbs the depths as the Co. anticipates a cash-squeeze despite the lift unit sale. Elsewhere, Roche (+0.3%) remains resilient to the losses in the region after the group was awarded emergency approval in the US for a COVID-19 antibody test and expects production to hit high double-digit millions by June and 100mln later in the year. Finally, Royal Mail (+6.2%) is buoyed by reports that Czech billionaire Kretinsky reportedly bought a 5.35% stake in the Co., sparking speculation he could launch a takeover bid.

Top European News

  • ThyssenKrupp Sinks as Unit Bidders Said to Seek More Investors
  • Liberty, Telefonica in Talks to Build $30 Billion U.K. Arm
  • European Stocks Slump on New U.S.-China Tensions, Manufacturing
  • Germany’s New Cases, Number Of Deaths at Lowest in Five Weeks

In FX, the Greenback is back on a firmer footing after succumbing to somewhat more than the usual month end selling and remaining under pressure on Friday when US President Trump upped the ante against China via recriminations over the source of COVID-19 and the threat of retaliation. However, risk aversion has spread to the extent that the Buck has resumed a degree of safe-haven premium vs currency counterparts bar the Yen, with the DXY retaining a firmer grasp of the 99.000 handle within a 99.239-477 range.

  • JPY – As noted above, the Yen is resisting the broad trend of underperformance relative to the recovering Dollar, albeit in holiday-thinned trade due to Japan’s Greenery Day amidst the longer Golden Week vacation, as Usd/Jpy meanders in a tight band below 107.00.
  • GBP/EUR/CHF/NZD/CAD/AUD – Sterling has lost more of its seasonal bid, as the sell in May trend looks set to continue for a second day with Cable teetering above 1.2400 and Eur/Gbp testing resistance/psychological offers around 0.8800 ahead of the 50 DMA (0.8825) even though the Euro is struggling to keep hold of the 1.0900 handle vs the Greenback in wake of weak Eurozone manufacturing PMIs, ECB SPF downgrades and a worse than forecast Sentix survey. Technically, Eur/Usd is currently close to a Fib retracement at 1.0938 and supported ahead of the big figure that also coincides with the 30 DMA. Elsewhere, the Franc remains well shy of recent highs near 0.9600 circa 0.9650, but on the rebound in Eur/Chf cross terms around 1.0550 following mixed Swiss inputs from yet another big rise in bank sight deposits and better than expected, albeit still sub-50 manufacturing PMI. Meanwhile, the Kiwi, Aussie and Loonie are all nursing losses after conceding ground to their US rival with Nzd/Usd hovering just under 0.6050, Aud/Usd straddling 0.6400 and Usd/Cad pivoting 1.4100 amidst renewed declines in oil prices. The Kiwi has not gleaned much from S&P reaffirming NZ’s AA rating and positive outlook or more moves towards lifting lockdown, awaiting Q1 jobs data, while the Aussie appears hesitant ahead of the RBA, retail sales and the SOMP.
  • SCANDI/EM – The aforementioned downturn in crude is weighing on the Norwegian Crown alongside the ongoing PMI manufacturing contraction, though not as pronounced as in Sweden where the Krona is also unwinding more post-Riksbank gains. However, the Rand has derived some comfort from SA’s PMI beating consensus and deflecting attention away from bleak economic projections out of the Treasury Director, while the Lira is trying to pare losses off another multi-month low on the back of firmer than anticipated Turkish CPI in contrast to a deeper sub-50 manufacturing PMI.

In commodities, WTI and Brent front-month futures remain subdued but trade just off recent lows of USD 18.05/bbl and USD 25.50/bbl respectively. Desks note that the sentiment surrounding the complex is showing signs of improvement, with economies gradually reopening alongside a phase of lower global supply. “A combination of demand edging higher as we move through the remainder of the year, while supply is expected to slip, will likely push the global oil market into deficit over the second half of this year, allowing it to draw down the significant stock builds from the first half of this year.”, ING writes. That being said, markets have begun to factor in a potential escalation in US-China tensions – with President Trump floating an end to the trade pact should China not purchase US goods – which could weigh on sentiment as well as hit demand. WTI June lost further ground after hovering around USD 18.50/bbl and briefly breached support at USD 18.10/bbl, Brent July trades on either side of USD 26/bbl for a large part of the morning and holds onto losses of over 2%. Elsewhere, spot gold sees an underlying bid as losses across equities prompts inflows into the yellow metal – trading towards the top of its current USD 1693-1707/oz band. Copper prices meanwhile resumed its decline amid the broader risk-aversion and some producers are poised to resume operations.

US Event Calendar

  • 10am: Factory Orders, est. -9.35%, prior 0.0%; Factory Orders Ex Trans, prior -0.9%
  • 10am: Durable Goods Orders, est. -14.4%, prior -14.4%; Durables Ex Transportation, est. -0.2%, prior -0.2%
  • 10am: Cap Goods Orders Nondef Ex Air, est. 0.1%, prior 0.1%; Cap Goods Ship Nondef Ex Air, prior -0.2%

DB’s Jim Reid concludes the overnight wrap

So far in this lockdown I’ve only been out for local walks. However, on Friday afternoon I had to cycle to the post office to send something special delivery. While I queued outside I saw my first-ever social distancing fight. A van overtook two cyclists and then screeched to a halt in front of them and the two parties exchanged very loud and angry words about an earlier commotion. After a minute, the van driver got out and went up to one of the cyclists and for all the world it looked like he was going to hit him. However, he suddenly stopped about 2 meters away as if there was a force field there (May the fourth be with you today by the way) and continued shouting and gesturing at him. It was very odd to watch.

As we move very slowly towards the end of the most stringent lockdowns across the world markets are starting the week on the back foot after US tech gave up some ground at the back end of last week after earnings and also as tensions in the US/China relationship resurfaced as the blame game for covid-19 steps up. Given it’s a US election year this issue isn’t likely to go away, especially as Joe Biden has suggested that Mr Trump is weak on China. However, on Thursday night and Friday it became a more immediate topic as the Washington Post reported that the US had held preliminary discussions to punish China for its role in the virus outbreak that included the possibility of the US cancelling its debt obligations with China. There was an immediate denial from Larry Kudlow who confirmed that the full faith and credit of US debt obligations is ‘sacrosanct’. Nevertheless, the risk of a cold war between the two nations seems to be building.

Hinting at a more troubled world order in the future, yesterday US Secretary of State Michael Pompeo said on ABC TV that there was “enormous evidence” to suggest covid-19 began in a laboratory in Wuhan. When you think how nervous markets got about the US/China trade war then if this theme continues you can’t help thinking that the end game is far worse than it would be from a simple trade war. Very much one to watch.

Speaking overnight, President Trump also said tariffs would be “the ultimate punishment” and promised a “conclusive” report from the US government on the Chinese origins of the pandemic. He further said that the Phase 1 trade deal with China requires the country to purchase US goods and if they don’t, the US will terminate the agreement. Futures on the S&P 500 are down -0.61% as we type while the Hang Seng (-3.83%), Kospi (-1.61%), Taiwan’s Taiex (-2.20%) and India’s Nifty (-3.31%) are all in the red. Markets in Japan and China are closed for a holiday. In FX, the Norwegian krone is trading down -1.17% this morning while the Japanese yen is up +0.13%. Elsewhere, WTI oil prices are down -3.29% this morning.

In other weekend news, Saudi Arabia’s Tadawul index dropped -7.41% yesterday after the kingdom’s finance minister said that “painful” measures – including deep spending cuts – were needed to respond to the coronavirus crisis and crash in oil prices. On Friday, Moody’s changed the outlook on the country’s sovereign rating to negative while reaffirming the A1 rating. Elsewhere, Yohnap reported that North Korean troops fired at their South Korean counterparts in the demilitarized zone that divides the two countries for the first time in years.

Meanwhile, expect there to be some attention in markets today on Warren Buffett’s annual shareholder meeting on Saturday where he confirmed that he’d sold all of his airline stocks, saying “I don’t know if two or three years from now if as many people will fly as many passenger miles as they did last year”.

Returning to the virus, with the extra fatalities of the last few days, Covid-19 has now moved from 24th to 23rd in the worst pandemics in history measured in fatalities as a percentage of the global population (24 in total over 2000 years). Swine Flu in 2009 has now been surpassed. You can see the note here from a couple of weeks ago where we discussed the list. To reach 22 on this list fatalities would have to reach 626,100. Massive global mitigation is expected to keep Covid-19 at the lower end of our table. As we showed in the note a completely unmitigated global strategy could have put it as high as 13th on the list. We also showed what we think the global mortality rate will end up being based on various studies and discussed how the modern world has a very different tolerance for pandemics than at any time prior to the last few decades.

In terms of this week, the main symbolic highlight will be Friday’s US job numbers. We’ll also see PMIs in the early part of this week, 263 S&P 500 and Stoxx 600 companies reporting, more central bank meetings (including the BoE Thursday), and another Euro Area finance minister’s videoconference. If you want a potential black swan curveball event then the German Constitutional Court issues its final verdict on the ECB’s PSPP program tomorrow. What I know about the German constitutional legal system could be put on the back of a postage stamp and still leave some room. Nevertheless, the usual form here is a begrudging acceptance of the ECB’s involvement in financing member states and we all move on. However, one to keep a little attention on.

Ahead of payrolls Friday, DB’s US economists are forecasting an unprecedented -22m fall in nonfarm payrolls, which would by far be the biggest monthly decline in the data going back to 1939, with the previous record being ‘only’ a -1.959m decline back in September 1945 just as WWII ended. They’re also forecasting a rise in the unemployment rate to 18.0%, which would be the highest unemployment rate for the US since the same war. With the jobless numbers set to reach unprecedented levels, investors will also be paying attention to the more up-to-date weekly initial jobless claims from the US on Thursday, which will cover the week up to May 2. The previous 6 weeks have seen a total of over 30m claims, though the last 4 weeks in a row have seen a decline from the peak, offering hope that the most rapid period of job losses may have passed.

The other data that will gain attention this week are the PMI releases from around the world. Thanks to various public holidays, the releases will be more scattered this week, with PMIs from various G20 countries coming out each day. See the day-by-day calendar at the end for the full run down (along with all the other releases) but today sees the manufacturing numbers from those on Labour Day holiday on Friday.

Earnings season continues apace over the coming week, with 159 S&P 500 companies reporting and a further 104 in the STOXX 600. Highlights include AIG and Tyson Foods today, followed by Disney, Total, BNP Paribas and Fiat Chrysler tomorrow. Wednesday then sees reports from Novo Nordisk, PayPal, TMobile, General Motors, Credit Agricole, UniCredit and BMW. On Thursday, we’ll hear from Bristol Myers Squibb, Danaher, Raytheon Technologies, Linde, ArcelorMittal, AB InBev, Nintendo, Uber, IAG and Air France-KLM. Lastly on Friday, Wirecard, Siemens and Nomura will be announcing.

Reviewing last week now and in it we waved goodbye to April – the best month for the S&P 500 (+12.68%) since January 1987. The -2.81% fall on Friday though meant that the index closed the week down -0.21%, the smallest weekly in either direction since the first week of the year. There was a pullback in technology stocks as earnings of large-cap US companies, most notably Apple and Amazon, disappointed late in the week. Consequently the NASDAQ fell -0.34% on the week (-3.20% Friday). On the other hand, European equities rose on a shortened week, with many countries closed for Labour Day on Friday. The Stoxx 600 gained +2.37% over the five days but they’ll likely be some catch down today. Equity performance was fairly correlated on the week for those indices that were off on Friday, with the DAX up +5.08% (-2.22% Thursday), the Italian FTSE MIB gaining +4.93% (-2.09% Thursday), and the CAC rallying +4.07% (-2.12% Thursday). The FTSE, which was open on Friday, was up just +0.19% over the full week, after the -2.34% decline on Friday not helped by Shell (-14.24% on the week) cutting its dividend for the first time since 1945. Asian equity indices also saw shortened weeks outside of the Nikkei, which declined by -2.84% Friday to finish the week up +1.86%. The CSI 300 gained +3.04% on a 4 day week, while the Kospi rose +3.10% on a 3 day week. In other risk markets, oil rebounded after 3 weeks of losses. WTI futures rose +16.77% last week (+4.99% Friday) to $19.78/barrel as demand may be turning a corner at the same time that OPEC+ and non-members both enact production cuts. Brent crude rose +23.32% on the week (+4.63% Friday), just the second weekly gain in the last ten weeks.

55% of S&P 500 companies have now reported Q1 earnings. In aggregate earnings are missing by -2.5% (vs. beating by 3.4% in an average quarter) and have fallen 16.6% year-over-year. Blended EPS growth for the index looks set to contract by -13%, which would be the worst quarter since 2009. However this is driven by a large downside skew, with median company growth on track to be only modestly negative at -0.9%. Much like GDP earlier last week, these numbers are likely to be worse in Q2 because most of the shutdowns were enacted at the end of March.

With the pullback in US equities, the VIX rose +1.3pts to 37.19 last week (+3.0pts Friday). This was the first weekly rise since the SPX lows in the third week of March. Even as equity volatility increased slightly, credit spreads tightened slightly on the week – albeit complicated by the index rebalancing at the end of the month. US HY cash spreads were -33bps tighter on the week (+7bps Friday), while IG was -18bps tighter on the week (+1bp Friday). In Europe, HY cash spreads were -8bps tighter over the shortened week, while IG was -13bps tighter.

Much like equities, core sovereign bond yields in the US and Europe diverged slightly last week. US 10yr Treasury yields were up +1.1bps (-2.8bps Friday) to finish at 0.612%, 7.1bps from the March all-time lows. Meanwhile, 10yr Bund yields fell -11.3bps to -0.59%, the lowest since March 13. Gilt yields fell -4.3 bps over the 5 days (+1.8 bps Friday) to 0.248%, just 9bps from the all-time lows in early March. Euro debt diverged in a similar manner. Spanish and French sovereign debt were -11.6 and -2.0 bps tighter, respectively, to Bunds, while Italian debt traded +3.7bps wider after the decision by Fitch to downgrade the country’s credit rating to BBB- and an ECB meeting that disappointed on OMT guidance.

On the economic data front last Friday, UK mortgage approvals in March fell to their lowest level in seven years, while the final manufacturing PMI came in at 32.6, 0.3 below the flash reading. In the US, Markit Manufacturing PMIs were at 36.1 (36.7 expected), 0.8 below the flash reading of 36.9. At the same time the ISM Manufacturing PMI came in stronger than expected at 41.5 (36.0 expected), down from 49.1 last month. The ISM measures continue to see significant upside contribution from supplier delivery delays, but this is driven by supply chain disruption rather than stronger fundamentals. So difficult to read too much into this stronger reading.

 

3A/ASIAN AFFAIRS

MONDAY MORNING/ SUNDAY NIGHT: 

SHANGHAI CLOSED UP 37.64 POINTS OR 1.33%  //Hang Sang CLOSED DOWN 1,029.79 POINTS OR 4.18%   /The Nikkei closed DOWN 574.34 POINTS OR 2.84%//Australia’s all ordinaires CLOSED UP 1.21%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0624 /Oil DOWN TO 18.79 dollars per barrel for WTI and 25.85 for Brent. Stocks in Europe OPENED RED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.0624 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1256 TRADE TALKS STALL//YUAN LEVELS GETTING DANGEROUSLY CLOSE TO 7:1//TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED//CORONAVIRUS//FALLOUT!  : /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

South Korea

 

b) REPORT ON JAPAN

 

3 C CHINA

CHINA

Here are the key findings form the 5 I’s.  They conclude that the virus originated from the Wuhan labs

(zerohedge)

 

Here Are The Key Findings From The Bombshell Government Dossier On China’s Bat Virus Program

A leaked dossier compiled by Western intelligence agencies concludes that China lied and deliberately suppressed or destroyed evidence during the crucial early days of the COVID-19 outbreak, and notes that Chinese researchers have been experimenting with – and creating – deadly bat coronaviruses.

Here are key findings from the 15-page report compiled by Western governments known as the ‘Five Eyes,’ according to Australia’s Daily Telegraph.

The great coverup

A key theme of the dossier is that China’s negligence and lies resulted in the “endangerment of other countries,” as the CCP silenced or ‘disappeared’ doctors who spoke out.

Doctors who bravely spoke out about the new virus were detained and condemned. Their detentions were splashed across the Chinese-state media with a call from Wuhan Police for “all citizens to not fabricate rumours, not spread rumours, not believe rumours.”

A tweet from the Global Times on January 2 states: “Police in Central China’s Wuhan arrested 8 people spreading rumours about local outbreak of unidentifiable #pneumonia. Previous online posts said it was SARS.” This had the intended effect of silencing other doctors who may have been inclined to speak out. –Daily Telegraph

Furthermore, evidence was destroyed, and China refused to provide live samples to international scientists working on a vaccine.

The paper obtained by The Saturday Telegraph speaks about “the suppression and destruction of evidence” and points to “virus samples ordered destroyed at genomics labs, wildlife market stalls bleached, the genome sequence not shared publicly, the Shanghai lab closure for ‘rectification’,academic articles subjected to prior review by the Ministry of Science and Technology and data on asymptomatic ‘silent carriers’ kept secret”. –Daily Telegraph

China’s deadly denials

The dossier slams China’s constant lies about the virus, noting that “Despite evidence of human-human transmission from early December, PRC authorities deny it until January 20,” adding “The World Health Organisation does the same. Yet officials in Taiwan raised concerns as early as December 31, as did experts in Hong Kong on January 4.”

China also imposed internal travel bans while condemning the rest of the world for wanting to do the same.

“Millions of people leave Wuhan after the outbreak and before Beijing locks down the city on January 23,” reads the dossier. “Thousands fly overseas. Throughout February, Beijing presses the US, Italy, India, Australia, Southeast Asian neighbours and others not to protect themselves via travel restrictions, even as the PRC imposes severe restrictions at home.”

The dossier also notes that China successfully pressured the EU to strike languageabout PRC disinformation, and has threatened Australia for continuing to investigate.

“As Australia calls for an independent inquiry into the pandemic, PRC threatens to cut off trade with Australia. PRC has likewise responded furiously to US calls for transparency.”

Engineered?

While the leaked dossier does not reach a conclusion whether COVID-19 is of natural origin or engineered, it includes a February 6 study from the South China University of Technology which suggested “the killer coronavirus probably originated from a laboratory in Wuhan.

The paper was withdrawn due to what its lead author said was a lack of direct evidence, however the dossier notes that scholar Yanzhong Huang said on March 5 “No scientists have confirmed or refuted the paper’s findings.”

That said, the Telegraph notes that the official US position is that the virus was not engineered, but that it escaped from either the Wuhan Institute of Virology or the Chinese CDC, which is located roughly 900 feet from the Wuhan wet market from which a cluster of early cases emerged.

John Roberts

@johnrobertsFox

A Senior Intelligence Source tells me there is agreement among most of the 17 Intelligence agencies that COVID-19 originated in the Wuhan lab. The source stressed that the release is believed to be a MISTAKE, and was not intentional.

“The Intelligence Community also concurs with the wide scientific consensus that the COVID-19 virus was not man-made or genetically modified,” said acting Director of National Intelligence, Richard Grenell, adding “The IC will continue to rigorously examine emerging information and intelligence to determine whether the outbreak began through contact with infected animals or if it was the result of an accident at a laboratory in Wuhan.”

China’s ‘risky bat research’ and creation of deadly viruses

While the international scientific consensus is that COVID-19 wasn’t manmade, the Western intelligence dossier highlights research by scientists Shi Zhengli and her protégé Peng Zhou, whose work on bat coronavirus Zero Hedge highlighted in January, and who were modifying bat coronavirus to test its transmissibility to other species.

 

Shi Zhengli, director of the Centre for Emerging Infectious Diseases at the Chinese Academy of Sciences’ Wuhan Institute of Virology, who working in Australia in 2006.

It notes a 2013 study conducted by a team of researchers, including Dr Shi, who collected a sample of horseshoe bat faeces from a cave in Yunnan province, China, which was later found to contain a virus 96.2 per cent identical to SARS-CoV-2, the virus that caused COVID-19.

The research dossier also references work done by the team to synthesise SARS-like coronaviruses, to analyse whether they could be transmissible from bats to mammals. This means they were altering parts of the virus to test whether it was transmissible to different species. –Daily Telegraph

A November 2015 study from Zhengli and her team in conjunction with the University of North Carolina concluded that the SARS-like coronavirus could jump directly from bats to humans, and there is currently no cure or treatment.

The Western dossier notes from the study: “To examine the emergence potential (that is, the potential to infect humans) of circulating bat CoVs, we built a chimeric virus encoding a novel, zoonotic CoV spike protein — from the RsSHCO14-CoV sequence that was isolated from Chinese horseshoe bats — in the context of the SARS-CoV mouse-adapted backbone.”

“This virus is highly pathogenic and treatments developed against the original SARS virus in 2002 and the ZMapp drugs used to fight ebola fail to neutralise and control this particular virus,” said North Carolina University Professor Ralph Baric, a co-author on the 2015 paper.

A few years later, in March 2019, Dr Shi and her team, including Peng Zhou, who worked in Australia for five years, published a review ­titled Bat Coronaviruses in China in the medical journal Viruses, where they wrote that they “aim to predict virus hot spots and their cross-species transmission potential”, describing it as a matter of “urgency to study bat corona­viruses in China to understand their potential of causing another outbreak. Their review stated: “It is highly likely that future SARS or MERS like coronavirus outbreaks will originate from bats, and there is an increased probability that this will occur in China.”

The report notes that Dr. Shi’s research continues to this day, telling Scientific American “Bat-borne coronaviruses will cause more outbreaks … We must find them before they find us.”

Zhengli and Zhou’s Australian researchh

Both Shi and Zhou spent three years at Australia’s Animal Health Laboratory – operated by the country’s national science agency CSIRO. Between 2011 and 2014, Zhou arranged for wild bats to be caught and transported alive from Queensland to the lab in Victoria, where they were euthanized, dissected and studied for deadly viruses.

While the United States has since cut all funding to the Wuhan Institute of Virology, CSIRO refused to acknowledge questions over whether it was still collaborating with lab.

Wuhan lab worker who disappeared…

The Telegraph notes the case of Huang Yan Ling, a researcher at the Wuhan Institute of Virology who is rumored to be “patient zero” after having been the first to be diagnosed with the disease.

Then came her reported disappearance, with her biography and image deleted from the Wuhan Institute of Virology’s website.

On February 16 the institute denied she was ­patient zero and said she was alive and well, but there has been no proof of life since then, fanning speculation. –Daily Telegraph

Key dates in the coverup:

November 9, 2015: Wuhan Institute of Virology publish a study revealing they created a new virus in the lab from SARS-CoV.

December 6, 2019: Five days after a man linked to Wuhan’s seafood market presented pneumonia-like symptoms, his wife contracts it, suggesting human to human transmission.

December 27: China’s health authorities told a novel disease, then affecting some 180 patients, was caused by a new coronavirus.

December 26-30: Evidence of new virus emerges from Wuhan patient data.

December 31: Chinese internet authorities begin censoring terms from social media such as Wuhan Unknown Pneumonia.

January 1, 2020: Eight Wuhan doctors who warned about new virus are detained and condemned.

January 3: China’s top health authority issues a gag order.

January 5: Wuhan Municipal Health Commission stops releasing daily updates on new cases. Continues until January 18.

January 10: PRC official Wang Guangfa says outbreak “under control” and mostly a “mild condition”.

January 12: Professor Zhang Yongzhen’s lab in Shanghai is closed by authorities for “rectification”, one day after it shares genomic sequence data with the world for the first time.

January 14: PRC National Health Commission chief Ma Xiaowei privately warns colleagues the virus is likely to develop into a major public health event.

January 24: Officials in Beijing prevent the Wuhan Institute of Virology from sharing sample isolates with the University of Texas.

February 6: China’s internet watchdog tightens controls on social media platforms.

February 9: Citizen-journalist and local businessman Fang Bin disappears.

April 17: Wuhan belatedly raises its official fatalities by 1290.

 

end

 

I disagree with Pompeo…that it was “man made”.  However we all agree that it originated from the Wuhan lab.  We need the notes from the original lab workers to determine exactly what happened
(zerohedge)

There’s “Enormous Evidence” Coronavirus Originated From Wuhan Lab: Pompeo

Secretary of State Mike Pompeo says there’s “enormous evidence” that the coronavirus originated in the Wuhan Institute of Virology, while agreeing with the intelligence community’s determination that the disease is “not manmade or genetically modified.”

Speaking with ABC‘s “This Week” Sunday, Pompeo said:

Martha, there’s enormous evidence that that’s where this began. We have said from the beginning, this virus originated in Wuhan, China. We took a lot of grief for that from the outset. But I think the whole world can see now. Remember, China has a history of infecting the world and they have a history of running sub-standard laboratories. These aren’t the first times that we have had the world exposed to viruses as a result of failures from a Chinese lab.

Responding to a question over whether China should suffer consequences for their handling of the outbreak, Pompeo said that the Chinese Communist Party “did all that it could to make sure the world didn’t learn in a timely fashion,” adding that “It was a classic communist disinformation effort.”

ABC News

@ABC

NEW: Secretary of State Mike Pompeo tells @MarthaRaddatz China “did all that it could to make sure the world didn’t learn in a timely fashion” about COVID-19.

“It was a classic communist disinformation effort,” he adds and they will be held “accountable.” https://abcn.ws/2xr5BKq

Embedded video

Pompeo’s comments echoed the overall tone coming from the Trump administration, which has ratcheted up criticism of Beijing last week while demanding answers about the origin of COVID-19.

Donald J. Trump

@realDonaldTrump

Concast (@NBCNews) and Fake News @CNN are going out of their way to say GREAT things about China. They are Chinese puppets who want to do business there. They use USA airwaves to help China. The Enemy of the People!

end

An excellent paper by Huang of the South China Morning post.  He asserts that China now must face the consequence of the COVID 19 that they realized upon the world.  The world now turns against globalization.  The author then outlines what will happen in the years to come

(Huang/SCMP)

China Faces “Economic Reckoning” As COVID-19 Turns World Against Globalisation

Authored by Cary Huang, op-ed via The South China Morning Post,

  • Trump, Brexit, trade war… the forces against globalisation have been gathering pace since 2008. Now the coronavirus threatens the knockout blow
  • That’s bad news for an economic giant that is one of its biggest beneficiaries

One of the more worrying consequences of the  coronavirus is that it looks likely to become a catalyst for deglobalisation.

At the centre of this will be the decoupling of the Chinese economy with developed economies and the US in particular. The world’s three largest free economies – the European Union, the  United States  and  Japan – are all drawing up separate plans to lure their companies out of China.

European Union trade commissioner Phil Hogan has called on companies to consider moving away from China; US President  Donald Trump’s top economic adviser Larry Kudlow has said the government should pay the costs of American firms moving manufacturing back from China onto US soil; and Tokyo has unveiled a US$2.2 billion fund to tempt Japanese manufacturers back to Japan or even to Southeast Asia.

Coronavirus: Can China overcome global mistrust to lead the fight against Covid-19

Meanwhile, bills are piling up in the US Congress aimed at reducing America’s reliance on Chinese supply chains and pushing for a decoupling of the world’s two largest economies.

While these are recent moves, the truth is the debate on globalisation – and deglobalisation – began more than a decade ago in the wake of the global financial crisis of 2008.

After decades of globalisation in trade, capital flows and even people-to-people exchanges, the trend has reversed over the past decade as trade and financial integration stalled.

Protectionist tendencies are on the rise.Since 2008, G20 countries have added more than 1,200 restrictions on exports and imports.  Britain’s decision to leave the EU, the election of Trump on a protectionist agenda, and the rising popularity of right-wing political parties in France, Italy and elsewhere are all examples of rising public discontent with the status quo.

Deglobalisation gained steam when Trump launched tariff wars against many of American’s trade partners, China in particular. Since the advent of the  US-China trade war in the past two years there has been growing evidence of a sharp decrease in merchandise, capital and people-to-people flows.

Conventional wisdom suggests globalisation makes the world a better place to live as a whole, as free trade generally promotes global economic growth. Economic liberalisation creates jobs, makes companies more competitive, and lowers prices for consumers. Advances in technology and communications have made it easier than ever for people and businesses to stay connected.

Chinese farmers see livelihoods threatened by coronavirus pandemic and related economic slump

But globalisation is a complicated issue and its benefits and disadvantages are not equally shared. Globalisation is good for multinational corporations and Wall Street as it opens up opportunities to sell goods and services to much larger markets with greater profits. They also benefit from moving assembly lines to developing countries where production costs are lower.

The biggest problem for developed countries is that jobs are lost in the process. Supporters of globalisation point out that it has brought about cheaper imported goods. But this benefit does not offset the decline of jobs and therefore wages.

Another problem for developed countries is that they lose domestic fiscal revenue when countries move production elsewhere. In the US, the process has cost not only many jobs but also steadily increased the trade deficit and debt.

China has been the biggest beneficiary as its economic rise has come hand in hand with globalisation.

Since it joined the World Trade Organisation in 2001, China has leapfrogged France (in 2005), Britain (in 2006), Germany (in 2007) and Japan (in 2010) to become the world’s second-largest economy. This rise was thanks largely to open access to international markets and billions of dollars of foreign direct investment (FDI). China has for some years been the world’s top destination for FDI and this has played a critical role in making the country a global economic powerhouse, turning an agricultural backwater into the world’s manufacturing hub and largest merchandised goods exporter in just a few decades.

The flip side is that deglobalisation poses a very real risk for China, as its economic prospects have become so deeply intertwined with world markets.

US colleges face US$15 billion hit as Chinese students stay away amid coronavirus pandemic

Exports of goods and services accounted for 19.51 per cent of China’s GDP last year, according to the World Bank. While that figure is declining, it is still sizeable. Based on this, a 10-percentage-point decline in China’s exports might mean a decline of about 2 percentage points in GDP growth on average.

Exports employ 180 million workers, so any hit to the sector would also have a knock-on effect on investment, incomes, consumption and employment.

Politicians, policymakers and business executives in developed economies have come to realise the hazard involved in overreliance on China for critical supplies, particularly for medical equipment, pharmaceuticals and medicines.

What has upset many in the West is the realisation that they were wrong to assume globalisation and democracy would go hand in hand. China’s meteoric economic rise, its pivot to more authoritarian rule and a more assertive stance on the international stage in recent years have proved such assumptions completely wrong.

Coronavirus: How badly is Covid-19 disrupting the oil industry in the US and beyond?

For China hawks in the West, the globalisation of the past few decades has seen the free West help create a communist monster, one that now poses the most severe challenge to established universal values and the global order.

That is why the Trump administration’s December 2017 National Security Strategy classified China as a strategic rival that aimed to “undermine the American economy, values and interests”. The EU has made a similar policy statement, identifying China as a “systemic rival”

The global economy as a whole will suffer from deglobalisation and the decoupling of the world’s largest economies if the flow of capital, investment and trade becomes less dynamic. But the escalating trade war and rising strategic competition between the US and China were fostering the deglobalisation trend even before the outbreak of the coronavirus pandemic. Covid-19 is only likely to accelerate the decoupling and therefore may well prove to be a historic turning point.

It seems unavoidable that the coronavirus will usher in a new era of economic development, both for China and the rest of the world. 

end
CHINA/USA
A Chinese report warns of a possible armed conflict with the uSA over the coronavirus backlash. The USA does not need to engage in armed conflict.  All the USA needs to do is cut off all dealing with China..period..
(zerohedge)

Chinese Report Warns Of Possible Armed Conflict With US Over Coronavirus Backlash

An internal report presented to Chinese President Xi Jinping and other top leaders concludes that global anti-China sentiment is at a level not seen since the 1989 Tiananmen Square crackdown, and recommends preparing for a worst-case scenario of armed conflict with the United States, according to Reuters, citing people familiar with the content of the document.

The report, created by the China Institutes of Contemporary Internal Relations (CICIR) – which is affiliated with the Ministry of State Security – suggests that the wave of anti-China sentiment is led by the United States, which sees China’s rise as a global superpower as a threat to Western democracies.

One of those with knowledge of the report said it was regarded by some in the Chinese intelligence community as China’s version of the “Novikov Telegram”, a 1946 dispatch by the Soviet ambassador to Washington, Nikolai Novikov, that stressed the dangers of U.S. economic and military ambition in the wake of World War Two.

Novikov’s missive was a response to U.S. diplomat George Kennan’s “Long Telegram” from Moscow that said the Soviet Union did not see the possibility for peaceful coexistence with the West, and that containment was the best long-term strategy. –Reuters

Reuters, which hasn’t seen the paper, couldn’t determine to what extent the report’s grim outlook reflects positions held by China’s state leaders, nor how much it might influence policy. That said, it suggests Beijing is taking the threat of global backlash over the coronavirus pandemic – which Western intelligence agencies suspect originated at a Wuhan biolab which was experimenting with bat coronavirus, and had previous concerns raised over the pandemic potential of such research.

China’s early coverup of the outbreak – including silencing and/or disappearing whistleblowing doctors and journalists, lying about the transmissibility of the virus while hoarding personal protective equipment (PPE), quarantining Wuhan domestically while allowing international travel, and using the World Health Organization to run cover – has drawn global scorn as COVID has infected over 3.5 million and killed nearly 250,000 in five months.

Chinese officials had a “special responsibility” to inform their people and the world of the threat posed by the coronavirus “since they were the first to learn of it,” U.S. State Department spokeswoman Morgan Ortagus said in response to questions from Reuters.

Without directly addressing the assessment made in the Chinese report, Ortagus added: “Beijing’s efforts to silence scientists, journalists, and citizens and spread disinformation exacerbated the dangers of this health crisis.” –Reuters

President Trump in recent days has been ratcheting up criticism of Beijing, while threatening new tariffs on China. His administration has been considering retaliatory measures over the outbreak, according to the report – which warns that anti-China sentiment could also threaten their Belt and Road infrastructure initiatives, and that Washington could take advantage by offering financial and military support for regional allies, which would in turn make the security situation in Asia more volatile.

On Monday, Treasury Secretary Steven Mnuchin said that President Trump is reviewing options to penalize China, adding that he expects Beijing to meet their obligations under the phase one trade deal.

“I have every reason to expect that they honor this agreement, and if they don’t, there would be very significant consequences in the relationship and in the global economy as to how people would do business with them,” said Mnuchin.

As Reuters notes, China’s Xi has shaped the country’s military into a fighting force equipped to win modern wars – expanding air and naval capabilities and reach in a challenge to over 70 years of US dominance in Asia.

China’s foreign ministry is now calling for peace and cooperation, saying “the sound and steady development of China-U.S. relations” are in the best interests of both countries and the international community, and that “any words or actions that engage in political manipulation or stigmatization under the pretext of the pandemic, including taking the opportunity to sow discord between countries, are not conducive to international cooperation against the pandemic.

Trump, meanwhile, announced that he will cut off funding for the World Health Organization (WHO) for being “very China-centric.”

And while the world focuses on China’s response to the virus, Australia – where two scientists from the Wuhan Institute of Virology conducted coronavirus experiments overseas – has called for an international investigation into the origins and spread of COVID-19, while the so-called ‘five eyes’ Western intelligence agencies explore whether coronavirus escaped from the Wuhan lab – while operating under the assumption that it’s a non-modified virus of natural origin.

end
HONG KONG 
The Coronavirus is taking its toll on Hong Kong which recorded its worst contraction ever
(zerohedge)

‘Economic Fallout Accelerated’ – Hong Kong Records Worst Contraction In History  

Hong Kong’s economy in the first quarter suffered its deepest annual contraction on record, plunging 8.9% YoY as the coronavirus pandemic dealt a heavy blow to business activity in the city, already suffering from a collapse in tourism and retail industries due to months of anti-government protests in late 2019.

The Census and Statistics Department published 1Q GDP figures on Monday, revealing a decline in YoY growth trend for the third consecutive quarter. Preliminary data showed the 8.9% print was worst than 3Q98 when GDP plunged 8.3% during the Asian financial crisis, reported South China Morning Post. The final print is expected in late May.

Hong Kong Financial Secretary Paul Chan Mo-Po warned, “we are deep into recession” as the “economic situation is very challenging.”

He said on a QoQ comparison, GDP had contracted for four consecutive quarters, indicative of a deep decline in the economy that could soon surpass what was seen in the Asian financial crisis when there were five quarters of consecutive declines.

“If we are able to work and unite together, not just to fight against the virus, but stimulate consumption and economic development, the economic situation will stabilise somewhat in the second quarter,” he said.

“If the global epidemic situation improves, we will be able to come out of recession gradually towards the end of this year.”

The city’s key growth drivers – exports, retail, and investments, have been severely damaged because of the slump. Exports plunged 9.7% in 1Q YoY due to supply chain disruptions across Asia.

“The three locomotives broke down,” he said. “Unemployment hit a new high in March, the worst in about nine years.”

A government spokesperson on Monday said the recession deepened in 1Q20, as lockdowns crushed economic activity and supply chains. Virus-related shutdowns in the city have prevented mass protests, but the trade-off has broken tourism and retail industries.

“With the disease evolving into a pandemic in March, the economic fallout became even more severe,” the spokesperson said.

On a QoQ basis, 1Q GDP shrank around 5.3%, the steepest decline since records began in 1974.

Beijing warned last week that Hong Kong was headed for the worst recession on record as full-year GDP forecasts were downgraded to between -4% to -7%. Estimates in February were roughly -1.5% contraction to +.50%, though the pandemic has undoubtedly created an economic shock that has roiled the city.

There are some signs that the virus spread is slowing in Asia. However, Iris Pang, Greater China economist at ING, warned that “social distancing “will continue to hurt catering and shopping.” She warned that more Hong Kong protests are expected “over the summer holidays.”

The deepening downturn in the city will likely weigh on consumer spending habits throughout the year. Uncertainty over job prospects will also damage consumer sentiment as the city is highly exposed to global trade.

“Hong Kong’s near-term economic outlook is subject to very high uncertainties, hinging crucially on the evolving global public health and economic situations,” the government said in a statement.

Financial relief for business and households is expected to push the city’s budget deficit this year to a record HK$276.6 billion ($35.68 billion), or about 9.5% of GDP.

The Hong Kong Retail Management Association recently warned that despite relief measures, nearly 25% of the 62,400 retail brick and mortar stores could close by the end of the year.

It’s surprising that Hong Kong is experiencing one of the worst declines in the city’s history. Meanwhile, China has already shown signs of a recovery. How is that even possible? Unless China is lying about its economic recovery…

end

Michael Every…

Rabobank: There Is One Key Thing To Watch Today: The Yuan

Submitted by Michael Every of Rabobank

Tunnels & Trolls

 

There is one key thing to watch today. That is USD/CNH, which is vitally important as the exchange rate of the world’s two largest economies, and as a key trigger for risk off panic when CNH starts to fall. Most of the time, of course, watching this cross or describing its daily movements is like watching paint dry, or describing pain drying. As I repeatedly state, it is not a real market in the traditional sense (though what is nowadays?). Rather, it is a political virtue-signalling device. For that reason, pay very close attention to it as US-China relations tank. Indeed, it seems both sides are doing their level best to undermine relations with a series of tunnels that destroy the foundations of trust and by trolling the other.

From Beijing’s side, the irascible Global Times, among other outfits, has continued to suggest that Covid-19 did not originate in China and that the US army might be responsible instead. On Friday, the Chinese embassy in Paris even released a Lego-style animation mocking the US and its virus response, which was not what one would call traditional diplomacy. Neither was the Global Times editor calling Australia gum stuck to the bottom of a shoe last week. China does not return from holiday until Wednesday, so this is all just a warm-up.

From the side of the land of the brave and the home of Tunnels & Trolls there has been equal tunnelling and trolling. US President Trump, speaking on the virus on TV yesterday, stated: “We will be giving a very strong report on what we think happened, and I think it will be conclusive…Personally, I think [China] made a very horrible mistake. They tried to cover it, they tried to put it out. Trump also stated that if China does not purchase US goods in line with the “phase one trade deal” that he will terminate it. His likely Democratic presidential opponent is meanwhile attacking Trump for having prioritised the trade deal over a tougher Covid response – indeed, Pew polling in the US shows anti-China rhetoric sells well across party lines. Trump is already pivoting, using tweets to conflate his regular attacks on the press with ones on China, claiming some US news channels are fake and “going out of their way to say GREAT things about China. They are Chinese puppets who want to do business there. They use USA airwaves to help China. The Enemy of the People!

Secretary of State Pompeo has gone even further, claiming “enormous evidence” that Covid-19 came from Wuhan and that “these are not the first times we’ve had a world exposed to viruses as a result of failures in a Chinese lab.” He’s also tweeted even more incendiary attacks on the Chinese Communist Party itself, and on TV stated “China behaved like authoritarian regimes do, attempted to conceal and hide and confuse,” and that it continued to block US and WHO expert access to samples of the virus needed for study. There are also news reports circulating that claim US officials believe (meaning ‘want the press to report that’) China deliberately covered up Covid-19 while it secured access to the majority of world Personal Protective Equipment (PPE). Further anti-China briefings from US officials can no doubt be expected ahead, with another scheduled for today.

I have repeated several times recently that this backdrop is not conducive for any realistic hopes of a US-China trade deal. Quite the opposite. At this stage the only question is how far relations deteriorate and how much damage is done. USD/CNH was flat this morning at around 7.13, with the market either seeing tacit intervention or a lack of any participant willing to be seen taking a side in this epic trolling session.

It is unlikely that will remain the case, however, and the key thresholds to watch are 7.1545, which was the high seen this year so far, and then 7.1940, which was the high seen before the “phase one trade deal” was signed. Break through the latter and we are in a dark and scary tunnel.

Of course, the timing of all this could not really be worse given we are already seeing mounting evidence that when you remove a virus lockdown things don’t improve much:

  • A consumer survey in China showed 51% of respondents planned to spend less and save more ahead, with only 9% increasing spending; other estimates are that while some 90% of firms are open again, a huge share are operating at a much-reduced capacity. Is it any surprise that we are also seeing manufacturing PMIs in Indonesia, India, Taiwan, Japan, and South Korea at the lowest since 2009, or ever?
  • In the UK, a survey shows that nearly 3 in 4 people are worried about lockdowns being rolled back and are unlikely to return to normal consumer behaviour. There is now chatter that the government might have to extend help to commercial landlords whose tenants can’t pay the rent. Hey, just stick it on the tab, right?
  • In the US, Georgia has reopened and yet has been “a disaster” for some retailers, according to a Bisnow.com story. Admittedly the firm featured most heavily–one which lets you throw axes at targets–might not be high up on the list of consumer priorities post-lockdown, although some might say it is much needed. However, the owner reports that he did not even see 10% of his usual client numbers – he got just two all weekend.
  • Only Australia seems to be bucking the trend with a big beat in building approvals (albeit -4.0% m/m vs. -15% expected)…except held-wanted ads dropped 53.1% m/m in April so it’s unclear who is going to be earning enough to buy the houses that are being built, especially with the borders closed too. Moreover, a Labor Party Senator for NSW just wrote an editorial which asks “Do we want migrants to return in the same numbers? The answer is no.” This argues “As a result of COVID-19, Australia will soon have an opportunity to do something we have never done before: restart a migration program. When we do, we must understand that migration is a key economic policy lever that can help or harm Australian workers during the economic recovery and beyond. We must make sure that Australians get a fair go and a first go at jobs. Our post-COVID-19 economic recovery must ensure that Australia shifts away from its increasing reliance on a cheap supply of overseas, temporary labour that undercuts wages for Australian workers and takes jobs Australians could do.” Another political taboo bites the dust, and another economy has to work out where it goes next if not down the same old rabbit-hole. As such, AUD goes down too: more so as despite the yield pick-up over USD it is still a good proxy for CNY or CNH.

In short, we are all still in a long, dark tunnel – and we don’t know if the light we see ahead is a way out or just the reflection of a monster’s eye

end

4/EUROPEAN AFFAIRS

SPAIN//ITALY

Both Spain and Italy are in severe trouble and they both need another bailout as their deficits skyrockets

(Mish Shedlock/Mishtalk)

 

Spain Seeks Another Bailout As Deficit Skyrockets

Authored by Mike Shedlock via MishTalk,

Spain needs another rescue. Its deficit and debt violate Eurozone treaty rules.

Deficit rule violation is across the board. At least Spain admits it.

As translated from El Mundo, Spain Needs a New Era of Adjustment.

In simple terms, Spain admits it needs another bailout. This is a Mish-modified translation.

An economic collapse is underway. Spain officially sent to the European Union a request for a bailout this year and a new era of adjustments starting in 2021 in order to make sustainable the gigantic jump in public debt.

The forecast is the budget deficit will skyrocket to 10.3% of the Gross Domestic Product this year and for the debt to jump from 95.5% to 115.5% , a level that exceeds the worst ...

Spain in Deep Fiscal Trouble

The rest is behind a paywall, but you get the idea:

Spain admits it is in deep fiscal trouble. 

Also from El Mundo (but not behind a paywall):  The Government anticipates a recession of 9.2% and an increase in unemployment to 19%

The budget plan that the Government sent to Brussels last night includes an economic debacle as a result of the crisis that has unleashed the coronavirus: according to its estimates, the Gross Domestic Product (GDP) will collapse 9.2% this year, while the rate unemployment will skyrocket from 14% to 19%.

In addition, the Government now maintains that the recovery will be asymmetric,  in 2021 everything lost will not be recovered.

All the jobs created in the the last four years will vanish. And the recovery will only return to the level in 2017.

Eurozone Outlook

Italy is in worse trouble. 

In fact, every Eurozone country will be in severe violation of Stability and Growth Pact rules regarding both debt and deficits.

The Rules

  1. Budget deficit must not exceed 3% of gross domestic product (GDP).
  2. Public debt (government debt & that of public agencies) must not exceed 60% of GDP.

Excessive Deficit Procedures

The Eurozone has never really enforced any rules, but it does pressure countries with periodic threats of Excessive Deficit Procedures.

EU Recovery Plan

Eurointelligence comments Thinking Through the Details of a Recovery Fund.

In our assessment of the economic impact of the agreed way forward, we know most of what we need to know right now. The European Council has agreed on Angela Merkel’s version, not the coronabond or the Spanish proposal. As FAZ reports this morning, the plan is for the EU to increase its budget capacity from the current 1.2% to 2%, for a period of two to three years. This increase will not come in the form of direct contributions from the member states, but of guarantees. The paper puts the annual volume at €100bn per year, which would be be approximately 0.6% of EU-27 GDP on our calculations. The total borrowed could be in the order of €250-300bn over the period.

If we assume total borrowing of €300bn, half of it in the form of grants, the average macroeconomic impact would be 0.4% of GDP for three years running.

As ever, beware of headline totals. Ursula von der Leyen said last night that the size would be measured in the trillions, not billions. As we scour this morning’s headlines, we find plenty of gullible journalists impressed by that number. We think it is an illusion. So was the eurogroup’s €500bn package, because it conflated into a single round number the ESM’s outstanding capacity plus the estimated lending capacity of two levered funds.

Assume Spain is granted 0.4 percentage points of GDP for three years.

What does that do in comparison to the numbers above?

EU’s Trickery of a Fake MFF

The EU will not enforce any rules, of course. Instead it will respond with magic solutions as it always does.

In a follow-up article, Eurointelligence discussed The EU’s Trickery of a Fake Monetary Fund Facility MFF.

Return of the German Professors

Also consider the Eurointelligence article on the Return of the German Professors on March 24.

We have been waiting for the German professors to wag their fingers, or to threaten legal action against the ECB or national governments. But so far it has been mostly quiet on that front. This morning, however, we saw an article by Otmar Issing in FAZ, in which he argues that emergency was no excuse for law-breaking. He accuses the ECB of monetary financing and says that a mutualised eurobond is illegal unless formally accepted by national parliaments.

Issing’s comment is likely to matter not only only because of his former role at the ECB. He carries enormous weight among German conservatives.

Issing argues that, if countries had followed the EU fiscal rules and built up fiscal surpluses in good times, they would not be in the position to needed a bail-out now.

It is not the role of the ECB to prevent a collapse of national public finances. And Art 125 TFEU, the no-bail out clause, is still there. It says the union must not take over the liabilities of member states, and that member states must not take over one another’s liabilities. Even as advocates of a mutualised eurobond ourselves, we must acknowledge that there is no firm legal basis for it under EU law.

Issing’s article is likely the beginning of a legal discussion about the future course of policy. We saw it during the euro crisis. The legal fall-out from that period is still not over. The German constitutional court has yet to rule on the legality of QE. We expect the next phase of legal arguments to arise before the old one has come to an end.

Huge Political Battle Brewing

A huge political battle is brewing. 

Spain wants another bailout and Eurobonds, Germany wants neither.

The EU responded as it always does, with magic proposals and fake leverage. 

Solidarity?

  • Sure. Solidarity is between German and the Netherlands.
  • Solidarity is also between Spain and Italy. 
  • France is somewhere between the extremes depending on the French president, now Emmanuel Macron.

Creditors vs Debtors

More accurately, view solidarity as a battle between the creditor states and the debtor states.

Italy vs the EU

Dogz Bollox🏴󠁧󠁢󠁥󠁮󠁧󠁿Right Wing News@Bollocks_Dogz

Italian politician Fabio Rampelli removes the EU flag from his chambers and replaces it with the national one.

If the Coronavirus did one good thing, that was expose the European union for the inept bureaucrats they are.

Embedded video

Please note that Italian politician Fabio Rampelli removed the EU flag from his chambers and replaced it with the national one.

Eurozone Collapse: V-Shaped Recovery Mirage Is Gone

Please note the Eurozone Collapse: V-Shaped Recovery Mirage Is Gone.

If by any chance you were wondering why the US dollar has been firm despite all the Fed shenanigans, you now know.

Inflation or Deflation?

Meanwhile, the debate over inflation or deflation continues.

Will it be Inflation or Deflation?

If you believe the answer is inflation, then you do not understand the importance of credit and demand shocks. Click on the link for discussion.

end
SPAIN/THE GLOBE/CORONAVIRUS UPDATE/MONDAY

Spain’s Push To Extend Lockdown Sparks Political Standoff As Global Coronavirus Deaths Decline For 5th Day: Live Updates

Summary:

  • Deaths decline for 5th day
  • Japan extends state of emergency
  • Spanish opposition threatens to torpedo vote to extend lockdown
  • Iran to allow Friday prayers
  • UK defense secretary says China owes the world ‘an explanation’

*     *     *

As most of the US and most of Europe start yet another week under lockdown, the FT reports that the rate of global coronavirus deaths slowed for the fifth straight day: The worldwide single-day total of deaths reported yesterday (typically, those deaths occurred during the prior 24 hour period) hit 3,481, falling for the fifth day in a row.

Sunday’s total represents the smallest daily increase in deaths since the end of March, reflecting trends seen in New York, the UK, Italy and elsewhere on Sunday.

Globally, the number of newly confirmed COVID-19 cases climbed by 82,260 yesterday, the biggest spike on a Sunday since the pandemic began. It brought the total number of ‘confirmed’ infections to 3.4 million, with hundreds of thousands more potentially left uncounted.

The US suffered an additional 1,158 deaths to push the total there to 61,760. This is the lowest daily figure since April 6, though the US still accounts for a third of all daily fatalities.

Meanwhile, in Japan, PM Shinzo Abe has made it official.

As was widely expected, Japanese PM Shinzo Abe officially extended Japan’s nationwide state of emergency – which had been due to expire on Wednesday – through May 31.

While Japan has escaped the massive death tolls seen in Europe and the US, the number of confirmed cases has exploded over the last month, a sign that the world’s third-largest economy is still struggling with the first wave of the virus, which has now burrowed deep into Japanese society, according to Nikkei.

While Tokyo hasn’t been devastated by the virus on the level of NYC or Wuhan, the spike in infections has left hospital systems strained around the country.

“Nearly one more month is needed to improve the medical system, which has been stretched thin,” Abe told reporters at a news conference on Monday evening. “The reduction of new infections has still not attained the necessary level.”

Abe promised that a panel would examine the effectiveness of the state of emergency, and if allowable, would order it to be lifted before the May 31 deadline if enough progress has been made.

While Japan ramps up its restrictions, Spain is heading for a political confrontation over its lockdown – possibly the most restrictive in Europe – as the death toll lingers near its lowest point since the outbreak began.

It had been taken as a given that PM Pedro Sanchez would manage to win the votes for a planned two-week extension of the lockdown. However, the main leader of the opposition in the Spanish Parliament – a lawmaker named Pablo Casado – claims his People’s Party (a center-right party) plans to vote against the extension, which gives Sanchez extraordinary power to rule by decree.

Sanchez argues that the lockdown must be lifted gradually to guarantee that the progress the country has made will be protected: According to health ministry figures released on Monday, the daily death toll remained at 164 for the second consecutive day, the lowest level since March 18, when the lockdown was just 3 days old.

Iran is set to hold Friday prayers this week and has re-opened mosques in a handful of towns believed to pose a low risk to public health after about two months of closure. Though the reopenings come with rules: Worshippers can spend a maximum of half an hour in mosques and have to wear face masks and gloves.

Iran’s death toll reached 6,277 on Monday, up from 6,203 a day before. A total of 98,647 individuals have now tested positive.

Last night, a US intel leak appeared to confirm what many China hawks had already suspected: That China withheld information – like the confirmation of human-to-human transmission – and used the time to hoard PPE and other medical supplies, which would explain the inexplicable global shortage that seemed to already be in place by the time American buyers started finding that warehouses had already been mysteriously emptied.

Now, as the UK reconsiders its decision to allow telecoms components manufactured by Huawei to be used as part of its 5G network, the British Defense Minister said Monday that China has some explaining to do about the US report cited above – though he added that there would be time for an inquiry after all of this is over.

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

ISRAEL/WEST BANK

Israel is now moving fast with its plan on West Bank annexation..and this is moving forward without a Palestinian state. We should therefore expect a third intifada after the coronavirus episode is behind them.

(zerohedge)

 

US Embassy: Israeli West Bank Annexation Can Move Forward Without A Palestinian State

The recently established US Embassy in Jerusalem (moved from Tel Aviv last year as part of Trump’s plan) has confirmed that the world will soon see the most controversial element of Trump’s peace plan put into effect: Israeli annexation over broad swathes of the West Bank, particularly the Jordan Valley.

“As we have made consistently clear, we are prepared to recognize Israeli actions to extend Israeli sovereignty and the application of Israeli law to areas of the West Bank that the [Trump peace plan] foresees as being part of the State of Israel,” a top US Embassy official told the Times of Israel on Friday.

 

Prime Minister Benjamin Netanyahu with US Ambassador to Israel David Friedman (center). Image source: US Embassy/Times of Israel.

The statement made clear that “Israeli actions” will be validated with or without recognition of a Palestinian state, something which on paper at least Trump’s ‘deal of the century’ offered.

Though the deal offers statehood, the Palestinians have rejected the US-Israeli brokered Trump peace plan from the start, given they simply had no involvement or were not fundamentally consulted.

Ultimately such a brazen annexation, which as we noted before PM Netanyahu said will take place as early as within two months, or likely early summer, will essentially end the path to statehood.

Should Israeli annexation indeed move forward by this summer, as Netanyahu envisions, it could potentially unleash protests and violence on the level of a third Intifiada. Palestinian Authority leaders as well as Hamas have vowed that such an extensive new Israeli land grab will be resisted by call costs.

end
RUSSIA/CORONAVIRUS UPDATE//SUNDAY

Russia Reports Record New Cases For 4th Day As COVID-19 Tears Through Moscow: Live Updates

Summary:

  • Russia reports 4th straight record new cases
  • Spain sees lowest deaths since March 18
  • Zimbabwe asks IMF for $2 billion rescue loan
  • Moscow Mayor warns 2% of city likely already infected
  • Roche receives emergency auth from FDA for COVID-19 tests
  • France’s controversial ‘StopCovid’ app nearly ready
  • Boris Johnson names son after doctors who saved his life
  • Global COVID-19 confirmed cases nears 3.5 million

*        *        *

Every day, it seems, Russia sets a new record for the largest number of new COVID-19 cases confirmed in a day. As we reported yesterday, Health officials in Moscow announced more than 9k new cases. On Sunday, they announced more than 10k new cases, another record sum. In the span of just two weeks, Russia has gone from having a relatively inconsequential number of positive cases to housing one of the largest outbreaks in the world. Of course, the infections didn’t just happen overnight. It’s merely the latest evidence that by the time Russia closed its Far Eastern border back in January the seeds of domestic transmission may have already been planted.

That would jive with evidence that the first COVID-19 death in the US might have occurred as early as Feb. 6, meaning parts of New York, California and Washington were probably already suffering from local human-to-human transmission.

Russia added 10,633 cases of Covid-19, the highest daily number for the nation so far, increasing for a fifth day in a row. The total number of cases has risen to 134,687, according to the government’s virus response center. Around a half of the new cases are asymptomatic and Moscow accounts for nearly 56% of new infections. Russia’s total Covid-19 fatalities rose to 1,280.

As the Guardian reported, Moscow’s mayor warned on Saturday that up to 2% of Moscow’s population may be infected, as hospitals in the Russian capital were overwhelmed and another top government tested positive. If Mayor Sergei Sobyanin’s projection is correct, that would mean more than 240,000 Muscovites have already been infected, 4x the official number.

Russia confirmed 10,633 new coronavirus infections Sunday, bringing its countrywide total to 134,687and marking a new one-day record increase. Russia is now the seventh most-affected country in terms of infections, having surpassed China, Turkey and Iran last week. Roughly 1,280 deaths have been confirmed countrywide. More than half of the confirmed cases are in Moscow or the surrounding area. Sunday’s increase was Russia’s fourth record-day jump in a row.

After announcing that Russian PM Mikhail Mishustin, on Friday authorities announced the housing minister was the latest top official to test positive. Vladimir Putin has not been pictured in public for nearly a month and is working from his residence outside Moscow.

Hospitals in the capital are already at capacity, with television footage showing ambulances forced to wait for hours to deliver the infected.

As Moscow’s hospital system groans, anger is rising across Russia. Recently, the government shuttered two dozen hospitals for quarantines, with many doctors falling sick. Russian independent media and non-governmental organizations have reported anonymous pleas from outraged medical workers who said they had been ordered to the frontlines without adequate protection.

Across the world, the number of ‘confirmed’ coronavirus cases has climbed to 3.5 million, with hundreds of thousands – potentially even millions – of cases likely uncounted. The number of deaths, meanwhile, is slowly approaching 250,000 (it stood at 244,239 as of Sunday morning). During it annual meeting, the IMF said it had set aside $1 trillion of lending capacity to help emerging-market member states particularly hard hit by the pandemic and some of the ramifications for global financial conditions (negative prices on oil futures, the rapidly strengthening greenback, etc.). 189 countries are members of the IMF, and so far, mostly South American states like Ecuador have asked for large bailouts.

But on Sunday, the FT reported that Zimbabwe had asked for a loan to help clear billions of dollars in debt and avoid an economic collapse. The FT cited a letter from Finance Minister Mthuli Ncube to the IMF.

Zimbabwe is about $2 billion behind on payments to lenders, including the World Bank and African Development Bank, and has been excluded from emergency loans from international institutions, the newspaper said.

Following reports that it planned to roll back some lockdown measures, Singapore said Sunday that companies with employees who can work from home will probably be asked to continue doing so even after the country’s partial lockdown ends on June 1, while sectors like manufacturing should prepare for a gradual reopening in the coming weeks, Singapore’s Trade and Industry Minister said.

After successfully blocking the president’s businesses from receiving any government assistance, political opponents of President Trump have now succeeded in preventing Trump’s friends and associates – no matter how tenuous the connection – from benefiting from the program. For example, Texas hotelier Monty Bennett, whose companies are among the biggest known recipients of rescue loans for small businesses hurt by the pandemic, said he will return the money. Bennett is a major Trump donor.

On the pharmaceutical front, as the debate over remdesivir’s effectiveness rages, Roche said it received authorization from the FDA for its Elecsys coronavirus antibody test. The test, designed to determine if a patient has developed antibodies against the virus, has a specificity greater than 99.8%.

There were 164 new fatalities, bringing total deaths to 25,264, according to Health Ministry data. That compared with 276 daily fatalities reported Saturday. Total infections rose by 838 to 217,466, down from the previous increase of 1,147. The figures include adjustment on how previous new cases were counted in certain regions, the ministry said.

During a Sunday morning interview with CNN’s Jake Tapper – building on Fed Chairman Jay Powell’s exhortation for the federal government to push through more stimulus – on its “State of the Union” program, Larry Kudlow was pressed to explain why Congress doesn’t just plow ahead with more stimulus.

“Waiting any further – does it make any sense?…There’s a real need, we need more money in that program,” Tapper said. The confrontational interview followed a CNN report claiming the second round of the ‘PPP’ had delivered 2.2 million small business loans worth an aggregate $175 billion.

Circling back to Europe, the controversial app – known as StopCovid – that France is developing to trace those who could be infected, known as StopCovid, could be ready by the end of May, the government spokeswoman Sibeth Ndiaye told France Inter Sunday. That would be after France starts lifting its lockdown, from May 11, though the government also announced plans to try and extend its ‘state of emergency’ order until July.

Aside from a few one-off spikes, France has seen deaths and new cases mostly flatten in recent weeks. The country’s total case number stands at 130,979 while its death toll is less than 2k at 1,953.

Having returned to work after his struggle with the virus, UK PM Boris Johnson sent a message of encouragement to his supporters… ‘We will beat this together’.

Boris Johnson #StayHomeSaveLives

@BorisJohnson

If you keep going in the way that you have kept going so far, we will come through this all the faster and the United Kingdom will emerge stronger than ever before.

Text: We will beat this together.

He also announced that he would be naming his newborn son after the two doctors who saved his life during his struggle with the coronavirus.

Johnson’s fiancee Carrie Symonds announced their child’s name, Wilfred Lawrie Nicholas Johnson, in an Instagram post on Saturday. The baby was born last Wednesday.

Finally, Spain reported 164 new fatalities over the last 24 hours, compared with 276 for the prior day, bringing the country’s death toll to 25,264, according to Health Ministry data. That marked the country’s lowest single-day death toll since March 18. Spain counted 838 new cases, bringing its total to 217,466. According to Bloomberg, the figures reflect adjustments made to older cases.

END

SAUDI ARABIA

My goodness:  70% of Mecca is already infected with the COVID 19 and it is quite possible that many of the Saudi Royal family have the infection

(zerohedge)

 

Saudi Officials Say Whopping 70% Of Mecca’s Population Likely Infected With COVID-19

We detailed before that in late February Saudi authorities made the historically unprecedented to move to shut down the Islamic pilgrimage to Mecca due to the coronavirus pandemic. At the time they further suspended entry visas for pilgrim’s wishing to visit the kingdom’s holy sites.

By far the largest annual gathering of humans in the world is the pilgrimage to Mecca, which in 2018 alone saw about 2.4 million Muslims make the religious trip. Perhaps it was too late even by that point? A new report in Middle East Eye suggests nearly 70% of Mecca, or more than two million residents, has the virus based on recent rounds of broad testing, also amid the growing threat to the Saudi Royal family:

According to three senior Saudi medical sources, nearly 70 percent of Mecca’s more than two million residents are estimated to be carriers of the virus, according to recent random testing conducted in the holy city.

Saudi Arabia has so far recorded 21,402 cases and 157 deaths from Covid-19. These are the highest numbers in the six-member Gulf Cooperation Council (GCC).

 

Mecca’s Kaaba, normally site of millions of Muslim pilgrims on ‘Hajj’ sits empty, via Reuters.

“The actual spread of the disease could be three to four times higher than the declared one,” an anonymous medical official was quoted as saying in the report. “Saudi health authorities expect the peak to be sometime in June.”

A month ago the kingdom tightened restrictions further in key cities, including the imposition of a strict 24-hour curfew on the pilgrimage cities of Mecca and Medina. This after a country-wide lockdown was issued starting March 25.

Since then hospitals have reportedly become “overwhelmed” according to several international reports.

The alarming report also comes on the heels of recent New York Times reporting which said some 150 members of the royal family are being treated for COVID-19 at elite units of regional hospitals set up for that purpose.

 

AFP via Getty

But this week Prince Turki bin Faisal al-Saud, a Saudi royal and former intelligence chief, downplayed the NYT report in the Saudi newspaper Al-Sharq Al-Awsat.

“The truth is that only less than 20 members of the al-Saud family have been infected, and the hospital has not been allocated for them. The hospital treats all citizens and residents,” Prince Turki wrote.

end

SUNDAY//SAUDI STOCKS/sunday

Saudi  stocks on Sunday crashed after their Finance Minister warns of the biggest crisis in decades

(zerohedge)

Tadawful: Saudi Stocks Crash After FinMin Warns Of “Biggest Crisis In Decades”

It looks like the dead bat bounce is over.

Yesterday we cautioned that “Selling in May” may be a good risk strategy for 2020, and for traders in Saudi Arabia that warning is already being validated with Saudi stocks crashing the most in almost two months following a Moody’s outlook cut and the kingdom’s finance minister saying that “painful” measures including deep spending cuts, are needed to respond to the coronavirus crisis and crash in oil prices, while Saudi officials said a whopping 70% of Mecca’s population is already likely infected with the coronavirus.

One day after Warren Buffett surprised the videoconferencing Omaha pilgrims when he said that he had dumped all his airlines holdings and was holding out for lower stock prices, the benchmark Saudi stock index, the Tadawul All Shares, closed down 7.4%…

… the biggest one day drop since the whole coronavirus crash started on March 9.

Saudi Aramco dropped by 5.2% to 30 riyals per share, while major lenders including Al Rajhi Bank, National Commercial Bank and Saudi British Bank plunged at least 6.7%.

It wasn’t just Saudi Arabia – where more than 100 Saudi stocks retreated between 9.5% and 10% – saw violent selling. Stocks in Kuwait, the United Arab Emirates, Qatar, Egypt and Israel also declined. In Dubai, 10 stocks including Deyaar Development, Damac Properties and Dubai Investments fell between 4.8% and 5%, the maximum allowed limit.

The Saudi selling was triggered after Finance Minister Mohammed Al-Jadaan, who is seen as “the voice of the Saudi government and leadership”, said in an interview with Saudi television station Al-Arabiya that the world’s biggest oil exporter hasn’t witnessed “a crisis of this severity” in decades, adding that government spending will have to be cut “very deeply”, something we touched on earlier.  His comments, according to Bloomberg, were a sharp change in tone from more reassuring remarks he gave about the economy one week before.

Commenting on Al-Jadaan’s ominous warning, Yasin, from Al Dhabi Capital in Abu Dhabi said that Al-Jadaan “was a voice that brought back people to the reality that post-corona and the lower oil prices are here to stay for a while.”

“Investors also read that this is a signal that other Gulf governments will have to take a similar stance and therefore we saw negative reflection spreads to U.A.E. markets…. The question to many is: will the other economic activities recover substantially to help offset some of the drop in oil revenues in 2020, or will it stay muted in H2/2020 and therefore keep the pressure on spending this year and next at least?

As a result, investors “took it as a warning of much higher spending cuts to come than the original 20%-30% expected earlier in the crisis.”

There were more bad news earlier, when on Friday Moody’s cut the government’s outlook to negative from stable due to ““increased downside risks to Saudi Arabia’s fiscal strength”, even as the rating was kept at A1 for now.

In addition to concerns about the local economy, and Buffett’s tongue-in-cheek warning that a second wave of selling is coming, there is also the specter of a new war of words between the US and China to worry about: “The smokescreen of another bilateral issue ahead between the U.S. and China over the origins of the coronavirus pandemic will pick up steam,” Jameel Ahmad, a markets analyst at FXTM in London, told Bloomberg.

In addition to a fiscal crisis, the Kingdom may soon be dealing with a funding crisis as well: the collapse in crude prices and the government’s drop in foreign reserves, which plunged by a record $27BN in March…

… is putting more pressure on the Saudi riyal. For now, however, prices for 12-month dollar-riyal forward contracts are well short of their all-time high reached in 2016.

Commenting on the drop in reserves, Al Jazeera said that when the kingdom last stared down the crash in crude in 2014, it wielded reserves that peaked at over $735 billion. The stockpile was down by over a third just three years later, channeled almost entirely toward deficit spending.

And now, Saudi Arabia is blowing through its reserves at the fastest pace in at least two decades, even as the government is barely using the holdings to cover fiscal needs. Following its debut in international bond markets in 2016, borrowing covered most of the budget deficit in the first quarter.

With its buffers already fragile and the economy waylaid by the coronavirus, Saudi Arabia is looking to scale back spending and rely more on debt. Straining under lockdown to contain the spread of the pandemic, the kingdom is also bracing for a second impact from the oil rout and unprecedented production cuts negotiated by OPEC and its allies, after a damaging price war between Russia and Saudi Arabia.

Goldman Sachs predicted that the central bank’s reserves, down more than 100 billion riyals ($27 billion) in March alone, will stabilize soon. “Despite a further anticipated decline in oil revenues in the second quarter, we expect the rate of reserve burn to slow,” Farouk Soussa, a Goldman Sachs economist, said in a report.

That said, Goldman thinks that a currency devaluation would be too costly for Saudi Arabia and the better option is to adapt to the oil shock through fiscal changes, although it is very much unclear how much demand there is for Saudi debt which isn’t and probably never will be backstopped by the Fed. Well, remove that “never” – there will come a time when the Fed will own everything.

6.Global Issues

A good commentary from Charles Hugh Smith as he explains why assets must fall

(Smith/Of Two Minds Blog)

Why Assets Will Crash

Authored by Charles Hugh Smith via OfTwoMinds blog,

This is how it happens that boats that were once worth tens of thousands of dollars are set adrift by owners who can no longer afford to pay slip fees.

The increasing concentration of the ownership of wealth/assets in the top 10% has an under-appreciated consequence: when only the top 10% can afford to buy assets, that unleashes an almost karmic payback for the narrowing of ownership, a.k.a. soaring wealth and income inequality: assets crash.

Most of you are aware that the bottom 90% own very little other than their labor (tradeable only in full employment) and modest amounts of home equity that are highly vulnerable to a collapse of the housing bubble. (The same can be said of China’s middle class, only more so, as 75% of China’s household wealth is in real estate, more than double the percentage of wealth held in housing in U.S. households.)

As the chart illustrates, the top 10% own 84% of all stocks, over 90% of all business equity and over 80% of all non-home real estate. The concentration of ownership of assets such as vintage autos, collectibles, art, pleasure craft and second homes in the top 10% is likely even greater.

The more expensive the asset, the greater the concentration of ownership, as the top 5% own roughly 2/3 of all wealth, the top 1% own 40% and the top 0.1% own 20%. In other words, the more costly the asset, the narrower the ownership. (Total number of US households is about 128 million, so the top 5% is around 6 million households and the top 1% is 1.2 million households.)

This means the pool of potential buyers is relatively small, even if we include global wealth owners.

Since price is set on the margins, and assets like houses are illiquid, then we can anticipate all the markets for assets owned solely by the wealthy to go bidless–yachts, collectibles, vacation real estate–because the pool of buyers is small, and if that pool gets cautious due to a drop in net worth/unearned income, there won’t be any buyers except at the margins, at incredible discounts.

As we know, in a neighborhood of 100 homes currently valued ar $1 million each, when a desperate seller accepts $500,000, the value of the other 99 homes immediately drops to $500,000.

Since few of the current bubble-era asset valuations are supported by actual income fundamentals, then the sales price boils down to a very small number of potential buyers and what they’re willing to pay.

Houses have a value based on rent, of course, but rents will drop very quickly for the same reason: prices are set on the margins. The most desperate landlords will drop rents and re-set the rental market from the margins. If demand plummets (which it will as people can no longer afford rents in hot urban markets once they lose their jobs), then vacancies will soar and rents will crash as a few desperate landlords will take $1200/month instead of $2500/month.

Due to the multi-year building boom of multi-family buildings in hot job markets (which inevitably leads to an over-supply once the boom ends), there are now hundreds of vacancies where there were once only a few dozen, and thousands where there were previously only hundreds.

As millions of wait staff, bartenders, etc. who made good money in tips find their jobs have vanished, all the urban hotspots will see mass out-migration: Seattle, Portland, the S.F. Bay Area, L.A., NYC, Denver, etc. as demand for rentals will evaporate and rents will be set on the margins by the most desperate landlords. Everyone holding out for the previous bubble-era rent will have $0 income as their units are vacant.

Tech start-ups and Unicorns are melting like ice cubes in Death Valley, and tech-sector layoffs are already in the tens of thousands. This wave of highly paid techies losing their jobs will become a tsunami, further reducing the pool of people who can afford rents of $2,500 to $3,000 for a studio or one-bedroom apartment.)

The concentration of ownership generates a self-reinforcing feedback that further depresses prices: since the top 10% own most of the assets of the nation, they are most prone to a reversal of “the wealth effect.” As their assets soared in value, the top 10% felt wealthier and more confident in future gains, enabling them to borrow and spend freely on second homes, pleasure craft, new vehicles, collectibles, luxury travel, etc.

Once even one class of assets plummets in value–for example, the recent decline in the stock market– the wealth effect reverses and the top 10% feel poorer and less confident about future gains, and thus less enthused about borrowing and spending. The demand for other costly assets quickly evaporates, further reducing the wealth of the “ownership class,” which further reduces their desire and ability to buy bubble-era assets.

The high-priced assets owned by the top 10% will be the assets least in demand due to their high cost and potential for enormous losses: nothing loses value faster in a recession that narrowly owned assets such as vintage cars, art, vacation homes, yachts, etc.

Once assets start sliding in value, the reverse wealth effect quickly dries up demand for all asset classes with narrow ownership. Since these assets are illiquid–that is, the market for them is thin, with buyers few and far between–the prices are set by a very shallow pool of buyers and desperate sellers.

Consider a pleasure craft that retails new for $120,000. In the boom era of rising stocks and housing, a used boat might fetch $65,000. But as the wealth of the small pool of households able to buy and maintain a costly craft evaporates, the number of qualified buyers evaporates, too.

The seller might be aghast by an offer of $35,000 and reject it angrily. Six months later, he’s praying someone will take it off his hands for $15,000, and in another six months, he’ll accept $500 just to get out from underneath the insurance, slip-rental and licencing fees.

This is how it happens that boats that were once worth tens of thousands of dollars are set adrift by owners who can no longer afford to pay slip fees, and vacation homes are abandoned and auctioned off for overdue property taxes: the market for these luxuries dries up and blows away, i.e. goes bidless–there are no buyers at any price.

Once housing and real estate valuations fall, that will trigger a decline in the value of all other costly, narrowly owned assets, which will reinforce the reverse wealth effect.

This is the systemic payback for concentrating ownership of assets in the hands of the few: when their bubble-era priced assets plummet in value, the bottom falls out of all assets with narrow ownership. The price of superfluous assets such as boats, vintage cars, collectibles, art and vacation homes can quickly fall to a fraction of bubble-era valuations, destroying much of what was always fictional capital.

(For more on the intrinsic fragility of a system that concentrates ownership in the hands of the few, please read Our Inevitable Collapse: We Can’t Save a Fragile Economy With Bailouts That Increase Fragility May 1, 2020.)

The Federal Reserve reckons it can “save” the bubble-era valuations of junk bonds by being the “buyer of last resort,” but it will end up being the “only buyer,” effectively making the system even more fragile and prone to collapse.

The public will eventually have to decide if the nation’s central bank should be bailing out assets owned by the financial elite while the upper-middle class watches its assets collapse in value.

My COVID-19 Pandemic Posts

END

THIS is very good:  antibodies going after the spikes in the coronavirus:

(zerohedge)

 

Coronavirus Defeated By Experimental Antibody That Targets Spike Protein

An experimental antibody developed by researchers at Utrecht University in the Netherlands can defeat coronavirus in a laboratory setting, according to a new study published in Nature Communications Bloomberg, which notes that the antibody – known as 47D11 – neutralized the virus in cell cultures.

Monoclonal antibodies are proteins created in a lab which resemble naturally occurring versions used by the immune system to fight off viruses and bacteria. 47D11 was created by using genetically modified mice to produce antibodies which target a specific site on a virus – in this case the spike protein, which coronavirus uses to attach to and enter human cells.

After the mouse antibodies were proven effective in defeating coronavirus, the researchers ‘reformatted’ it to create a fully human version, according to the study.

The experimental antibody has neutralized the virus in cell cultures. While that’s early in the drug development process — before animal research and human trials — the antibody may help prevent or treat Covid-19 and related diseases in the future, either alone or in a drug combination, according to a study published Monday in the journal Nature Communications.

According to Berend-Jan Bosch of Utrecht University, more research is needed to confirm the findings in a clinical setting. According to the researchers, the antibody can also kill other viruses equipped with similar spike proteins such as Sudden Acute Respiratory Syndrome (SARS).

“Monoclonal antibodies targeting vulnerable sites on viral surface proteins are increasingly recognized as a promising class of drugs against infectious diseases and have shown therapeutic efficacy for a number of viruses,” wrote Bosch and colleagues.

They’re are already used in treatments for cancer, inflammation, ebola and other applications.

END
MEXICO
Mexico’s economy is now disintegrating to pieces:
(zerohedge)

Mexico’s Economy Is Disintegrating

While few have lofty expectations for economic performance with the global economy still largely shutdown, what is happening in Mexico is simply unprecedented. Here are some striking observations detailing the unprecedented economic collapse of the southern US neighbor, courtesy of Goldman.

Business confidence declined sharply in April (the seventh consecutive monthly decline) with the index now sitting deep within pessimist territory. The Manufacturing and Services PMIs also fell sharply in April, and are now at the lowest levels on record.

Business sentiment and conditions were on a gradual weakening trend well before the coronavirus pandemic as producers were apprehensive with regard to policy direction and overall macro and sector-level policies under the AMLO administration, and have in March-April deteriorated sharply in anticipation of a severe global and domestic recession triggered by the Covid-19 pandemic and the underwhelming policy response, particularly on the fiscal front.

Business confidence in the manufacturing sector recorded a -6.2pt decline in April to 37.4, adding to the six consecutive monthly declines since October 2019. The headline index has now declined a cumulative 13pt in the past seven months and is sitting significantly below the 50 optimism/pessimism threshold.

The decline of business confidence in April was broad based: for the fourth consecutive month all five sub-indices declined, with the index assessing whether this is the right moment to invest down by 11.7pt in the month and down 29.1pt from a year ago, to a low 18.9. The indices reflecting present and future economic conditions also recorded sharp declines of 8.0pt and 2.9pt, respectively, to 31.8 and 43.7, respectively. Finally, the indices measuring current and future conditions of the individual business/firms declined by 8.4pt and 2.3pt, respectively, to 40.9 and 51.3.

All three Manufacturing PMI indices weakened significantly in April, suggesting overall business conditions in the sector have deteriorated sharply at the beginning of 2Q2020:

  • Inegi Manufacturing PMI declined 5.2pt (to 42.7). The new orders index declined 11.3pt to 36.4 and the expected production index declined by 7.5pt, to 38.9. The employment index declined by 2.9pt to 46.0. This is the lowest headline and expected production reading on record;

  • Markit Manufacturing PMI fell by a large 12.9pt, to 35.0The Output (-17.3pt to 29.7), New Export Orders (-18.2pt to 30.8), New Orders (-17.8pt to 27.7) sub-indices declined sharply in the month. The Employment (-15.0pt to 34.2) sub-index also declined significantly. The input and output prices indices declined by 6.2pt and 6.1pt, pointing to an overall deflationary environment;
  • IMEF Manufacturing PMI declined by 3.7pt, to 40.5 (third consecutive monthly decline). The New Orders (-3.8pt to 29.0) and Production (-6.8pt to 28.7) sub-indices declined in April but by less than the March decline. The Employment sub-index declined by 3.307, to 42.3. Finally, the IMEF Non-Manufacturing (Services) PMI declined by 9.7pt in March and another 3.2pt in April to an all-time low 35.5 in March, and moved deeper within negative territory. The New Orders (-6.9pt, to 22.5), Production (-6.1pt, to 23.6), and Employment (-2.5pt, to 41.7) recorded significant declines in April (but the monthly drop was lower than that observed in March).

7. OIL ISSUES

Oil is still expected to remain low despite Canada and some USA shale shuts in. There is a massive 375 million barrels of oil stored in tankers

(zerohedge)

There Is Now A Record 375 Million Barrels Of Oil Stored On Tankers

Last weekend we showed that as oil storage on land was rapidly filling up, a familiar sight was seen off the coast of Asia’s oil hub in Singapore: a record surge in tankers on anchor used as seaborne storage, and taking advantage of the supercontango just waiting for oil prices to rebound so they can deliver their (formerly) precious cargo.

So as more and more storage moves offshore, here is an update from Bank of America on the current status of the oil market as the “oil glut moves from tanks to tankers.”

In the last five weeks, onshore inventories held in floating top tanks climbed 180mn bbl, suggesting that builds have averaged roughly 4.3mn b/d since mid-March. These inventory increases reduce BofA’s estimates for available onshore crude storage capacity from roughly 910mn bbl to 730 mn bbl (Chart 2), although the bank still believes that this capacity is unlikely to be fully utilized due to logistical constraints and other issues.

How did we get here? As has been extensively reported here and elsewhere, WTI timespreads signaled a massive build in Cushing inventories and stocks would likely reach their operational limits within a few weeks (Chart 3). More recently, the expiration of the May WTI contract demonstrated the lack of available capacity at the hub. Cushing inventory builds are set to slow dramatically as much of the remaining capacity may be needed as an operational backstop for pipeline issues and blending needs (Chart 4). Over the coming weeks and months, US inventory trends could even reverse as producers in Canada and the Bakken shut-in output and refiners increase runs on the back of the re-opening of the economy.

As Bank of America adds, land based crude oil inventories first surged in China, where the coronavirus outbreak originated (Chart 5). Since then, China’s inventories have stagnated while stocks in the US and elsewhere ticked higher. There is room for incremental builds in China going forward, especially if the government uses more commercial tank space for strategic petroleum reserves (Chart 6). Elsewhere, inventories in Europe and the Middle East remain relatively lower. In Europe, this may be due to the mothballing of some tank storage at refiners and terminals. So, actual storage utilization rates may be higher than the data suggests. In the Middle East, inventories have climbed in GCC countries but may also remain lower on average as these countries prefer to sell oil as exports before storing domestically. In the US, producers have leased 23mn bbl of the roughly 70mn bbl of available SPR capacity and added 1.1mn bbl to SPR storage last week.

Of course, in addition to land based storage, the market also uses tankers for crude oil storage as a spillover outlet. Crude oil on the water has risen by roughly 150mn bbl since the start of the year, to more than 1.2bn bbl (Chart 7). This is due to a combination of higher crude in transit stemming from OPEC’s oil price war and from increases in crude oil floating storage. Since mid-March, crude oil floating storage has grown by an estimated 91mn bbl, or roughly 2.2mn b/d (Chart 8). Asia and Europe saw the largest increases in floating storage, climbing 36mn bbl and 20mn bbl respectively over the same period.

According to data from Clarksons, there are more than 350 vessels currently being used for floating oil (crude and product) storage globally(Chart 9). Of this total, roughly 100 are very large crude carriers (VLCC) and ultra-large crude carriers (ULCC). Total oil held in floating storage has risen to 375mn bbl, up 220mn bbl from mid-March and 230mn bbl from the start of the year (Chart 10). A majority of this storage has occurred on VLCCs and ULCCs, followed by Suezmax and Aframax vessels.

The first vessels booked for floating storage were primarily VLCCs and ULCCs, but demand for Suezmax and Aframax vessels has also increased dramatically since April (Chart 11). As traders utilize more of the smaller vessels, the average amount of floating storage per vessel has decreased, implying an increase in the average cost for floating storage. Since the beginning of the year, the average level of storage per vessel have collapsed from more than 1.5mn bbl to just 1mn bbl. (Chart 12). This rise in tanker rates for each ship type, combined with crude increasingly being stored on smaller vessels at the margin, is a double positive whammy on the marginal cost of crude storage and thus on the contango in the crude curves.

The abrupt demand contraction has forced crude oil forward curves into steep contango (Chart 13), with Brent 1-13 spreads widening to -$16/bbl at times to facilitate floating storage. As demand for freight picked up, dirty tanker rates spiked. The shape of the forward curve for the TD3 dirty tanker route (Middle East to Japan) was very flat just eight weeks ago (Chart 14), but the increase in demand from Saudi Arabia and from floating storage pushed front month rates up nearly 400%. More recently, rates have subsided somewhat but still remain exceptionally high compared to historical levels.

Freight rates have been exceptionally volatile, with VLCC 12 month time charters spiking to $80,000/day in early April and falling to around $65,000/day recently (Chart 15). The increase in smaller vessels has been less dramatic, with Suezmax and Aframax vessels peaking at $45,000/day and $34,000/day respectively. The very steep contango in the front of the Brent curve (e.g. 1-3m) has allowed for floating storage to be economical. Yet the 12 month contango in Brent was recently lower than the going rate for 12 month time charters for Suezmax and Aframax vessels. Additional pressure on Brent timespreads will be needed in order to encourage more floating storage using these types of vessels (Chart 16).

Refining margins have been exceptionally volatile since lockdowns began on a global scale (Chart 17). As refiners cut runs or shut down completely, margins experienced short term rebounds, but margins continue to trend towards zero on a spot basis as refined product inventories surge. In the US, product inventories have risen counter-seasonally and are now nearly 70mn bbl above year ago levels and 26mn bbl above previous five-year highs from 2016. It is no surprise that refined product markets have also developed their own supercontango (Chart 18), as prompt prices plummeted. Refiners have attempted to take advantage of the significant price improvement for forward product prices by storing products on land on and the water.

Estimates for floating storage vary depending on methodology. Some trackers classify floating storage as vessels that have remained idle for 10 days and others assume 14 days. The types of vessels tracked may also vary, leading to higher or lower floating storage levels. Nonetheless, all estimates point to rising volume on the water (Chart 19). Refined product floating storage is not well tracked, but Clarksons does track total tankers used for floating storage. Combining Clarksons data with other crude oil only floating storage data from Vortexa implies that refined product builds have been exceptional (Chart 20). Even if total levels of implied refined product floating storage are off, there is little doubt that product storage is on the rise.

The oil surplus was initially visible in dirty tanker freight rates, but clean tanker rates are now beginning to surge as refiners and traders seek to float unsold product volumes (Chart 21). With refined product prices like Singapore gasoline falling to $0.50/gal, shipping has become a disproportionately large component of the all-in cost of delivered fuel, making fuel movements exceptionally expensive. The economics for floating product storage varies dramatically depending on the contango of each product market and on the density of individual products. The recent surge in clean product tanker rates has challenged floating storage economics (Chart 22), but volatility in product forward curves should continue to offer opportunities for traders to float cargoes.

Another round of run cuts could bring renewed crude weakness. The global oil rout likely peaked in April as oil demand contracted by nearly 25mn b/d YoY. Now, countries are emerging from lockdown, boosting oil demand just when OPEC+ cuts are kicking in and producers elsewhere are cutting output. Even so, the market should remain in surplus for the remainder of 2Q20, resulting in continued, albeit slower crude oil and product builds. The oil market is forward looking and market balances look much better in 2H20 which should be supporting of prices. That said, with so much product moving into floating storage, we see risk of additional pressure on refining margins, even as global refinery outages hit record levels (Chart 23). Any further reduction in refinery demand for crude could ultimately result in renewed weakness for crude oil prices (Chart 24) and would likely warrant steeper contango.

end

The USA will not impose oil production cuts and thus they are now “dead”

(zerohedge)

Texas Regulator Says Efforts To Impose Oil Production Cuts Are Now “Dead”

So much for any Saudi hopes that the US would join OPEC+ in implementing production cuts.

Texas Railroad Commissioner Ryan Sitton, the Texas regulator who had proposed mandating oil production cuts in line with the historic April OPEC+ agreement to cut oil output by 9.7mmb/d, called those efforts “dead” a day before the state was set to vote on the measure.

In an interview on Bloomberg TV, Sitton predicted that curtailing production in a process known as “pro-rationing” would fail to get the support needed from the three-member agency, not to mention the state’s countless shale producers all of whom are scrambling to convert every drop of oil into precious cash flow.

“At this point we still are not ready to act, and so it’s too late, so there is no proposal to make,” Sitton said adding that “I think that proration is now dead.”

As Bloomberg notes, “Sitton had been the most outspoken member of the Texas Railroad Commission, the state’s chief energy regulator, when it came to advocating for production caps.” Chairman Wayne Christian recently stated his opposition to cuts in an opinion piece for the Houston Chronicle, and Commissioner Christi Craddick had expressed numerous concerns during the most recent meeting.

The question then becomes if the US will once again ramp up output following the recent rebound in the price of oil…

… even as OPEC+ continues to curtail production, while global oil and gasoline demand, which rising modestly remains far below levels where the market remains in balance. And a close follow up: will output see a renewed surge just as optimism was starting to emerge that global storage caps would not be hit in the next month, sending the price of oil sharply lower again?

8 EMERGING MARKET ISSUES

Venezuela

Venezuela’s gold vaults are not empty as Iran is taking the bullion for oil services.

(zerohedge)

 

Venezuela’s Gold Vaults Empty As Iran Takes Bullion For Oil Services Rendered

With cash levels dwindling and its once mighty oil sector on its knees and needing help desperately, OilPrice.com’s Tsvetana Paraskova reports that Nicolas Maduro’s regime in Venezuela is paying Iran in gold for help with Venezuela’s crumbling oil industry, U.S. Special Representative for Venezuela Elliott Abrams said at a conversation with Washington-based think tank Hudson Institute this week.

Venezuela’s oil output is at record lows…

And, its cash reserves are at record lows

And since, over the past few weeks, Iran has been sending more and more planes to Venezuela, Abrams said that“our guess is that they are being paid in gold,”he said.

“Those planes that are coming in from Iran that are bringing things for the oil industry are returning with the payments for those things: gold,”Abrams said.

In April alone, Venezuela loaded 9 tons of gold, worth around US$500 million, on airplanes for Iran, in exchange for Iranian help for repairing Venezuela’s crumbling refineries, sources with direct knowledge of the matter told Bloomberg this week.

We suspect Venezuela’s gold vaults are running extremely dry. At last count, in August 2019, it was around 100 tons…

But that was before Maduro started to dramatically increase his sales of Venezuelan Gold around the world.

[ZH: It makes perfect sense for Iran to demand payment in gold since even the official Bolivar is utterly worthless. For a sense of just how gold is supposed to behave in a hyperinflationary environment, we note that in January 2010, a Venezuelan could by an ounce of gold for 1000 so-called “Strong”-Bolivars.

Today, that same ounce of yellow metal costs your average Venezuelan 300 billion “strong”-Bolivars (which were devalued by 1000:1 in March 2018) or 300 million ‘new’- Bolivars…]

On Thursday, U.S. Secretary of State Mike Pompeo also mentioned the Iranian-Venezuelan cooperation, saying“We are deeply concerned about Iran’s destabilizing behavior in Venezuela- over the last few days, Iranian aircraft have transferred unknown support to the regime.”

“Over the last few days, multiple aircraft belonging to Mahan Air have transferred unknown support to the Maduro regime. Birds of a feather. This is the same terrorist airline that Iran uses to move weapons and fighters around the Middle East. These flights must stop, and countries should do their part to deny overflights, just as many have already denied landing rights to this sanctioned airline,” Secretary Pompeo said at a press conference earlier this week.

The U.S. has stepped up pressure on the Maduro regime in recent months, the latest being ordering U.S. supermajor Chevron to wind down its Venezuelan operations by the end of the year. Halliburton has also said it will suspend most of its operations in Venezuela, after Washington tightened the noose around Caracas by banning U.S. oil companies operating in the country from drilling for oil, transporting it, or providing any equipment for use in Venezuela.

END

 

 

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

Euro/USA 1.0936 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 /RED

 

 

USA/JAPAN YEN 106.81 UP 0.120 (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 1.2432   DOWN   0.0031  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/

 

USA/CAN 1.4100 UP .0035 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  MONDAY morning in Europe, the Euro FELL BY 33 basis points, trading now ABOVE the important 1.08 level FALLING to 1.0936 Last night Shanghai COMPOSITE CLOSED UP 37.64 POINTS OR 1.33% 

 

//Hang Sang CLOSED DOWN 1,029.79 POINTS OR 4.18%

/AUSTRALIA CLOSED UP 1,21%// EUROPEAN BOURSES ALL RED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL RED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 1,029/79 POINTS OR 4.18%

 

 

/SHANGHAI CLOSED UP 37.64 POINTS OR 1.33%

 

Australia BOURSE CLOSED UP 1.21% 

 

 

Nikkei (Japan) CLOSED DOWN 574.34  POINTS OR 2.84%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1706.00

silver:$14.99-

Early MONDAY morning USA 10 year bond yield: 0.60% !!! DOWN 2 IN POINTS from FRIDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 1.23 DOWN 2  IN BASIS POINTS from FRIDAY night.

USA dollar index early MONDAY morning: 99.42 UP 34 CENT(S) from  FRIDAY’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: 0.86% UP  5 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: .-02%  DOWN 0   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.77%//UP 5 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:1,75 DOWN 2 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 98 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: RISES TO –.56% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.31% 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 1.0905  DOWN     .0064 or 64 basis points

USA/Japan: 106.91 UP .227 OR YEN DOWN 23  basis points/

Great Britain/USA 1.2414 DOWN .0048 POUND DOWN 48  BASIS POINTS)

Canadian dollar DOWN 25 basis points to 1.4090

 

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The USA/Yuan,CNY: AT  CLOSED

 

THE USA/YUAN OFFSHORE:  7.0388  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  7.0488 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

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

 

Your closing 10 yr US bond yield UP 2 IN basis points from MONDAY at 0.64 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 1.28 UP 3 in basis points on the day

Your closing USA dollar index, 99.58 UP 50  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED UP 10.61  0.18%

German Dax :  CLOSED DOWN 359.60 POINTS OR 3.31%

 

Paris Cac CLOSED DOWN 187.18 POINTS 4.09%

Spain IBEX CLOSED DOWN 213.30 POINTS or 3.08%

Italian MIB: CLOSED DOWN 552.08 POINTS OR 3.12%

 

 

 

 

 

WTI Oil price; 19.90 12:00  PM  EST

Brent Oil: 26.25 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    75.28  THE CROSS LOWER BY 0.08 RUBLES/DOLLAR (RUBLE HIGHER BY 8 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.56 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 :  20.97//

 

 

BRENT :  27.96

USA 10 YR BOND YIELD: … 0.64….plus 2 basis points

 

 

 

USA 30 YR BOND YIELD: 1.29..plus 4 basis points..

 

 

 

 

 

EURO/USA 1.0897 ( DOWN 72   BASIS POINTS)

USA/JAPANESE YEN:106.71 UP .018 (YEN DOWN 2 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 99.53 UP 45 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2442 DOWN 21  POINTS

 

the Turkish lira close: 7.0446

 

 

the Russian rouble 74.83   UP 0.53 Roubles against the uSA dollar.( UP 53 BASIS POINTS)

Canadian dollar:  1.4089 DOWN 24 BASIS pts

 

German 10 yr bond yield at 5 pm: ,-0.56%

 

The Dow closed UP 26.07 POINTS OR 0.11%

 

NASDAQ closed UP 105.77 POINTS OR 1.23%

 


VOLATILITY INDEX:  35.94 CLOSED DOWN 1.25

LIBOR 3 MONTH DURATION: 0.5408%//libor dropping like a stone

LIBOR-OIS:  .5408

TED SPREAD:  (LIBOR- 3 MONTH TREASURY BILL):  .4828

 

USA trading today in Graph Form

‘Investors’ Ignore Mumbling 90-Year-Old Omaha Man – BTFD As Buffett Sells

It’s not just airlines…

Here’s the real reason why billionaire investing ‘genius’ Warren Buffett didn’t spend one penny of his massive cash pile as stocks plunged at record pace… according to his favorite broad market indicator, US stocks have never been more expensive…

Source: Bloomberg

Of course, airlines themselves were clubbed like baby-seals after Berkshire’s boss dumped them all…

Source: Bloomberg

And the “Virus Fear” trade is notably higher (i.e. fear is rising)

Source: Bloomberg

But investors are fickle and despite Buffett’s many clear warnings, they bought the fucking dip in everything else. Nasdaq led on the day…

Only Trannies were red (on Airlines)

The buying panic started around 1315ET as the following headlines all hit and the machines just decided to buy the confusion:

Good news…

But…

Futures show today’s malarkey best…Small Caps were down almost 3% overnight, only to end higher…

Today’s manic ramp was pinned around major technical levels…

FANG stocks – of course – which we are sure they will argue that Buffett does not understand – were bid…

Source: Bloomberg

But bank stocks were also battered for the 3rd day in a row…

Source: Bloomberg

And so much for The Fed’s plans to buy HY bond ETFs…

Source: Bloomberg

The yield curve steepened today (2Y -1bps, 30Y +5bps) (Japan was closed last night)…

Source: Bloomberg

Some more chaos in 10Y Yields though stick in their 3-week range…

Source: Bloomberg

The dollar manage to hold on to gains, though after an illiquid higher open last night, it was sold all day…

Source: Bloomberg

Capital flight appears to be accelerating as Brazil COVID chaos spreads…

Source: Bloomberg

Cryptos are mixed from Friday with Bitcoin higher, Ether lower…

Source: Bloomberg

Once again oil was extremely volatile intraday relative to the rest of the commodity market (but WTI ended higher)…

Source: Bloomberg

Quite a swing from down 8% overnight to settling 5% higher (on the back of a Genscape report that Cushing stocks are bit building as fast)…

Gold is outperforming silver once again (gold up along with the dollar today)…

Source: Bloomberg

And finally, if you’re really buying this dip on the back of Buffett’s “Don’t bet against America” comments… prepare for some pain…

 

end

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

MARKET TRADING//USA

a)Market trading/LAST NIGHT/USA

Stocks, Yuan, Oil Are All Tumbling As Asia Opens

No Buffett buying spree, and no Federal bailout #4 (or is it 6?)… and the result – in admittedly thin liquidity – is US equity futures, crude oil futures, and offshore yuan are all dumping as Asian markets open…

Dow futures are down over 350 points…

WTI Crude is down over 5%…

And offshore yuan is ugly…

Gold is also under pressure and the dollar rallies, with futures testing $1700…

But, Bonds are modestly bid (futures open, cash closed)…

Somebody wake up Kudlow… stat!

end

b)MARKET TRADING/USA/AFTERNOON

Yields Jump After Apple Announces Another Massive 4-Tranche Buyback-Funding Bond Offering

After a subdued overnight session, where investors flows were directed toward the bond complex and out of risk assets, moments ago we saw a sharp steepening move in Treasury yields across the curve, with 10Y and 30Y yields moving higher by 3-4bps.

The reason: a flurry of rate locks because at around 8:20am dealers announced that Apple was in the market with another massive multi-tranche bond offering joining Monday’s “burgeoning” IG credit issuance slate.

As Bloomberg reported, Apple’s offering includes 3Y, 5Y, 10Y and 30Y tranches, and will be used to fund the company’s newly announced $50 billion stock buyback expansion; additionally, continuing the record flood of bond issuance, Amgen and Starbucks also have slated issuance for Monday, with IG issuers are expected to raise $70b this week.

As a result, around 30k Jun20 TY contracts changed hand from 8:20am to 8:25am, highest volumes of the session, in move from 139-02 down to 138-28+ lows; 10-year yields moved up to 0.63%, ~2bp cheaper on the day, leaving 2s10s steeper with front-end yields little changed.

end

ii)Market data/USA

US Manufacturers New Orders Crash BY Most Ever (And April Will Be Worse)

Amid collapsing employment, crashing sentiment signals, and carnage in any hard data signals around the world, it is no surprise that analysts expected a 9.7% MoM plunge in factory orders in March (still before the major lockdowns in April).

But the actual print, down 10.3% MoM, was notably worse and sent Factory orders down 11.4% YoY – the worst since the great financial crisis (ignoring the 2014/5 aberration)

Source: Bloomberg

This is the biggest monthly drop ever…

Source: Bloomberg

The surge and plunge in July/August 2014 was largely driven by an Ex-Im Bank-sponsored ordering-spree for Boeing jets., and so realistically should not be counted as a systemic shift in the economy.

Additionally, the final print for overall durable goods new orders also worsened from -14.4% MoM to -14.7% MoM.

Source: Bloomberg

Ex-Transports, the drop was modest (and likely to get a lot worse) but it was a bloodbath in transports, defense, and motor vehicles…

Source: Bloomberg

This is the biggest drop in Non-defense Aircraft and Parts new orders… ever…

END

Source: Bloomberg

We suspect these numbers will get notably worse as we enter April when most of the world was locked-down.

end

 

iii) Important USA Economic Stories

Huge numbers of SUV’s are being parked in the middle of the ocean with no place to go:  the auto industry is in big trouble

(zerohedge)

SUVs Are Being Parked In The Middle Of The Ocean As Auto Inventory Crisis Deepens

What happens when you have an auto glut that simply won’t go away? What do you do with all of those unsold cars? It’s a question we first explored way back in 2014 in an article called “Where the World’s Unsold Cars Go to Die”. In that piece, we highlighted images from around the world of various places unsold cars were being stored.

Back then, we could have never predicted that a pandemic would be the black swan that would have caused the next historic buildup of auto inventory. But now, with ports at capacity, tankers carrying automobiles – at least those tanker that aren’t carrying oil – are being told to stay out at sea.

Such was the case on April 24 when a cargo of 2,000 Nissan SUVs was approaching the port of Los Angeles. They were told to drop anchor about a mile from the port and remain there. The port was full and the glut is indicative of just how the industry has collapsed in the U.S.

John Felitto, a senior vice president for the U.S. unit of Norwegian shipping company Wallenius Wilhelmsen told Bloomberg: “Dealers aren’t really accepting cars and fleet sales are down because rental-car and fleet operators aren’t taking delivery either. This is different from anything we’ve seen before. Everyone is full to the brim.”

Though the Nissan shipment was eventually received 5 days later, Kipling Louttit, executive director of the Marine Exchange of Southern California said: “It is very abnormal for a container ship, a car carrier or a cruise ship not to go right to the berth, discharge and be on their way.”

The Long Beach terminal south of LA is capable of storing several thousand vehicles. Cars usually spend a short amount of time there before being relocated to lots 5 to 8 miles away. Then, they’re sent to dealers.

But the collapse in sales last month caused a backlog buildup. Ships had to divert to other ports and others had to wait to discharge cargo. The Port of Hueneme needed to find space for an additional 6,000 surplus cars. Kristin Decas, the port’s director and chief executive officer said: “You can’t stack cars. We even looked at using the Ventura County Fairgrounds.”

Toyota has gone as far as to lease additional space at a sports venue in California. Hyundai also found additional space and has said that its West Coast inventories were “elevated”.

Nissan spokesman Chris Keeffe said: “The company is optimizing the flow of the vehicles and positioning them closer to dealers for quick availability when the market recovers and customers return to showrooms.”

Demand for cars and trucks in the U.S. is expected to drop 27% to 12.5 million vehicles this year, according to Bloomberg. Recall, we wrote just yesterday that Edmunds shared those sentiments: April is slated to be the worst month on record for U.S. auto sales. 

Edmunds forecasts that just 633,260 new cars and trucks will be sold in the U.S. for an estimated seasonally adjusted annual rate (SAAR) of 7.7 million. This reflects a 52.5% decrease in sales from April 2019, and a 36.6% decrease from March 2020.

Edmunds analysts note that this would be the lowest-volume sales month on record; the second worst month for sales in the past 30 years was January of 2009, when 655,000 vehicles were sold.

“April auto sales took the biggest hit we’ve seen in decades,” said Jessica Caldwell, Edmunds’ executive director of insights.

“These bleak figures aren’t just because consumers are holding back on their purchases — fleet sales are seeing an even more dramatic drop as daily rental business has dried up. Like many other industries, the entire automotive sector is struggling as the coronavirus crisis continues to cripple the economy.”

END

David Stockman talks about the huge destruction of financial markets

(David Stockman)

David Stockman On The Fed’s Destruction Of Financial Markets & What It Means For You

Via InternationalMan.com,

International Man:

Decades of money printing have created enormous distortions in the market. It seems that the coronavirus popped the Everything Bubble. Where do you see the stock market going?

David Stockman:

I’d say it’s going in a new direction, and it’s not up year after year, month after month, day after day.

It’s not going to be a world where buying the dip is a no-brainer thing to do.

I think the stock market was insanely valued when the S&P 500 peaked at 3,380 on February 19th.

It has got a long way yet to correct.

Who knows what earnings are going to be?

No one knows how long these lockdowns will last.

You look at the news flow every day, and it’s like a massive political arm-wrestling match between the White House and the Democratic governors and mayors.

I’m sure in their minds, these local and state politicians, think they’re serving the public good and protecting the safety and lives of their citizens. But, the fact is, back in the unstated regions of their brains, they’re focused on taking down the US economy, which was Trump’s only claim to reelection.

I think when push comes to shove in the great human struggle of things in our political system, this lockdown lunacy is going to be prolonged far longer than you can imagine, and the economic loss is going to be staggering.

Even the Wall Street brokers now—Goldman Sachs and the rest of them—are projecting a 25 to 30% GDP collapse on an annualized basis in Q2.

Just a few days ago, they were all expecting this to be one and done, and that in the next quarter it’ll level out—but that view is fading very fast.

We have a hand-to-mouth economy. By that, I mean no business could afford cashflow interruption because they had levered their balance sheet to the hilt or had spent most of their cashflow available to buy back their stock.

So, once you start these chain reactions, you have incredibly vulnerable business balance sheets in America that collectively have $16 trillion of debt.

I’m not talking about banks or financial institutions now—just operating businesses.

That’s not to mention American households—half of them don’t even have $300 to last a week or two.

Overwhelmingly, 90% of the households in America have been told that they’re the Energizer spending bunny of American economics, and if you don’t have enough wages this week, borrow some money on your credit card and just keep on spending.

This has created a hand-to-mouth economy that has no immunities—if you want to use that metaphor in an economic sense. It cannot cope, and it has no antibodies to fight back against the interruption of paychecks and cash flow.

There is going to be broken furniture everywhere as it filters through an economy that is sitting with $74 trillion of public and private debt on its back. That’s how much we have today.

People need to focus on this fact, that we thought we had a warning back when the great financial crisis occurred in 2008 when Lehman Brothers went bankrupt, the Great Recession, all that.

At the time, there was $52 trillion of debt in the economy, and people said that we’re living beyond our means—we need to learn some lessons here and repair the excesses.

Well, that never happened. We’ve added $22–23 trillion of debt since then. Therefore, the economy is now even more fragile, even more vulnerable to any kind of dislocation.

Now, what we’re getting is the mother of all dislocations. It’s happening so fast and severely that it’s off the charts.

You can look at any of the so-called incoming indicators that everybody constantly jaws about on bubble vision on CNBC, and you will see that the last two data points are literally off the charts. The Empire State Index was out recently, and it’s down to -70, against a base of zero, and it usually says +20, 30, or 40.

Never has anything like this been recorded. We have an economy that’s going to implode in the next four or five months. Earnings are going to drop tremendously.

It’s going to be a question of whether the markets can convince themselves to “do the Rip Van Winkle thing, go to sleep on earnings for the next year, and start discounting 2022 earnings,” or something.

I don’t think that’s going to work this time. I believe there is going to be a real loss of confidence because the Fed has no dry powder.

The market will likely work its way down in irregular, violent, volatile moves. It will go up for a few days and then experience a big correction, and up for a few more days, another big correction.

The S&P 500 ought to be valued at 1,500 or 1,600, which is way the hell below where it is today—and far below where it was at the peak of almost 3,400.

What I’m saying is, the market that never stops rising has finally met its match.

The patented “buy the dip” mantra is going to keep the thing alive for a few more months until the last robo-machine and day trader has his brains blown out after they bought the dip one more time and then got monkey-hammered by another reversal.

That’s where I think we’re heading.

International Man:

The Federal Reserve’s unprecedented bailout of everyone and everything seems to have no end. What do you think the consequences of this will be?

David Stockman:

I think what people must get their minds around is that this is happening with such warp speed: job losses, cash flow, GDP, the federal budget.

What the Fed has done is more off the charts than anything we’ve seen yet.

In early March, the balance sheet of the Fed was at $4.2 trillion—after they gave up on quantitative tightening (QT) and normalizing the balance sheet—which they promised to do when Ben Bernanke took it to these high levels after the great recession.

Recently, that number was $6.2 trillion.

In merely 30 days, they printed $2 trillion of additional balance sheet or doubled the first trillion. That’s the level first achieved in September 2008—and had taken the Fed 94 years to create from the days that it opened its doors.

I calculated it: that’s about 35,000 days it took the Fed to get the first $1 trillion of balance sheet.

These madmen and women in the Eccles Building, it took them 30 days to create twice the amount of balance sheet that it took during those first 95 years of the Fed.

What does this mean?

It means that they’re destroying the financial markets as we know them.

There’s no interest rate left. They’re pushing everything close to zero through this massive intervention and buying everything in sight directly or indirectly. That includes commercial paper, municipal bonds, investment-grade corporates, fallen angels, so to speak—that’s just a backdoor way into junk. They’re buying ETFs—the bond ETFs.

It’s only a matter of time before they’re going to be in there, hand over fist, buying stocks.

Janet Yellen and all the rest of them are saying, “Well, maybe they need that additional power.”

How can you have capitalism when you have no capital markets?

It’s that simple. The Fed destroyed it.

The consequence will be massive speculation, malinvestment, and keeping all the zombies alive.

For instance, the high yield market had a significant dislocation recently—where yields soared from 5% to 10% or more—which was an effort by Mr. Market to say that there are a lot of borrowers out there that aren’t solvent. They’re going to have to meet their maker in Chapter 11.

So, what is the Fed trying to do?

It’s trying to prevent any of that from happening. The Fed wants to keep everybody that has borrowed up to their eyeballs alive.

Therefore, it means that the economy will become weaker, more stagnant, and more inefficiency-ridden with time.

If you don’t have the cleansing process of creative disruption, if you don’t allow the price of capital to reflect risk and reward, if you don’t permit failures to be eliminated and liquidated, you’re going to have either a sclerotic economy like Italy or England or even worse, a Soviet economy, if you carry this far enough.

Frankly, I think the right phrase for the Eccles Building and the twelve people on the FOMC is the “Monetary Politburo.” They’re trying to control every movement in the entire economic system through the domination of financial asset prices and pegging of interest rates across the whole yield curve.

It is madness.

Where it will lead is very hard to say. Obviously, not to anything good.

It is so off the charts, and ludicrous relative to anything anybody thought even ten years ago, certainly twenty or thirty years ago. It’s difficult to imagine how bad it is going to get, but it’s going to get pretty bad.

International Man:

Those are some great points. Where do you see the future of the US dollar?

David Stockman:

To paraphrase Winston Churchill about democracy, the US dollar is the worst currency imaginable—except for all the other currencies in the world.

In other words, all the central banks are doing the same thing the Fed is doing, only worse. It’s a race to the bottom.

The European Central Bank cut its policy rate to even deeper subzero, which is just crazy.

The Bank of Japan might as well just buy a paper mill and print paper until there are no trees left in Japan.

In the case of the US dollar, the traditional idea is that we’re going to destroy the currency. That’s true if the rest of the world is prudent.

We don’t have a Weimar Republic 1923 situation where they were trying, in the UK and certainly in New York, and the Bank of France, to restore sound money—prewar money. They failed, but they were attempting to restore sound money and a gold standard currency.

Germany was a basket case economically; they were paying reparations and started up their printing press. There was massive capital outflow, they imported inflation, which then fed upon itself, and the whole wheelbarrow full of money thing happened.

That was inflation in one country when the rest of the world was trying to pursue relatively sound money.

By contrast, today, we have monetary inflation in all countries. So you look at the dollar, and you look at what the other central banks are doing, the dollar is the cleanest dirty shirt in the laundry. It’s probably going to get stronger, not weaker in the FX markets.

But that doesn’t mean that we’re out of the woods.

It only means that the central banks of the world collectively—which have already taken their balance sheets from $2 trillion in the late 1990s to over $25 trillion—are printing money at such a rate that they’re likely to bring down the entire world monetary system. Not simply the US dollar.

International Man:

How will the Fed’s actions affect savers and retirees?

David Stockman:

The essence of it is that the Fed policy is criminal—just flat out criminal—in terms of its impact on savers and retirees on a fixed income.

There is no interest rate left unless you want to speculate in junk bonds. Why should a 78-year-old be speculating in junk bonds to pay for rent or put food on the table?

It is criminal.

That’s what this whole financial repression, zero interest rate, or subzero interest rate policy is doing. It’s hurting tens of millions of people who’ve tried to save and be prudent and not live hand to mouth.

If something like COVID-19 comes along, or an earthquake depending on where you live, or just a bad spell of health affecting your family, you need something to fall back on.

How can people save today when you get nothing?

Take somebody who worked in the steel mill 40 years, who was able to scratch and save and defer gratification. Let’s just say he came up with $300,000 of lifetime savings. He’s now retired. He needs to keep it liquid, but he’s earning less interest income per week than one cappuccino at Starbucks on a lifetime worth of savings.

That’s so evil.

You may ask these central bankers, “Well, what about the savers?” These idiots say that there is too much in savings.

Well, let’s look around right now.

Why do we have a $2.3 trillion bailout? Why are we giving helicopter money to upwards of 180 million people—who are going to get that $1,200 check?

Why are we bailing out small businesses left and right to have them preserve jobs?

Why are we doing all of that if there’s an excess of savings in the world?

In reality, there is no excess. It’s complete nonsense.

The idea that the central bank is there to subsidize, coddle, and bail out the borrower and savage the saver is just fundamentally wrong and goes right to the heart of why we’re in such big trouble.

*  *  *

The amount of money the that is being pumped into every corner of the economy by the Federal Reserve is unprecedented. The consequences of which could be crippling to the the average person. That’s precisely why NY Times best-selling author Doug Casey and his team just released a free PDF report on how to survive and thrive an economic collapse. It reveals how it will all play out and what you can do about it. Click here to download it now.

END

I guess this is one store that many Bostonians will not want to visit:  COVID 19 ravages a Walmart operation in Worcester..21% infected

(zerohedge)

Massachusetts Walmart Ravaged By COVID, 21% Of Employees Infected, Store Closed 

Nearly 21% of the 391 employees at a Massachusetts Walmart have tested positive for COVID-19, reported WCVB-TV Boston, citing statements from local officials on Saturday.

According to WCVB’s Josh Brogadir on Sunday morning, “Walmart in Worcester normally open at 7AM but remains closed after #coronavirus outbreak.”

Josh Brogadir

@JoshBrogadirTV

Walmart in Worcester normally open at 7AM but remains closed after outbreak.
• total of 81 positive cases of 391 (20.7%) employees tested
• city inspection Tues found not all workers wore masks
• update expected at city briefing today at 4:30PM

View image on Twitter

Brogadir said a total of 81 employees tested positive for the virus out of 391, which equates to 20.7% of the workforce at the store have become infected. The store was shut down by Worcester health officials on Wednesday (April 29) after dozens of employees tested positive.

WCVB says Walmart hired an independent professional cleaning company to disinfect the Worcester store. 

“Our inspectional services department will inspect the facility to make sure that the cleaning was done in compliance with our guidelines,” said Worcester City Manager Ed Augustus.

Augustus said the store would not reopen until “it has been professionally cleaned and all employees have been tested for coronavirus.”

He said the store had confirmed cases over the last three weeks, but a majority occurred in the previous week.

Last week, a Walmart spokesperson said the Worcester store would be closed for one day to undergo a deep cleaning. However, about five days later, the store remains closed.

Other big-box retailers and Amazon warehouses have had a rash of outbreaks over the last several months. Employees at Target and Whole Foods, as well as Amazon, Instacart, FedEx, and Walmart, walked off the job on Friday afternoon (May 1) and protested over working conditions, lack of hazard pay, and how their employers are not providing them with proper health equipment during the pandemic.

As President Trump attempts to reopen the crashed American economy, the deadliest day of the pandemic was just recorded on Friday, with more than 2900 deaths. Dozens of states have unveiled re-opening plans, as it seems a premature reopening could trigger a second coronavirus wave

end

China and other foreigners use chips that make up 80% of the American Power grid.  Navarro warns that the uSA is vulnerable and these must return to the uSA for produciton

(zerohedge)

American Power Grid ‘Vulnerable’ To Chinese Cyberattacks, Navarro Warns

Reuters report claiming Beijing is already preparing for the prospect of “an armed conflict” with the US has seemingly driven the deteriorating relations between Washington and Beijing back into the limelight (at least as far as the market is concerned).

But for conservatives, who have been looking at China with a wary eye since the outbreak began,this latest ‘escalation’ is hardly a surprise. And when it comes to rebutting China’s aggression to an audience of mostly Trump supporters, nobody in the West Wing is as practiced as Pete Navarro. Which is probably why he was called to deliver a warning about the newest “threat” from China, a threat that could potentially be even more crippling to the US economy than the virus.

That threat? The vulnerability of the US power grid.

“I think that what’s important for the American people to understand very clearly is that “China lied, people died”. China spawned the virus and they hid the virus for 6 weeks, which allowed the virus to escape Wuhan and infect the rest of the world. And they spent that time going around the world, vacuuming up masks.”

Navarro explained how President Trump’s latest executive order protects America’s power grid by forcing the federal government to buy and use components made only in the US (the federal government administers roughly 20% of the US power grid). Under current rules, companies subject to the influence of foreign adversaries are still allowed to compete for government contracts to supply these components, Navarro argued in a Fox op-ed published shortly before his appearance.

Right now, Navarro said his primary responsibility in the administration is overseeing the reorientation of American supply chains away from China (though this will ultimately be decided by individual corporations, the White House can certainly take steps to sway their decisions, not that the crisis hasn’t been instructive enough on its own). He argued that this latest EO, along with another EO(Executive order) that will require federal agencies to use all-American components for medicines, are the first steps of the “decoupling” of the US economy away from China’s – something that, polls show, Americans mostly support.

Without these orders, Navarro said, China poses a direct threat to the US power grid so long as components made in China and other foreign markets are used.

TV News HQ@TVNewsHQ

Watch Trump Trade Adviser Peter Navarro: “China spawned the virus and they hid the virus for about six weeks which allowed it to escape Wuhan and infect the world.”

Embedded video

Navarro also reiterated demands for an investigation into the early days of the outbreak and whether the virus did indeed originate from a lab: “Did they make scientists disappear?” Navarro asked.

He also insisted that “buy American is going to be the law of the land soon at HHS at DoD at the Veterans Administration…but we need to innovate…and we need to de-regulate…we need to have the whole chain here so it’s not all around the world, holding America hostage.”

Before the interview ended, Navarro urged viewers to read an article published last week by the Daily Telegraph that Navarro said gave “the entire timeline” of Beijing’s “complicity” in this.

end

Another good commentary from John Rubino:  Expect Trump to gave in and give the States the money they need including Illinois and California and not go bankrupt..this however will propel gold northbound in a hurry.

John Rubino/

Bankrupt Cities And States Get The National Disaster They’ve Been Hoping For

Authored by John Rubino via DollarCollapse.com,

The people running states like New Jersey and cities like Chicago know they’re broke. Ridiculously generous public employee pensions – concocted by elected officials and union leaders who had to have understood that they were writing checks their taxpayers couldn’t cover – are bleeding them dry, with no political solution in sight.

They also know that they have only two possible outs: bankruptcy, or some form of federal bailout. Since the former means a disgraceful end to local political careers while the latter requires some kind of massive crisis to push Washington into a place where a multi-trillion dollar state/city bailout is the least bad option, it’s safe to assume that mayors and governors – along with public sector union leaders – have been hoping for such a crisis to save their bacon.

And this year they got their wish. The country is on lockdown, unemployment is skyrocketing and mayors and governors now have a plausible way to rebrand their criminal mismanagement as a “natural disaster” deserving of outside help.

Here, for instance, is an estimate of how high unemployment will spike for various states. Note that overall it’s brutal, but the distribution isn’t what you might expect:

And here’s a table of state rainy day funds (i.e., cash on hand). To their credit, oil-producing states had the discipline to save against that commodity’s inevitable price fluctuations. Other states apparently didn’t see the need:

Illinois, which has the most underfunded pensions but, interestingly, a relatively healthy labor market, apparently had its natural disaster bailout plan prepped and printed before COVID-19 was invented and released. Because governor Gov. J.B. Pritzker almost instantly had his hand out for – get this – $41 billion, a sum equal to three times the state’s estimated pandemic-related revenue loss in the coming year. Overall, governors have asked for about $500 billion in aid.

And wait till California starts begging. See California Governor: Expect Budget Gap in ‘Tens of Billions’.

For President Trump, bailing out “badly run Democrat states”  seems politically pointless, since those states will never, ever vote Republican. Senate majority leader Mitch McConnell, meanwhile, trolled his Dem counterparts by suggesting that states just declare bankruptcy (thus freeing them to cut pension benefits).

But of course this is just partisan fantasy. Letting Illinois go bankrupt would send the muni bond market into a “who’s next?” seizure, which would quickly spread to corporate bonds, equities, and real estate, cratering the US and then the global economy. At least that’s the worst-case scenario economists will present to policymakers.

With no stomach for presiding over the end of the world during an election year, Washington will cave, agreeing to whatever governors demand. And so the grossest mismanagement in the history of US state and city government will be swept under the rug – or more accurately will be swept onto taxpayer balance sheets along with that of all the other sectors that are – surprise! – too big to fail.

This is a shame since one of the few things worth looking forward to in the deep recession the world was stumbling towards before the pandemic hit was the collapse of unconscionable public sector pensions, and the disgrace of the people who conned teachers, firefighters, and cops into thinking that those generous benefits were guaranteed. On the list of financial/political crimes of the modern era, theirs ranks near the top. And now they’ll go both unpublicized and unpunished.

Meanwhile, the resulting multi-trillion-dollar addition to the national debt will hasten the fiery end of the fiat currency/fractional reserve banking/unlimited-government-debt world. One can only hope that future historians will get the story right while the perps are still alive to answer for their sins.

end

If everyone thought that the initial drop in GDP at 4.8% was bad..it looks like the true number will be -8%

(zerohedge)

Q1 GDP To Be Revised Drastically Lower To -8%

Last week’s -4.8% GDP which officially heralded the start of the recession, was panned as the worst economic print since the financial crisis, and one which is about to get far worse in Q2, when some expect a GDP drop as much as 40%.

But before we get to Q2 we have two more revisions of the first quarter GDP number, and according to Goldman, before all is said and done, the first quarter GDP drop may end up matching the collapse recorded in Q4 2008.

According to Goldman’s economists, today’s Factory orders – which declined 10.3% in March, missing expectations for a smaller decrease – will be the catalyst for further aggressive cuts to the Q1 GDP print. As the bank explains, “growth in core capital goods orders for February was revised up by 0.2pp to -0.7%, and growth in core capital goods shipments was revised down by 0.1pp to -0.9%. Growth in core capital goods orders and shipments were left unrevised in prior months.”

And so, reflecting the growing weakness in non-durable inventories and the net downward revisions to March durable goods data, Goldman further lowered its first quarter tracking estimate for the May 28th Q1 GDP revision by five tenths to -7.2%, roughly 50% lower than the -4.8% originally reported. Worse, as additional source data is incorporated and non-response biases are resolved, Goldman expects the final vintage of the data to show an even larger decline of -8.2% (-0.5pp relative to our previous estimate of -7.7%), which would match the Q4 2008 drop when the financial system was on the verge of collapse.

Of course, all of this only looks at Q1, when the US economy was only impaired for about 2 weeks in late March when widespread shutdowns were launched. One can only imaging what Q2 GDP will look like.

end

Who in their right frame of mind would want to board a Carnival Cruise line

August first..sailing date?

(zerohedge)

Scandal-Plagued Carnival Books First Post-Corona Cruise For Aug. 1

When we first saw the following headline, our first reaction was to rub our eyes in disbelief, before double-checking the URL to make sure we were really on CNBC.com and not some new Onion vertical.

With an open criminal investigation in Australia and hundreds of thousands of outraged customers and their friends and family members who will likely never voluntarily board another cruise for as long as they live, Carnival Corp – the world’s biggest cruise line operator – is planning to launch its first post-corona cruises on Aug. 1, with 8 ships leaving from ports in Miami, Cape Canaveral and Galveston, Texas.

CNBC Now

@CNBCnow

JUST IN: Carnival Cruise Line says it will begin to phase-in cruises again starting August 1 with eight of its ships leaving from Miami, Port Canaveral and Galveston. http://cnbc.com

US Top News and Analysis

CNBC is the world leader in business news and real-time financial market coverage. Find fast, actionable information.

cnbc.com

The first few replies sum up what we imagine to be the sentiments of many Americans who followed the horrifying reports about what we dubbed “a nightmare at sea”: Every time a new outbreak aboard a cruise ship seemed to explode into an international incident, the cruise line was seemingly inevitably a Carnival subsidiary, particularly the “Princess Cruises” line that drew the ire of Australian public health officials and – later – prosecutors.

First there was the Diamond Princess, then the Coral Princess and the Ruby Princess.

Ships from other Carnival subsidiaries also saw outbreaks at sea. Ultimately, dozens died and thousands were infected. Reporting from Bloomberg and the Washington Post has suggested that Carnival management was partly at fault.

Replies to the news were pretty much what we expected…

…and, like Mr. Weisenthal, we suspect there will be quite a bit of coverage when the first cruise sets sail.

Joe Weisenthal@TheStalwart

What % of that first cruise in August is going to be reporters?

Though we imagine more than a few bargain-hunters will jump at the opportunity as well…after all…

end

Small Businesses, Many Of Which Couldn’t Get PPP Loans, Have “A Few Months Or Less” To Survive

Small business impacted by the coronavirus pandemic have had difficulty obtaining loans from the Paycheck Protection Program (PPP), according to a CNBC/SurveyMonkey Small Business Survey released Monday.

Of 2,200 small businesses owners polled, just 13% of the 45% who applied for a PPP loan were approved. 7% of respondents had already received financing, while 18% are still waiting on a response from a lender, according to CNBC.

Those applying for a different program, the $10,000 Economic Injury Disaster Loan, fared worse – with just 3% of small business owners reporting that they were approved, and 16% still awaiting a response.

Both relief programs are run by the Small Business Administration. PPP loans are capped at $100,000 per employee and can range in size. The $10,000 advance from EIDL does not have to be repaid, making it effectively a grant.

Sole proprietorships that represent 81% of all small businesses in America is a group particularly hard hit in this credit crunch. For them the window for relief loans opened late, giving them a shorter time opportunity to garner the money desperately needed to ensure they can remain in business. –CNBC

Dire straits

Meanwhile, 43% of small businesses surveyed report that they can survive for a few more months or less – with 31% reporting a ‘few months,’ 7% ‘less than a month’ and 6% less than a week under the current economic lockdown.

Rohit Arora, CEO of online lending platform Biz2Credit, which lends to small businesses, confirms what we’ve been reporting for weeks – that multiple problems plagued the PPP rollout for small businesses.

“The law was murky, and both applicants and bank loan officers were ill-equipped to process the data, as requirements were changing so fast.”

“Another issue is the fact that as a general rule, large banks haven’t focused on small business loans given to companies with less than 50 employees,” said Arora. “They have deemed it too labor intensive.”

Meanwhile, small community banks were ill-equipped to handle the flood of applications and were quickly overwhelmed by the massive volume of data being fed into their system in a short period of time.

Karen Kerrigan, CEO of the Small Business & Entrepreneurship Council, says the regulations imposed on borrowers under the PPP has also been a challenge, and many business owners have decided not to tap the program for that reason. Among them: the 25/75 rule that says business owners must use 75% of the funds they receive only for payroll, and 25% for rent, mortgage payments, utilities and other operating expenses in order to get loan forgiveness.

In many cases this has been a deal breaker. Rent and other operating expenses are high, and getting only a quarter of the loan to cover those costs is not enough,” she explains.

Another requirement for loan forgiveness is that business owners have eight weeks to bring back employees after the money hits their bank accounts. “What happens to those small business owners operating in hard-hit places like New York and New Jersey, where stay-at-home orders are still in place and no one knows when the shutdown orders will be lifted?” she says. –CNBC

In a potentially promising sign for future disbursements, several fintech companies such as Square, PayPal and Intuit are now authorized PPP lenders.

“These companies serve millions of small business owners, many of whom are sole proprietorships and mom and pops. They have the AI and advanced technology to process these loans, as well as strong relationships with many borrowers who regularly use their concierge-type services,” said Kerrigan.

On Sunday, White House National Economic Director Larry Kudlow said that a third round of stimulus may be necessary, but that the Trump administration had made no decision on further funding.

Read the rest of the report here.

 

California First To Be Approved For Up To $10 Billion Bailout From Feds To Pay Unemployment Benefits

As politicians argue over whether or not to bailout decades-long bad decisions on the basis of a sudden virus/lockdown-driven drop in revenues, California has stepped up to the plate with what appears to be a direct request for a bailout to fund the benefits for millions of newly-unemployed residents (and illegal immigrants).

Just a day after California Governor Newsom warned of the state’s sudden budget collapse…

“Last year I did a May revise with a $21.4 billion budget surplus,” Newsom said on Friday during his daily coronavirus briefing, according to Bloomberg.

“This year I will be doing a May revise looking at tens of billions of dollars in deficit. We just went tens of billions in surplus in just weeks to deficits.

The Wall Street Journal reports that California has become the first state to borrow money from the federal government so it can continue paying out rising claims for unemployment benefits during the coronavirus pandemic.

The Golden State borrowed $348 million in federal funds after receiving approval to tap up to $10 billion for this purpose through the end of July, a Treasury Department spokesman said Monday.

“I’m doing everything I can to work with cities and counties, but we are not going to be in a position, even as the nation’s fifth-largest economy, to provide for the needs of all the cities and the counties without federal support,” said Newsom.

Meanwhile, in a  memo last week, Newsom’s finance director ordered departments to significantly slash spending immediately using strict measures, including bans on new goods and service contracts.

As the journal concludes, California serves as an early sign of the potential magnitude of the federal assistance that could be required if states are to continue paying out jobless benefits. It is one of more than 20 states and jurisdictions that entered the current economic crisis without enough money in their unemployment trust funds to pay benefits through a yearlong recession, according to Labor Department data.

With 30 million unemployment claims filed since the coronavirus pandemic resulted in the shutdown of broad swaths of the economy, states are reporting that they’ll need at least $1 trillion in aid from the federal government – which has already doled out over $2.2 trillion in relief for business loans, stimulus checks, expanded unemployment benefits and small business assistance.

And with a lack of tax revenue, states with bloated budgets and massive entitlement programs are facing significant pain in the months ahead.

The U.S. government has also approved loans of up to $12.6 billion for Illinois and up to $1.1 billion for Connecticut through the end of July to replenish state unemployment insurance funds, though the two states hadn’t yet started borrowing by the end of April. California was the only state to have accessed the program so far in the current downturn, the Treasury spokesman said.

One wonders if the reason that the other states haven’t been so quick to draw down on the loans is because they are hoping for a broader-based bailout from a Democrat-sponsored Congressional bill that enables pension benefits to be covered… and not just the jobless.

end
Shiva services begins at sundown as Gold’s Gym is our next to file for bakruptcy due to government lockdown
(zerohedge)

Muscle’d Out: Gold’s Gym Files For Chapter 11 Due To Government Lockdowns

Gold’s Gym International Inc. filed for Chapter 11 on Monday (May 4) as a way to “facilitate the financial restructuring of the company” after nationwide lockdowns resulted in its inability to service debt payments, read a company press release.

The gym operator filed for bankruptcy in Dallas, Texas, and noted in the filing that it has $100 million in assets and liabilities. The company will continue to operate during the restructuring process:

“We want to be 100 percent clear that Gold’s Gym is not going out of business,” President and CEO Adam Zeitsiff said in a press release. “The brand is strong, and we’ll continue to innovate and grow our digital business, our licensing program and our global footprint as we focus on serving our millions of members across the world.”

Here’s a message from the President and CEO Adam Zeitsiff on today’s bankruptcy filing…

The gym operator said its financial difficulties stem directly from coronavirus lockdowns and said it believes it will remerge from bankruptcy proceedings by the start of August.

“This has been a complete and total disruption of every one of our business norms, so we needed to take quick, decisive actions to enable us to get back on track,” the company said.

The restructuring will only impact company-owned locations, which represent roughly 10% of the 700 locations around the world.

Last month, the company closed 30 locations across the US. This included gyms in Alabama, Colorado, Missouri, Texas, Oklahoma, North Carolina, and South Carolina. At the time, it blamed virus-related shutdowns for its rapid financial deterioration.

Not too long ago, 24 Hour Fitness said it was preparing to restructure. As Americans are confined to their homes in the lockdown, with an increasing number of them canceling gym memberships and opting for a Peloton bike. We noted a little more than a week ago that one Peloton spin class had a record number of riders for a live class, drawing in more than 23,000 riders.

end

iv) Swamp commentaries)

 

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

The Telegraph [UK]: Coronavirus NSW: Dossier lays out case against China bat virus program

It cites… their research synthesising a bat-derived coronavirus that could not be treated… At least one of the ­estimated 50 virus samples Dr Shi has in her laboratory is a 96 per cent genetic match to COVID-19 investigation by the Five Eyes intelligence agencies of the United States, Australia, NZ, Canada and the UK… The dossier is damning of China’s constant denials about the outbreak… https://www.dailytelegraph.com.au/coronavirus/bombshell-dossier-lays-out-case-against-chinese-bat-virus-program/news-story/55add857058731c9c71c0e96ad17da60

U.S. intelligence analysis obtained by the AP says Chinese leaders “intentionally concealed the severity” of the coronavirus pandemic in order to stock up on critical medical supplies needed to fight it… – AP

Newsweek: Dr. Fauci Backed Controversial Wuhan Lab with Millions of U.S. Dollars for Risky Coronavirus Research – involves manipulating viruses in the lab to explore their potential for infecting humans, because it creates a risk of starting a pandemic from accidental release the project description refers to experiments that would enhance the ability of bat coronavirus to infect human cells and laboratory animals using techniques of genetic engineering. In the wake of the pandemic, that is a noteworthy detail… The work entailed risks that worried even seasoned researchers

https://www.newsweek.com/dr-fauci-backed-controversial-wuhan-lab-millions-us-dollars-risky-coronavirus-research-1500741

@lawyer4laws: Can someone explain-Why a Virology lab would go in search of a “Remote Dangerous Virus” only found on 1 particular Bat species located in primitive secluded location . . Then work on transference to Humans . . Claiming doing so is for Health and Safety measures?

Why US outsourced bat virus research to Wuhan – US-funded $3.7 million project approved by Trump’s Covid-19 guru Dr Anthony Fauci in 2015 after US ban imposed on ‘monster-germ’ research

In October 2014, the US government had placed a federal moratorium on gain-of-function (GOF) research – altering natural pathogens to make them more deadly and infectious – as a result of rising fears about a possible pandemic caused by an accidental or deliberate release… in part due to lab accidents at the US Centers for Disease Control and Prevention (CDC) in July 2014

https://asiatimes.com/2020/04/why-us-outsourced-bat-virus-research-to-wuhan/

US Secretary of State Pompeo: China has a history of infecting the world and they have a history of running substandard laboratories. These are not the first times that we’ve had a world exposed to viruses as a result of failures in a Chinese lab.

Global markets recoil as Trump threatens US-China trade war – The US president is increasingly making China’s handling of the pandemic a major issue… Reports suggested the White House is crafting renewed import tariffs that would be applied to Chinese imports in retaliationhttps://www.theguardian.com/business/2020/may/01/global-markets-donald-trump-us-china-trade-war-coronavirus-covid-19

Trump Weighs China Stock Ban for $50 Billion of Federal Savings- The Thrift Savings Plan… is scheduled to transfer roughly $50 billion of its international fund to mirror an MSCI All Country World Index, which captures emerging markets, including China…https://www.bloomberg.com/news/articles/2020-05-01/trump-considers-order-to-block-savings-fund-from-chinese-firms

WaPo: House antitrust investigators demand Amazon CEO Jeff Bezos testify in wide-ranging antitrust probe, threatening possible subpoena – Lawmakers who have been investigating Amazon and other tech giants as part of a wide-ranging antitrust probe said Amazon repeatedly has misrepresented its practices, including at a congressional hearing last year, raising the potential that a company witness may have committed perjury…https://www.washingtonpost.com/technology/2020/05/01/amazon-jeff-bezos-testify/

Jeff Bezos may have lied to Congress about Amazon practices, lawmakers say

The House Judiciary Committee wants Amazon CEO Jeff Bezos to testify about an allegation that his company uses third-party vendor information to guide creation of new Amazon products…

    Lying to Congress can be a crime. In a rare prosecution, Roger Stone, the flamboyant former adviser to President Trump, was convicted in November of lying to Congress about his attempts to contact WikiLeaks during the 2016 election.  Sometimes lying to Congress isn’t prosecuted. Obama administration intelligence chief James Clapper, for example, gave admittedly false testimony about domestic surveillance in 2013 and was not prosecuted

https://nypost.com/2020/05/01/jeff-bezos-may-have-lied-to-congress-about-amazon-lawmakers/

@johncardillo: And just like that around 30,000 COVID deaths just disappear.  This is the biggest scam ever perpetrated on America. You were lied to, held hostage, and nearly lost everything so Fauci & Co. could run a social experiment [CDC shows 37,308 PROVISIONAL Covid-19 deaths as of May 1, 2020!!! Influenza deaths are only 5,846.  CDC notes say there could be a 1 to 8 week lag on the stats.  https://www.cdc.gov/nchs/nvss/vsrr/COVID19/]    https://twitter.com/johncardillo/status/1256573366615629825

The CDC: Provisional death counts are based on death certificate data received and coded by the National Center for Health Statistics as of May 1, 2020.  Death counts are delayed and may differ from other published sources… https://www.cdc.gov/nchs/nvss/vsrr/COVID19/

Another CDC page shows 62,406 Covid-19 deaths as of May 1, 2020.  About the DataNumbers reported on Saturdays and Sundays are preliminary and not yet confirmed by state and territorial health departments. These numbers may be modified when numbers are updated on Mondays…CDC case counts and death counts include both confirmed and probable cases and deaths…

https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/cases-in-us.html

It appears that the CDC reports 37,308 CONFIRMED Covid-19 deaths [61k flu deaths two years ago] as of May 1, 2020 and 62,406 SUSPECTED Covid-19 deaths as of May 1, 2020.

The data is in — stop the panic and end the total isolation By Dr. Scott W. Atlas, Stanford

Fact 1: The overwhelming majority of people do not have any significant risk of dying from COVID-19…

Fact 2: Protecting older, at-risk people eliminates hospital overcrowding…

Fact 3: Vital population immunity is prevented by total isolation policies, prolonging the problem…

Fact 4: People are dying because other medical care is not getting done due to hypothetical projections…

Fact 5: We have a clearly defined population at risk who can be protected with targeted measures..

https://thehill.com/opinion/healthcare/494034-the-data-are-in-stop-the-panic-and-end-the-total-isolation

CDC: The overall cumulative COVID-19 associated hospitalization rate is 40.4 per 100,000, with the highest rates in people 65 years and older (131.6 per 100,000) and 50-64 years (63.7 per 100,000).

    Hospitalization rates for COVID-19 in adults (18-64 years) are higher than hospitalization rates for influenza at comparable time points* during the past 5 influenza seasons.  For people 65 years and older, current COVID-19 hospitalization rates are similar to those observed during comparable time points* during recent high severity influenza seasonsFor children (0-17 years), COVID-19 hospitalization rates are much lower than influenza hospitalization rates during recent influenza seasons

https://www.cdc.gov/coronavirus/2019-ncov/covid-data/covidview/index.html

Gov. Ron DeSantis Shames Media, Outbreak Models’ Doomsday Predictions: Off by Nearly 500k in Florida – the state with one of the most vulnerable populations due to age is faring well among the big states that were hit and is nowhere close to New York’s unfortunate predicament…

https://www.breitbart.com/politics/2020/05/01/gov-ron-desantis-shames-media-outbreak-models-doomsday-predictions-off-by-nearly-500k-in-florida/amp/

People with low vitamin D levels more likely to die from coronavirus, study finds https://trib.al/UGdNVg2

Tucker Carlson: During coronavirus pandemic, totalitarianism doesn’t shock us anymore

Never in American history have politicians been more powerful than they are now… In the state of Maine, Gov. Janet Mills now has the power to suspend any law she doesn’t like. She can seize any state resource she feels like seizing. She can force any citizen or all citizens from their homes… J.B. Pritzker is the governor of Illinois…. his word is now law in the state. It has to be law, he explained. Otherwise, thousands would die… Our rights are gone. No one has explained how politicians are allowed to do this, to override the Constitution. No one seems to care. They’re too afraid… As it stands, politicians won’t let people worship, or work, or go to school, or see their aging parentsThey’ve placed the nation under house arrest… What couldn’t they start doing? Could they intern people? Seriously…

https://www.foxnews.com/opinion/tucker-carlson-during-coronavirus-pandemic-totalitarianism-doesnt-shock-us-anymore

Gallup: Americans Differ Greatly in Readiness to Return to Normal

Republicans (44%) are most likely to say they are ready “right now”… [Only 4% of Dems; 22% Ind.]

https://news.gallup.com/poll/309578/americans-differ-greatly-readiness-return-normal.aspx

@RealWayneRoot: How did virus become political? Do viruses vote Republican or Democrat? Every Republican I know agrees this is hysterical & exaggerated & will be over soonEvery Dem & fake news media rooting for 2 years locked in our homes & economy destroyed.

@IngrahamAngle: Why did Gilead Sciences change their Remdesivir metric mid-study, from being a study to prevent death, to measuring  time to recovery? In clinical studies this is a big no-no. (Death rate improvement was only 11.6 to 8 percent). [Playing politics and self-serving games with people’s lives – the drug is given through an IV, only patients who are hospitalized are able to receive it for now.]

Analysts at RBC Capital Markets expect Gilead would price the drug at around $900 to $1,000 or lower per course… [Other analysts see ~$500 or lower.  Hydroxychloroquine is $1.20 a pill!]

https://www.biopharmadive.com/news/coronavirus-remdesivir-gilead-antiviral-drug-covid-19/573261/

“Remdesivir Is Probably Worthless” – Trauma Surgeon Exposes “Drug Company’s Shenanigans”

In an excellent Twitter thread, Hoofnagle details what he calls “some fascinating drug company shenanigans.“… Remdesivir is a clever pharmacologic prodrug that inhibits a key piece of RNA viruses that mammals don’t have – the RNA-dependent RNA polymerase, and inhibits viral replication. Unfortunately, by the time you are symptomatic with a virus, you are usually already high/peak viral load. So, when you give an antiviral to someone who is already ill, the damage from the virus is largely done… Consistent with this, the Lancet paper on the remdesivir trial in China shows no impact on viral load clinically… https://www.zerohedge.com/health/remdesivir-probably-worthless-trauma-surgeon-exposes-drug-companys-shenanigans

Coronavirus: Gilead’s Remdesivir Trial Missed a Huge Opportunity – Bloomberg

Rushing the drug through means we don’t know who it might help, or hurt…

    Doctors also need information on whether older or younger patients were likely to benefit, for example, and how different pre-existing illnesses might tip the risk-benefit ratio. Instead, we got what Memorial Sloan-Kettering Cancer Center physician and epidemiologist Peter Bach calls the bare minimum of information — just enough to get the drug over the hurdles needed for approval

https://www.bloomberg.com/opinion/articles/2020-05-01/coronavirus-gilead-s-remdesivir-trial-missed-a-huge-opportunity

Gilead Lobbying Rose as Interest in COVID-19 Treatment Climbed

The pharmaceutical company spent $2.45 million on lobbying in the first three months of the year, a 32% increase over the $1.86 million it spent in the first quarter of 2019…

https://www.npr.org/sections/health-shots/2020/05/02/849149873/gilead-lobbying-rose-as-interest-in-covid-19-treatment-climbed

GOP Sen. Josh Hawley @HawleyMO: I’m at the airport, flying back to DC, and multiple @United employees have told me the company is cutting their hours, pay & benefits immediately. This is AFTER United took billions in bailout money that was earmarked for workers. This has better not be true

Pelosi: Any guaranteed income plan should apply to illegal immigrants with tax ID numbers

https://justthenews.com/government/congress/pelosi-any-guaranteed-income-should-apply-illegal-immigrants-tax-id-numbers#.XqyLkjRCAAg.twitter

CNBC’s @SaraEisen: Grocery inflation due to pandemic… fresh meat by 8%, eggs by 31% cheese by 11% and cows milk by 10% versus this time last year via new numbers from @nielsen

Buffett’s Berkshire posts nearly $50 billion loss as coronavirus causes pain

https://www.reuters.com/article/us-berkshire-results-idUSKBN22E0GD

Buffett Stays on Sidelines with Cash Rising to $137 Billion [Plus >$6B from stock sales in April]

https://www.bloomberg.com/news/articles/2020-05-02/buffett-stays-on-the-sidelines-amid-market-tumble-as-cash-climbs

Buffett sold his airlines: Passenger miles will fall for the next 3-4 years and there are too many planes.

Yahoo’s @JuliaLaRoche: Warren Buffett on COVID-19: “The range of possibilities on the economic side are still extraordinarily wide. We do not know exactly what happens when you voluntarily shut down a substantial portion of your society… and I don’t really know of any parallel.”

Warren Buffett: The American economic miracle ‘has always prevailed and it will do so again’ https://yhoo.it/35u49DU  [Warren’s behavior is at odds with his words, which is not a rarity.  Tomorrow, we will elaborate on Warren’s possible motive for hibernating; hint: think of the global politics of the ‘30s.]

Buffett rejects diversity measure, but throws support behind its goal [Eye roll] https://t.co/anIvJlKAxE

FT: [US & EU] Banks to book more than $50bn against bad loans

https://www.ft.com/content/c31db8ab-9a90-4680-bf13-b0a859e7e1b4

Today – ESMs traded -48.75 early last night on the above Buffett and China stories.  Conditioned traders will probably buy the NYSE open; but real sellers could prevent the usual Monday rally.

The upward bias of earnings season ends is over.  The grandest and most reliable seasonal pattern, the propensity for stocks to rally from November 1 to April 30, has ended.  Be very careful; a scary equity retrenchment, or worse, could be materializing.

Expected economic data: March Factory Orders -9.2% m/m; March Durable Goods Orders -14.4 %

 

On Sunday, Fox’s Maria Bartiromo shredded GOP Sen. Graham for not investigating Spygate figures when for two years he has incessantly promised that he would do so.

https://www.washingtonexaminer.com/news/foxs-maria-bartiromo-presses-lindsey-graham-to-make-good-on-pledge-to-subpoena-doj-and-fbi-officials

 

Flynn bombshell puts renewed attention on Durham probe; source says Barr talking to him ‘every day’ – Sources even said charges could be justified against officials [FBI, DoJ & Team Mueller?]

https://www.foxnews.com/politics/flynn-bombshell-puts-renewed-attention-on-durham-probe-source-says-barr-talking-to-him-every-day

 

Gregg Jarrett: FBI’s actions in Michael Flynn case should send a chill down your spine

“You know, I thought this is the most outrageous, unethical, dishonest, and corrupt act I have ever seen. And, I have been a lawyer for 40 years. I have never seen such misbehavior by government officials,”…

https://www.foxnews.com/media/gregg-jarrett-michael-flynn-fbi-bombshell-notes-justice-department

 

@VicToensing: Plea deals require all promises be listed in writing. MuellerTeam not list @GenFlynn

son not to be prosecutedTeam not want future jurors (when General might testify vs a defendant) to know that promise. Fraud on court. Fraud on future jurors.Team shld be disbarred.

 

Texas Vigilantes Show Up Outside of Dallas Storefront to Demand End to Shutdown

https://bigleaguepolitics.com/enough-is-enough-texas-vigilantes-show-up-outside-of-dallas-storefront-to-demand-end-to-shutdown/

 

Angry People Have Shown Up at Closed Illinois Unemployment Offices, Prompting Police Protection for Workers – State unemployment offices are closed to the public, but some people angry about not being able to file for benefits are showing up anyway.

https://www.wbez.org/stories/angry-people-have-shown-up-at-closed-illinois-unemployment-offices-prompting-police-protection-for-workers/aa9a1f7a-2cdb-4ce5-a527-2fa83bb7eb79

 

Four Michigan Sheriffs Say They Won’t Enforce Governor’s Orders

https://thefederalist.com/2020/04/15/four-michigan-sheriffs-say-they-wont-enforce-governors-totalitarian-orders/

 

Oregon Gov. Kate Brown Extends Lockdown to JULY 6 Despite Ranking 40th on State Coronavirus List with 104 Deaths in State of 4 Million! https://www.thegatewaypundit.com/2020/05/tyranny-oregon-gov-kate-brown-extends-lockdown-july-6-despite-ranking-40th-state-coronavirus-list-104-deaths-state-4-million/

 

Chicago mayor threatens to issue citations, arrest those who ignore stay-at-home order

[It is not lost on Chicagoans that the mayor advocated for releasing criminals from prison due to Covid.]

https://www.foxnews.com/us/chicago-mayor-lori-lightfoot-threatens-citations-arrest-residents-ignore-stay-at-home-order

 

Chaos unfolds amid heavy NYPD presence in Hasidic Jewish neighborhood

A source said the incident involved a funeral procession.  The chaos unfolded in the wake of a “zero tolerance” warning from Mayor Bill de Blasio to New York’s “Jewish community, and all communities” regarding violations of social distance rules…A spokesperson for the NYPD said cops responded Thursday to a synagogue on Kent Avenue in Brooklyn, where they issued two summonses over doors being chained from the inside. Another summons was issued for social distancing.

https://nypost.com/2020/04/30/chaos-unfolds-amid-heavy-nypd-presence-in-hasidic-jewish-neighborhood/

 

Chicago Residents Tear down Fences to Get into Locked down City Parks

https://thefederalist.com/2020/04/30/chicago-residents-tear-down-fences-to-get-into-locked-down-city-parks/

 

[IL] Governor Pritzker Forces Illinois Residents into Endless Lockdown — Then Is Caught Flying His Wife and Kids to Florida

https://www.thegatewaypundit.com/2020/04/busted-governor-pritzker-caught-forcing-illinois-residents-endless-lockdown-flies-wife-kids-florida-video/

 

Taser-wielding NYPD cop punches bystander during social-distancing bust

https://nypost.com/2020/05/03/taser-wielding-cop-attacks-bystander-during-social-distancing-bust/

 

Two more California counties to reopen economies despite Newsom’s stay-at-home order

https://www.washingtonexaminer.com/news/two-more-california-counties-to-reopen-economies-despite-newsoms-stay-at-home-order

 

Baltimore Police Now Recording All Citizens with Full-time Aerial Cameras [“1984” has arrived.]

https://www.thenewamerican.com/usnews/constitution/item/35594-baltimore-police-now-recording-all-citizens-with-full-time-aerial-cameras

 

GOP RepAndyBiggsAZ: Dr Fauci and Dr Birx have basically said we would rather commit economic suicide than have freedom and let people govern themselves and take the risk of freedom.  It’s past time for them to exit the stage.

 

Jonathan Turley: No, Obama Cannot Be Part of a Dream Clinton/Obama Ticket

There is a new bizarre theory lighting up the Internet that, with Biden continuing to struggle as a presumptive nominee, Democrats are considering the prospect of a DNC engineered ticket of Hillary Clinton and Barack Obama The 12th Amendment states clearly and unambiguously that “no person constitutionally ineligible to the office of President shall be eligible to that of Vice-President of the United States.”  Period… https://jonathanturley.org/2020/05/03/no-obama-cannot-be-part-of-a-dream-clinton-obama-ticket/

 

Joe struggled to answer basic question on an interview with friendly MSNBC on Friday.  His wife now appears with him regularly on his town halls.  The optics is terrible: While Jill talks about policies, Joe stares into the camera.  On Saturday, the NY Times Editorial Board joined the oust Biden movement.

 

NYT Editorial Board: Investigate Tara Reade’s Allegations – Americans deserve to know more about a sexual assault accusation against the likely Democratic Party nominee…

“This is a start, but it does not go far enough. Any serious inquiry must include the trove of records from Mr. Biden’s Senate career that he donated to the University of Delaware.”… 

https://www.nytimes.com/2020/05/01/opinion/biden-tara-reade.html

 

NYT op-ed on Sunday: Democrats, It’s Time to Consider a Plan B – Democrats ought to start considering a backup plan for 2020…  https://www.nytimes.com/2020/05/03/opinion/joe-biden-tara-reade.html

 

Two more people back parts of Tara Reade’s claims against Joe Biden

https://nypost.com/2020/05/03/two-more-people-back-parts-of-tara-reades-claims-against-joe-biden/

 

Biden doesn’t want Senate records opened due to ‘speeches I’ve made’

https://nypost.com/2020/05/01/biden-doesnt-want-senate-records-opened-due-to-speeches-ive-made/

 

ByronYork: Biden defends sealing his senatorial records at University of Delaware. Material in them ‘could be taken out of context,’ Biden tells MSNBC, and could be ‘fodder in a campaign.’

 

Biden campaign operatives accessed secret Senate records at Delaware library, report says

https://nypost.com/2020/05/01/joe-bidens-staff-accessed-records-at-university-of-delawares-library/

 

Biden’s VP search chief tied to China money scandal, Harvey Weinstein and women allegations

‘I never received an apology from Chris Dodd,’ says Carla Gaviglio, who alleges she was assaulted in a ‘shocking and vulgar’ 1985 restaurant episode involving the former Connecticut senator…

   Dodd was listed in 2017 as the second largest career recipient of Weinstein’s political donations, behind Barack Obama…

    During the Clinton-era fund-raising scandal, Dodd was forced to watch as his fellow senators dissected fundraising activities of the Democratic National Committee that he presided over as general chairman from 1995-1997 and that led to illegal foreign donations flowing into party coffers from Chinese-connected figures [Solomon says Dem elites are irate that Biden selected Dodd.]

https://justthenews.com/accountability/political-ethics/bidens-vp-search-chief-tied-china-money-scandal-harvey-weinstein

 

@HansMahncke: New poll finds that a majority of Americans believe the Steele dossier that there was collusion between Donald Trump and Russia. What’s buried in the details is that Harvard Harris Polls deceptively only provided two options: Dossier is real or dossier is Russian disinformation.

 

28 Million Mail-In Ballots Went Missing in Last Four Elections – nearly one in five of all absentee ballots and ballots mailed to voters residing in states that do elections exclusively by mail…

https://www.realclearpolitics.com/articles/2020/04/24/28_million_mail-in_ballots_went_missing_in_last_four_elections_143033.html

 

@RyanAFournier: Isn’t it ironic that Nancy Pelosi blocked remote voting for Congress because she feels it’s not secure, but wants the entire country to vote-by-mail.

 

The Babylon Bee: Scientists Who Didn’t Predict a Single Thing Accurately for Last Two Months Confident They Know What the Weather Is Going to Be Like in 100 Years   https://t.co/iEAiYhDvxg

Well that is all for today

I will see you TUESDAY night.

 

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