MAY 6//WITH RATES ESCALATING THE BANKERS ORCHESTRATED ANOTHER RAID ON GOLD/SILVER: GOLD DOWN $17.00 TO $1687.00//SILVER DOWN 6 CENTS TO $14.92//MAY SEES ANOTHER RISE IN GOLD TONNAGE STANDING: 26.2208 TONNES//CORONAVIRUS UPDATE//HONG KONG REAL ESTATE CRASHES//10 YEAR USA BOND YIELDS RISE WITH ANNOUNCEMENT OF HUGE 96 BILLION TREASURY REFUNDING//LAZARD: CASCADING BANKRUPTCIES WILL BE UPON US/ ;LORD AND TAYLOR LIQUIDATION TO PROCEED//SAM ZELL: WORSE THAN A DEPRESSION//SWAMP STORIES FOR YOU TONIGHT//

GOLD:$1687.00  DOWN $17.00   The quote is London spot price

 

 

 

 

 

Silver:$14.92  DOWN 6 CENTS

 

Closing access prices:  London spot

 

i)Gold : $1688.00  LONDON SPOT  4:30 pm

 

ii)SILVER:  $14.86//LONDON SPOT  4:30 pm

CLOSING FUTURES PRICES:  KEY MONTHS

 

MAY COMEX GOLD:  XXX 1:30 PM

JUNE GOLD:  $1689.00  CLOSE 1.30 PM//   SPREAD SPOT/FUTURE JUNE: $2.00.//PREMIUMS WENT UP AGAIN

 

CLOSING SILVER FUTURE MONTH

SILVER APRIL COMEX CLOSE: XXX

SILVER MAY COMEX CLOSE;   $15.02…1:30 PM.//SPREAD SPOT/FUTURE MAY:  10 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: 480/1208

issued 1000

EXCHANGE: COMEX
CONTRACT: MAY 2020 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,704.400000000 USD
INTENT DATE: 05/05/2020 DELIVERY DATE: 05/07/2020
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
072 C GOLDMAN 16
099 H DB AG 129
118 H MACQUARIE FUT 180
135 H RAND 1
152 C DORMAN TRADING 8
323 H HSBC 32
355 C CREDIT SUISSE 32
435 H SCOTIA CAPITAL 66
624 C BOFA SECURITIES 26
657 C MORGAN STANLEY 66
661 C JP MORGAN 1000 480
685 C RJ OBRIEN 2
686 C INTL FCSTONE 1 25
690 C ABN AMRO 4 240
732 C RBC CAP MARKETS 12
737 C ADVANTAGE 6 17
800 C MAREX SPEC 2 16
905 C ADM 55
____________________________________________________________________________________________

TOTAL: 1,208 1,208
MONTH TO DATE: 4,710

NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT: 1208 NOTICE(S) FOR 120,800 OZ (3.757 tonnes)

 

TOTAL NUMBER OF NOTICES FILED SO FAR:  4710 NOTICES FOR 471000 OZ  (14.650 TONNES)

 

 

SILVER

 

FOR MAY

 

 

424 NOTICE(S) FILED TODAY FOR  2,120,000  OZ/

total number of notices filed so far this month: 6953 for 34,765,000 oz

 

BITCOIN MORNING QUOTE  $9206 UP  181 

 

BITCOIN AFTERNOON QUOTE.: $9229 UP $207

 

GLD AND SLV INVENTORIES:

WITH GOLD DOWN $17.00: 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 3.68 TONNES OF GOLD INTO THE GLD//

 

GLD: 1,071.71 TONNES OF GOLD//

 

 

WITH SILVER DOWN 6 CENTS TODAY: AND WITH NO SILVER AROUND

 

NO CHANGE IN SILVER INVENTORY AT 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 ROSE  BY A FAIR SIZED 743 CONTRACTS FROM 131,830 UP TO 132,573 AND CLOSER TO OUR NEW RECORD OF 244,710, (FEB 25/2020. THE FAIR SIZED GAIN IN OI OCCURRED WITH  OUR 17 CENT GAIN IN SILVER PRICING AT THE COMEX. IT SEEMS THAT THE GAIN IN COMEX OI IS DUE TO STRONG  BANKER SHORT COVERING PLUS A SMALL EXCHANGE FOR PHYSICAL ISSUANCE, SOME LONG LIQUIDATION, ACCOMPANYING  A SMALLER SILVER OZ STANDING AT THE COMEX FOR MAY. WE HAD A NET GAIN IN OUR TWO EXCHANGES OF 1049 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: 250  AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  250 CONTRACTS. WITH THE TRANSFER OF 250 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 250 EFP CONTRACTS TRANSLATES INTO 5.245 MILLION OZ  ACCOMPANYING:

1.THE 17 CENT GAIN IN SILVER PRICE AT THE COMEX AND

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

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING  AND

21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

5.845 MILLION OZ STAND IN JANUARY.

2.955 MILLION OZ STANDING FOR FEBRUARY.:

27.120 MILLION OZ STANDING IN MARCH.

3.875 MILLION OZ STANDING FOR SILVER IN APRIL.

18.845 MILLION OZ STANDING FOR SILVER IN MAY.

2.660 MILLION OZ STANDING FOR SILVER IN JUNE//

22.605 MILLION OZ  STANDING FOR JULY

10.025   MILLION OZ INITIAL STANDING IN AUGUST.

43.030   MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)

7.32     MILLION OZ INITIALLY STANDING IN OCT

2.630     MILLION OZ STANDING FOR NOV.

20.970   MILLION OZ  FINAL STANDING IN DEC

5.075     MILLION OZ FINAL STANDING IN JAN

1.480    MILLION OZ FINAL STANDING IN FEB

23.005  MILLION OZ FINAL STANDING FOR MAR

4.660  MILLION OZ FINAL STANDING FOR APRIL

45.335 MILLION OZ INITIALLY STANDING FOR MAY

 

TUESDAY, AGAIN OUR CROOKS USED COPIOUS PAPER IN ORDER TO LIQUIDATE SILVER’S PRICE…AND THEY WERE UNSUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT ROSE 17 CENTS).. AND, OUR OFFICIAL SECTOR/BANKERS  WERE SOMEWHAT SUCCESSFUL IN THEIR ATTEMPT TO FLEECE SOME AMOUNT OF SILVER LONGS FROM THEIR POSITIONS. THE GAIN 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) ZERO LONG LIQUIDATION AS  WE DID HAVE A  NET GAIN OF 1049 CONTRACTS OR 5.245 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:

4135 CONTRACTS (FOR 4 TRADING DAYS TOTAL 4135 CONTRACTS) OR 20.675 MILLION OZ: (AVERAGE PER DAY: 1033 CONTRACTS OR 5.168 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF APRIL: 20.675 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON. THIS REPRESENTS AROUND 2.95% 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:          1,009.52 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:                   20.675 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 FAIR SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 743, WITH OUR 17 CENT GAIN IN SILVER PRICING AT THE COMEX ///TUESDAY THE CME NOTIFIED US THAT WE HAD A SMALL SIZED EFP ISSUANCE OF 250 CONTRACTS WHICH EXITED OUT OF THE SILVER COMEX AND TRANSFERRED THEIR OI TO LONDON  AS FORWARDS. SPECULATORS CONTINUED THEIR INTEREST IN ATTACKING THE SILVER COMEX FOR PHYSICAL SILVER

 

TODAY WE GAINED A FAIR SIZED OI CONTRACTS ON THE TWO EXCHANGES:  993 CONTRACTS (WITH OUR 17 CENT GAIN IN PRICE)

 

THE TALLY//EXCHANGE FOR PHYSICALS

i.e 250 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH A FAIR SIZED INCREASE OF 743 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 17 CENT GAIN IN PRICE OF SILVER/ AND A CLOSING PRICE OF $14.98 // TUESDAY’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: 424 NOTICE(S) FOR  2,170,000 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  45.335 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 221 CONTRACTS TO 490,343 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 GAIN OF COMEX OI OCCURRED WITH OUR  COMEX LOSS IN PRICE  OF $1.65 /// COMEX GOLD TRADING// TUESDAY// 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 0 OPEN INTEREST STANDING FOR  OUR NEW 4 GC CONTRACT

 

WE GAINED A GOOD SIZED 3749 CONTRACTS  (11.66 TONNES) ON OUR TWO EXCHANGES.

 

E.F.P. ISSUANCE

 

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 3528 CONTRACTS:

CONTRACTS, FEB>  CONTRACTS; MARCH 00 APRIL: 0. MAY: 0, AND JUNE 3528.; DEC 0 AND ALL OTHER MONTHS ZERO//TOTAL: 3528.  The NEW COMEX OI for the gold complex rests at 490,343. ALSO REMEMBER THAT THERE WILL BE A DELAY IN THE ISSUANCE OF EFP’S.  THE BANKERS REMOVE LONG POSITIONS OF COMEX GOLD IMMEDIATELY.  THEN THEY ORCHESTRATE THEIR PRIVATE EFP DEAL WITH THE LONGS AND THAT COULD TAKE AN ADDITIONAL, 48 HRS SO WE GENERALLY DO NOT GET A MATCH WITH RESPECT TO DEPARTING COMEX LONGS AND NEW EFP LONG TRANSFERS. . EVEN THOUGH THE BANKERS ISSUED THESE MONSTROUS EFPS, THE OBLIGATION STILL RESTS WITH THE BANKERS TO SUPPLY METAL BUT IT TRANSFERS THE RISK TO A LONDON BANKER OBLIGATION AND NOT A NEW YORK COMEX OBLIGATION. LONGS RECEIVE A FIAT BONUS TOGETHER WITH A LONG LONDON FORWARD. THUS, BY THESE ACTIONS, THE BANKERS AT THE COMEX HAVE JUST STATED THAT THEY HAVE NO APPRECIABLE METAL!! THIS IS A MASSIVE FRAUD: THEY CANNOT SUPPLY ANY METAL TO OUR COMEX LONGS BUT THEY ARE QUITE WILLING TO SUPPLY MASSIVE NON BACKED GOLD (AND SILVER) PAPER KNOWING THAT THEY HAVE NO METAL TO SATISFY OUR LONGS. LONDON IS NOW SEVERELY BACKWARD IN BOTH GOLD AND SILVER  AND WE ARE WITNESSING DELAYS IN ACTUAL DELIVERIES.

IN ESSENCE WE HAVE A GOOD SIZED INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 3528 CONTRACTS: 221 CONTRACTS INCREASED AT THE COMEX AND 3528 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 3749 CONTRACTS OR 11.66 TONNES. TUESDAY, WE HAD A LOSS OF $1.65 IN GOLD TRADING

AND WITH THAT LOSS IN  PRICE, WE HAD A CONSIDERABLE SIZED GAIN IN  TOTAL/TWO EXCHANGES GOLD TONNAGE OF 11.66 TONNES!!!!!! THE BANKERS/OFFICIAL SECTOR WERE SUPPLYING INFINITE SUPPLIES OF SHORT GOLD COMEX PAPER WITH RECKLESS ABANDON. THE BANKERS WERE SUCCESSFUL IN THEIR ATTEMPT TO LOWER GOLD’S PRICE (IT FELL $1.65). AND IT ALSO SEEMS THAT THEIR ATTEMPT TO FLEECE ANY GOLD LONGS FROM THE GOLD ARENA WAS UNSUCCESSFUL  (SEE BELOW).

4 GC OPEN INTEREST:  0

 

END

 

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES:

WE HAD  A FAIR SIZED INCREASE IN EXCHANGE FOR PHYSICALS  (3528) ACCOMPANYING THE SMALL GAIN IN COMEX OI  (221 OI): TOTAL GAIN IN THE TWO EXCHANGES:  3749 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 SMALL LOSS IN GOLD PRICE TRADING//TUESDAY

 

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 : 9516 CONTRACTS OR 951,600 oz OR 29.598 TONNES (4 TRADING DAYS AND THUS AVERAGING: 2379 EFP CONTRACTS PER TRADING DAY

 

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 4 TRADING DAY(S) IN  TONNES: 29.598 TONNES

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

THUS EFP TRANSFERS REPRESENTS 29.598/3550 x 100% TONNES =0.722% 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   2595.94  TONNES

JANUARY 2220 TOTAL EFP ISSUANCE; : 570.19 TONNES

FEB 2020 TOTAL EFP ISSUANCE :            653.78 TONNES

 

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

APRIL TOTAL EFP. ISSUANCE:               243.45  TONNES  (EFP ISSUANCE BECOMING A LOT LESS)

MAY TOTAL EFP ISSUANCE:                     29.598 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, ROSE BY A FAIR SIZED 743 CONTRACTS FROM 131,830 DOWN TO 132,573 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 GAIN 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) ZERO LONG LIQUIDATION 

 

EFP ISSUANCE 250 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: 250 CONTRACTS   AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 250 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON.  IF WE TAKE THE  COMEX OI GAIN  OF 799 CONTRACTS TO THE 250 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A SMALL GAIN OF 1049 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES 5.245 MILLION  OZ!!! WITH THE 17 CENT GAIN IN PRICE///

 

 

RESULT: A FAIR SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 17 CENT GAIN IN PRICING THAT SILVER UNDERTOOK IN PRICING// TUESDAY. WE ALSO HAD A SMALL SIZED 250 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)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 18.06 POINTS OR 0.63%  //Hang Sang CLOSED UP 268.72 POINTS OR 1.13%   /The Nikkei closed DOWN 574.34 POINTS OR 2.84%//Australia’s all ordinaires CLOSED DOWN .24%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0985 /Oil UP TO 25.41 dollars per barrel for WTI and 31.64 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.0984 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1173 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 PANDEMIC  : /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING WEAKER AGAINST USA DOLLAR/OFFSHORE YUAN TRADING WEAKER AGAINST THE DOLLAR /TRADE DEAL NOW DEAD..TRUMP  RAISED RATES TO 25%

 

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

GOLD

LET US BEGIN:

THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY A SMALL 221 CONTRACTS TO 490,764 MOVING CLOSER TO  OUR  RECORD THAT WAS SET IN JANUARY/2020: {799,541  OI(SET JAN 16/2020)} AND  PREVIOUS TO THAT: 797,110 (SET JAN 7/2020).  AND THIS SMALL COMEX OI GAIN WAS SET WITH OUR SMALL LOSS OF $1.65 IN GOLD PRICING /TUESDAY’S COMEX TRADING//). WE ALSO HAD A GOOD EFP ISSUANCE (3528 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 3749 CONTRACTS.

WE AGAIN HAD 5    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 3528 EFP CONTRACTS WERE ISSUED:

 FEB: 0; MARCH 00 AND APRIL: 0, MAY: 0  JUNE : 3528 AND 0 FOR DEC AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE: 3528 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:  3749 TOTAL CONTRACTS IN THAT 3528 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A SMALL SIZED 221 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 SMALL FALL IN PRICE

 

THE BANKERS WERE SUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT FELL BY $1.65).  BUT, THEY WERE UNSUCCESSFUL IN FLEECING ANY LONGS, AS THE TOTAL GAIN ON THE TWO EXCHANGES REGISTERED 2.699 TONNES.

 

 

NET GAIN ON THE TWO EXCHANGES :: 3749 CONTRACTS OR 374900 OZ OR 11.66 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:  490,343 TOTAL OI CONTRACTS X 100 OZ PER CONTRACT = 49.03 MILLION OZ/32,150 OZ PER TONNE =  1525 TONNES

THE COMEX OPEN INTEREST REPRESENTS 1525/2200 OR 69.34% OF ANNUAL GLOBAL PRODUCTION OF GOLD.

Trading Volumes on the COMEX TODAY: 217,817 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY213,374 contracts// volumes very low

MAY 6/2020

MAY GOLD CONTRACT MONTH

 

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
2325.097 oz
Brinks
Deposits to the Dealer Inventory in oz 98,639.497 oz

Manfra

 

 

 

Deposits to the Customer Inventory, in oz  833,824.854

OZ

BRINKS

DELAWARE

HSBC

JPMORGAN

 

 

INCL.

1995  AND

20,000

KILOBARS

No of oz served (contracts) today
1208 notice(s)
 120800 OZ
(3.757 TONNES)
No of oz to be served (notices)
3720 contracts
(372,000 oz)
11.57 TONNES
Total monthly oz gold served (contracts) so far this month
4710 notices
471000 OZ
14.650 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 1 deposits into the dealer

 

i) Into Dealer MANFRA:  98,639.497 oz

 

total dealer deposits: 98,639.497   oz

total dealer withdrawals: nil oz

we had 4 deposit into the customer account

i) Into BRINKS:  120,730.601 OZ

ii) Into Delaware; 5944.703 oz

iii) Into HSBC:  64,129.55 oz (1995 kilobars)

iv) 643,020.00000 oz  20,000  kilobars

 

 

 

 

 

 

 

total deposits: 833,824.854   oz

 

 

we had 1 gold withdrawals from the customer account:

i) Out of Brinks:  2325.097 oz

 

 

 

 

 

total gold withdrawals; 2325.097   oz

We had 2  kilobar transactions  +

 

We had 5  4 KC bar volume transactions/0  open interest

 

 

 

ADJUSTMENTS: 0  

 

 

The front month of May registered a GIGANTIC total of 4928 oi contracts for a loss of 325 contracts. We had 399 notices filed upon yesterday so we gained 74 contracts or an additional 7400 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 3021 contracts DOWN to 319,551 contracts. July has ANOTHER GAIN OF 13 OI contracts gain and thus 112 contracts  outstanding.  Next comes August another strong delivery month and here the OI ROSE by 3019 contracts up to 84,112 contracts.

 

 

We had 1208 notices filed today for 120,800 oz

 

FOR THE  MAY 2020 CONTRACT MONTH)Today, 0 notice(s) were issued from JPMorgan dealer account and 1000 notices were issued from their client or customer account. The total of all issuance by all participants equates to 1208 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 480 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 (4710) x 100 oz , to which we add the difference between the open interest for the front month of  May. (4928 CONTRACTS ) minus the number of notices served upon today (1208 x 100 oz per contract) equals 843,000 OZ OR 26.2208 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 (4710)x 100 oz + 4928 OI) for the front month minus the number of notices served upon today (1208) x 100 oz which equals 843000 oz standing OR 26.2208 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 74 contracts or an additional 7400 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 177.76 TONNES OF REGISTERED GOLD WHICH CAN SETTLE UPON LONGS ie. 26.221 tonnes

CALCULATION OF REGISTERED GOLD THAT CAN BE SETTLED UPON:

total registered or dealer  6,243,203.878 oz or 194.18  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: 5,715,131.6  (177.76 tonnes)
true registered gold  (total registered – pledged tonnes  5,616492.1 (177.76 tonnes)
total eligible gold:  15,369,414.508 oz (478.05 tonnes)

total registered, pledged  and eligible (customer) gold;   21,612.618.386 oz 672.243 tonnes (INCLUDES 4 GC GOLD)

total 4 GC gold:   127.79 tonnes

total gold net of 4 GC:  544.45 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 6/2020

And now for the wild silver comex results

Total COMEX silver OI ROSE BY A FAIR SIZED 743 CONTRACTS FROM 131,830  UP TO 132,573(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 FAIR OI COMEX GAIN TODAY OCCURRED WITH OUR 17 CENT GAIN IN PRICING//TUESDAY. WE GAINED A TOTAL OF 993 CONTRACTS.  THE GAIN IN TOTAL OI (TWO EXCHANGES) OCCURRED WITH 1)  A GOOD ISSUANCE OF EXCHANGE FOR PHYSICALS 2) A SMALL DECREASE IN SILVER OZ STANDING AT THE COMEX, 3)  HUGE BANKER SHORT COVERING , 4)ZERO LONG LIQUIDATION, AND ALL OF THIS OCCURRED WITH OUR 17 CENT GAIN IN PRICE 

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF MAY

THE FRONT DELIVERY OF MAY SAW A HUGE 2538 OPEN INTEREST CONTRACTS STANDING  AND THUS WE HAD A LOSS OF 1147 CONTRACTS.  We had 1022 notices filed yesterday so we LOST 125 contracts or an additional 625,000 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. It looks like there is no silver over here and thus they must travel to London to get the stuff.

 

AFTER MAY WE HAVE THE NON ACTIVE MONTH OF JUNE.  HERE JUNE SAW A GAIN OF 150 CONTRACTS RISING TO 462.

AFTER JUNE COMES THE VERY BIG DELIVERY MONTH OF JULY AND HERE THE OI GAINED 1260 CONTRACTS UP TO 99,118 CONTRACTS

 

 

We, today, had  424 notice(s) FILED  for 2,120,000, OZ for the APRIL, 2019 COMEX contract for silver

 

MAY 6/2020

MAY SILVER COMEX CONTRACT MONTH

Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 10,022.13 oz
CNT
DELAWARE

 

 

Deposits to the Dealer Inventory
nil oz

 

Deposits to the Customer Inventory
606,188.09 oz
Delaware
Scotia
No of oz served today (contracts)
424
CONTRACT(S)
(2,120,000 OZ)
No of oz to be served (notices)
2114 contracts
 10,570,000 oz)
Total monthly oz silver served (contracts)  6953 contracts

34,765,000 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 2 deposits into the customer account

into JPMorgan:   0

ii)into Delaware:  6985/800

iii) Into Scotia: 599,202.29 oz

 

 

 

 

 

 

 

 

*** 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 50.98% of all official comex silver. (160.819 million/315.378 million

 

total customer deposits today: 606,189.09    oz

we had 2 withdrawals:

i) Out of Delaware:  9037.10 oz

 

ii) Out of CNT:  985.03 oz

 

total withdrawals;  10,022.13    oz

We had 0 adjustments:

 

 

total dealer silver:  90.445 million

total dealer + customer silver:  315.378 million oz

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The total number of notices filed today for the MAY 2020. contract month is represented by 424 contract(s) FOR 2,130,000 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 6953 x 5,000 oz = 34,765,000 oz to which we add the difference between the open interest for the front month of MAY.(2538) and the number of notices served upon today 424 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAY/2019 contract month: 6953 (notices served so far) x 5000 oz + OI for front month of MAY (2538)- number of notices served upon today (424) x 5000 oz of silver standing for the MAY contract month.equals 45,335,000 oz.

We lost 125 or an additional 625,000 oz will seek out metal on the London side of the pond.

 

TODAY’S ESTIMATED SILVER VOLUME: 37,924 CONTRACTS //

 

 

FOR YESTERDAY: 36,131 CONTRACTS..,CONFIRMED VOLUME//extremely low volume

 

 

YESTERDAY’S CONFIRMED VOLUME OF 36,131 CONTRACTS EQUATES to 180 million  OZ 25.8% OF ANNUAL GLOBAL PRODUCTION OF SILVER..

 

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

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

end

 

NPV for Sprott

1. Sprott silver fund (PSLV): NAV RISES TO +0.34% ((MAY 6/2020)

2. Sprott gold fund (PHYS): premium to NAV  RISES TO +0.99% to NAV:   (MAY 6/2020 )

Note: Sprott silver trust back into POSITIVE territory at +%-/Sprott physical gold trust is back into POSITIVE/ 0.34%

(courtesy Sprott/GATA

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

NAV 15.37 TRADING 15.38///POSITIVE 0.08

END

 

 

And now the Gold inventory at the GLD/

MAY 6//WITH GOLD DOWN $17.00 TODAY/ A HUGE CHANGE IN GOLD INVENTORY AT THE GLD//A PAPER ADDITION OF 3.68 TONNES/INVENTORY RESTS AT 1075.39 TONES

MAY 5/WITH GOLD DOWN $1.65 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A PAPER ADDITION OF 3.81 TONNES//INVENTORY RESTS AT 1071.71 TONNES

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 6/ GLD INVENTORY 1075.39 tonnes*

IN LAST 814 TRADING DAYS:   +129.09 NET TONNES HAVE BEEN REMOVED FROM THE GLD

 

LAST 714 TRADING DAYS://+304.23  TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

end

 

 

Now the SLV Inventory/

MAY 6/WITH SILVER DOWN 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 413.124 MILLION OZ//

MAY 5/WITH SILVER UP 17 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 413.124 MILLION OZ///

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 6.2020:

SLV INVENTORY RESTS TONIGHT AT

413.124 MILLION OZ.

END

LIBOR SCHEDULE AND GOFO RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.40/ and libor 6 month duration .70

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

GOLD LENDING RATE: – 1.70

GOLD LEASES RATES TURNING INCREASING NEGATIVE

CENTRAL BANKS CALLING IN THEIR GOLD LEASES

GOLD EXTREMELY SCARCE!

 

XXXXXXXX

12 Month MM GOFO
+ 1.90%

LIBOR FOR 12 MONTH DURATION: 0.83

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = -1.07

GOLD LEASES RATES TURNING INCREASING NEGATIVE

CENTRAL BANKS CALLING IN THEIR GOLD LEASES

GOLD EXTREMELY SCARCE!

end

 

 

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

Silver To Go Over $150/oz In Massive Short Squeeze

Research Director of GoldCore, Mark O’Byrne discusses the safest way to invest in precious metals, the outlook for the precious metals markets, what lead him to start a bullion brokerage and storage company and why silver could rise by 10 times in the coming years.

He outlines the differences between bail-outs and bail-ins and why he thinks that while bail-ins may occur, they are less likely to occur than before. It seems that central banks and governments are planning on inflating their debts and hence currencies away. Still best to be cautious and not keep too much money in bank deposits and always evaluate bank risk.

GoldCore provide storage services and bullion sales around the world, with most client assets stored in ultra secure vaults in Singapore and Switzerland. They had concerns about the liquidity and political situation in Hong Kong, so choose to move nearly all of their clients’ coin and bar assets out.

Jurisdiction is a vital consideration when storing precious metals. He feels the confiscation risk to Americans is low because so few have physical gold and silver in their possession when compared to 1933. He is very cautious about ETF’s, gold exchanges, digital gold and U.S. vaults that hold significant quantities of bullion. They could be a target of nationalization by a desperate U.S., Canadian, UK or EU government.

His expectations for silver are quite bullish. He cautions that price manipulation has been a real issue and is likely continuing today as silver prices languish despite massive shortages and surging premiums on silver coins and bars. He expects a short squeeze situation to develop soon, which could quickly drive gold, platinum and particularly silver prices much higher.

0:30 – The starting of GoldCore.
4:26 – Bail-ins and bail-outs.
5:50 Bank account “guarantees” are far from guaranteed
7:00 – Why countries are inflating currencies.
8:40 – GoldCore’s focus on gold and silver bullion as insurance.
12:30 – Importance of considering jurisdictional risks and why Zurich remains the preferred storage location of HNW and companies.
22:00 – Silver outlook and why silver will go much, much higher.
26:45 – Massive systemic risks and the coming debt reset.
29:45 – Stay calm, optimistic and prepare materially by owning gold and silver in the safest ways possible and we will get through the coming global economic, financial and currency crisis.

Watch Video Here

NEWS and COMMENTARY

Gold gains on bleak U.S. data, but en route for 2% weekly fall

Gold demand inched up to 1,083.8 tonnes (t) in Q1, supported by investment

Oil rises again as output cuts kick in, inventories grow less than expected

Trump threatens new tariffs on China in retaliation for coronavirus

Gold Loses Shine on Moderating Coronavirus Fears

“Yes It Will. The Only Question Is When” – WATCH HERE

GOLD PRICES (USD, GBP & EUR – AM/ PM LBMA Fix)

04-May-20 1703.70 1709.10, 1371.14 1374.63 & 1558.72 1563.83
01-May-20 1673.05 1686.25, 1332.08 1347.15 & 1523.14 1536.68

30-Apr-20 1716.75 1702.75, 1373.92 1361.69 & 1577.86 1568.91
29-Apr-20 1706.00 1703.35, 1371.97 1368.64 & 1569.69 1568.10
28-Apr-20 1708.10 1691.55, 1367.68 1357.98 & 1571.11 1559.27
27-Apr-20 1717.25 1714.95, 1381.36 1380.19 & 1582.96 1581.18
24-Apr-20 1727.25 1715.90, 1401.32 1391.59 & 1604.96 1589.09
23-Apr-20 1727.55 1736.25, 1399.49 1405.84 & 1601.78 1608.64
22-Apr-20 1702.65 1710.55, 1377.95 1388.28 & 1567.46 1576.44
21-Apr-20 1678.60 1682.05, 1328.16 1364.82 & 1548.00 1547.82
20-Apr-20 1684.95 1686.20, 1349.14 1355.70 & 1547.63 1551.98
17-Apr-20 1693.15 1692.55, 1362.48 1354.04 & 1564.47 1555.79
16-Apr-20 1717.85 1759.50, 1378.57 1382.91 & 1581.45 1589.06
15-Apr-20 1712.25 1718.65, 1367.92 1377.33 & 1566.02 1580.99
14-Apr-20 1715.85 1741.90, 1367.36 1383.07 & 1567.91 1588.26

 

NOTE: Inbound deliveries to our Loomis and Brink’s vaults in Zurich, Singapore, London and Dublin have resumed and investors can move their assets to our vaults from safe deposit box companies, bullion stored with banks or digital gold platforms or ETFs.

We have resumed buying non stored bullion again and are buying gold and silver coins and bars at attractive premiums. Please email us for shipping instructions to vaults: support@goldcore.com

Receive Our Award Winning Market Updates In Your Inbox – Sign Up Here

Mark O’Byrne
Executive Director

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

Craig Hemke offers the only plausible explanation for the disappearance of speculators..They have been mislabeled as banks and they are desperately trying to get out of their shorts.

(Craig Hemke/Sprott/GATA)

Craig Hemke at Sprott Money: Where have all the Comex specs gone?

 Section: 

11:34p ET Tuesday, May 5, 2020

Dear Friend of GATA and Gold:

Comex gold and silver open interest is collapsing, especially among speculators, while demands for delivery on Comex contracts are soaring, the TF Metals Report’s Craig Hemke writes today at Sprott Money.

What explains this disparity? Hemke wonders if some bullion bank traders have been misclassified as speculators and are exiting the metals futures markets as they approach default.

Hemke’s analysis is headlined “Where Have All the Specs Gone?” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/Blog/where-have-all-the-specs-gone-craig-hem…

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

iii) Other physical stories:

Escobar: Get Ready For The Next Game-Changer – The Gold-Backed Digital Yuan

Authored by Pepe Escobar via The Strategic Culture Foundation,

A new, radical paradigm shift is in progress. The U.S. economy may shrink as much as 40% in the first semester of 2020. China, already the world’s largest economy by PPP for a few years now, may soon become the world’s largest economy even in exchange rate terms.

The post-Planet Lockdown world – still a hazy mirage – may well need a post-Planet Lockdown currency. And that’s where a serious candidate steps into the fray: the fiat digital yuan.

Last month, the People’s Bank of China (PBOC) confirmed that a group of top banks started trials in electronic payment in four different Chinese regions using the new digital yuan. Yet there’s no timetable yet for the official launch of what is called the Digital Currency Electronic Payment (DCEP).

The man with the plan is PBOC governor Yi GangHe has confirmed that apart from the trials in Suzhou, Xiong’an, Chengdu and Shenzhen, the PBOC is also testing hypothetical scenarios for the 2022 Winter Olympics.

While DCEP, according to Yi, “has made very good progress,” he insists the PBOC will be “cautious in terms of risk control, especially to study anti money-laundering and ‘know your customer’ requirements to incorporate in the design and system of DCEP.”

DCEP should be interpreted as the road map for China leading to an eventual, even more groundbreaking replacement of the U.S. dollar as the world’s reserve currency. China is already ahead in the digital currency sweepstakes: the sooner DCEP is launched the better to convince the world, especially the Global South, to tag along.

The PBOC is developing the system with four top state-owned banks as well as payment behemoths Tencent and Ant Financial.

mobile app developed by the Agricultural Bank of China (ABC) is already circulating on WeChat. This is in effect an interface linked to DCEP. Moreover, 19 restaurants and retail establishments including Starbucks, McDonald’s and Subway are part of the pilot testing.

China is advancing fast on the whole digital spectrum. A Blockchain Service Network (BSN) was launched not only for domestic but also for global trade purposes. A large committee is supervising BSN, including executives from the PBOC, Baidu and Tencent, according to the Ministry of Industry and Information Technology (MIIT).

Backed by gold

So what does this all mean?

Well connected banking sources in Hong Kong have told me Beijing is not interested for the yuan to replace the U.S. dollar – for all the interest across the Global South in bypassing it, especially now that the petrodollar is in a coma.

The official Beijing position is that the U.S. dollar should be replaced by an IMF-approved Special Drawing Rights (SDR) basket of currencies (dollar, euro, yuan, yen). That would eliminate the heavy burden of the yuan as the sole reserve currency.

But that may be just a diversionist tactic in an environment of all-out information war. A basket of currencies under the IMF still implies U.S. control – not exactly what China wants.

The meat of the matter is that a digital, sovereign yuan may be backed by gold. That’s not confirmed – yet. Gold could serve as a direct back up; to back bonds; or just lay there as collateral. What’s certain is that once Beijing announces a digital currency backed by gold, it will be like the U.S. dollar being struck by lightning.

Under this new framework, nations won’t need to export more to China than they import so they have enough yuan to trade. And Beijing won’t have to keep printing yuan electronically – and artificially, as in the case of the U.S. dollar – to meet trade demands.

The digital yuan will be effectively backed up by the massive amount of Made in China goods and services – and not by a transoceanic Empire of 800 Bases. And the value of the digital yuan will be decided by the market – as it happens with bitcoin.

This whole process has been years in the making, part of serious discussions started already in the late 2000s inside BRICS summit meetings, especially by Russia and China – the core strategic partnership inside the BRICS.

Considering multiple strategies to progressively bypass the U.S. dollar, starting with bilateral trade in their own currencies, Russia and China, for instance, set up a Russia-Chian RMB Cooperation Fund three years ago.

Beijing’s strategy is carefully calibrated, like playing go long-term. Apart from methodically stockpiling gold in massive quantities (just like Russia) for seven years now, Beijing has been campaigning for a wider use of SDR while making sure to not position the yuan as a strategic competitor.

But now the post-Planet Lockdown environment is shaping up as ideal for Beijing to make a move. Even before the onset of the Covid-19 crisis the predominant feeling among the leadership was that China is under a full spectrum attack by the United States government. Hybrid War already reaching fever pitch implies bilateral relations will only get worse, not better.

So when we have China as the world’s largest economy by both PPP and exchange rate; still the strongest growing major economy, barring the first semester of 2020; productive, innovative, efficient and on track to reach a higher technological level with the Made in China 2025 program; and capable of winning the “people’s war” against Covid-19 in record time, all the necessary elements seem to be in place.

But then, there’s soft power. Beijing needs to have the Global South on its side. The United States government knows it very well; no wonder the current hysteria is all about demonizing China as “guilty” on all – unproved – counts of fostering and lying about Covid-19.

An “impeding arrival”

A key advantage of a sovereign digital yuan is that Beijing does not need to float a paper yuan – which by the way is being sidelined all across China itself, as virtually everyone is switching to electronic payment.

The digital yuan, using blockchain technology, will automatically float – thus bypassing the U.S.-controlled global financialized casino.

The amount of sovereign digital currency is fixed. That in itself eliminates a plague: quantitative easing (QE), as in helicopter money. And that leaves the sovereign digital currency as the preferred medium for trade, with currency transfers unimpeded by geography and, the icing on the cake, without banks charging outrageous fees as intermediaries.

Of course there will be pushback. As in non-stop demonization of neo-Orwellian China for straying away from the whole purpose of bitcoin and cryptocurrencies – which is to have freedom from a centralized structure via decentralized ownership. There will be howls of horror at the PBOC potentially capable of seizing anyone’s digital funds or turning off a wallet if the owner displeases the CCP.

China is on it, but the U.S., UK, Russia and India are also on their way to launch their own crypto-currencies. For obvious reasons, the Bank of International Settlements (BIS), the Central Bank of Central Banks, is very much aware that the future is now. Their research with over 50 Central Banks is unmistakable: we are facing an “impeding arrival”. But who will take the Biggest Prize?

END

As The Gold Market Broke In March, HSBC Was Hit With A Record 12 VaR Breaches

Every quarter, banks proudly announce their VaR limits to demonstrate to the world just how overcapitalized they are for a worst case scenario. The only problem is that VaR calculations look at the past, not future, and when we get a forced global economic shutdown as a result of a viral pandemic which sends the VIX above 80, VaR models tend to… fail.

That’s what happened with the two largest European banks HSBC and BNP, whose risk limits were brutally and repeatedly violated in March as unprecedented market volatility made a mockery out of the banks’ estimates on how much they could lose or gain on their trading desks.

According to Bloomberg calcualtions, Europe’s two biggest banks exceeded their value-at-risk, or VaR limits, a measure of risk used to calculate how much capital they need to hold against potential losses, more times in March than over several years during calmer times.

In March alone, London-based HSBC’s trading models breached the daily expected profit-and-loss threshold 12 times, while French megabank BNP Paribas, which suffered hundreds of millions in losses on its various equity derivative products as discussed previously, reported nine such violations during the same quarter, close to a third of all such instances reported since 2007.

HSBC had 15 “back-testing exceptions” in January and March, when the firm was caught out by moves in the prices of precious metals. Europe’s biggest bank said it made two outsized profits and one loss in January that were driven largely by palladium volatility; subsequent problems were caused in part by “delivery disruptions in the gold market” which means that we now know which bank was on the other side of the gold spot-future trade.

While HSBC said it would normally only expect to record two to three breaches in an entire year, the pandemic “caused price disruptions that have not been observed in the past two years,” according to a filing, and in a statement to Bloomberg, the bank added that VAR “modelling forms just one part of our market risk management toolkit.” Hopefully the other “models” are more credible and don’t boil down to “beg central bank for bailout.”

At the same time, Germany’s Deutsche Bank reported several such “backtesting outliers” as well, while the largest Swiss bank, UBS, reported three “negative backtesting exceptions” in the quarter because of “unprecedented price moves in various asset classes,” filings show.

As Bloomberg notes, regulators have closely scrutinized banks that have problems gauging the risks their traders are taking ever since the huge losses racked up during the last financial crisis. While significant breaches usually lead to automatic penalties, regulators have naturally eased off when the breaches do occur, given how quickly trading models can become obsolete during such a virus pandemic, which begs the question: just what use are capital markets models, or stress tests for that matter? (Don’t answer, Nassim Taleb has written several books on the subject).

In March, the Bank of England said that it would temporarily allow banks to offset increases in value-at-risk calculations “through a commensurate reduction” in other risks they take. Which, considering the surge in loan standards, apparently means no longer offering loans or credit cards to ordinary peasants.

At BNP Paribas, the average daily value at risk soared to €35 million because of “the shock of volatility on equity markets,” mostly from mid-March onwards, according to a presentation Tuesday. That was the highest level in four years, and 49% above its quarterly average last year.

The surge in the VaR which caught the French bank unprepared, was reflected in BNP Paribas’ results. Its stock-trading business swung to a loss in the quarter, even as FICC climbed 35% as investors lifted their trading in interest rates, foreign exchange and corporate debt. Deutsche Bank has said the impact of the modeling breaches was mitigated because the European Central Bank relaxed its rules, and there was no overall impact on its capital requirements as a result.

END

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

71671201

Spencer Platt | Getty Images

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

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

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

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

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

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

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

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

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

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

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

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

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

end

March 4.2019

Parker City News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kovel declined to comment.

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

-END-

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

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

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

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

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

… 

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

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

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

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

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

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

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

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

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

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

* * *

END

Your early WEDNESDAY 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: 7.0934/ GETTING VERY DANGEROUSLY PAST  7:1

//OFFSHORE YUAN:  7.1173   /shanghai bourse CLOSED UP 18.06 POINTS OR 0.63%

HANG SANG CLOSED UP 268.82 POINTS OR 1.13%

 

2. Nikkei closed DOWN 574.34 POINTS OR 2.84%

 

 

 

 

3. Europe stocks OPENED ALL MIXED/

 

 

 

USA dollar index UP TO 100.03/Euro FALLS TO 1.0803

3b Japan 10 year bond yield: FALLS TO. –.02/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.18/ 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:: 25.41 and Brent: 31.64

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

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

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

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

3i European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund RISES TO -.55%/Italian 10 yr bond yield UP to 1.88% /SPAIN 10 YR BOND YIELD UP TO 0.80%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.43: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 2.19

3k Gold at $1701.00 silver at: 15.05   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble DOWN 59/100 in roubles/dollar) 74.31

3m oil into the 25 dollar handle for WTI and 31 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 106.18 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 .9745 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0532 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 RISING to 0.55%

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 0.69% early this morning. Thirty year rate at 1.36%

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

6.  TURKISH LIRA:  UP  TO 7.1387..

Futures Reverse Overnight Losses On Fresh “Reopening Hopes” As Euro Tumbles

After some early jitters sent S&P futures sliding on Tuesday evening, the E-mini rebounded over 1% and traded near yesterday’s session highs after President Donald Trump pushed again to reopen the economy warning that it would lead to deaths, while stocks in Europe turned higher despite mixed earnings, doubts about the easing of coronavirus lockdowns and simmering U.S.-China tensions, not to mention dismal economic data. Contracts on all three major American equities gauges rose as did the dollar while Treasuries edged lower, and oil traded unchanged after yesterday’s tremendous rally.

The S&P 500 on Tuesday saw a gain of almost 2% cut in half in the last hour of trading after Fed Vice Chairman Richard Clarida warned the economy will need more government support. Walt Disney fell in after-hours trading, becoming the latest firm to detail the severity of the pandemic’s impact on its business. General Motors reported earnings that while a big drop from a year ago, beat on the top and bottom line.

Separately, President Trump said Tuesday Americans should begin returning to their everyday lives even if it leads to more sickness and death. Meanwhile, data from Germany provided further evidence of the pandemic’s devastating effect, as new cases in the euro area’s biggest economy rose ahead of talks on easing restrictions. Traders may have seen a glimmer of hope in earnings from drugmakers and online grocers, though insurers, banks and carmakers added to the chorus of companies taking a heavy hit.

“As we ease these lockdowns there remains the risk that of course you then have to tighten up the controls,” said Andrew Wilson, chairman of global fixed income at Goldman Sachs Asset Management, said on Bloomberg TV. “It is absolutely dependent on what happens with respect to infection rates and whether there is the so-called second wave,” he said of the market and economic outlook.

MSCI’s index of global shares was trading slightly in the green, while the pan-European STOXX 600 was 0.3% higher, with increases for health-care and insurance stocks offsetting losses for oil and travel companies. Shares in UniCredit fell about 1% after Italy’s biggest bank posted a 2.7 billion-euro loss in the first quarter amid loan writedowns in anticipation of the damage caused by the pandemic. The Final Eurozone PMIs came in and while posting a modest improvement from the flash numbers, remained deep in record low territory.


Earlier in the session, MSCI’s broadest index of Asia Pacific shares outside of Japan climbed 0.7%. Volumes were light with Japanese markets closed for a holiday.  China, opening for the first time since Thursday, reversed early losses, sending the blue-chip index up 0.6%. Australian equities fell, while Hong Kong and Korean benchmarks advanced. Japanese markets were shut for a public holiday.

In a move that was seen by analysts as offering a olive branch to Washington amid the trade tensions, China’s central bank set the yuan at a broadly neutral midpoint. The exchange rate has been a contentious point in Sino-U.S. ties. “The People’s Bank of China went a long way to extinguishing one major trade war hotspot by setting the yuan reference rate on a more risk-friendly level,” said Stephen Innes, chief markets strategist at AxiCorp.

“USD/CNH dropped about 200 pips on the stable fix, and a recovery in risk sentiment ensued, and there was no follow-through on U.S. President Trump’s threat to China.”

“Earnings season is not great, but it’s really the issue of the virus and the end of the lockdown, and sentiment towards that will push the market,” said Francois Savary, chief investment officer at Swiss wealth manager Prime Partners. “We think there’ll be a consolidation for the equity market. It won’t take us back to the lows we saw in March, but markets are waiting for a clearer outlook on how the lockdown will end.”

Donald Trump has repeatedly taken aim at China as the source of the pandemic and warned that it would be held to account. On Tuesday, he urged China to be transparent about the origins of the coronavirus, which began in the Chinese city of Wuhan late last year.

In rates, bonds across the euro region extended losses sparked by Tuesday’s German court ruling criticizing the European Central Bank’s easing measures, while 10Y yield continued to trade in a narrow range, rising about 1.7bps to 0.676%. German borrowing costs rose before the country’s first syndicated bond sale in half a decade. Germany’s benchmark 10-year yields rose two basis points to -0.55%, though they remain close to Tuesday’s seven-week low. Treasuries are slightly cheaper on the day following gains for S&P 500 futures and oil in European trading. Cash Treasuries were closed during Asia session with Japan on holiday. Long end has underperformed this week ahead of today’s quarterly refunding announcement at 8:30am ET, at which significant increases in auction sizes are expected.

In FX, the euro weakened amid a slew of bleak economic forecasts by the European Union, declining to a six-day low of $1.0816 on Wednesday and heading toward its lowest close since mid-March, back when markets were roiled by demand for the U.S. currency. The currency was still under pressure after Germany’s top court on Tuesday ruled that the European Central Bank’s quantitative-easing programme “partially violated” the German constitution.

The pound also slumped on poor economic data, helping the dollar extend its advance amid lingering concerns about renewed U.S.-China tensions. The yen rose 0.2% to 106.35, having earlier reached 106.20, its strongest since March 17. The dollar index was flat at 99.810.

In commodities, U.S. crude futures fell 22 cents to $24.34 a barrel after five straight sessions of gains. Brent crude dropped 25 cents $30.72.  The decline was prompted by a higher-than-expected rise in U.S. inventories, refocusing investors on the risk of oversupply amid a slump in fuel demand. Analysts cautioned the rebalancing of the market would be choppy.

“We’re talking about normalisation of supply and demand’ but we’ve got a long way to go,” said Lachlan Shaw, National Australia Bank’s head of commodity strategy. “There are a lot of supply cuts that have come through. That combined with some early signs of demand lifting has meant the rate of inventory build is slowing.”

Elsewhere, spot gold eased 0.1% to $1,704 an ounce.

Looking ahead, today’s ADP National Employment Report of private U.S. payrolls on Wednesday could foretell the damage to be revealed on Friday in the U.S. government’s measure of jobs in April. It’s expected to show nearly 22 million jobs were lost last month.  Scheduled earnings include T-Mobile, Shopify, Barrick Gold and GM

Market Snapshot

  • S&P 500 futures up 0.6% to 2,875.50
  • STOXX Europe 600 up 0.2% to 336.06
  • MXAP up 0.4% to 144.33
  • MXAPJ up 0.6% to 465.52
  • Nikkei down 2.8% to 19,619.35
  • Topix down 2.2% to 1,431.26
  • Hang Seng Index up 1.1% to 24,137.48
  • Shanghai Composite up 0.6% to 2,878.14
  • Sensex up 0.9% to 31,736.63
  • Australia S&P/ASX 200 down 0.4% to 5,384.61
  • Kospi up 1.8% to 1,928.76
  • German 10Y yield rose 2.0 bps to -0.558%
  • Euro down 0.4% to $1.0793
  • Brent Futures up 1.4% to $31.40/bbl
  • Italian 10Y yield rose 9.9 bps to 1.692%
  • Spanish 10Y yield rose 2.0 bps to 0.801%
  • Brent Futures up 1.4% to $31.40/bbl
  • Gold spot down 0.09% to $1,704.45
  • U.S. Dollar Index up 0.4% to 100.15

Top Overnight News from Bloomberg

  • President Donald Trump launched headlong into his push to reopen the country on Tuesday, saying Americans should begin returning to their everyday lives even if it leads to more sickness and death from the pandemic
  • China fired back at U.S. Secretary of State Michael Pompeo, saying he has no evidence to back up claims that the virus that causes Covid-19 escaped from a lab in the central city of Wuhan
  • The euro-region economy is set to shrink 7.7% this year, sending unemployment and public debt levels surging, after governments put in place drastic measures to limit the spread of the coronavirus, the European Commission said Wednesday
  • Italy and Spain, the two European countries most severely hit by the coronavirus, are suffering even deeper slumps after record contractions in the first quarter. Companies experienced unprecedented declines in output and new orders in April, according to IHS Markit’s Purchasing Managers’ Surveys. Jobs were also cut at the fastest pace in the index’s 22 years
  • Gold holdings in exchange-traded funds surged above 3,000 tons to an all-time high, according to preliminary data compiled by Bloomberg. Year-to-date inflows of more than 420 tons have far eclipsed the volume added over all of 2019
  • Germany’s debt agency is stepping out of its comfort zone, making its first syndicated bond offering since 2015 and for a previously untapped maturity period of 15 years
  • Italy’s Giuseppe Conte is insisting that he’ll serve out his full term as premier as tensions within his ruling coalition build up amid a struggle to restart the crippled economy
  • Qatar’s sovereign fund is borrowing around 7 billion euros ($7.6 billion) against its stock holdings, as the top liquefied natural gas exporter seeks to bolster its cash reserves at a time of plunging energy prices, people with knowledge of the matter said
  • German factories saw demand collapse in March, when measures to contain the coronavirus brought the economy to a sudden halt. Orders fell 15.6% from the previous month, the most since data collection started in 1991 and more than economists predicted
  • When the shock of Germany’s top-court ruling on the European Central Bank bond-buying program subsides, policy makers should find that arguing their way out of a tight spot isn’t so hard
  • A flurry of drug companies stepped up efforts to tackle the virus. Gilead Sciences Inc. is working to ensure access to a treatment drug in Asia, Europe and the developing world. Pfizer Inc. administered the first U.S. patients with its experimental vaccine, and Regeneron Pharmaceuticals Inc.said an antibody treatment could be available as soon as this fall.
  • Federal Reserve Vice Chairman Richard Clarida mixed a sobering acknowledgment of the damage inflicted on the U.S. economy by the coronavirus pandemic with an optimistic outlook for the second half of the year
  • Australian retail sales have been buttressed by a purchasing frenzy as households stocked up ahead of the coronavirus lockdown; the quarterly retail figure reflects volumes
  • New Zealand’s jobless rate rose and wage growth slowed in the first quarter as the Covid-19 pandemic started to push the economy toward recession
  • Oil’s rally ran out of steam — after prices doubled over five days — as optimism that output cuts are easing the supply glut was balanced by trepidation over what promises to be a long and uncertain recovery

Asian equity markets traded predominantly firmer with the region lacking solid conviction after the choppy price action on Wall St where all major indices finished higher despite the late slip heading into the close, and amid cautiousness on China’s return against the backdrop of the increased tensions with the US. ASX 200 (-0.5%) retreated below the 5400 level with the declines led by weakness across the large banking names, although losses in the index were cushioned by strength in gold miners as the precious metal held above USD 1700/oz and with tech names galvanized by outperformance of the sector stateside. Hang Seng (+1.1%) and Shanghai Comp. (+0.6%) were varied with the ongoing easing of lockdown restrictions in Hong Kong helping the local bourse weather the 42% slump in retail sales, while mainland China was subdued on reopen from the 5-day closure as it took its first opportunity to react to the increased tensions with US after President Trump’s recent tariff threat and finger-pointing at China for the coronavirus outbreak. Finally, India’s NIFTY (+1.0%) was indecisive and swung between gains and losses with early momentarily wiped out amid a slump in energy names after the government hiked duties on petrol and diesel prices before the index rallied again, while Japan remained closed but is due to return from Golden Week tomorrow.

Top Asian News

  • Singapore Air Soars Most Since 1987 on Hopes of Easing Lockdowns
  • Jokowi Vows to Flatten Indonesia Virus Curve ‘At All Costs’
  • India’s Services Industry Grinds to Halt, Sending GDP Down 15%
  • Emerging-Market Watchers Say Another Sell-Off Is Approaching

Mixed trade in the equity-sphere in Europe (Euro Stoxx 50 Unch) as the region follows suit from a similar APAC performance – which are experiencing a lack of conviction as markets balance reopening economies with the resurfacing of a potential escalation in protectionism. That being said, US equity futures continue their grind higher in EU trade. FTSE 100 (+0.6%) has been leading the gains across the region, potentially aided by a softer Sterling alongside the recovery in the energy markets. The cash index briefly dipped below its 38.2% Fib (move from 6151 to 5702) at 5873 to a low of 5838, before regaining a footing above the level. Sectors also see a mixed performance with no clear standouts or reflection of the current risk sentiment. The energy sector nursed earlier losses but remains a laggard alongside Consumer Discretionary. In terms of the breakdown, Travel & Leisure resides at the bottom but does not see significant underperformance. In terms of individual movers, Dialog Semiconductor (+5.3%), ITV (+4%) and Hannover Re (+4.2%) are among the top post-earning gainers in the Stoxx 600, with the former also aiding the likes of Infineon (+4%) in sympathy. BMW (-3.1%) extends on losses after noting that the highest negative impact is expected in Q2 2020 and PBT is still predicted to be significantly lower. Wirecard (-1.5%) holds onto losses after a 4.4% stakeholder called for a board shakeup.

Top European News

  • National Express, Hiscox Join U.K. Equity Rush as Stocks Rally
  • Supercar Maker McLaren Said to Seek $374 Million in New Funding
  • Recession Deepens in Europe’s South Amid Lockdown Damage
  • European Banks Seek Sovereign Debt Relief in Lobbying Push

In FX, having held up relatively well when German factory orders fell around 50% more than forecast, the Euro couldn’t ignore single digit services PMIs in the Eurozone periphery or weaker than expected pan retail sales that accompanied bleak Spring economic projections from the EC. However, Eur/Usd has contained losses below 1.0800 unlike Cable that extended declines from circa 1.2450 through the 50 DMA (1.2411) and 1.2400 on the way to a new low for May around 1.2360. Some suspicions that a significantly worse than anticipated UK construction PMI was pressuring Sterling prior to the official release, while fix-related demand for Eur/Gbp was likely compounded by stops when the cross breached a key technical level in the form of the 200 DMA yet again (0.8722). Next up for the Pound, BoE super Thursday that kicks off at the unusually early time of 7.00BST and comes with the latest MPR and FSR.

  • USD – The Dollar is revelling in the plight of others and fragile risk sentiment, with the DXY back on the 100.00 handle ahead of ADP that offers the first monthly US jobs data proxy for Friday’s NFP release, albeit not always a reliable indicator for the BLS headline number. From a technical perspective, 100.209 forms near term resistance for the index and represents pre-month end highs before the Greenback succumbed to the weight or rebalancing sales to hit a 98.645 low on May 1, and the peak so far is 100.200 vs 99.749 at the other extreme.
  • CHF/NZD/CAD/AUD – The Franc has been caught in the cross-fire of Buck strength vs Euro weakness, as Usd/Chf hovers near 0.9750 in contrast to Eur/Chf trending back down towards 1.0500, while the Kiwi, Aussie and Loonie are all paring gains vs their US counterpart, with Nzd/Usd retreating from 0.6072 in wake of mixed NZ jobs data overnight, Aud/Usd fading from 0.6451 after similar conflicting retail sales figures for March and Q1 overall, and Usd/Cad losing some crude attraction following a close test of 1.4000 yesterday on the back of a better Canadian trade balance compared to consensus and the US.
  • JPY/SEK/NOK – In contrast to the broad G10 trend, the Yen is outperforming and edging closer to 106.00, albeit still without the usual level/depth of domestic input given the final day of Golden Week ahead of tomorrow’s return from the extended holiday break. Similarly, the Scandinavian Crowns retain bullish momentum against the backdrop of widespread single currency depreciation that has seen Eur/Jpy trade at 3 year lows well under 115.00, with Eur/Sek testing 10.6200 and Eur/Nok sub-11.0900 at one stage in the run up to tomorrow’s Norges Bank policy meeting.
  • EM – Usd/Try is extending its apparent unstoppable mission to revisit record highs at 7.2362 vs 7.1680 or so thus far today, even though Turkish banks are still selling the pair and the banking authority has tightened limits on trade with foreign institutions further in an attempt to stop the rally. Perhaps Treasury and Finance Minister Albayrak can turn the tide for the Lira via a conference call to global investors from 13.00GMT, but it’s seemingly a tall order. Elsewhere, the Real could fall prey to bears in the aftermath of Fitch downgrading Brazil’s BB- rating to negative amidst the rising political instability that has already propelled Usd/Brl beyond 5.5700.

In commodities, WTI and Brent front month futures are back on the rise after some ovrnight consolidation from the prior day’s mammoth gains which saw the contracts settle north of USD 24.50/bbl and USD 30/bbl respectively – aided by the demand side of the equation looking brighter as global economies plan to come back online. Meanwhile, supply side issues appear to be tempering amid the OPEC+ pact, whilst sources also noted that Saudi’s May exports are expected to fall to around 6mln BPD vs. ~9.4mln BPD in April. Over in the US, Texas regulators decided against curtailing the state’s output of over 5mln BPD, albeit this was expected. WTI June resides just under USD 25.50/bbl and towards the middle of its current USD 24-26/bbl intraday band. Brent July meanders south of USD 32/bbl after waning off its USD 32.27/bbl overnight high. Spot gold remains in limbo within a tight USD 7/oz range amid an indecisive risk tone heading into key risk events later this week including the US Labour Market report. Copper meanwhile tracks the gains in US equity futures and sees some support after dipping below but failing to close below its 21 DMA for three consecutive sessions.

US Event Calendar

  • 7am: MBA Mortgage Applications, prior -3.3%
  • 8:15am: ADP Employment Change, est. -21m, prior -27,000

DB’s Jim Reid concludes the overnight wrap

My postage stamp size knowledge of German constitutional law that I talked about in the preview on Monday that became postcard size later that day has now moved on to becoming the size of a small leaflet as we all scrambled round yesterday to understand the German Federal Constitutional Court (GCC) ruling.

As we suggested yesterday we did expect the court to issue a veiled warning to the ECB but this was perhaps more explicit than expected. They suggested that the ECB’s public sector purchase programme (PSPP) is partly violating the country’s constitution. This is actually a rejection of the European Court of Justice’s (ECJ) decision back in December 2018, when they ruled that the PSPP was acceptable as an instrument of monetary policy. However, the court in Germany said that the ECJ review on whether the ECB’s decisions on PSPP satisfied the principle of proportionality was “not comprehensible”. Furthermore, they said that in the next 3 months, unless the ECB Governing Council “adopts a new decision that demonstrates … that the monetary policy objectives pursued by the PSPP are not disproportionate to the economic and fiscal policy effects resulting from the programme”, then the Bundesbank “may thus no longer participate in the implementation and execution of the ECB decisions at issue”. That said, in a more positive sign for markets, the GCC didn’t find a violation when it came to the prohibition on the monetary financing of member state budgets.

In terms of the implications, our Germany team have a full writeup (link here), but the move puts the ball in the ECB’s and German government’s court. They expect that the ECB will be able to offer comprehensible and substantiated arguments for the proportionality of the PSPP. And though the rulings from the GCC yesterday relate to the PSPP and not to the more recent measures undertaken during the coronavirus pandemic, including the Pandemic Emergency Purchase Programme (PEPP), our Germany team also say that we can expect further challenges to the legality of the PEPP at some point, particularly given that compared to the PSPP the ECB issued a waiver on the eligibility criteria and introduced flexibility regarding the capital key of the national central banks. Overall this shouldn’t have a great short-term impact but it makes the longer term financing of Southern European debt via the ECB more complicated and one thing we know for sure is that without fiscal burden sharing there is little doubt that they will need a lot of ECB funding in the years ahead.

In terms of the market reaction to the news, the euro moved sharply lower, down to an intraday low of -0.74% against the US dollar, though by the end of the session it had recovered somewhat to be down -0.61%. The bigger reactions were seen in sovereign debt markets, where spreads spiked back up yesterday as the ruling led investors to ponder the tail risk implications for the sustainability of the Euro Area. The spread of 10yr Italian BTPs over bunds rose by +11.5bps to 244bps, its largest move wider in two weeks. Furthermore, the spreads of 10yr Spanish (+3.7bps), Portuguese (+4.8bps) and Greek (+4.7bps) debt over bunds also widened, showing that concerns aren’t entirely isolated to Italy, even if they are the biggest risk at the moment.

Partly on the back of the German ruling, our FX team changed their view on EURUSD from bullish to neutral yesterday (link here), and have revised their mid-year forecast to 1.08, down from 1.13 previously. They argue that the recent newsflow has been disappointing, with the GCC ruling yesterday adding to the existing failure to agree on a European recovery fund, along with ECB President Lagarde’s signal last week that the ECB doesn’t want to use OMT.

Meanwhile our rates strategists write (link here) that the ruling means that BTPs are now facing additional headwinds, and the decision further weakens the case for a positive BTP bias. According to them, while the short term is likely to see the ECB continue to support the market and deviate from capital keys as necessary, the ruling raises medium-term questions over the effectiveness of ECB policies.

In spite of the ruling, sentiment more broadly on global markets wasn’t really affected, and global equities advanced yesterday, with the S&P 500 up +0.90%, while the STOXX 600 climbed +2.15%. The equity rally in Europe was broad based, with every industry group higher and roughly 80% of individual stocks up. Energy companies particularly led the rally, with the Oil and Gas in Europe up +6.45% on the continued recovery in oil prices. By the end of the session WTI had risen +20.45% to $24.56/barrel, while Brent was also up +13.86% at $30.97/barrel. That’s the 6th day in a row Brent has moved higher, and the 5th for WTI. The rally even caught the attention of President Trump, who tweeted yesterday that “Oil prices moving up nicely as demand begins again!” Unsurprisingly, the currencies of oil producers outperformed, with the Russian Ruble up +1.41% against the US Dollar, while the Norwegian Krone also strengthened by +0.63%.

The S&P was up as much as +1.90% with less than an hour left in the US session, but then fell 100 bps over the last 45 minutes or so while Fed Governor Clarida spoke. Clarida did not offer ominous projections for the global economy, though he did say that further fiscal support would likely be needed for the economy to recover. Meanwhile St. Louis Fed President Bullard called the recent central bank actions, “very much an experiment.” Even with the pullback, all but two industry groups in the index were higher on the day – Banks and Consumer Staples were the two lone laggards.

This morning the Hang Seng (+0.64%) and Kospi (+1.02%) are both posting gains while the Shanghai Comp (+0.08%) and CSI 300 (+0.01%) are little changed as Chinese markets reopened after an extended holiday. Markets in Japan are still shut. In FX, the Turkish Lira is trading down -0.22% bringing the 5 day decline to -1.930% at 7.0887 while the onshore Chinese yuan is trading down -0.39% at 7.0907. Elsewhere, futures on the S&P 500 are little changed and WTI crude oil prices are down -0.61% to trade at $24.40.

In other overnight news, Fitch revised Brazil’s rating outlook to negative from stable while affirming the country’s BB- rating citing tensions between President Jair Bolsonaro and Congress that have hindered the government’s capacity to implement economic reforms that are needed to trim the fiscal deficit and put the country’s debt in a sustainable trajectory.

There was another predictably poor round of economic data from around the world yesterday, with fresh record lows being set once again. From the US, the ISM non-manufacturing index for April fell to a slightly higher-than-expected 41.8 (vs. 38.0 expected), though this was still its lowest reading since March 2009. Also in the US, the trade deficit in March widened to $44.4bn (vs. $44.2bn expected). The move was driven by a decline of -9.6% in exports, the largest monthly decline on record, while imports fell by a smaller -6.2%. Over in the UK, the final composite PMI came in at 13.8, which was clearly a record low since the series began in 1998, though above the flash reading of 12.9. And in Brazil, industrial production in March fell by -9.1% (vs. -3.7% expected).

To the day ahead now, and the data highlights include a number of further services and composite PMIs for April, including for the Euro Area, France, Germany, Italy and Brazil, along with the UK’s construction PMI for April. Elsewhere, there’ll be March’s German factory orders and Euro Area retail sales, while the US will see the release of April’s ADP employment change and the weekly MBA mortgage applications. From central banks, we’ll hear from the ECB’s Muller and Villeroy, along with the Fed’s Bostic, while the Brazilian central bank will also be deciding on rates. Finally, earnings releases today include General Motors, T-Mobile and PayPal, and the EU Commission will be releasing their latest economic forecasts.

 

3A/ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 18.06 POINTS OR 0.63%  //Hang Sang CLOSED UP 268.72 POINTS OR 1.13%   /The Nikkei closed DOWN 574.34 POINTS OR 2.84%//Australia’s all ordinaires CLOSED DOWN .24%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0985 /Oil UP TO 25.41 dollars per barrel for WTI and 31.64 for Brent. Stocks in Europe OPENED MIXED//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.0984 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 7.1173 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 PANDEMIC  : /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

CORONAVIRUS UPDATE/CHINA/GLOBE

‘Everything Is Fixed’: China Sees 0 New Coronavirus Cases As Brussels Warns Outbreak Could Destroy EU: Live Updates

Summary:

  • China reports 0 new cases
  • Brussels warns of massive contractions, virus threatens EU
  • Russia reports 10k+ cases for 4th day in a row
  • Volkswagen reports China sales may near pre-corona targets for 2020
  • NYC subway closes for cleaning for first time in 50+ years Wednesday
  • Beijing slams HK activists as “political viruses”
  • Germany reports slight uptick in new cases, deaths

*       *        *

Early Wednesday morning, public health officials in China announced that they had once again reported no new cases of the coronavirus anywhere in the country of 1.4 billion.

Granted, China’s daily stats have been trending toward zero for months, even if the world may never learn how many Chinese were actually infected – and how many actually died – during the outbreak. Nevertheless, the news seemed to energize Beijing, which announced that it might lower its 2020 GDP target ever so slightly even as Volkswagen, the world’s biggest carmaker, reported a strong rebound in China sales last month. Volkswagen CEO Stephan Wöllenstein says in a blog post published Wednesday that the carmaker is aiming to hit its pre-corona sales targets for the world’s largest car market – however difficult that might be to believe.

The notion that the Chinese auto market could be “back to normal” by summer – as Wöllenstein claims – sounds far-fetched, considering that certain restrictions on movement remain in Hubei and elsewhere.

What’s more, the CCP’s office overseeing Hong Kong called the SAR’s anti-government protests “political viruses”, and warned that Beijing would crack down with force if violent, disruptive protests were to resume. After the disappearing acts Beijing pulled on citizen journalists reporting out of Wuhannot to mention the arrest of Jimmy Lai, we suspect young Hong Kongers will be too focused on saving their careers and making rent to stir up trouble for the Communists.

Offering a study in contrasts, Brussels released new projections calling for disastrous economic contractions in some of the EU’s worst-hit member countries, including Italy. Under “benign assumptions”, EU output will decline 7.4% this year, the EU expects – a deeper contraction than the aftermath of the financial crisis. Compared with its autumn forecast, the EU is heading for a €850 billion ($918 billion) investment shortfall for 2020 and 2021. Greece, Italy and Spain are expected to see the steepest declines with a more than 9% decline in GDP. By contrast, GDP in Poland will fall by 4.3%, before rebounding by 4.1%.

The news drove the euro lower against the dollar for the third day on Wednesday as the outlook for the European economy has continued to deteriorate.

EU bureaucrats also warned that the virus threatens the very survival of the European political experiment, a sentiment that has been echoed by several European heads of state.

Meanwhile, Germany reported 947 new coronavirus cases on Monday, a slight increase on the prior day, while also reporting an uptick in recorded deaths from the disease. Germany’s Robert Koch Institute also reported an uptick in deaths, with 165 recorded on Monday, bringing the Germany-wide total to 6,996. Germany has reported a total of 164,807 infections, with 147,400 having made a full recovery.

For the fourth day in a row on Wednesday, Russia reported more than 10,000 new cases – 10,559 new infections, to be exact. That’s just shy of Sunday’s daily record of 10,633 new cases.

Right now, Russia now has 165,929 confirmed cases of COVID-19, as it climbs the global coronavirus outbreak rankings like King Kong scaling the Empire State Building. Oddly, the Russian death toll remains suspiciously low, with just 86 fatalities reported in the last 24 hours, bringing the nationwide tally to 1,537.

After closing Russia’s border with the Far East in January, Russian President Vladimir Putin’s approval rating has slipped to 59% in April from 63% a month earlier, one of the lowest prints on record, as hysteria about the outbreak (which has been mostly centered on Moscow and the surrounding area) and lingering resentments about continued cuts to social services as Russia grapples with low oil prices and myriad other issues. The pandemic will force the Eurasian giant to run a budget deficit equivalent to 4% of its GDP for 2020, its finance minister warned on Wednesday.

Starting during the early morning hours on Wednesday, the NYC subway stopped running between 1 am and 5 am, a practice that will continue every day until the outbreak subsides. More than 1,000 police officers were assigned to handle what is the first overnight shutdown of the city’s subway system in at least 50 years. Officers from the NYPD’s department of homeless outreach moved the indigent sleeping in the subway cars to shelters, accompanied by nurses prepared to take care of their health-care needs.

 

The number of new coronavirus cases confirmed around the world yesterday ticked higher compared with the day before, but not by much, remaining roughly in the ~80k range.

\While perusing the overnight headlines this morning, we enjoyed a hearty chuckle over what passes for “news” at Disney-owned ABC.

A retired Kansas farmer who mailed New York Gov. Andrew Cuomo an N-95 mask to give to a frontline worker there has received an honorary degree from his state.

Dennis Ruhnke of Troy, Kansas, was bestowed with a bachelor’s degree from Kansas State University during a ceremony on Tuesday afternoon.

“In 1971, Dennis was two credits away from earning his degree in agriculture when his father passed away. He chose to leave school to take care of his mother and the family farm,” Kansas Gov. Laura Kelly, who presented the degree alongside the university’s president, said in a Facebook post. “Dennis’ kindness and lifelong career in agriculture make him more than qualified to receive a degree.”

Congratulations, Dennis.

END

HONG KONG

Hong Kong real estate has crashed as buyers flee this market.  Prices collapse

(zerohedge)

Chinese Buyers Flee Hong Kong Real Estate In Major Hit To World’s Priciest Property Market

Mainland Chinese are no fools. They’re shunning commercial real estate deals in Hong Kong as a deep recession unfolds.

According to Bloomberg, citing a new CBRE Group Inc. report, there were no mainland Chinese buyers for property transactions greater than HK$77 million ($10 million) in 1Q20. This was a sharp difference from several years ago when bidding wars drove property prices higher.

“A lot of mainland buyers are taking a step back because of the economic outlook and the conflicts that made them feel unwelcome,” said Reeves Yan, head of capital markets at CBRE.

Preliminary data on Monday showed Hong Kong’s economy crashed in 1Q20, with the worst economic contraction ever, printing -8.9% YoY. The data suggest a further plunge in economic activity will be seen in 2Q as more of the lockdown was captured in the quarter.

Yan said capital controls imposed by Beijing on money flowing in and out of China had also damaged the commercial real estate market.

As shown in the chart below, there was a confluence of events that resulted in the decline of buyers:

The decline of mainland participation also resulted in a price slump, data from the Rating and Valuation Department showed. A decades-long trendline was recently broken. A peak in prices was seen about a year after the global slowdown started, and about half a year after the trade war gained momentum. In February, prices fell 8.5% from a year earlier.

Hong Kong Financial Secretary Paul Chan Mo-Po warned on Monday that a “deep recession” has made the “economic situation very challenging.”

Iris Pang, Greater China economist at ING, said there are some signs the virus spread across Asia has slowed but warned: “social distancing will continue to hurt catering and shopping.” She said the risk of more protests is increasing for “the summer holidays.”

A recovery of Hong Kong’s collapsed tourism industry could take years. Chinese tourists began to shun the city when protests erupted last summer. Then when the pandemic unfolded earlier this year, mainlanders completely abandoned the area. The decline of mainlanders means a reduction in foot traffic at the world’s most expensive shopping mall, located at Hong Kong’s Times Square in the center of Causeway Bay, reported Bloomberg. This is the area where mainlanders would come to pick up expensive watches and discounted cosmetics.

 

The Tiffany & Co. store at Times Square in Hong Kong. h/t Bloomberg

Mainlander visitors plummeted 53% in December over the prior year, mainly because of the protest. However, the virus, which resulted in strict stay-at-home orders, is likely to show visitor data near zero for early 2020.

“Many retailers are saying it’s a disaster,” said Nicholas Bradstreet, managing director of at Savills Plc. “In the last 10 days, their sales have been down 70% to 80% week-on-week. There’s very little traffic into the shops” at retail districts like Central, Causeway Bay and Tsim Sha Tsui, he added.

“Causeway Bay is very quiet now. It used to have a lot of traffic,” said Wong, a salesperson at a retail store in the area. “With the scarcity of face masks, people would rather not go out at all.”

 

Times Square in Causeway Bay, Hong Kong.
h/t Bloomberg

The retail downturn in Hong Kong is due to the lack of tourists from China, has stressed out landlords, and dented commercial real estate prices as we noted above.

Mall owners, including Times Square’s Wharf Real Estate Investment Co., is facing rent pressures and rising vacancies. The shares of the company have corrected about 15% since late January.

The deepening economic contraction will undoubtedly be shown in 2Q20. This will continue to pressure real estate prices as it now appears the prospects of a V-shaped recovery are fading.

END

4/EUROPEAN AFFAIRS

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

 

6.Global Issues

Very alarming:  we now have evidence that the coronavirus mutates.  It seems that the East coast of the uSA has this form as dominant and it is more contagious.

(zerohedge)

 

Coronavirus Mutates Into Now-Dominant, More Contagious Form As Doctors Ponder ‘East Coast vs. West Coast’ Strains

new study from Los Alamos National Laboratory has revealed a new, now-dominant strain of the coronavirus which appears to be more contagious, according to the authors. Meanwhile, doctors in the United States are wondering if the harder-hit East Coast is being hit with a different version of the virus than the West Coast.

Emerging in early February, the new strain migrated from Europe to the East Coast of the United States, where it became the dominant strain across the world beginning in mid-March. Wherever the new strain has appeared, it’s quickly infected far more people than earlier strains which emerged from Wuhan, China. Within weeks it became the most prevalent strain in some nations.

In addition to spreading faster, it may make people vulnerable to a second infection after a first bout with the disease, the report warned.

The 33-page report was posted Thursday on BioRxiv, a website that researchers use to share their work before it is peer reviewed, an effort to speed up collaborations with scientists working on COVID-19 vaccines or treatments. That research has been largely based on the genetic sequence of earlier strains and might not be effective against the new one. –LA Times (via Yahoo)

According to the report, fourteen mutations have been identified in the spike proteins of SARS-CoV-2, the protrusions on the exterior of the virus which make up its namesake ‘corona.’

The report was based on a computational analysis of more than 6,000 coronavirus samples from around the world, collected by the Germany-based Global Initiative for Sharing All Influenza Data.

Assisted by scientists at Duke University and the University of Sheffield in England, the Los Alamos team focused on a mutation called D614G, which controls changes in spike proteins.

“The story is worrying, as we see a mutated form of the virus very rapidly emerging, and over the month of March becoming the dominant pandemic form,” said lead author Bette Korber, a Los Alamos computational biologist. “When viruses with this mutation enter a population, they rapidly begin to take over the local epidemic, thus they are more transmissible.”

 

Bette Korber, a computational biologist at Los Alamos National Laboratory, leads a team examining mutations of the novel coronavirus. (Los Alamos National Laboratory)

While the Los Alamos report is highly technical and dispassionate, Korber expressed some deep personal feelings about the implications of the finding in her Facebook post.

This is hard news,” wrote Korber, “but please don’t only be disheartened by it. Our team at LANL was able to document this mutation and its impact on transmission only because of a massive global effort of clinical people and experimental groups, who make new sequences of the virus (SARS-CoV-2) in their local communities available as quickly as they possibly can.” –LA Times

The new strain first appeared in Italy, almost at the same time as the original Wuhan strain appeared, according to the report. By March 15, the mutated strain was dominant. The same was seen in New York, which was hit by the original virus around March 15, but was overwhelmed by the new strain within days.

The authors also warn that if the pandemic doesn’t wind down during the summer as most viruses do, it could undergo further mutations right as the first medical treatments and vaccines – should the adhere to ambitious timelines we’ve been promised – begin to roll out.

We cannot afford to be blindsided as we move vaccines and antibodies into clinical testing,” Korber added on Facebook. “Please be encouraged by knowing the global scientific community is on this, and we are cooperating with each other in ways I have never seen … in my 30 years as a scientist.”

David Montefiori, a Duke University scientist who worked on the report said it is the first to document a mutation in the coronavirus that appears to make it more infectious.

Although the researchers don’t yet know the details about how the mutated spike behaves inside the body, it’s clearly doing something that gives it an evolutionary advantage over its predecessor and is fueling its rapid spread. One scientist called it a “classic case of Darwinian evolution.”

D614G is increasing in frequency at an alarming rate, indicating a fitness advantage relative to the original Wuhan strain that enables more rapid spread,” the study said.

Different strains, different effects?

As the Times notes, doctors in the United States have begun to question whether new strains of the virus could account for differences in how it affects different people, according to UC San Francisco professor Alan Wu, who runs the clinical chemistry and toxicology laboratories at SF General Hospital.

According to Wu, medical experts have speculated in recent weeks that at least two strains of coronavirus were circulating in the US – one prevalent on the East Coast and one on the West Coast.

“We are looking to identify the mutation,” said Wu, who highlighted that his hospital has only had a few fatalities out of the hundreds of cases it’s treated, which is “quite a different story than we are hearing from New York.”

The Los Alamos study does not indicate that the new version of the virus is more lethal than the original. People infected with the mutated strain appear to have higher viral loads. But the study’s authors from the University of Sheffield found that among a local sample of 447 patients, hospitalization rates were about the same for people infected with either virus version.

Even if the new strain is no more dangerous than the others, it could still complicate efforts to bring the pandemic under control. That would be an issue if the mutation makes the virus so different from earlier strains that people who have immunity to them would not be immune to the new version.

And if the mutation makes it back to those who have already had COVID-19, it would make “individuals susceptible to a second infection,” according to the authors.

END

This is very scary!! A mysterious coronavirus linked syndrome has been observed among a cluster of children in the uK and now in New York similar to Kawasaki disease.  It is the inflammation of blood vessels.  It seems that in some children the coronavirus is attacking the ace 2 receptors in the blood.

(zerohedge)

Mysterious Coronavirus-Linked Syndrome Spreads From London To New York

An unusually deadly coronavirus-linked respiratory syndrome initially observed among a cluster of children in the UK has apparently popped up in New York City, according to local media reports.

ABC 7 says a group of 15 children in NYC have been hospitalized with unusual symptoms similar to – get this – toxic shock syndrome, or Kawasaki Disease. The symptoms include inflammation of the blood vessels, including coronary arteries. While there have been reports of COVID-19 causing heart attacks in some patients with certain preexisting conditions, this level of damage seems unusually severe. COVID-19 is also not usually very aggressive in young children. Other symptoms include fever, rash, abdominal pain and vomiting.

However, not all of the 15 patients tested positive for the coronavirus. Only 4 tested positive outright, while 6 tested positive for COVID-19 antibodies, meaning they had likely been previously infected.

On Long Island, Cohen’s Children Hospital has confirmed 25 kids have been hospitalized with Kawasaki-like symptoms; 11 of them are in the ICU. The county health commissioner in Nassau described their condition as “concerning.”

Mayor de Blasio issued a warning to parents advising them to contact authorities immediately if their child exhibits a combination of the symptoms for the mysterious inflammatory syndrome.

So far, no fatalities have been reported among the cases in the US.

All patients, ages 2-15, had a subjective or measured fever and more than half reported rash, abdominal pain, vomiting, or diarrhea. Respiratory symptoms were reported in less than half of these patients.

More than half of the reported patients required blood pressure support and five required mechanical ventilation. No fatalities have been reported among these cases.

If those symptoms are seen in children, pediatricians are being told to immediately refer patients to a specialist in pediatric infectious disease, rheumatology, and/or critical care, as indicated.

Early diagnosis and treatment of patients meeting full or partial criteria for Kawasaki disease is critical to preventing end-organ damage and other long-term complications.

It’s found that patients meeting criteria for Kawasaki disease should be treated with intravenous immunoglobulin and aspirin.

But the intensity of the syndrome has alarmed doctors, particularly in the middle of the COVID-19 outbreak, about the possibility that a new mutated strain of the virus might be emerging, or perhaps this is some other pathogen, or some other kind of unanticipated complication?

7. OIL ISSUES

 

8 EMERGING MARKET ISSUES

BRAZIL//CORONAVIRUS UPDATE//it is exploding in this country

“We Ask For Help But It Never Comes”: Dead Are Left To Rot, Then Buried In Mass Graves, As Coronavirus Overwhelms Brazil

Because of its size – both geographically and population-wise, as well as its economic heft – Brazil is often compared to the US. And when it comes to the progression of the coronavirus, it’s probably one of only a handful of countries (one other being perhaps India) where an apples-to-apples comparison might be most relevant.

Fortunately for Americans, President Trump has done a much more effective job at combating the virus in the US than his Brazilian counterpart Jair Bolsonaro – a former far-right Congressman known to some as “the Tropical Trump”. Bolsonaro has infamously continued to deny the virus’s severity, dismissing it as “a little flu”, while Brazil continues to post some of the lowest testing rates in the world.

This has allowed the virus to explode without much resistance, leading researchers at the University of Sao Paolo to project that more than 1.6 million Brazilians have likely already been infected (out of a population of roughly 209 million). In some of Brazil’s poorest, most remote villages, the outbreak has overwhelmed health-care systems.

Many corpses have been left inside homes for more than a day after death until they could be collected, a scenario that briefly played out in parts of Italy.

An expansive WSJ report published Monday explores the situation in Brazil, and concludes that as all of the country’s biggest cities and many of its wealthier provinces start to reopen, there’s concern that the country could single-handedly reignite the outbreak in the western hemisphere.

The report begins in the state of Manaus, a remote Amazonian province.

In the tiny, stifling home she shared with seven relatives in the Amazon, Maria Portelo de Lima began coughing, started feeling weaker and, over a week, got sicker and sicker.

Her family tried to get the 61-year-old to a hospital in Manaus, a city of 2.2 million in the heart of the rainforest. They were told no ambulances were available or hospital beds free because of a flood of coronavirus patients.

[…]

Ms. de Lima died April 26. With so many other Covid-19 victims in the city, it took 30 hours for an ambulance to pick up her body. She was buried in a mass grave, her identity marked by a wooden cross that cost $22.

In Manaus, Ms. de Lima’s death was among hundreds that have put that Amazon River city at the heart of Brazil’s coronavirus struggle. It is a place with far too few hospital beds and other health-care facilities to cope with such a disease outbreak.

Ms. de Lima’s niece, Rosa Alves, had frantically but unsuccessfully sought aid as her aunt’s condition worsened. “We feel humiliated. We pay taxes and when we need help, we ask for it and help never comes,” Ms. Alves said.

Manaus buried about 140 bodies the day Ms. de Lima died, six times the normal rate, according to its mayor, Arthur Virgilio. The mayor, a 74-year-old who described himself as stoic in the face of past tragedies, has openly wept as he watches his hometown buckle and his people suffer. On a recent night, learning of mass burials in the city, he broke down.

“I am asking for more help from Brasilia, we are at our limits,” Mr. Virgilio said. “We are heading for the peak, we need help from the federal government and the international community.”

The fast spread of the virus in Manaus, which is a hub for jungle safaris by American and European tourists, raises a note of caution for wealthy nations in the Northern Hemisphere. Hopes that coming warm weather will slow the virus clash with the mounting toll in a steamy city where the average April high was around 87 Fahrenheit.

Photos published with the report showed scenes of health-care workers overwhelmed by the profusion of cases in urban “favelas” – poor, densely packed slums offering ideal breeding conditions for the virus.

Per WSJ: “Medical workers check a man with breathing problems in the São Paulo’s favela of Paraisópolis. A scarcity of coronavirus tests in Brazil limits them to health and safety professionals, the very sick and those who died and are suspected of having the virus.”

Per WSJ: “Medical personnel disinfect rooms in a Paraisópolis sports hall used as a place to treat coronavirus patients. The virus is spreading in poor districts such as the favella, where 120,000 live in less than two square miles.”

Per WSJ: “An elderly Covid-19 patient in her house in Paraisopolis.”

In a testament to the virus’s varied effects (depending on the patient, it can be deadly, or extremely mild), Bolsonaro’s continued denials have left many Brazilians confused about who can and can’t catch the virus.

“People think the coronavirus is a rich man’s disease, that only those who travel catch it,” said Claudio Rodrigues Melo, who set up a soup kitchen for needy neighbors in one of São Paulo’s poorest areas.

Echoing Fox News’ initial denounciation of the virus as a “media conspiracy”, many in Brazil believe that it’s just a conspiracy, or only impacts the elderly.

“Or they think it only impacts the elderly, or even that it’s fake news, something made up by the Globo news network to discredit Bolsonaro,” he said.

And many supporters of the president have gathered to protest local lockdown orders at his exhortation, rallies far larger than comparable movements in the US.

Brazil boasts some of the lowest testing rates in the world, with only 1,600 tests per million residents, far below the US’s 33,000 per million rate.

Yet, despite this, Brazil has seen the number of confirmed cases balloon, alongside deaths.

A doctor from Ribeirão Preto Medical School who worked on the study projecting 1.6 million infections in Brazil claimed with little doubt that “Brazil is already the global epicenter of the coronavirus.”

At this point, with states already reopening, turning around and forcing a complete shutdown probably isn’t politically feasible.

The share of people supporting social isolation in a survey taken last week fell to 52% from 60% in the first week of April, according to pollster Datafolha. And among Brazilians with smartphones that can be tracked, only 40% appear to be adhering to stay-home measures, said In Loco, a tech company focused on geolocation data.

Data from Google’s Covid-19 Community Mobility Reports show growing numbers of Brazilians out shopping and going to work in the past two weeks, while Chileans and Colombians stay home.

The state of Santa Catarina in Brazil’s affluent south was the first to reopen, a little more than a week ago. Women and children thronged an upscale shopping center in the city of Blumenau.

The mall laid out a red carpet for the shoppers. Store employees lined up outdoors to greet them, while a saxophonist played Creedence Clearwater Revival’s “Have You Ever Seen the Rain?” All precautions were taken to protect customers, according to the mall’s owner.

But even some of the country’s most populous and economically important states are seeing hospitals being hopelessly overrun. Rio state has so many coronavirus patients that the waiting list for an ICU bed or a respirator is 360 patients long, according to the state’s health secretary Edmar Santos.

“We are on the verge of collapse,” he said. “We will quickly see chaos, not just in Rio de Janeiro, but in all of Brazil.”

Santos himself tested positive for coronavirus in April but has returned to work.

Like in the US, poorer working class workers say that if given the choice between starving and putting themselves at risk, they will gladly choose the latter.

Ryan Cesar Martins, 27, said he couldn’t afford to honor the social-isolation rules imposed by the state’s governor in March. He said a car-painting business he ran that earned him nearly $1,300 in January brought in less than $100 in April. His wife, Keila Evellin, 22, lost her off-the-books job as a saleswoman. They have maxed out their credit cards.

On Thursday, Mr. Martins went to work as an employee of another car-painting shop.

“If it’s a choice between getting the coronavirus and dying of hunger, I prefer not to die of hunger, so I’m going back to work,” Mr. Martins said.

Still, despite these horrible scenes, Brazil’s economy and social fabric have remained mostly intact, although capital flight looks to be accelerating…

When all this is said and done, we suspect Brazil’s response will be an important reference point as the world tries to evaluate the approaches espoused in Europe, the US and elsewhere.

END

ZIMBABWE

Zimbabwe owes the IMF money from a previous loan agreement.  They are now begging for aid to avoid another collapse

(zerohedge)

Zimbabwe Begs For Aid To Avoid “Collapse”

Zimbabwe finds itself in economic dire straits. Again.

The South African nation which previously wiped out its debt with a historic round of hyperinflation, is trying a different approach this time and is pleading with international institutions to help it eliminate billions of dollars in debt so the country can avoid economic collapse and unlock funds to fight the coronavirus pandemic.

Taking a page out of the Italian playbook, finance minister Mthuli Ncube told the IMF, African Development Bank and other institutions in a letter seen by the Financial Times that without urgent aid to clear arrears owed to official lenders, Zimbabwe faced “domestic collapse.”

As discussed previously, the IMF and other bodies have pledged billions of dollars in emergency loans to help emerging market nations battle the pandemic and shore up locked-down economies…

But Zimbabwe – along with Sudan and Eritrea – is excluded from such funds because of its longstanding arrears. As the FT reports, Zimbabwe is about $2bn behind on payments to official lenders including the World Bank and AfDB, although it has paid off the IMF.

In hope of generating some goodwill, and in a sign of its desperation to access funds, President Emmerson Mnangagwa’s government took responsibility for “recent policy mis-steps” – read cronyism – which have included state payouts to a company led by a close ally of the president. Last year, the payouts to Sakunda, a fuel importer headed by Kudakwashe Tagwirei, were financed with, surprise, money-printing that triggered a currency collapse and a warning from the IMF. A subsidy for gold miners that was financed with money creation also alarmed the IMF when it was uncovered.

“Zimbabwe breaks my heart every day,” a senior official at the IMF said. “I know the path forward for other countries, but the thing that stops it is arrears to the World Bank and the AfDB. Then there’s the bigger issue of politics.”

Ncube, a Cambridge-educated mathematician, was picked from academia by the government in 2018 to fix the economy. But his efforts have been stymied by mismanagement and corruption within the government, an official from an international finance institution said. In the letter, Ncube asked for “urgent and high-level dialogue” on a bridge loan to clear the multilateral arrears, as well as the rescheduling of other overdue debts owed to governments.

 

Tobacco traders in Harare.

In other words, take out debt to repay existing debt. In return for help, Zimbabwe would pledge to halt central bank money printing and “eliminate discretion in the allocation of foreign exchange.”

Which for those familiar with Zimbabwe’s “monetary policy” – which consists of nothing else but printing money – is hilarious.

In response to Zimbabwe’s plea, the IMF official said its hands were tied by its rules about arrears and that Zimbabwe would need to seek support from a bilateral partner, such as Britain. “We continue to engage with the authorities on their challenging economic situation,” the fund said in a statement. As for getting Britain which is facing an unprecedented fiscal shock of its own, good luck getting a “bilateral bailout.”

While Zimbabwe has reported only 34 coronavirus cases and four deaths to date – numbers which are laughably inaccurated – the economic chaos and lack of investment have left the public health system struggling to respond, the FT reports.

The pandemic has struck in the middle of a food crisis in the country, with millions of people facing hunger. A lockdown in neighbouring South Africa, where many Zimbabweans work, has severely reduced the flow of remittances to the country, worsening an already dire economic situation.

And speaking of dire financial situation, nothing new here: this being Zimbabwe, inflation climbed to 676% in March, as the country struggles with its usual hyperinflation demons.

With the economy in shambles, Mnangagwa’s cash-strapped government is relying on private donations to fight the pandemic. Meanwhile, Sakunda has outfitted a hospital in Harare, the capital, to treat coronavirus patients and has secured millions of dollars worth of medical protective gear from China. Perhaps instead of seeking another IMF bailout, Zimbabwe should address its new financial overlords in Beijing: we are confident they will be willing to replace their existing debt with a 100% equity stake over the entire nation.

END

 

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

Euro/USA 1.08080 DOWN .0030 REACTING TO MERKEL’S FAILED COALITION/ REACTING TO +GERMAN ELECTION WHERE ALT RIGHT PARTY ENTERS THE BUNDESTAG/ huge Deutsche bank problems ///ITALIAN CHAOS//CORONAVIRUS/PANDEMIC /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES /MIXED

 

 

USA/JAPAN YEN 106.18 DOWN 0.277 (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 1.2377   DOWN   0.0067  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/

 

USA/CAN 1.4055 UP .0014 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  WEDNESDAY morning in Europe, the Euro FELL BY 30 basis points, trading now ABOVE the important 1.08 level FALLING to 1.0808 Last night Shanghai COMPOSITE CLOSED UP 18.06 POINTS OR 0.63% 

 

//Hang Sang CLOSED UP 268.82 POINTS OR 1.13%

/AUSTRALIA CLOSED DOWN 0,24%// EUROPEAN BOURSES ALL MIXED

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL MIXED 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 268.82 POINTS OR 1.13%

 

 

/SHANGHAI CLOSED DOWN 18.06 POINTS OR 0.63%

 

Australia BOURSE CLOSED DOWN. 24% 

 

 

Nikkei (Japan) CLOSED DOWN 574.34  POINTS OR 2.84%

 

 

 

INDIA’S SENSEX  IN THE GREEN

Gold very early morning trading: 1700.10.10

silver:$15.06-

Early WEDNESDAY morning USA 10 year bond yield: 0.69% !!! UP 2 IN POINTS from TUESDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 1.36 UP 2  IN BASIS POINTS from TUESDAY night.

USA dollar index early WEDNESDAY morning: 100.03 UP 32 CENT(S) from  TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

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And now your closing  WEDNESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 0.47% DOWN 4 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.13%  DOWN 1   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.41%//DOWN 3 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:1,56 DOWN 3 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 111 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: FALLS TO –.31% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 1.87% 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 1.1276  DOWN     .0008 or 8 basis points

USA/Japan: 107.74 DOWN .199 OR YEN UP 20  basis points/

Great Britain/USA 1.2491 UP .0057 POUND UP 57  BASIS POINTS)

Canadian dollar DOWN 32 basis points to 1.3086

 

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The USA/Yuan,CNY: AT 6.8800    ON SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  6.8872  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  5.6842 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.13%

 

Your closing 10 yr US bond yield UP 1 IN basis points from TUESDAY at 2.06 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 2.59 UP 3 in basis points on the day

Your closing USA dollar index, 97.15 UP 81  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 WEDNESDAY: 12:00 PM

London: CLOSED DOWN 42.37  0.56%

German Dax :  CLOSED DOWN 113.18 POINTS OR .92%

 

Paris Cac CLOSED DOWN 21.16 POINTS 0.38%

Spain IBEX CLOSED DOWN 58.50 POINTS or 0.63%

Italian MIB: CLOSED UP 11.43 POINTS OR 0.05%

 

 

 

 

 

WTI Oil price; 54.92 12:00  PM  EST

Brent Oil: 61.83 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    63.05  THE CROSS HIGHER BY 0.15 RUBLES/DOLLAR (RUBLE LOWER BY 15 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.24 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 :  55.66//

 

 

BRENT :  62.41

USA 10 YR BOND YIELD: … 2.03…

 

 

 

USA 30 YR BOND YIELD: 2.57..

 

 

 

 

 

EURO/USA 1.177 ( UP 49   BASIS POINTS)

USA/JAPANESE YEN:107.27 DOWN .667 (YEN UP 67 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 97.69 DOWN 53 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2554 UP 119  POINTS

 

the Turkish lira close: 5.6298

 

 

the Russian rouble 62.86   UP 0.03 Roubles against the uSA dollar.( UP 3 BASIS POINTS)

Canadian dollar:  1.3034 UP 21 BASIS pts

 

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

 

The Dow closed DOWN 218.45 POINTS OR 0.91%

 

NASDAQ closed UP 45.27 POINTS OR 0.51%

 


VOLATILITY INDEX:  33.61 CLOSED DOWN .0

LIBOR 3 MONTH DURATION: 0.474%//libor dropping like a stone

LIBOR/OIS:  .417%//DROPPING

TED SPREAD (LIBOR VS 3 MONTH TREASURY BILL) : .344%  DROPPING

 

USA trading today in Graph Form

Nasdaq Continues Record Run Despite Biggest Job Loss Ever

Nasdaq outperformed once again today…(as everything else lagged)…NOTE – like yesterday, everything got a bit jiggy in the last 20-30 mins…

…because nothing says buy stocks like over 20 million job losses!!

Source: Bloomberg

Sending the Nasdaq Composite within a few points of unchanged for 2020…

Source: Bloomberg

And Nasdaq is roaring as earnings collapse…

Source: Bloomberg

Makes you wonder if anyone is actually paying attention…

Bank stocks were battered again (despite higher yields, steeper curves)…

Source: Bloomberg

The Virus Fear trade worsened notably again…

Source: Bloomberg

HYG and LQD are giving back lots of the Fed-supported buying binge…

Source: Bloomberg

Continued dramatic corporate issuance (and a heavy Treasury calendar ahead) sent longer-dated yields higher.

Source: Bloomberg

The moves have been dramatic jerks higher this week which suggest rate-locks, not systemic selling

Source: Bloomberg

The yield curve steepened significantly today (2s30s +9bps)…

Source: Bloomberg

The dollar managed gains, pushing up towards its recent downtrend channel…

Source: Bloomberg

Cryptos were higher on the day…but it was clear there was a rotation into Bitcoin from altcoin…

Source: Bloomberg

With Bitcoin testing $9400 intraday as the halving looms…

Source: Bloomberg

Gold was thumped back below $1700…

WTI could not make its mind up but ended lower on the day – breaking its 5 day win streak…

Wholesale beef prices are screaming higher, but cattle prices plunge as supply chains break…

Source: Bloomberg

Copper and Gold are signaling stocks are way over their skis here…

Source: Bloomberg

And finally, FANG stocks have broken to a new record high… as if the world was not locked down, economies on their backs.

Source: Bloomberg

Don’t you just love buybacks!!??

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

MARKET TRADING//USA

a)Market trading/LAST NIGHT/USA

 

b)MARKET TRADING/USA/AFTERNOON

“Stocks Have Never Been More Expensive”: Disconnect Between Markets And Reality Hits Idiotic Levels

One month ago, with the S&P500 staging an impressive V-shaped rebound from the March 23 lows after the Fed unleashed a nuclear bomb of monetary stimulus, we showed that forward stock multiples had surged right back 19.4x, which was just above the level the S&P500 held on Feb 19 when it was trading at an all-time high above 3,330. In other words, at in the first week of April, stocks were valued the same as they were at the February all time highs, which we showed in the following chart.

Fast forward one month when two things have happened: stocks have risen further, with the S&P rising just shy of 3,000 last week, while earnings expectations across the entire world have continued to slide and are yet to stabilize let alone find an inflection point, as the following Goldman chart shows:

This means that the chart we showed above which hit a 19.4x forward P/E is now even more idiotic, and below is an update of our chart courtesy of Deutsche Bank’s Torsten Slok.

This is what Torsten said:

It is difficult to think about the E in the P/E ratio when the economy is shut down and half of blue-chip companies don’t want to provide guidance on full-year earnings because of all the uncertainty. The Fed probably doesn’t worry much about if the forward multiple is 18, 20, or 25, their clear goal is to support markets at least as long as we are in lockdown and maybe until the unemployment rate has moved into the single digits again.

And just to show the idiotic disconnect between V-shaped markets and \-shaped reality, here is all you need to know about the Nasdaq:

And just to confirm that the “disconnect between markets and data is the largest on record”, here is the only chart you need from Matt King’s latest presentation.

 

source: @lisaabramowicz1

And as King concludes, “when limitless liquidity meets spiraling insolvency there’s bound to be a long-term price.

end

ii)Market data/USA

ADP//PRIVATE JOBS REPORT

“Unprecedented” – Companies Slashed Over 20 Million Jobs In April, ADP

Given the fact that over 30 million Americans have filed for initial jobless claims in the last six weeks, it is perhaps no surprise that economists expected a 20.5 million ADP job loss in April. In fact, silver lining, the number ‘beat’ with 20.236 million

Source: Bloomberg

For context, the largest monthly job loss during the great financial crisis was just 834,700!

Large- and mid-sized companies saw the biggest job-losses…

And the service sector saw the biggest job losses…

If you’re an educator or in “management”, it would appear times remain good…

“Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession,” said Ahu Yildirmaz, co-head of the ADP Research Institute.

“Additionally, it is important to note that the report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month. This is the same time period the Bureau of Labor and Statistics uses for their survey.”

And as we noted previously, far more Americans have lost their jobs in the last month than jobs gained during the last decade since the end of the Great Recession… (22.13 million gained in a decade, 30.3 million lost in 6 weeks)

Worse still, the final numbers will likely be worsened due to the bailout itself: as a reminder, the Coronavirus Aid, Relief, and Economic Security (CARES) Act, passed on March 27, could contribute to new records being reached in coming weeks as it increases eligibility for jobless claims to self-employed and gig workers, extends the maximum number of weeks that one can receive benefits, and provides an additional $600 per week until July 31. A recent WSJ article noted that this has created incentives for some businesses to temporarily furlough their employees, knowing that they will be covered financially as the economy is shutdown. Meanwhile, those making below $50k will generally be made whole and possibly be better off on unemployment benefits.

As Mises’ Robert Aro noted earlier in the week, the stimulus packages being handed out across this world provide us with an opportunity to document the anticapitalist process as it unfolds in real time, keeping in mind that when these inflation schemes fail, it will likely be blamed on capitalism.

The combination of increasing the money supply in order to pay people not to produce goods or services has consequences that not a lot of people are talking about.

It flies in the face of the free market and is as nonsensical as a negative interest rate. A loan that is forgivable is unconventional to say the least, because a loan is normally defined as an amount borrowed that is expected to be paid back with interest. When a loan is given on a first-come-first-served basis for the purpose of paying people not to work and is forgivable because it’s guaranteed by the United States government, we shouldn’t call it a loan.

It may be called socialism, maybe interventionism, and some may still prefer the term statism; but one thing is certain when it comes to the Paycheck Protection Program: it’s not capitalism!

Welfare cliffs are of course not the only reason so many capable Americans languish in partial dependency on government assistance. Dreadful government schools in poor areas and systematic obstacles to getting a job, such as minimum wage laws and occupational licensing laws, are also to blame. But the perverse incentives of America’s welfare system really hurt, and the CARES Act may have been a serious tipping point.

But, hey, there’s good news… well optimistic headlines as Treasury Secretary Steven Mnuchin said he anticipates most of the economy will restart by the end of August.

Finally, it is notable, we have lost 434 jobs for every confirmed US death from COVID-19 (60,999).

Was it worth it?

END

Yields Surge After Treasury Announces Record $96BN In Treasury Refunding, Launches 20-Year Coupon Bond

Two days after the Treasury announced it would sell a record $3 trillion (sorry, $2.999 trillion) in debt in the current quarter…

… moments ago we got the details of what the upcoming helicopter money takeoff will look like when the Treasury issued its quarterly refunding announcement.

While the market had expected an increase in issuance amounts ahead of the announcement, the size of issuance has exceeded expectations across virtually every tenor, and the result was a spike in 10Y yields as bond traders start to evaluate just how realistic it is to have a deluge of helicopter money supply at 0.65%.

And judging by the puke in Treasuries, we now sit back and wait for the Fed to announce QE whatever number it is now on, where they will monetize all these trillions in new bonds.

END

iii) Important USA Economic Stories

Very scary!! Lazard is now warning of cascading bankruptcies unless more stimulus is given

(zerohedge)

Lazard Warns Of “Cascading” Bankruptcies Without More Stimulus

While mass corporate bankruptcies are a dismal sign for the US economy, leading to sharp declines in living standards as formerly zombie companies finally succumb to their fate letting millions of people go in the process, they are also a cause of celebration for financial and legal bankruptcy advisors such as Greenhill, Houlihan Lokey and Lazard. So when one of these firms warns that it is about to make a killing, it’s time listen.

Speaking in an interview with Bloomberg TV, the politically-connected chief executive of the financial-advisory business. Lazard’s, Peter Orzsag, said that firms hammered by Covid-19 could start to bring down a much wider array of companies unless more funds are injected into the economy.

“If unemployment remains elevated for an extended period of time, and especially if there is not additional rounds of government stimulus, we’re at some significant risk of cascading bankruptcies,” Orszag told Bloomberg TV. “A bankruptcy at one firm then infects another firm, and then that infects a third firm.”

This is similar to what Matt King pointed out last week in his latest presentation, showing how just as the coronavirus spreads exponentially, so do corporate bankruptcies, where without rescue funding, as many as 60% of all SMEs can run out of cash after a 12 week shutdown.

Meanwhile, back in the real world, Congress is currently seeking an additional round of stimulus after almost $3 trillion has been earmarked for companies and individuals stung by the shutdowns tied to the Covid-19 pandemic. Yet even companies that have sought payroll assistance, such as airlines, may have to cut jobs as demand for services is slow to return.

Bankruptcies have already spiked, with Goldman forecasting the 12-month trailing default rate will increase to 13% over the course of 2020 before starting to decline as the economy normalizes in 2021.

As a result, Lazard has been busy working on several high-profile restructuring deals including that of retailers J.C. Penney and Forever 21. Orszag expects there will be additional rounds of intermittent shutdowns that will further complicate a recovery.

“This is not going to be one and done, and boom we’re out of the woods,” he said. “I don’t think we’re going to flip a switch and everything turns back on,” although judging by how the market is trading that precisely what stocks think will happen.

Ironically Orszag, who was the director of the Office of Management and Budget during former President Barack Obama’s administration, appears less interested in collecting advisory revenue from bankrupt clients, and said that he believes state and local aid should be at the forefront of the next wave of government aid, a popular Democratic talking point. That’s been a point of contention in Congress, though House Speaker Nancy Pelosi has hinted of at least a partial agreement with Mitch McConnell on that part of the rescue.

The Lazard banker expects public criticism to build in coming months over who gets access to funding. Jim Millstein of Guggenheim Securities, a Lazard rival in the restructuring business, said yesterday that the investor class had been a major beneficiary of the Federal Reserve’s moves to backstop the credit markets, surprising exactly nobody.

Separately, Orszag estimated that the Fed will own as much as 15% of corporate debt as it continues to buy bonds, and predicted that government intervention will be prolonged, forcing companies to consider stakeholders other than their investors.

“The backlash is going to be building,” Orszag said. “It’s going to be reaching its peak right when we probably are going to need an additional round of government assistance.”

 

Watch the full interview below:

It is now virtually impossible to get bank credit as lending standards soar.  This is bankrupt many!
(zerohedge)

It’s Now Virtually Impossible To Get Bank Credit As Lending Standards Soar

Two weeks ago we pointed out something concerning:shortly after JPMorgan reported that its loan loss provision surged five fold to over $8.2 billion for the first quarter, the biggest quarterly increase since the financial crisis, in preparation for the biggest wave of commercial loan defaults since the financial crisis…

… the bank  hinted that things are about to get much worse when it first halted all non-Paycheck Protection Program based loan issuance for the foreseeable future (i.e., all non-government guaranteed loans) because as we said “the only reason why JPMorgan would “temporarily suspend” all non-government backstopped loans such as PPP, is if the bank expects a default tsunami to hit coupled with a full-blown depression that wipes out the value of any and all assets pledged to collateralize the loans.”

Shortly after, the bank also said it would raise its mortgage standards, stating that customers applying for a new mortgage will need a credit score of at least 700, and will be required to make a down payment equal to 20% of the home’s value, a dramatic tightening since the typical minimum requirement for a conventional mortgage is a 620 FICO score and as little as 5% down. Reuters echoed our gloomy take, stating that “the change highlights how banks are quickly shifting gears to respond to the darkening U.S. economic outlook and stress in the housing market, after measures to contain the virus put 16 million people out of work and plunged the country into recession.”

Finally, just days later, JPM also exited yet another loan product, when it announced that it has stopped accepting new home equity line of credit, or HELOC, applications. The bank confirmed that this change was made due to the uncertainty in the economy, and didn’t give an end date to the pause.

In short, JPM appeared to be quietly exiting the origination of all interest income generating revenue streams over fears of the coming recession, which prompted us to ask “just how bad will the US depression get over the next few months if JPMorgan has just put up a “closed indefinitely” sign on its window.”

On Monday, we got confirmation that it was not just JPMorgan but all US commercial  banks that are making the issuance of new credit virtually impossible, when the Fed’s April senior loan officer survey showed that banks tightened lending standards across the board for C&I, CRE, mortgage, credit card and auto loans. The loan standards for most products – such as C&I loans, residential morgages and credit cards – were hiked so much they nearly matched the standards during the financial crisis when it was virtually impossible to get any new loans.

On the demand side, banks understandably reported stronger demand for large/medium C&I loans and mortgages but somewhat surprisingly weaker demand for CRE, credit card and auto loans. Most banks that reported stronger C&I loan demand cited an increase in customers’ precautionary demand for cash and liquidity and a decrease in customers’ internally generated funds as reasons, while several banks that indicated weakening CRE and consumer loan demand noted the impact of the COVID-19 crisis. Finally, banks pointed to clients’ increased interest in new credit facilities, in particular the Small Business Administration’s Paycheck Protection Program, which is logical: why struggle to get a nearly impossible bank loan when you can just get a grant from the government.

C&I and CRE loans

Net 41.5% and 39.7% of banks said they tightened lending standards for large/medium and small C&I loans in the April survey, respectively, compared with net flat and 1.4% reporting easing standards in the prior January survey, according to Bank of America. Meanwhile, the share reporting tighter standards for CRE loans jumped to 51.3% in the April survey from 2.9% in the January survey (Figure 4). Note that the CRE value reported here is the average for the three separate questions on loans for construction and land development, loans secured by nonfarm nonresidential structures, and loans secured by multifamily residential structures, which all showed increases in the share reporting tighter lending standards in the April survey compared to the January survey.

Meanwhile, a net 7.6% of banks reported stronger demand for large/median C&I loans while the net change in demand for small C&I loans was flat in the April survey, respectively, compared with net 11.1% and 11.4% reporting weaker demand in the January survey. On the other hand, the net share reporting weaker CRE loan demand increased to 33.8% in April from 1.5% in the January survey (Figure 5).

Mortgages

Net 1.8% and 18.5% of banks reported tighter lending standards for GSE-eligible and QM-jumbo mortgages in April, respectively, versus net 3.2% and 1.6% reporting easier standards in the prior January survey (Figure 6). On the other hand, the net share of banks reporting stronger demand increased to 21.8% and 27.3% in April from 20.6% and 11.3% in January for GSE-eligible mortgages and QM-jumbo mortgage loans, respectively (Figure 7).

Consumer loans

The net share of banks reporting tighter lending standards increased to 38.5% and 16.0% in April from 13.6% and 8.9% in January for credit card and auto loans, respectively (Figure 8). On the other hand, net 23.1% of banks reported weaker demand for credit card loans in April vs 2.3% reporting stronger demand in January, and net 34.7% reported weaker demand for auto loans, up from 5.4% in January (Figure 9).

END

You must listen to Sam Zell, real estate mogul of the uSA: the coronavirus will be the cause of a Great Depression , worse than the depression of 1929

(zerohedge)

Sam Zell: Fallout From Coronavirus Will Be “Worse Than The Great Depression”

Billionaire real-estate investor Sam Zell just became the latest bold-faced name to suggest that maybe – just maybe – the “V-shaped” rebound that investors seem to be anticipating probably isn’t going to pass.

Instead, the real-estate investing legend, who earned his nickname “the Grave Dancer” buying up distressed properties in the 1970s, said he believes the economy has been deeply scarred by this experience, and is in far worse shape than it appears. Instead of a lazy summer boat ride, the US is in for a grueling slog back to growth.

While Zell doesn’t enjoy the same level of name recognition as Warren Buffett, the ‘Oracle of Omaha’ who dumped his airline stocks and declared he was ‘sitting this one out’ for the good of Berkshire’s investors, his opinion still carries a lot of weight.

To be sure, Zell has almost certainly suffered some pretty serious blowback from the pandemic-induced market crash. Late last year, as the virus was first emerging in Wuhan, Zell was telling everybody who would listen about the untapped value in the distressed energy space (one of a handful of distressed bets that didn’t go his way). So he has a reason to be pessimistic.

But without exaggeration, Zell proclaimed that the impact on the impact on the economy from the coronavirus will be worse than the Great Depression 80 years ago, complete with long-lasting changes in human behavior that imperil many business models.

“Too many people are anticipating a kind of V-like recovery,” Zell said in an interview with Bloomberg Television. “We’re all going to be permanently scarred by having lived through this.”

And just as the Depression left a generation that seemingly couldn’t shake the experience, leading to a lifetime of thrift and risk aversion, Zell believes this “extraordinary shock” will also be hard to forget. The full scope of the economic damage won’t truly be visible until the economy reopens, and consumers realize that many retailers won’t be coming back. He also said he expects many hotels around the world won’t be capable of reopening.

“Just like we won’t see a lot of retailers reopen,” he said, “I think we’ll see a lot of hotels that basically can’t reopen.”

This might be Zell talking his book here, he doesn’t believe that the virus will the be a death knell or big cities like New York, nor that warehouses are the smartest bet in commercial real-estate right now. But for now, at least, Zell says he’ll be waiting on the sidelines watching other buyers and sellers perform the difficult work of post-dislocation price discovery.

For now, Zell believes the commercial real-estate market will likely be quiet as the market takes a beat to adjust.

“Those sellers that wanted to sell still remember the prices that were available seven or eight weeks ago. The buyers are looking at a very different world and expecting to see significant discounts,” he said. “When you’ve got that big a spread, nothing happens.”

With so much corporate debt, Zell said that a wave of bankruptcies – like the wave already forming in the retail space – is badly needed to clear the decks.

“Bankruptcies are what you need to clear markets and what you need to end recessions and dips,” Zell said. “The fact that there’s a lot more distressed players today will help clear the market, but it also means that there aren’t anywhere near as many opportunities as there were in the past.”

 
END
Mish describes the true retirement costs in Illinois: it is 58% of budget..wow!!
(Mish Shedlock/Mishtalk)

Illinois’ True Retirement Costs Surge Near 60% Of The Budget

Authored by Mike Shedlock via MishTlak,

JPMorgan’s latest pension graphic captures so much of what’s wrong with Illinois’ collapsing finances

Illinois was in an actuarial mess long ago. Covid-19 makes it harder to ignore says Wirepoints.

The chart by Michael Cembalest shows Illinois was paying about 25% of its budget for pension costs.

Before Covid-19, Illinois should have been paying over 50% to be sound on an actuarial basis. Now, the true costs are 58% of the budget.

Illinois has the worst funded pension plans in the nation. That was true before Covid-19 as well.

New Jersey, Hawaii, Connecticut, and Kentucky are next in line. But no other state comes close to having that much of their budgets swallowed by retirement costs.

McConnell Says Let the States Go Bankrupt 

In a Hugh Hewitt interview last month, Senate Majority leader Mitch McConnell Pushes Bankruptcy.

HH: I think people do not understand how badly mismanaged some states have been, and their unfunded liabilities. And if they were in the private sector, they would have to reorganize under the bankruptcy code. But there is no bankruptcy code chapter. Do you think that we need to invent one for states so that they can discharge some of these liabilities that were put in place by previous governors like, I mean, Jerry Brown ran a giveaway program for public employee unions that was just astonishing, and as did Gray Davis, as did, you know, a lot of Democratic governors, Illinois is probably the worst, and Connecticut.

MM: Yeah, I would certainly be in favor of allowing states to use the bankruptcy route. It saves some cities. And there’s no good reason for it not to be available. My guess is their first choice would be for the federal government to borrow money from future generations to send it down to them now so they don’t have to do that. That’s not something I’m going to be in favor of.

Unfortunate State of Bankruptcy Code

Unfortunately, states do not have the ability to declare bankruptcy under current law.

Cities and municipalities do have the right, but only if the states allow it.

According to Pew, Only 12 states authorize cities to file  without conditions, and another 12 permit filing with certain stipulations.

“For 50 years, Detroit’s economy,  its physical infrastructure, and its social structure had been on a steady decline. And the political system did nothing whatsoever about it,” says Richard Ravitch, former lieutenant governor of New York, who helped New  York City avoid bankruptcy in 1975 and has been advising Detroit officials.

By the time the state got involved in 2011, it was too late. The police chief described the situation as not only a  financial crisis but also a “service delivery insolvency,” characterized by high crime rates, broken streetlights, thousands of abandoned and blighted structures and lots, and closed parks, among other problems.

Illinois Cities in Same Situation as Detroit (by Population Rank)

  • Rockford (4)
  • Peoria (7)
  • Danville (61)
  • East St. Louis (81)
  • Kankakee (86)
  • Melrose Park (89)
  • Harvey (96)
  • Blue Island (109)
  • Evergreen Park (124)
  • Cairo (461)

All of those are dead or dying cities. All but Rockford and Peoria turn up in a Wirepoints report on Troubled Pension Plans.

Illinois Insolvent Pension Plans

In What’s Next for Illinois, Wirepoints mentions Rockford, Harvey, Palos Heights, East St. Louis, Peoria, Danville and dozens of other cities (see graph below)

Rockford’s is the fourth largest city in Illinois with a population of 147,881, nudged out of third place by Joliet with 147,957.

Illinois is Insolvent: State Requests a Pension Bailout From Congress

On April 17, I commented Illinois is Insolvent: State Requests a Pension Bailout From Congress

No Bailout

Illinois does not deserve a bailout. Its pension woes are of it own making and have nothing to do with the coronavirus.

Three National Priorities

  1. Bankruptcy legislation that allows municipalities to file when they want to, not when dictators like Illinois’ House Speaker Mike Madigan allow them.
  2. National right-to-work legislation that supersedes state legislation.
  3. Scrap Davis-Bacon and all prevailing wage laws

Explaining Dysfunctional Illinois in One Word, One Idea, One Person

I mentioned those priorities on Jan 9, 2017 , in Explaining Dysfunctional Illinois in One Word, One Idea, One Person

McConnell is correct, at least as pertains to municipalities: “There’s no good reason for it [municipal bankruptcy] not to be available,” said McConnell.

There is a Reason, But Not a Good One 

Republicans could easily have passed all three of those priorities when they held both houses of Congress.

But they didn’t.

What are McConnell’s and Trump’s excuses for that?

 

 

 

end

 

CMBS (COMMERCIAL MORTGAGE BACKED SECURITIES)

CMBS debt is on the verge for default …..  A monstrous 1/4 of all outstanding CMBS debt is on the verge of default

(zerohedge)

 

 

“Bracing For The Worst Crash Of Their Careers”: A Quarter Of All Outstanding CMBS Debt Is On Verge Of Default

Last week we reported that according to the latest TREPP remittance data compiled by Morgan Stanley, a record 66 CMBS loans totaling $1.0bn became newly delinquent in April, which was the greatest month-over-month change on record. In total, 324 loans with a total balance of $4.8bn are currently delinquent, which is also an all time high.

What was more troubling than the plain vanilla surge in delinquencies, is the coming deluge of defaults. Recall that a CMBS loan becomes delinquent after it misses two consecutive payments. Loans that have missed just one month of interest are classified as “late but within grace period” or “late beyond grace period”. It is this measure that spiked a record 600bp MoM to ~8.5%.

Yet it now appears that this data was not only somewhat stale but also dramatically underestimated the full severity of the commercial real state catastrophe over the last weeks of April, because according to Fitch data, borrowers with mortgages representing almost $150 billion in CMBS, accounting for 26% of the outstanding debt, have asked about suspending payments in recent weeks – an unprecedented surge in requests for payment relief on CMBS, and an early sign of the severity of the pandemic-induced real estate crisis. Putting this number in context, after the last financial crisis, delinquencies and foreclosures on the debt peaked at 9% in July 2011. So here we are, barely a month into the corona crisis, and the number is already three times greater!

While not all of the borrowers who have requested forbearance will be delinquent or enter foreclosure, Fitch estimates that the $584 billion industry could near the 2011 peak as soon as the third quarter of this year.

With a deluge of default on deck, the special servicers who handle vulnerable CMBS loans, are bracing for what Bloomberg called  “the worst crash of their careers”, by which of course it meant best, because the more the default, the greater the payday for the special servicers. They’re staffing up following years of downsizing to handle a wave of defaults, modification requests and other workouts, including potential foreclosures.

“Everything is happening at once,” said James Shevlin, president of CWCapital, a unit of private equity firm Fortress Investment Group and one of the largest special servicers. “It’s kind of exciting times. I mean, this is what you live for.”

AS discussed last week, unlike the last financial crisis which was ignited by a surge in residential foreclosures as the housing market was one giant bubble, now commercial real estate is getting hit not because of outsized valuation but because of collapsing cash flows with the economic shutdown shuttering stores and putting travel on ice.

Making matters worse is that unlike residential real estate, there’s no bailout relief plan for commercial real estate, and while bankers usually have leeway to negotiate payment plans on commercial property, options for borrowers and lenders are limited for CMBS and foreclosure is usually a quick end to any delinquency or default.

Meanwhile, as we reported last week, the debt transferred to special servicers from master servicers, mostly banks that handle payment collections, is already swelling. Unpaid principal in workouts jumped to $22 billion in April, up 56% from a month earlier, according to the data firm Trepp.

Similar to the mob, special servicers make money by collecting outstanding debt and charging fees based on the unpaid principal on the loans they manage. Most are units of larger finance companies. Midland Financial, named as special servicer on approximately $200 billion of CMBS debt, is a unit of PNC. Rialto Capital, owned by private equity firm Stone Point Capital, was a named special servicer on about $100 billion of CMBS loans. LNR Partners, which finished 2019 with the largest active special-servicer portfolio, is owned by Starwood Property Trust, a real estate firm founded by Barry Sternlicht.

Quoted by Bloomberg, Sternlicht said during a conference call on Monday that special servicers don’t “get paid a ton money” for granting forbearance.

“Where the servicer begins to make a lot of money is when the loans default,” he said. “They have to work them out and they ultimately have to resolve the loan and sell it or take back the asset.”

In other words, special servicers are about to make a killing.

And again, just like the mob which thrives in times when other sources of funding are scarce, special servicers often play hardball, demanding personal guarantees, coverage of legal costs and complete repayment of deferred installments, according to Ann Hambly, chief executive officer of 1st Service Solutions, which works for about 250 borrowers who’ve sought debt relief in the current crisis.

“They’re at the mercy of this handful of special servicers that are run by hedge funds and, arguably, have an ulterior motive,” said Hambly, who started working for loan servicers in 1985 before switching sides to represent borrowers.

On the other hand, perhaps comparisons to the mafia are a bit exaggerated: fears about self-dealing are overblown according to Fitch’s Adam Fox, whose research after the 2008 crisis concluded most special servicers abide by their obligations to protect the interests of bondholders: “There were some concerns that servicers were pillaging the trust and picking up assets on the cheap,” he said. “We just didn’t find it.”

Maybe Fitch just didn’t look hard enough. After all, it wouldn’t be the first time that a rating agency has missed something rather big starting it right in the face.

Mob or not, it’s time for special servicers to party because after nearly a decade of downsizing where anyone could obtain or refi a loan on even cheaper terms, it’s jackpot time. Also unlike the last crisis, this time the spoils will be shared by far fewer: the seven largest firms employed 385 people at the end of 2019, less than half their headcount at the peak of the last crisis.

The good news is that once a debt collected, always a debt collected, and Miami-based LNR, where headcount ended last year down 40% from its 2013 level, is calling back veterans from other duties at Starwood and looking at resumes. CWCapital, which reduced staff by almost 75% from its 2011 peak, is drafting Fortress workers from other duties and recruiting new talent, while relying on technology upgrades to help manage the incoming wave more efficiently.

“It’s going to be a very different crisis,” said Shevlin, who has been in the industry for more than 20 years. And while commercial real estate borrowers are bracing for the “worst crash of their careers”, the special servicers – and other debt collectors – are about to enjoy the biggest bonanza they have ever seen.

end

Tom Luongo explains beautifully the Beef dislocation of supply and why beef prices are rising

(Tom Luongo)

 

“Where’s The Beef?” – Not On The Horizon!

Authored by Tom Luongo via Gold, Goats, ‘n Guns blog,

The reports continue to come in that there’s a real problem with the U.S. food supply. From McDonald’s reviewing their supply chain for beef to the pleas of ranchers already staring at feeding issues with last year’s poor harvests the signs are there for a major supply dislocation in beef going forward.

Kroger is limiting the amount of beef and pork people can buy.

My local Winn-Dixie has had limits on large cuts of pork for the past couple of weeks. Porn loins have been gone for weeks now, so no pork jerky for us, which is a tragedy.

Now Wendy’s, which doesn’t use frozen beef, is reporting more than 20% of their stores are out of beef.

Stephens analyst James Rutherford noted 18% of Wendy’s restaurants were “completely sold out of beef items as of Monday evening,” reported Bloomberg.

“By our count 1,043 Wendy’s units were selling zero beef items yesterday evening,” but within the figure, about 128 restaurants were still selling beef chili. Rutherford added that the shortage varies across the country and said some restaurants still have full menus, while states like Ohio, Michigan, Tennessee, Connecticut, and New York are “fully out of fresh beef.” The note also said Wendy’s is “more exposed” to meat shortages because of its reliance on fresh beef compared with its competitors.

If you subscribe, like I do now, to the idea that this Coronapocalypse is mostly a cover story for the failures of the global financial and political system to usher in a new round of totalitarian control then destroying the most vulnerable, yet important, part of our food supply would be a key strategic goal.

My talk with Patrick Henningsen of 21st Century Wire recently covered the motive, means and opportunity for why this perspective should be our default setting.

But this beef shortage has been a year in the making. Last year because of poor grain harvests, especially corn, where millions of bushels came in at quality not even fit for silage, we were already expecting disruptions in the beef market as ranchers were thinning herds and bidding up the price of feeder calves earlier in year.

I’ve spoken with ranchers here in Florida about this. And this is an area which 1) grows a lot of cows, and 2) where meat packing plants have been mostly unaffected by COVID-19. So, it’s important when I tell you this dynamic in January and February has completely reversed itself.

Finished cattle are fetching excellent prices while feeders are down. Comex Live Cattle futures, however, have yet to get the news because the dislocation in the supply chain has farmers slaughtering animals faster than they can be processed and brought to market.

And just like in the oil industry, once you kill a heifer or cap a well it takes a long time to bring that lost supply back into the supply chain.

Moreover, the supply bottlenecks are not at the independent processors, but the large scale ones who are optimized to feed this meat into the restaurant and food service supply chain rather than to the supermarkets.

And even then, they are experiencing shortages, which means there is a real dislocation in the supply chain that isn’t going to be easy to unwind.

More than chicken or pork, beef is vulnerable because of the life cycle of the cow and the time necessary to rebuild a robust supply chain. And with huge uncertainty in the market right now who can blame ranchers for conserving cash and being defensive.

This is no different than any another commodity with high start up costs. It involves high risk and a long time to return on that risk. So when the market gets ugly, better safe than sorry.

Why?

Because animals take a long time to recover when lost. I’ve been there, I’ve lost dairy goats to disease. Not only does it break your heart losing an animal you’ve bottle raised but you’ve lost years of input costs and future production.

For a cattle rancher looking at slaughtering middle-aged, productive heifers because of poor market conditions the time is prohibitive. Here’s the data for how long it takes to replace the lost production from this year because it was slaughtered as opposed to birthing next year’s food.

Shave a month or two off these times depending on breed, conditions etc. but the basic math is inarguable. Slaughtering a productive heifer takes around six years to replace.

Pigs aren’t nearly as bad. This is why the pork industry can bounce back so quickly from swine flu outbreaks.

And guess who can ill afford to lose these heifers? The smaller ranchers working on thinner margins because they have fewer animals to spread fixed costs over.

If you think the fixed costs due to government-mandated food safety and the like will be lightened in the coming years, then I suggest you are terminally naive. If anything it will get worse for domestic producers.

Because we’ve blown open gaping holes in government budgets which can’t be filled with deficit spending. So, we’ll see more stringent enforcement of petty crimes and an increase in fines which always fall hardest on the smaller producers who don’t have the resources or political clout to fight them.

In fact, this is what I’ve been banging on about as the real problem with our response to the financial crisis and the Coronapocalypse. Why has the private sector been shut down, tens of millions thrown out of work, while no one is talking about downsizing the costs of local, state and federal government agencies?

As a libertarian I want to see freedom return to the food production industry, the barriers to small farmers torn down and the assumption of risk placed back on the consumer and producer equally rather than the government through the USDA providing the false security of its stamp of approval and leaving the door open to systemic corruption and inefficiency.

Justin Amash

@justinamash

Instead of using government to force meat processing plants to open, let’s pass @RepThomasMassie’s PRIME Act to get government out of the way of farmers who want to sell meat directly to consumers, restaurants, and grocers within their state. Happy to be an original cosponsor.

Why are the productive members of society losing their jobs by the millions? These are the people who produce the taxes which pay for all this wonderful government oversight which is responsible for clogging up the supply chains for everything from oil to beef to paper products.

Shouldn’t they be the ones at work? Shouldn’t the secretaries, janitors, administrators, middle managers, statisticians, HR managers, lawyers, assistants and department heads who cost taxes to pay their salaries be the ones on the unemployment lines?

How many jobs could we save by downsizing, right now, the Federal government back to levels seen just ten years ago? Imagine how much cheaper things would be if most of the USDA and Department of Agriculture were laid off right now and those savings used to not pay farmers to plough under crops to maintain prices or slaughter animals which are now financial burdens.

Imagine how many lives wouldn’t be needlessly destroyed (the stock) and disrupted (the people) while we quickly reorient capital spending towards the things we truly need.

Now what if instead of freaking out and destroying our society and our food supply about a disease not much worse than the annual flu our state and local governments did the same things?

At the end of the day the costs are the costs and bailing out one side of the tax ledger is demonstrably more expensive than bailing out the other. Because every private worker laid off is another one not paying taxes to support the job of the government worker.

And we still have to pay both unemployment and the government worker’s salary. If you fire the government worker, you just have to pay his unemployment. The salary and the benefits are eliminated.

If we have to downsize and tighten our belts during a crisis, why shouldn’t we start with the true luxury item, government itself.

Beef isn’t a luxury item it is a response to our expanded and diverse division of labor which allows us to utilize the vast lands of North America to grow cattle, lands beautifully suited to the task with people happy to make their living doing so.

But it will not continue so long as busybodies and ideologues continue standing in the way of our solving real problems.

The problem isn’t the farmers, the truckers, the refrigeration companies and the consumers, the problem is where it always is, in the decrees of clueless government officials with a pretense of knowledge who use their monopoly power over pointing guns and using force to stand in the way of progress during the good times and fixing what’s broken during the bad.

And until we get this through our thick heads, until we stop looking for handouts and bailouts we will have no one to blame but ourselves, especially when the pantries are empty and hamburger is $12 a pound.

*  *  *

Join my Patreon if you want help figuring out how to find new solutions to old problems.  Install the Brave Browser if you want to limit what Google knows about you.

end

Uber slashes 3700 jobs//gig economy is now crushed

(zerohedge)

Uber Slashes 3,700 Jobs As Lockdowns Crush Gig-Economy 

On Tuesday, it was Airbnb Inc. announcing layoffs. Now it appears Uber has done the same, indicating in a company filing on Wednesday morning that it will cut 3,700 of its 26,900 employees or about 14% of its workforce.

“On May 6, 2020, Uber Technologies, Inc. (the “Company”) announced plans to reduce its operating expenses in response to the economic challenges and uncertainty resulting from the COVID-19 pandemic and its impact on the Company’s business. Due to lower trip volumes in its Rides segment and the Company’s current hiring freeze, the Company is reducing its customer support and recruiting teams by approximately 3,700 full-time employee roles. In connection with these actions, the Company estimates that it will incur approximately $20 million related to severance and other termination benefits. The Company is evaluating other cost and will provide an update in subsequent SEC disclosures regarding such amounts, if material,” the filing states.

Uber’s stock plunged nearly 4% Wednesday morning.

A recent report from The Information suggests lockdowns have sent global bookings of the ride-sharing company down at least 80%. These are similar numbers to the collapse in Airbnb bookings since mid-March.

Khosrowshahi told employees in a memo on Wednesday:

“We are looking at many scenarios and at each and every cost, both variable and fixed, across the company,” Khosrowshahi said. “We want to be smart, to move fast, to retain as many of our great people as we can, and treat everyone with dignity, support and respect.”

Full memo below (via CNBC):

Team Uber,

I wanted to let you know that we just announced the elimination of around 3,700 roles in CommOps and Recruiting, and the closure of 40% of our Greenlight locations. You can read the emails that were sent to those teams here.

With the reality of our Rides trips volumes being down significantly, our need for CommOps as well as in-person support is down substantially. And with our hiring freeze, there simply isn’t enough work for recruiters.

This is not in any way a reflection of these employees’ efforts or contributions to getting us to where we are, as a service that everyone associates with movement and earnings opportunities. We wouldn’t be here without their efforts and I want to personally thank them for everything they’ve done for Uber.

We have worked hard to put together generous severance packages with a longer period of healthcare coverage to help provide a bridge, and we are also supporting EXTs whose roles are affected by today’s decision.

That’s today’s news. But, as I said at yesterday’s All Hands, this is one part of a broader exercise to make the difficult adjustments to our cost structure (team size and office footprint) so that it matches the reality of our business (our bookings, revenue and margins). We are looking at many scenarios and at each and every cost, both variable and fixed, across the company. We want to be smart, to move fast, to retain as many of our great people as we can, and treat everyone with dignity, support and respect. As I said yesterday, you can expect we will have a further, final update for you within the next two weeks.

Days like this are brutal. I am truly sorry that we are doing this, just as I know that we have to do this. And while it’s easier said than done, we have to keep our heads down and keep executing, because that—and nothing less—is what will keep Uber going and get us to the other side.

Given this news, and since we have Q1’20 earnings tomorrow, I thought it would be good to get everyone together again on Friday for a Global All Hands, where we can walk through our financial results and today’s changes, and can continue to answer your questions as openly as possible. Keep an eye out for an invite soon.

UberOn,

Dara

And just like that, gig-economy companies are struggling to survive in virus lockdowns that now risk ushering in a depression.

end
Lord and Taylor to liquidate/it is totally bust
(zerohedge)

Lord & Taylor Plans To Liquidate, ‘Going Out Of Business’ Sales Expected As Soon As Stores Reopen

During an interview with Bloomberg News that aired yesterday, billionaire real-estate investor Sam Zell warned that Americans probably won’t realize the depths of the economic scarring caused by the coronavirus shutdown until restrictions are lifted, and thousands of businesses simply never return.

Well, readers might have just gotten a taste of what this shock might be like, because after a flurry of reports about looming Chapter 11 filings involving major mall stalwarts like Neiman Marcus, JC Penney, J Crew and Saks Fifth Ave (among others), Reuters added on Wednesday that Lord & Taylor would likely proceed with a liquidation instead of trying to tough it out through bankruptcy.

To be clear, for those – like CNBC’s Scott Wapner – who aren’t well-versed in the workings of corporate finance: When a company files for Chapter 11 protection, typically, the underlying business will continue to function as normal (or something approximating that), while the court sorts the mess out, creditors find some new common ground, and (again, typically) equity shareholders are totally wiped out.

But when a company decides to proceed with liquidation, things get a lot dicier, the businesses often cease operating (leading to the termination of all workers) while all of the company’s assets are typically sold off to pay back creditors.

Having sold its former HQ building to WeWork a couple of years ago, L&T is now planning to liquidate the inventory in all 38 of its stores. Typically, this is done via “going out of business sales”, as owners scramble to sell all of their inventory before they turn off the lights and walk away.

Venerable U.S. retailer Lord & Taylor plans to liquidate inventory in its 38 department stores once restrictions to curb the spread of coronavirus are lifted as it braces for a bankruptcy process from which it does not expect to emerge, people familiar with the matter said on Tuesday.

Lord & Taylor’s preparations to liquidate its inventory as soon as its stores reopen offer a window into the grim future of a high-profile retailer – a storied department store chain founded in 1826 and billed as the oldest in the United States – that does not expect to survive the pandemic’s economic fallout.

On Monday, retailer J.Crew Group Inc filed for bankruptcy protection with a plan to avoid liquidation and reorganize its debts thanks to an agreement with its creditors.

Retailers that pursue a liquidation hold “going out of business” sales in order to generate cash, and their stores often become magnets for consumers looking for bargains. Lord & Taylor is holding off on a bankruptcy filing and subsequent liquidation until it can reopen its stores to attract those shoppers, according to the sources, who spoke on condition of anonymity.

Lord & Taylor has lined up liquidators to help it run the “going out of business” sales and is girding to permanently close all its stores once the merchandise is sold, some of the sources said. The retailer had been exploring filing for bankruptcy among other options, including trying to negotiate relief from creditors and finding additional financing.

The sources said that it remained possible that external funding or some other intervention could rescue Lord & Taylor, and asked not to be identified because the liquidation preparations are confidential.

Lord & Taylor did not respond to a request for comment.

Its stores are primarily in the northeastern United States, which has been hit hard by the pandemic, making the exact timing of the bankruptcy filing hard to plan, the sources said. Lord & Taylor also has stores in the Chicago area and Florida.

Though Hudson’s Bay retained ownership of Lord & Taylor’s choice assets, and might cash out more during the bankruptcy, the investor, which also owns a chunk of Saks Fifth Avenue, sold Lord & Taylor to fashion rental startup Le Tote last year when it spun it off from Saks.

Fashion rental service start-up Le Tote acquired Lord & Taylor last year from Saks Fifth Avenue owner Hudson’s Bay Company for C$100 million ($71 million).

Hudson’s Bay kept ownership of some of Lord & Taylor’s real estate and assumed responsibility for its rent payments, amounting to tens of millions of dollars a year.

Hudson’s Bay may use the bankruptcy filing to take some of its leases back from the department store operator, one of the sources said.

Le Tote declined to comment. Hudson’s Bay did not immediately respond to a request for comment.

Other department store operators – already hit hard by competition from online rivals – are also struggling to survive. Neiman Marcus Group plans to file for bankruptcy within days, while J.C. Penney Company Inc is also considering a similar move, Reuters previously reported.

Neiman Marcus and JC Penney at least appear to have struck deals with creditors to extend enough financing to tide the retailers through the bankruptcy, where the unsustainable ghosts of LBOs past will finally be excised. Macy’s is trying to do the same – though whether or not it will succeed remains unclear. For the former companies, these arrangements have probably taken liquidation off the table – for now at least.

Over the longer term, survival will depend on whether the American economy is as “deeply scarred” from the lockdowns as people like Zell fear it might. As one of the oldest department stores in the world, Lord & Taylor was founded in 1826 by two English immigrants to the Lower East Side. During the Civil War, the company sold mourning outfits to widows. But it floundered over the decades as lower-cost competitors like TJ Maxx and Macy’s ate into its market share. Investment firm NRDC Equity Partners acquired Lord & Taylor for $1.2 billion in 2006, when department stores were still doing well, and later it became a part of Hudson’s Bay.

On the bright side: At least when the lockdowns end, New Yorkers will have an excellent opportunity to do some bargain shopping.

end

Strange: a researcher on the cusp of a COVID 19 breakthrough at the University of Pittsburgh has been killed in a bizarre murder suicide

(zerohedge)

Researcher On Cusp Of COVID-19 Breakthrough Killed In Bizarre Murder-Suicide

A University of Pittsburgh researcher working on a coronavirus project was fatally shot on Saturday at his home in Ross Township, while associate Hao Gu, 46, was found dead in a car approximately 100 yards away of what appeared to be a self-inflicted gunshot.

The researcher, 37-year-oild Bing Liu, was found shot multiple times in the head, neck and torso around Noon on Saturday. Nothing was stolen from the townhouse and there was no forced entry, according to the Post Gazette. He worked in the college’s department of computational and systems biology at the Pitt School of Medicine.

Bing was on the verge of making very significant findings toward understanding the cellular mechanisms that underlie SARS-CoV-2 infection and the cellular basis of the following complications,” the department announced in a written statement, adding “We will make an effort to complete what he started in an effort to pay homage to his scientific excellence.”

Liu’s expertise was developing computational models, simulation and analysis techniques to study the dynamics of biological systems – in some cases using machine learning techniques to understand cellular processes, according to his bio.

He was described as an outstanding teacher and mentor.

“He was a very talented individual, extremely intelligent and hard-working,” said the head of his department, Ivet Bahar. “He has been contributing to several scientific projects, publishing in high-profile journals. He was someone whom we all liked very much, a very gentle, very helpful, kind person, very generous.”

“We are all shocked to learn what happened to him. This was very unexpected,” she added.

…Mr. Liu has co-authored 30-plus publications, including four in 2020. Ms. Behar said he had just begun research on the novel coronavirus.

He was just starting to obtain interesting results,” she said. “He was sharing with us, trying to understand the mechanism of infection, so we will hopefully continue what he was doing.”’ –Post Gazette

“His loss will be felt throughout the entire scientific community,” said the university in a statement.

The motive in the shooting is unknown and the investigation is ongoing. A formal ruling from the Allegheny County Medical Examiner’s Office regarding the cause and manner of Gu’s death is pending, according to the report.

end

iv) Swamp commentaries)

This ought to be fun!!

 

Grenell Gives Schiff Ultimatum: ‘Release Secret Russiagate Transcripts Or I Will’

Acting Director of National Security Richard Grenell has given Rep. Adam Schiff (D-CA) and ultimatum; release 53 of the transcripts from 53 secret interviews conducted by the House Intelligence Committee’s Trump-Russia investigation, or Grenell will do it through the Office of the Director of National Intelligence, according to the Washington Examiner.

In a letter to Schiff, Grenell noted that the transcripts of all 53 interviews – consisting of more than 6,000 pages, have been cleared for public release.

“All of the transcripts, with our required redactions, can be released to the public without any concerns of disclosing classified material,” wrote Grenell in the May 4 letter.

The Intel Committee did the first probe into Russia’s 2016 campaign interference and allegations of Trump-Russia collusion. Even today, its findings make up most of what we know about the affair. As part of that investigation — it was run by then-majority Republicans — the committee interviewed some key witnesses in the Trump-Russia matter: Donald Trump Jr., Steve Bannon, Andrew McCabe, Sally Yates, Michael Cohen, Hope Hicks, and many more. –Washington Examiner

The decision to make the transcripts public was reached in  September 2018, when the House was still controlled by the GOP, with the caveat that they would need to be first checked by the Intelligence Community for classified information.

Two weeks ago, the Wall Street Journal reported that the Intelligence Community had finished reviewing 43 of the transcripts, but that Schiff was sitting on them – and had prevented declassification of the remaining ten transcripts.

In fact, Grenell reveals in his letter that Schiff has been sitting on the 43 transcripts since June 2019. With the remaining 10 cleared, Grenell wrote:

“I urge you to honor your previous public statements, and your committee’s unanimous vote on this matter, to release all 53 cleared transcripts to Members of Congress and the American public as soon as possible,” adding “I am also willing to release the transcripts directly from the Office of the Director of National Intelligence, as to ensure we comply with the unanimous and bipartisan vote to release the transcripts.”

Your move, Schiff.

END

Thousands Donate To GoFundMe For Jailed Salon Owner Who Stood Up To Judge In Viral Video

GoFundMe account set up for a Texas salon owner who was sentenced to seven days in jail for flouting Governor Greg Abbott’s stay-at-home rules has raised over $175,000$265,000 as of this writing.

Shelly Luther, owner of Salon À la Mode, found to be in criminal and civil contempt by Judge Eric V. Moyé of 14th Civil District Court in Dallas County, who also slapped her with a $7,000 fine, after she continued to operate in violation of the statewide order and a restraining order from the court.

Luther, 46, received a cease-and-desist letter from ordering her to close the salon. Instead, she made a public display of ripping it up – which gained attention among supporters, several of whom were at court.

Judge Moyé chastised Luther, saying she acted selfishly when she resumed operations – and called on her to apologize to elected officials whose orders she disobeyed. Moyé added that until a vaccine is found for COVID-19, citizens must obey emergency orders, according to the New York Times.

“Failure to do so will only have catastrophic consequences,” he said, adding “and those reach far beyond the exigencies of one family or one business.”

In response, Luther said in a now-viral video: “I have to disagree with you, sir, when you say that I’m selfish, because feeding my kids is not selfish,” adding “So, sir, if you think the law’s more important than kids getting fed, then please go ahead with your decision. But I am not going to shut the salon.

Sara Gonzales

@SaraGonzalesTX

A judge told Shelley Luther, the salon owner who opened her business in defiance of the governor’s orders, that she had the option to avoid jail time if she admitted to the government she was “wrong” and “selfish” for opening.

Here is her response:

Embedded video

Sara Gonzales

@SaraGonzalesTX

While criminals are being released into the streets, Shelley was sentenced to 7 days in jail.

END

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

German court’s ECB bond buy ruling hits euro, bonds, stocks

Germany’s top court ruled that the Bundesbank must stop buying bonds under the European Central Bank’s stimulus scheme if the ECB cannot justify the purchases.  The ruling that Germany’s central bank must end the government bond purchases within three months unless the ECB can prove they are needed clouds the bloc’s monetary policy outlook at a time when the coronavirus is hammering economic growth…  https://www.reuters.com/article/eurozone-markets-german-court-idUSL8N2CN30D

Defiant ECB Pledges Full Commitment after German Ruling on QE – pledging to continue doing everything necessary to revive inflation…

https://www.bloomberg.com/news/articles/2020-05-05/defiant-ecb-pledges-full-commitment-after-german-ruling-on-qe

Fed Is Propping Up Companies It Had Warned Banks Not to Touch

  • Indebtedness will be measured using adjusted earnings
  • Fed had criticized leveraged borrowers for abusing adjustments

At issue is the trend among many leveraged companies to “adjust”… earnings before interest, taxes, depreciation and amortization, or Ebitda — to make them appear more creditworthy. After intense lobbying by business groups, the Fed has now said those adjusted earnings can be used for the Main Street lending program, rather than those under generally accepted accounting standards…  https://www.bloombergquint.com/global-economics/fed-is-propping-up-companies-it-had-warned-banks-not-to-touch

Billionaire Sam Zell Sees Economy Permanently Scarred by Pandemic

  • Investor likens impact on U.S. society to the Great Depression
  • Social distancing, working from home likely to persist a while

Retail, hospitality, travel, live entertainment and professional sports are some of the industries he sees continuing to struggle.  “How soon will anybody get on an airplane? How soon will anybody stay in a hotel? How soon will anybody go to a mall?” he asked. “The fact that these places may be open doesn’t necessarily mean that they’ll be doing business.”…

    For years, Zell has been warning that the U.S. construction boom would result in oversupply and lower prices, and the current shutdown “is going to dramatically make things much worse.”  “Just like we won’t see a lot of retailers reopen,” he said, “I think we’ll see a lot of hotels that basically can’t reopen.”

https://www.msn.com/en-us/news/money/billionaire-sam-zell-sees-economy-permanently-scarred-by-pandemic/ar-BB13CmMq

Retailers Canceling Apparel Orders Amid Coronavirus Torments Clothes Makers – Factories in Asia find few options in battling fashion companies making last-minute purchase changes because of falling saleshttps://www.wsj.com/articles/retailers-canceling-apparel-orders-amid-coronavirus-torments-clothes-makers-11588683151

COVID-19 Will Leave a Lasting Mark on the Shipping Industry

The COVID-19 crisis risks upending the past 30 years of rising intercontinental trade volumes. Countries have implemented various new shipping restrictions to contain the virus, though pandemic-induced declines in demand have so far prevented severe disruptions…

https://worldview.stratfor.com/article/covid-19-will-leave-lasting-mark-shipping-industry-trade-coronavirus-protectionism-exports-supply-chains

Planning for an American Bankruptcy Epidemic – The COVID-19 pandemic looks likely to cause the biggest surge in bankruptcies that the United States’ court system has ever experienced. Without an immediate increase in judicial capacity to manage the coming flood of cases, an even larger economic disaster awaits…  https://www.project-syndicate.org/commentary/america-looming-bankruptcy-epidemic-by-ben-iverson-and-mark-roe-2020-05?

Pence Says White House Weighing Disbanding Coronavirus Task Force

Pence portrayed the task force as having accomplished its goal, as the U.S. outbreak — the largest in the world — plateaus… states are beginning to try to reopen businesses and lift social-distancing regulations as the growth of the outbreak slows…

https://www.msn.com/en-us/news/politics/pence-says-white-house-weighing-disbanding-coronavirus-task-force/ar-BB13DI8R

@CBSNews: President Trump says there will be a “different form” of the White House coronavirus task force, with different peoplefocused on “safety and opening”

Government scientist Neil Ferguson resigns after breaking lockdown rules to meet his married lover – Prof Ferguson allowed the woman to visit him at home during the lockdown while lecturing the public on the need for strict social distancing… The epidemiologist leads the team at Imperial College London that produced the computer-modelled research that led to the national lockdown, which claimed that more than 500,000 Britons would die without the measures… https://www.telegraph.co.uk/news/2020/05/05/exclusive-government-scientist-neil-ferguson-resigns-breaking/

Though hailed as an epidemiologist, Ferguson’s Ph.D. and Master Degrees are in physics.

Sweden tames its ‘R number’ without lockdown  [Imperial College’s infamous model grossly wrong]

Last week, the UK’s R number was estimated at 0.8 (± 0.2 points), a figure described as an achievement of lockdown. But Sweden’s reading is 0.85, with a smaller error margin of ±0.02pts.

     This raises an interesting question: might voluntary lockdowns work just as well? And might they keep the virus at a manageable level with lower social and economic costs?…

    Imperial[College] also applied its UK assumptions to Sweden, warning that its rejection of lockdown was likely to leave the virus rampant with an R of between 3 and 4. That is to say: every person infected would give it to three or four others. Its modelling envisaged Sweden paying a heavy price for its rejection of lockdown, with 40,000 Covid deaths by 1 May and almost 100,000 by June… The latest figure for Sweden is 2,680 deaths, with daily deaths peaking a fortnight ago. So Imperial College’s modelling – the same modelling used to inform the UK response – was wrong, by an order of magnitude…  https://www.spectator.co.uk/article/sweden-tames-its-r-number-without-lockdown

Pitt researcher studying coronavirus killed in suspected murder-suicide in Ross Township

Bing Liu “was on the verge of making very significant findings” in a SARS-CoV-2 research project at the University of Pittsburgh, his department said… “Bing was on the verge of making very significant findings toward understanding the cellular mechanisms that underlie SARS-CoV-2 infection and the cellular basis of the following complications,” the department said in a written statement…

https://www.wtae.com/article/surprising-facts-about-cinco-de-mayo/20123966

Well that is all for today

let us close with this offering courtesy of Shipp and Greg Hunter

Coup Conspiracy Case Will Get Them All – Kevin Shipp

By Greg Hunter On May 6, 2020

Former CIA Officer and counter- terrorism expert Kevin Shipp says America is facing big internal and external foes. One of the biggest external enemies is China, who has taken a huge economic hit over the virus it released globally. Shipp contends, “Trump is finally confronting them (China) with tariffs, so they are hurting there. They are heading for a recession. Huawei is no longer going to be in the United States. That’s a loss of huge revenue. So, my concern is this: China is going to have to escalate to defend itself. In history, we have seen a lot of wars that have been started during an economic crisis where two nations are fighting and there is some sort of economic devastation. That’s where China is right now. I think what is going to happen is China is going to escalate, and we are already seeing that in the South China Sea. They sunk a South Vietnamese fishing boat, and they are rattling their sabers about their own ships in the South China Sea. . . .China is going to escalate using proxies, and then they are going to start saber rattling militarily against the United States. This is NOT good. . . .They are going to have to escalate not just to save their economy, but to also to try to save their position in the world.”

Shipp, who wrote a popular book called “From the Company of Shadows,” is an expert on the shadow government and the Deep State. Shipp says that is the other huge internal enemy of America. The Deep State failed at a coup to remove President Trump from office. Now, the tables have turned, and Shipp thinks Attorney General Bill Barr and his prosecutor John Durham are pursuing a conspiracy case against the coup plotters in the FBI, DOJ and the CIA. This type of case takes time and why nobody has been charged yet. Shipp explains, “I taught conspiracy law at the university level. I don’t think they will be able to get these people individually. You know, the devil made me do it. I was following orders from Barack Hussein Obama, and there is no intent here. I just went with orders I was given and blah, blah, blah. Where it sounds like Durham is going is conspiracy law. If you’ve got one person coordinating with another person, coordinating with another person, coordinating with another person, aka, John Brennan, James Comey and others, and you have them conspiring to spy on the President and the presidential candidate, then you have one or more persons conspiring to violate federal law. Then you have a conspiracy. What a conspiracy charge does is net everybody involved into a felony charge including people that are on the periphery. I think that’s where Durham is going, and that’s where he has a case.”

Does Shipp think the virus debacle that crippled the U.S. economy will hurt Trump’s chances for a second term? Democrats don’t have much of a message or much of a presidential candidate in Biden. So, the hapless Dems will have to cheat, and even that probably is not going to be enough to deny Trump a second term. Shipp says, “Vote by mail is cheat by mail. We know how easy it is to fake a mail-in ballot, especially absentee ballots. Those have been abused in previous elections. . . . That is the easiest way to do voter fraud that there is. . . . The Democrats are terrified. . . . They are terrified that Trump is going to win because it’s pretty obvious he will. . . . They will stop at nothing to try to overturn Trump and retain their power. . . . If Trump gets elected a second time, the investigations will begin, and this will go all the way up to the Ukraine, the activities of the Democrat Party, Barak Obama, Hillary Clinton, their lawyers and their corrupt connections to the Soros organization in Ukraine. That, among other things, will all come out.”

Join Greg Hunter as he goes One-on- One with whistleblower and former CIA Officer Kevin Shipp.

-END-

 

I will see you THURSDAY night.

 

One comment

  1. […] by Harvey Organ, Harvey Organ Blog: […]

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