MAY 7//BIG NEWS OF THE DAY: FED FUNDS RATE IN NOV SIGNALS NEGATIVE INTEREST RATES: THAT PROPELLED GOLD NORTHBOUND: GOLD UP $29.65 TO $1716.65//SILVER UP 45 CENTS TO $15.37//COMEX GOLD TONNAGE STANDING: 26.00 TONNES//SILVER: 25.36 MILLION OZ//CHINA THREATENS THE USA AGAIN OVER ORIGINS OF THE CORONAVIRUS//VIRTUAL CONFERENCE BETWEEN CHINA AND USA SET UP FOR NEXT WEEK: TRUMP MAY RE INSTAL TARIFFS IF CHINA DOES NOT LIVE UP TO ITS DEAL//CORONAVIRUS UPDATES//3.1 MILLION MORE AMERICANS FILE FOR UNEMPLOYMENT BENEFITS//FLYNN GUILTY PLEA VACATED/MORE SWAMP STORIES FOR YOU TONIGHT///

GOLD:$1716.65  UP $29.65   The quote is London spot price

 

 

 

 

 

Silver:$15.37  UP 45 CENTS

 

Closing access prices:  London spot

 

i)Gold : $1718.50  LONDON SPOT  4:30 pm

 

ii)SILVER:  $15.35//LONDON SPOT  4:30 pm

CLOSING FUTURES PRICES:  KEY MONTHS

 

MAY COMEX GOLD:  1721.50 1:30 PM

JUNE GOLD:  $1728.50  CLOSE 1.30 PM//   SPREAD SPOT/FUTURE JUNE: $11.85.//PREMIUMS WENT UP AGAIN

 

CLOSING SILVER FUTURE MONTH

SILVER APRIL COMEX CLOSE: XXX

SILVER MAY COMEX CLOSE;   $15.44…1:30 PM.//SPREAD SPOT/FUTURE MAY:  7 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: 131/326

EXCHANGE: COMEX
CONTRACT: MAY 2020 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,684.200000000 USD
INTENT DATE: 05/06/2020 DELIVERY DATE: 05/08/2020
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
072 C GOLDMAN 4
118 H MACQUARIE FUT 51
323 H HSBC 9
355 C CREDIT SUISSE 9
435 H SCOTIA CAPITAL 157
624 C BOFA SECURITIES 8
657 C MORGAN STANLEY 19
657 H MORGAN STANLEY 100
661 C JP MORGAN 131
686 C INTL FCSTONE 7
690 C ABN AMRO 29 62
732 C RBC CAP MARKETS 3
737 C ADVANTAGE 17 5
800 C MAREX SPEC 23 2
905 C ADM 16
____________________________________________________________________________________________

TOTAL: 326 326
MONTH TO DATE: 5,036

NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT: 326 NOTICE(S) FOR 32600 OZ (1.0139 tonnes)

 

TOTAL NUMBER OF NOTICES FILED SO FAR:  5036 NOTICES FOR 503,600 OZ  (15.6654 TONNES)

 

 

SILVER

 

FOR MAY

 

 

129 NOTICE(S) FILED TODAY FOR  645,000  OZ/

total number of notices filed so far this month: 7082 for 35,410,000 oz

 

BITCOIN MORNING QUOTE  $9275 UP  141 

 

BITCOIN AFTERNOON QUOTE.: $9915 UP $773

 

GLD AND SLV INVENTORIES:

WITH GOLD UP $29.45: AND NO PHYSICAL TO BE FOUND ANYWHERE:

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

 

A SMALL CHANGE IN GOLD INVENTORY//

 

A SMALL PAPER DEPOSIT OF 0.41 TONNES OF GOLD INTO THE GLD//

 

GLD: 1,075.80 TONNES OF GOLD//

 

 

WITH SILVER UP 45 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 SMALL SIZED 152 CONTRACTS FROM 132,573 UP TO 132,725 AND CLOSER TO OUR NEW RECORD OF 244,710, (FEB 25/2020. THE SMALL SIZED GAIN IN OI OCCURRED WITH  OUR 6 CENT LOSS 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, ZERO LONG LIQUIDATION, ACCOMPANYING  A SMALL INCREASE IN SILVER OZ STANDING AT THE COMEX FOR MAY. WE HAD A NET GAIN IN OUR TWO EXCHANGES OF 647 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: 425  AND ZERO FOR ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE  250 CONTRACTS. WITH THE TRANSFER OF 425 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 425 EFP CONTRACTS TRANSLATES INTO 3.485 MILLION OZ  ACCOMPANYING:

1.THE 6 CENT LOSS IN SILVER PRICE AT THE COMEX AND

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

JUNE/2018. (5.420 MILLION OZ);

FOR JULY: 30.370 MILLION OZ

FOR AUG., 6.065 MILLION OZ

FOR SEPT. 39.505 MILLION  OZ S

FOR OCT.2.525 MILLION OZ.

FOR NOV:  A HUGE 7.440 MILLION OZ STANDING  AND

21.925 MILLION OZ FINALLY STAND FOR DECEMBER.

5.845 MILLION OZ STAND IN JANUARY.

2.955 MILLION OZ STANDING FOR FEBRUARY.:

27.120 MILLION OZ STANDING IN MARCH.

3.875 MILLION OZ STANDING FOR SILVER IN APRIL.

18.845 MILLION OZ STANDING FOR SILVER IN MAY.

2.660 MILLION OZ STANDING FOR SILVER IN JUNE//

22.605 MILLION OZ  STANDING FOR JULY

10.025   MILLION OZ INITIAL STANDING IN AUGUST.

43.030   MILLION OZ INITIALLY STANDING IN SEPT. (HUGE)

7.32     MILLION OZ INITIALLY STANDING IN OCT

2.630     MILLION OZ STANDING FOR NOV.

20.970   MILLION OZ  FINAL STANDING IN DEC

5.075     MILLION OZ FINAL STANDING IN JAN

1.480    MILLION OZ FINAL STANDING IN FEB

23.005  MILLION OZ FINAL STANDING FOR MAR

4.660  MILLION OZ FINAL STANDING FOR APRIL

45.360 MILLION OZ INITIALLY STANDING FOR MAY

 

WEDNESDAY, AGAIN OUR CROOKS USED COPIOUS PAPER IN ORDER TO LIQUIDATE SILVER’S PRICE…AND THEY WERE SUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT FELL 6 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 GAIN IN SILVER OZ STANDING FOR MAY, HUGE BANKER SHORT COVERING  AND 4) ZERO LONG LIQUIDATION AS  WE DID HAVE A  NET GAIN OF 577 CONTRACTS OR 2.885 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:

4560 CONTRACTS (FOR 5 TRADING DAYS TOTAL 4560 CONTRACTS) OR 22.800 MILLION OZ: (AVERAGE PER DAY: 912 CONTRACTS OR 4.550 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF APRIL: 22.800 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:          1,011.64 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:                   22.800 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 SMALL SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 152, WITH OUR 6 CENT LOSS IN SILVER PRICING AT THE COMEX ///WEDNESDAY THE CME NOTIFIED US THAT WE HAD A SMALL SIZED EFP ISSUANCE OF 425 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 GOOD SIZED OI CONTRACTS ON THE TWO EXCHANGES:  577 CONTRACTS (DESPITE OUR 6 CENT LOSS IN PRICE)

 

THE TALLY//EXCHANGE FOR PHYSICALS

i.e 425 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH A SMALL SIZED INCREASE OF 152 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH A 6 CENT LOSS IN PRICE OF SILVER/ AND A CLOSING PRICE OF $14.92 // WEDNESDAY’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: 129 NOTICE(S) FOR  645,000 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  45.360 MILLION OZ
  2. THE  RECORD PRIOR TO TODAY WAS SET IN FEB 25/2018:  244,710 CONTRACTS,  WITH A SILVER PRICE OF $18.90//.
  3. HUGE ANNUAL EFP’S ISSUANCE EQUAL TO 2.9 BILLION OZ OR 400% OF SILVER ANNUAL PRODUCTION/2017 RECORD SETTING EFP ISSUANCE FOR ANY MONTH IN SILVER; APRIL/2018/ 385.75 MILLION OZ/  AND THE SECOND HIGHEST RECORDED EFP ISSUANCE JUNE 2018 345.43 MILLION OZ

 

AND YET, WITH THE EXTREMELY HIGH EFP ISSUANCE, WE HAVE A CONTINUAL LOW PRICE OF SILVER DESPITE THE ABOVE HUGE DEMAND.  TO ME THE ONLY ANSWER IS THAT WE HAVE SOVEREIGN  (CHINA) WHO IS ENDEAVOURING TO GOBBLE UP ALL AVAILABLE PHYSICAL SILVER NO MATTER WHERE, EXACTLY WHAT J.P.MORGAN IS DOING. AND IT IS MY BELIEF THAT J.P.MORGAN IS HOLDING ITS SILVER FOR ITS BENEFICIAL OWNER..THE USA GOVERNMENT WHO IN TURN IS HOLDING THAT SILVER FOR CHINA.(FOR A SILVER LOAN REPAYMENT)

 

GOLD

 

IN GOLD, THE COMEX OPEN INTEREST ROSE BY A GOOD SIZED 3285 CONTRACTS TO 493,628 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 GOOD SIZED GAIN OF COMEX OI OCCURRED DESPITE OUR  COMEX LOSS IN PRICE  OF $17.00 /// COMEX GOLD TRADING// WEDNESDAY// WE  HAD CONSIDERABLE BANKER SHORT COVERING , A SMALL DECREASE IN GOLD OZ STANDING AT THE COMEX, ALONG WITH ZERO LONG LIQUIDATION ACCOMPANYING A GOOD  EX. FOR PHYSICAL ISSUANCE. THIS ALL HAPPENED WITH OUR STRONG LOSS  IN THE PAPER PRICE OF GOLD.

WE HAD A VOLUME OF 14  4 -GC CONTRACTS AND  0 OPEN INTEREST STANDING FOR  OUR NEW 4 GC CONTRACT

 

WE GAINED A GOOD SIZED 9023 CONTRACTS  (28.06 TONNES) ON OUR TWO EXCHANGES.

 

E.F.P. ISSUANCE

 

 

 

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A STRONG SIZED 5738 CONTRACTS:

CONTRACTS, FEB>  CONTRACTS; MARCH 00 APRIL: 0. MAY: 0, AND JUNE 5738.; DEC 0 AND ALL OTHER MONTHS ZERO//TOTAL: 5738.  The NEW COMEX OI for the gold complex rests at 493,628. 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 9023 CONTRACTS: 3285 CONTRACTS INCREASED AT THE COMEX AND 5302 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 9023 CONTRACTS OR 28.066 TONNES. WEDNESDAY, WE HAD A LOSS OF $17.00 IN GOLD TRADING

AND WITH THAT LOSS IN  PRICE, WE HAD A CONSIDERABLE SIZED GAIN IN  TOTAL/TWO EXCHANGES GOLD TONNAGE OF 25.822 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 $17.00). AND IT ALSO SEEMS THAT THEIR ATTEMPT TO FLEECE ANY GOLD LONGS FROM THE GOLD ARENA WAS UNSUCCESSFUL  (SEE BELOW).

4 GC OPEN INTEREST: 1  //VOLUME 14 CONTRACTS

 

END

 

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES:

WE HAD  A GOOD SIZED INCREASE IN EXCHANGE FOR PHYSICALS  (5738) ACCOMPANYING THE GOOD GAIN IN COMEX OI  (3285 OI): TOTAL GAIN IN THE TWO EXCHANGES:  9023 CONTRACTS.  WE NO DOUBT HAD 1 )HUGE BANKER SHORT COVERING, 2.)A SMALL DECREASE IN OUNCES STANDING AT THE GOLD COMEX FOR THE FRONT MAY MONTH,  3) ZERO LONG LIQUIDATION AND  …ALL OF THIS WAS COUPLED WITH THAT STRONG LOSS IN GOLD PRICE TRADING//WEDNESDAY

 

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 : 15,254 CONTRACTS OR 1,525,400 oz OR 47.44 TONNES (5 TRADING DAYS AND THUS AVERAGING: 3050 EFP CONTRACTS PER TRADING DAY

 

TO GIVE YOU AN IDEA AS TO THE STRONG SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 5 TRADING DAY(S) IN  TONNES: 47.44 TONNES

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

THUS EFP TRANSFERS REPRESENTS 47.44/3550 x 100% TONNES =1.333% 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   2613.64  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:                     47.44 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 SMALL SIZED 152 CONTRACTS FROM 132,845 UP TO 132,725 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 GOOD SIZED NUMBER OF EXCHANGE FOR PHYSICALS (SEE BELOW), 3) A SMALL INCREASE IN SILVER OZ STANDING AT THE COMEX FOR MAY  4) ZERO LONG LIQUIDATION 

 

EFP ISSUANCE 425 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: 425 CONTRACTS   AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 425 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 152 CONTRACTS TO THE 425 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A FAIR GAIN OF 577 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES 2.885 MILLION  OZ!!! WITH THE 6 CENT LOSS IN PRICE///

 

 

RESULT: A SMALL SIZED INCREASE IN SILVER OI AT THE COMEX DESPITE THE 6 CENT LOSS IN PRICING THAT SILVER UNDERTOOK IN PRICING// WEDNESDAY. WE ALSO HAD A SMALL SIZED 425 EFP’S ISSUED TRANSFERRING COMEX LONGS OVER TO LONDON. TOGETHER WITH THE STRONG  SIZED AMOUNT OF SILVER OUNCES STANDING FOR THIS MONTH, DEMAND FOR PHYSICAL SILVER CONTINUES TO INTENSIFY AS WE WITNESS SEVERE BACKWARDATION IN SILVER IN LONDON.

 

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

(report Harvey)

 

 

2 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 6.62 POINTS OR 0.23%  //Hang Sang CLOSED DOWN 156.85 POINTS OR 0.65%   /The Nikkei closed UP 55/42 POINTS OR 0.28%//Australia’s all ordinaires CLOSED DOWN .27%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0882 /Oil UP TO 26.29 dollars per barrel for WTI and 31.63 for Brent. Stocks in Europe OPENED GREEN//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.1092 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8834 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 GOOD SIZED 3285 CONTRACTS TO 493,628 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 GOOD COMEX OI GAIN WAS SET WITH OUR STRONG LOSS OF $17.00 IN GOLD PRICING /WEDNESDAY’S COMEX TRADING//). WE ALSO HAD A GOOD EFP ISSUANCE (5738 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 9023 CONTRACTS.

WE AGAIN HAD 14    4 -GC VOLUME//1 OPEN INTEREST GAIN

 

 

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 5738 EFP CONTRACTS WERE ISSUED:

 FEB: 0; MARCH 00 AND APRIL: 0, MAY: 0  JUNE : 5738 AND 0 FOR DEC AND  ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE: 5738 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:  9023 TOTAL CONTRACTS IN THAT 5738 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE GAINED A GOOD SIZED 3285 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 A SMALL DECREASE IN COMEX GOLD TONNAGE // STANDING FOR DELIVERY……(SEE CALCULATIONS BELOW). ALL OF THE ABOVE OCCURRED WITH A LARGE FALL IN PRICE

 

THE BANKERS WERE SUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT FELL BY $17.00).  BUT, THEY WERE UNSUCCESSFUL IN FLEECING ANY LONGS, AS THE TOTAL GAIN ON THE TWO EXCHANGES REGISTERED 28.066 TONNES.

 

 

NET GAIN ON THE TWO EXCHANGES ::9023 CONTRACTS OR 902,300 OZ OR 28.066 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:  493,628 TOTAL OI CONTRACTS X 100 OZ PER CONTRACT = 49.36 MILLION OZ/32,150 OZ PER TONNE =  1535 TONNES

THE COMEX OPEN INTEREST REPRESENTS 1535/2200 OR 69.81% OF ANNUAL GLOBAL PRODUCTION OF GOLD.

Trading Volumes on the COMEX TODAY: 278,943 contracts

CONFIRMED COMEX VOL. FOR YESTERDAY236,231 contracts// volumes very low

MAY 7/2020

MAY GOLD CONTRACT MONTH

 

Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
64.302 oz
BRINKS
2 kilobars
Deposits to the Dealer Inventory in oz NIL oz

 

 

 

Deposits to the Customer Inventory, in oz  

64,302.00000

OZ

HSBC

 

2,000

KILOBARS

No of oz served (contracts) today
326 notice(s)
 32,600 OZ
(1.0139 TONNES)
No of oz to be served (notices)
3323 contracts
(332300 oz)
10.33 TONNES
Total monthly oz gold served (contracts) so far this month
5036 notices
503,600 OZ
15.664 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month xxx oz

<

We had 0 deposits into the dealer

 

total dealer deposits: nil   oz

total dealer withdrawals: nil oz

we had 1 deposit into the customer account

i) Into HSBC:  64,302.0000 oz  (2,000 kilobars)

 

 

 

 

 

 

 

total deposits: 64,302.0000   oz

 

 

we had 1 gold withdrawals from the customer account:

i) Out of Brinks:  64.302 oz  (2 kilobars)

 

 

 

 

 

total gold withdrawals; 64.302   oz

We had 2  kilobar transactions  +

 

We had 14  4 KC bar volume transactions/0  open interest

 

 

 

ADJUSTMENTS: 2   (both customer adjusted up to the dealer)

i) Out of Brinks:  63,948.339 oz adjusted up to the dealer

ii) Out of Scotia:  19,977.970 oz adjusted up to the dealer.

 

 

The front month of May registered a GIGANTIC total of 3650 oi contracts for a loss of 1278 contracts. We had 1208 notices filed upon yesterday so we LOST 70 contracts or an additional 7000 oz will NOT stand as these guys morphed into London based forwards and thus accepted a fiat bonus for their effort.

The next delivery month after May is the huge delivery month of June.  Here June saw a  loss OF 1742 contracts DOWN to 317,809 contracts. July has ANOTHER GAIN OF 13 OI contracts  and thus 125 contracts  outstanding.  Next comes August another strong delivery month and here the OI ROSE by 3910 contracts up to 88,022 contracts.

 

 

We had 326 notices filed today for 32,600 oz

 

FOR THE  MAY 2020 CONTRACT MONTH)Today, 0 notice(s) were issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 326 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 131 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 (5036) x 100 oz , to which we add the difference between the open interest for the front month of  May. (3650 CONTRACTS ) minus the number of notices served upon today (326 x 100 oz per contract) equals 836,000 OZ OR 26.000 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 (5036)x 100 oz + 3650 OI) for the front month minus the number of notices served upon today (326) x 100 oz which equals 836,000 oz standing OR 26.000 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 lost  70 contracts or an additional 7000 oz will not seek out metal on this side of the pond as they morphed into London based forwards.

 

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 180.375 TONNES OF REGISTERED GOLD WHICH CAN SETTLE UPON LONGS ie. 26.00 tonnes

CALCULATION OF REGISTERED GOLD THAT CAN BE SETTLED UPON:

total registered or dealer  6,327,130.187 oz or 196.80  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: 5,799,057.9  (180.375 tonnes)
true registered gold  (total registered – pledged tonnes  5,799,057.9 (180.375 tonnes)
total eligible gold:  15,349,725.897 oz (477.44 tonnes)

total registered, pledged  and eligible (customer) gold;   21,676,856.084 oz 674.24 tonnes (INCLUDES 4 GC GOLD)

total 4 GC gold:   127.79 tonnes

total gold net of 4 GC:  546.45 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 7/2020

And now for the wild silver comex results

Total COMEX silver OI ROSE BY A SMALL SIZED 152 CONTRACTS FROM 132,573  UP TO 132,725(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 SMALL OI COMEX GAIN TODAY OCCURRED WITH OUR 6 CENT LOSS IN PRICING//WEDNESDAY. WE GAINED A TOTAL OF 647 CONTRACTS.  THE GAIN IN TOTAL OI (TWO EXCHANGES) OCCURRED WITH 1)  A SMALL ISSUANCE OF EXCHANGE FOR PHYSICALS 2) A SMALL INCREASE IN SILVER OZ STANDING AT THE COMEX, 3)  HUGE BANKER SHORT COVERING , 4) ZERO LONG LIQUIDATION, AND ALL OF THIS OCCURRED WITH OUR 6 CENT LOSS IN PRICE 

 

WE ARE NOW INTO THE ACTIVE DELIVERY MONTH OF MAY

THE FRONT DELIVERY OF MAY SAW A HUGE 2119 OPEN INTEREST CONTRACTS STANDING  AND THUS WE HAD A LOSS OF 419 CONTRACTS.  We had 424 notices filed yesterday so we GAINED 5 contracts or an additional 25,000 oz will  stand at the comex as these guys refused to morph into London based forwards and thus they negated receiving 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 LOSS OF 4 CONTRACTS FALLING TO 458.

AFTER JUNE COMES THE VERY BIG DELIVERY MONTH OF JULY AND HERE THE OI GAINED 586 CONTRACTS UP TO 99,709 CONTRACTS

 

 

We, today, had  129 notice(s) FILED  for 645,000, OZ for the APRIL, 2019 COMEX contract for silver

 

MAY 7/2020

MAY SILVER COMEX CONTRACT MONTH

Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
 45,918.01 oz
CNT
Delaware

 

 

Deposits to the Dealer Inventory
nil oz

 

Deposits to the Customer Inventory
nil oz
No of oz served today (contracts)
129
CONTRACT(S)
(645,000 OZ)
No of oz to be served (notices)
1990 contracts
 9,950,000 oz)
Total monthly oz silver served (contracts)  7082 contracts

35,410,000 oz)

Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month

total dealer deposits: nil oz

total dealer withdrawals: nil oz

i)we had 0 deposits into the customer account

into JPMorgan:   0

ii)into everybody else; 0

 

 

 

 

 

 

 

 

 

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

JPMorgan now has 160.819 million oz of  total silver inventory or 50.98% of all official comex silver. (160.819 million/315.332 million

 

total customer deposits today: nil    oz

we had 2 withdrawals:

i) Out of Delaware:  17,156.100 oz

 

ii) Out of CNT:  28,761.910 oz

 

total withdrawals;  45,918.01    oz

We had 0 adjustments:

 

 

total dealer silver:  90.445 million

total dealer + customer silver:  315.332 million oz

 

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The total number of notices filed today for the MAY 2020. contract month is represented by 129 contract(s) FOR 645,000 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 7082 x 5,000 oz = 35,410,000 oz to which we add the difference between the open interest for the front month of MAY.(2119) and the number of notices served upon today 129 x (5000 oz) equals the number of ounces standing.

.

Thus the INITIAL standings for silver for the MAY/2019 contract month: 7082 (notices served so far) x 5000 oz + OI for front month of MAY (2119)- number of notices served upon today (129) x 5000 oz of silver standing for the MAY contract month.equals 45,360,000 oz.

We GAINED  5 or an additional 25,000 oz will NOT seek out metal on the London side of the pond as they refused a London based forward contract..

 

TODAY’S ESTIMATED SILVER VOLUME: 48,628 CONTRACTS //

 

 

FOR YESTERDAY: 41,626 CONTRACTS..,CONFIRMED VOLUME//extremely low volume

 

 

YESTERDAY’S CONFIRMED VOLUME OF 41,626 CONTRACTS EQUATES to 208 million  OZ 29.7% OF ANNUAL GLOBAL PRODUCTION OF SILVER..

 

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

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

end

 

NPV for Sprott

1. Sprott silver fund (PSLV): NAV FALLS TO -0.95% ((MAY 7/2020)

2. Sprott gold fund (PHYS): premium to NAV  FALLS TO -0.49% to NAV:   (MAY 7/2020 )

Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into NEGATIVE/ 0.95%

(courtesy Sprott/GATA

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

NAV 15.71 TRADING 15.50///NEGATIVE 1.20

END

 

 

And now the Gold inventory at the GLD/

MAY 7/WITH GOLD UP $29.65 TODAY : A SMALL CHANGE IN GOLD INVENTORY AT THE GLD//A PAPER ADDITION OF .41 TONNES/INVENTORY RESTS AT 1075.80 TONNES

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 7/ GLD INVENTORY 1075.39 tonnes*

IN LAST 815 TRADING DAYS:   +129.50 NET TONNES HAVE BEEN REMOVED FROM THE GLD

 

LAST 715 TRADING DAYS://+304.64  TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY.

 

 

end

 

 

Now the SLV Inventory/

MAY 7/WITH SILVER UP 45 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 413.124 MILLION OZ//

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 7.2020:

SLV INVENTORY RESTS TONIGHT AT

413.124 MILLION OZ.

END

LIBOR SCHEDULE AND GOFO RATES/GOLD LENDING RATES:

 

 

YOUR DATA…..

6 Month MM GOFO 2.34/ and libor 6 month duration 0.69

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

GOLD LENDING RATE: – 1.65

GOLD LEASING RATES NEGATIVE//GOLD SCARCE

CENTRAL BANKS CALLING IN ALL GOLD LEASES

 

XXXXXXXX

12 Month MM GOFO
+ 1.88%

LIBOR FOR 12 MONTH DURATION: 0.80

 

GOFO = LIBOR – GOLD LENDING RATE

GOLD LENDING RATE  = -1.08

GOLD LEASING RATES NEGATIVE//GOLD SCARCE

CENTRAL BANKS CALLING IN ALL GOLD LEASES

end

 

 

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

Peter Schiff: The Fed Can Never Take The Easy Money Drug Away

The Federal Reserve is creating a massive amount of money out of thin air and injecting it into the economy. Pretty much everybody believes this is the only choice given the economic emergency we face. But we’re told once the emergency is over, the Fed will take the excesses away. In his podcast, Peter Schiff explains why this will never happen. Once the drug addict is hooked, you can’t just take the drug away.

Peter started the podcast saying he thinks the bear market relief rally is coming to an end.

The Fed can only buy so much with its QE and rate cuts.”

The stock market rally in April created a lot of optimism about the economy. The prevailing mindset was “if we can turn it off, we can turn it back on.”

Peter said now that the fog is starting to lift a bit, people are starting to realize that narrative wasn’t true and that this is going to be a much deeper and protracted recession.

But people still don’t realize just how weak the economy was before the coronavirus pandemic. Now the government and the Federal Reserve are engaging in the same policies that undermined the economy in the first place.

Pundits and analysts keep talking about how the Fed is “injecting liquidity into the economy.” That translates to inflation. The Fed is creating money out of thin air and spending it into circulation.

But that does not help the economy. It’s never helped the economy. What it does do is help to sustain a bubble.”

During a recent interview, Fed Vice Chair Richard Clarida talked about how the Fed is supporting the economy through this pandemic. How does a central bank “support an economy?” Peter said it really can’t.

What can the Fed actually do? Just print money, right? That’s all they can do. They can artificially suppress interest rates so that we can take on more debt, and they can create money. They can rob people of their purchasing power through inflation and allow the government to spend that stolen purchasing power into the economy. But does that help the economy? No. The Fed has no tools to support the economy. You don’t support the economy by printing money. Now, the Fed could try to support the bubble. It can try to prevent the bubble from deflating or have it deflate more slowly. But that’s actually hurting the real economy.

In a nutshell, by enabling the government to borrow and spend even more money, by monetizing the massive debt, the Fed is hurting the economy over the long-term. Peter said that there’s a lot the Fed can do to undermine the economy, but there’s nothing it can do to support the economy other than extracting themselves from interfering.

They have to undo the damage they’ve done. They have to allow interest rates to go up. They have to stop monetizing debt. That would help the economy only because they stopped hurting it. That’s what they could do to help – stop hurting!”

During that same interview, Clarida also claimed that the Fed would withdraw and remove all of the excesses it’s injecting into the economy. We’ve heard that promise before. When the Fed launched quantitative easing early in the 2008 financial crisis, Ben Bernanke told Congress it was temporary. He insisted the central bank was not monetizing the debt. He swore that the Fed would sell all of the bonds it was adding to the balance sheet.

It never happened.

Isn’t that the same BS line they fed us after the 2008 financial crisis? QE was a temporary emergency. They were going to eliminate it or unwind it as soon as the emergency was over. They weren’t monetizing the debt. It was all temporary. They were going to normalize rates, shrink the balance sheet. That’s what they said before. It was a lie before. I knew it was a lie before. I told everybody that would listen that the Fed was lying.”

Peter said this is an even bigger lie. It’s impossible for the central bank to remove the support from the economy.

They are basically giving a drug addict drugs. And if you’re high on drugs, you can’t say we’re going to take away the drugs when you don’t need it anymore when the drugs are the source of the high. When you’re high on drugs, you constantly need those drugs. You can’t take the drugs away. So, all the Federal Reserve does when it intervenes in the way that it has, and it comes in with all this cheap money — it can never take the cheap money away. Again, that’s the monetary roach motel that I’ve talked about.”

Peter said the reason gold didn’t go higher after the 2008 financial crisis is because the Fed managed to convince everybody that it wasn’t a monetary roach motel. People actually believe the extraordinary monetary policy in the wake of the crash was temporary, that the Fed could unwind its balance sheet and raise interest rates.  That’s why gold had its big downward correction.

It was gold discounting the normalization process. All of the rate hikes, all of the quantitative tightening was priced into gold before the Fed even started.”

If you recall, gold’s decline ended at the same time the Fed raised rates for the first time.

It was a sell the rumor, buy the fact. They were selling gold for years based on the anticipation of the Fed returning to normal. And then the minute they took their first step on the road to normalcy, that’s when gold bottomed and they started buying gold. Except the Fed never completed the journey.”

Now the Fed is doing the same thing again. They are giving a bigger dose of the same drug that they couldn’t get the economy off before. Keep in mind, the Fed was cutting rates and doing QE before COVID-19.

This is like a rerun of a bad movie. We have Clarida tossing out the same old lines. “This is temporary — for the emergency.” When it’s no longer needed, we’ll take it away. But as Peter said, it’s always needed.

I mean, if you want to keep the bubble going. If you want to let the bubble pop, if you want to let the whole house of cards collapse, sure, you can remove the policy. But if you’re determined to keep the bubble going, which is what the Fed is, then you can never stop.”

Peter said the difference this time and the reason he thinks gold will keep going up is that nobody is going to believe the Fed this time.

They can’t fool anybody. Fool me once, shame on you. Fool me twice, shame on me. The market’s not going to get fooled again by the exact same lie. Especially on that is so much more preposterous now because the debt is so much bigger. The size of the monetary stimulus is so much larger. We have a much bigger drug habit than we ever had. And if we couldn’t kick the last drug habit, how are we going to kick this one?”

 

ii) Important gold commentaries courtesy of GATA/Chris Powell

iii) Other physical stories:

LBMA Gold Price Benchmark Ignores Market Conditions, Short-Changing Investors

Submitted by Ronan Manly, BullionStar.com

As the gaping spread between London (LBMA) spot gold prices and front-month COMEX gold futures prices persists for a sixth week triggered by the bullion bank EFP liquidity blow up on Monday 23 March 2020, one unappreciated aspect of this gold price discovery scandal is that daily London LBMA Gold Price auctions are deliberately ignoring COMEX gold prices when setting the Opening Price (starting price) in the twice daily gold price auction.

Ignoring the Obvious

By ignoring the much higher COMEX gold futures prices while setting the LBMA gold auction starting price, the auction administrator IBA is ignoring current market conditions in the gold market (note – a stated methodology of the auction is to use current market conditions). The LBMA Gold Price auction is thus short-changing global gold market participants and investors who all use the LBMA Gold Price benchmark (the final price from the auction) as a critical reference rate. Their motivation? To take the spotlight off the fact that the London spot gold market is broken and that the LBMA market makers have liquidity problems.

However, such is the importance of the LBMA Gold Price benchmark that it is a regulated commodity benchmark under European Benchmark Regulation (BMR), including Annex II of the BMR. Prior to BMR, the LBMA Gold Price was a benchmark regulated by the UK Financial Conduct Authority (FCA).

In short, the LBMA Gold Price benchmark is used all throughout the gold market to value everything from gold-backed Exchange Traded Funds (such as the SPDR Gold Trust GLD) to ISDA Commodity Definitions (e.g. ISDA swaps), and from OTC structured product valuations to central bank gold lending agreements. The LBMA Gold Price benchmark is also used to value mining contracts, refining contracts and by thousands of other precious metals market participants, such as wholesalers and bullion retailers to value their own bi-lateral transactions.

By failing to take into account current market conditions in the gold market, the LBMA Gold Price is not only short-changing investors who rely on the benchmark, but as a regulated benchmark, it’s operation is in breach of European Benchmark Regulations as not being a representative benchmark, and IBA is in breach of not explaining to the public how the LBMA Gold Price methodology works (see below).

As a reminder, since 23 March 2020, there has been a persist and unprecedented large spread between the active month COMEX gold futures and the London spot gold price, with COMEX gold prices trading far higher than the London spot gold price. In actuality, it is the London spot gold price which is trading at a discount to the COMEX gold prices. See chart below.

COMEX gold futures prices are determined by trading in the CME’s GC100 exchange traded 100 oz gold futures contract.London spot gold prices are determined by trading of unallocated gold in a market made by bullion bank market making members of the London Bullion Market Association (LBMA) such as JP Morgan, HSBC, UBS and Goldman Sachs.

 

Divergence between COMEX gold prices and London gold spot price since 23 March 2020. Source: www.barchart.com
 

At times during the last 6 weeks, the COMEX front-month gold futures contract has been trading at nearly $100 above the spot price, and regularly at more than $25-40 above the spot price (e.g. 24 March, 26 March, 29 March, 6 April, 9 April, 13 April, 14 April, 16 April, 23 April, 24 April). For granularity, see interactive chart here:

https://www.barchart.com/futures/quotes/GCM20/interactive-chart/fullscreen.

For example, on 14 April when the LBMA GOLD Price afternoon auction was being conducted, the front-month COMEX gold futures price was trading at more than US $1762, yet the opening price of the LBMA Gold Price auction (the price of Round 1) was input by IBA at US $1737.30, a $25 difference on the low side.

 

COMEX gold futures prices vs spot gold prices, 14 April. Source: www.barchart.com

The opening price in the LBMA Gold Price auction is critical because it determines everything about the auction, from the bids and offers of the auction participants to the trading volume, and most importantly to the fixing price which becomes that auction’s final price which is then published as the LBMA Gold Price benchmark and reference price which is used by gold market participants on a daily basis all over the world.

 

LBMA Gold Price auction report – 14 April, afternoon auction. Opening price $1737.50. Source

For those who may not know, the current LBMA Gold Price is a continuation of the infamous London Gold Fixing auctions, and just like its former version, it runs twice daily auction at 10:30 am and 3:00 pm London time. In its current guise, the LBMA Gold Price auction is administered by ICE Benchmark Administration (IBA), part of Intercontinental Exchange (ICE). LBMA owns the intellectual property rights to the LBMA Gold Price, having registered the trade mark here, so the buck stops with the LBMA.

IBA has been the administrator of the LBMA Gold Price auction since the LBMA worshipful company of bullion banks re-bottled the same old Gold Fixing with a new label and launched it on 20 March 2015 on the first day of the astrological year, which conveniently for the sun and moon worshipers behind the scenes who really run the LBMA, was also a total solar eclipse by a new moon on a vernal equinox, something which hasn’t happened since 1662. And which is reflected in, you guessed it, the LBMA’s logo of sun and crescent moon.

 

LBMA eclipse sun and moon logo introduced in 1998

In the same way that the old Gold Fixing auction (London Gold Market Fixing Limited) had an auction chairman who determined the opening price (note Rothschild was the permanent chairman until 2004, then stepped into the shadows in 2004 after which between 2004-2015 there was a rotating chairman), when the Gold Fixing was relaunched in March 2015 as the LBMA Gold Price, the LBMA and IBA also continued to use a human chairman to set the auction starting price in line with market conditions because, in their own words:

“Feedback from the market is that the price in the first round of the auction, as well as the prices for the following rounds, is of paramount importance

 

ICE Benchmark Administration website 19 March 2015

In it’s FAQ document published in March 2015, IBA also underscored the importance of the auction’s initial price, explaining as follows:

“Why are you using a Chairperson and not an algorithm for day one?

Feedback from the market is that the setting of the initial price of the first round of the auction, as well as prices for the following rounds, are important

From March 2015 to 2017, there were a panel of four of these chairmen running the LBMA Gold Price auction, all bullion bankers, two of which were Jonathan Spall and Philip Clewes-Garner. The IBA website describing the auction methodology even stated that: “the chairman sets the starting price…in line with current market conditions“

 

BA website archive, March 2016 – Source

In fact, the LBMA website still says that “the chairman sets the starting price…in line with current market conditions“.

 

Current LBMA website – LBMA Gold Price page

And what is “in line with current market conditions” in the usual convention of determining the opening price? Answer – both the COMEX futures gold price and the London spot price. As the former gold fixing website makes this clear in a page titled “How is the Price Fixed?

“(The opening price): The Chair shall identify the opening price. The opening price should be the prevailing US dollar mid-market price for London gold and is identified by the Chair after appropriate consideration of the prevailing spot priceand the prevailing bid/offer price in the gold futures market.

Why the opening price refers to both London spot and COMEX futures is simply because together, trading in the London gold market and in COMEX gold futures jointly determine the international gold price, with COMEX through the CME Globex platform trading 24 hours a day all through the week and at all times before, during and after the LBMA Gold Price auctions.

That London and COMEX New York are the consistent and dominant drivers of gold price discovery, returns and volatility, and that gold prices spill over between London and New York all the time can be seen from a glance at the research of LBMA-affiliated academics such as Brian Lucey and Fergal O’Connor, here here and here.

 

The Fix is in – Rothschilds Offices, St Swithin’s, London

Algorithm – But with a Driver

In March 2017, ICE Benchmark Administration ditched the human chairman, and began using an algorithm to run the LBMA Gold Price auction. This was after a consultation which assured that once the algorithm is adopted“:

“IBA can confirm that the auction will always be supervised by at least two
IBA analysts. This approach is consistent with how we operate our other benchmarks. Our aim is to put the auction on auto-pilot, not to make it driverless.“

Since 2017, the LBMA Gold Price methodology on the IBA website now states that

“The prices during the auction are determined by an algorithm that takes into account current market conditions and the activity in the auction. Each auction is actively supervised by IBA staff.

Dodging the Question

Given the fact that the LBMA Gold Price auction is not using COMEX gold prices as a factor when choosing an opening price for the daily auctions, and is therefore not ”taking into account current market conditions”, last week I asked ICE Benchmark Administration by email some basic questions about its source for the opening prices, and who sets the opening price, if this opening price is manually input by an IBA analyst or is calculated by the algorithm?

At first IBA deflected the question, not providing any answer in its response.

Then I asked again:

”Would you be able to confirm who sets the opening price, is it manually input by a human (similar to when a few years ago the opening price was chosen by a chairman) or is the opening price calculated by the algorithm?

And how is the source of the opening price determined during times, like now, when ‘market conditions’ have a large spread between spot and COMEX futures prices.”

To which I got an unhelpful answer from ICE:

 ”All information you require can be found on our website at the following link: https://www.theice.com/iba/lbma-gold-silver-price”

As the information I asked about is not explained at all on the IBA website, I sent another response:

”The IBA website does not specify if the opening price of the LBMA Gold Price auction is chosen by a human or an algorithm.

And the IBA website explains nothing about why the opening price of the auction is not taking into account the actual market conditions of the near month COMEX futures prices, which are far above the LBMA spot prices.

Hence the questions, which is why I asked. Sending me to a web page which does not provide these answers is unhelpful. So the questions still stand…:

1. Who sets the opening price, is it manually input by a human or is the opening price calculated by the algorithm?

2. How is the source of the opening price determined during times, like now, when ‘market conditions’ have a large spread between spot and COMEX futures prices?”

To which IBA replied:

”1. The pricing within the auctions is determined by an algorithm as per our website.

2. The price is determined using many market sources and taking market conditions into consideration.

I cannot and will not go into the specifics of how our algorithm works, nor the input sources.

Not in Compliance

You can see straight up the problems with this above answer from IBA:

a) The answer still does not confirm who chooses the opening price

b) The answer ignores any discussion of COMEX gold prices in the current environment

c) The answer reiterates the line about taking into account market conditions when that is patently not the case, and the answer fails to list any of its claimed “many market sources

d) The answer fails to explain the pricing sources or pricing hierarchy of the opening price

e) And most shockingly, the part of the answer which states ”I cannot and will not go into the specifics of how our algorithm works, nor the input sources” is in breach of EU Benchmark Regulations (BMR).

Why this is so is because European Benchmark Regulations (BMR) Annex II, which regulates the LBMA Gold Price states that:

ANNEX II

COMMODITY BENCHMARKS

Methodology

1. The administrator of a commodity benchmark shall formalise, document, and make public any methodology that the administrator uses for a benchmark calculation. At a minimum, such methodology shall contain and describe the following: 

a) all criteria and procedures that are used to develop the benchmark, including how the administrator uses input data including the specific volume, concluded and reported transactions, bids, offers and any other market information in its assessment or assessment time periods or windows, why a specific reference unit is used, how the administrator collects such input data, the guidelines that control the exercise of judgement by assessors and any other information, such as assumptions, models or extrapolation from collected data that are considered in making an assessment.

c) the relative importance that shall be assigned to each criterion used in benchmark calculation, in particular the type of input data used and the type of criterion used to guide judgement so as to ensure the quality and integrity of the benchmark calculation;

h) criteria according to which transaction data may be excluded from a benchmark calculation.

2. The administrator of a commodity benchmark shall publish or make available the key elements of the methodology that the administrator uses for each commodity benchmark provided and published or, when applicable, for each family of benchmarks provided and published

3. Along with the methodology referred to in paragraph 2, the administrator of a commodity benchmark shall also describe and publish all of the following:

(a) the rationale for adopting a particular methodology, including any price adjustment techniques and a justification of why the time period or window within which input data is accepted is a reliable indicator of physical market values;

(c) the procedure for external review of a given methodology, including the procedures to gain market acceptance of the methodology through consultation with users on important changes to their benchmark calculation processes.

 

ICE statement claiming that the LBMA Gold Price is in compliance with EU Benchmark Regulations – 7 April 2020. Source – here

Conclusion

As recently as 7 April 2020, IBA claims that it is in compliance with the European Benchmark Regulations for the regulated benchmarks that it administers via the “ICE Benchmark Administration Statement of Compliance with the EU Benchmarks Regulation and Independent Assurance” which is signed by the president of ICE of Benchmark Administration, Timothy Bowler, see here.

This Statement by IBA is accompanied by a full and detailed  “Independent practitioner’s assurance report” by consultancy EY assuring that IBA is in full compliance with the European Benchmark Regulations.

IBA president, Timothy Bowler, on 7 April 2020, in the very middle of this period where the LBMA Gold Price is using an opening price far lower than prevailing market conditions claims that:

“Access to accurate, reliable information is essential to the integrity and everyday functioning of global markets and the economies which they support. Benchmarks form a vital part of this ecosystem, helping market participants to assess the value of assets and make informed business decisions with confidence“

All very laudable objectives. But hollow and totally at odds with the reality on the ground where IBA refuses to divulge its methodology with the shocking statement “I cannot and will not go into the specifics of how our algorithm works, nor the input sources“.

In conclusion, anyone who has investment and assets with values based on the LBMA Gold Price should at this point be worried by this and should urgently be asking why IBA is refusing to explain why the LBMA Gold Price is not taking into account current market conditions in the form of the highly liquid COMEX gold futures prices, and thereby completely understating the LBMA Gold Price benchmark reference price that is used to value trillions of dollars worth of gold related investments around the world every day.

As the owner of the LBMA Gold Price, the same questions should be asked to the London Bullion Market Association. Remember a fish rots from the head down. Because if your investments are based on the LBMA Gold Price, you and your assets are right now being short-changed. And don’t let the LBMA bluff about physical gold not being able to make it on flights from London to New York. That was never the problem. The problem is a liquidity problem within the LBMA market caused by liquidity problems at LBMA market making bullion banks.

This article was originally published on the BullionStar.com website under the same title “LBMA Gold Price benchmark ignoring market conditions, short-changing investors“.

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.

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Spencer Platt | Getty Images

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

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

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

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

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

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

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

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

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

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

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

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

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

end

March 4.2019

Parker City News

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Kovel declined to comment.

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

-END-

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

 Section: 

9:47a ET Tuesday, March 5, 2019

Dear Friend of GATA and Gold:

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

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

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

… 

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

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

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

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

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

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

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

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

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

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

* * *

Your early THURSDAY 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: 7.0882/ GETTING VERY DANGEROUSLY PAST 7:1

//OFFSHORE YUAN:  7.1092   /shanghai bourse CLOSED DOWN 6.62 POINTS OR 0.23%

HANG SANG CLOSED DOWN 156.85 POINTS OR 0.65%

 

2. Nikkei closed UP 55.42 POINTS OR 0.28%

 

 

 

 

3. Europe stocks OPENED ALL GREEN/

 

 

 

USA dollar index UP TO 100.22/Euro FALLS TO 1.0780

3b Japan 10 year bond yield: RISES TO. –.00/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 106.57/ 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:: 26.29 and Brent: 31.63

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

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

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

3h Oil 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 -.51%/Italian 10 yr bond yield UP to 1.97% /SPAIN 10 YR BOND YIELD UP TO 0.86%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 2.48: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield FALLS TO : 2.18

3k Gold at $1695.10 silver at: 15.03   7 am est) SILVER NEXT RESISTANCE LEVEL AT $18.50

3l USA vs Russian rouble; (Russian rouble UP 73/100 in roubles/dollar) 73.77

3m oil into the 57 dollar handle for WTI and 64 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 106.57 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 .9766 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0529 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 0.51%

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 0.70% early this morning. Thirty year rate at 1.40%

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

6.  TURKISH LIRA:  UP  TO 7.1669..DEADLY TO THE COUNTRY..

Futures Soar On Chinese Exports, Trade Talk Optimism, Oil Spike

It’s been a while since we used the headline “Futures surge on trade talk optimism but here we are again.

US equity futures rebounded from Wednesday’s slump, climbing alongside stocks in Europe on Thursday following an unexpected jump in Chinese exports and, drumroll, optimism of trade talks between the US and China, while Asian shares mostly fell as investors sift the latest company earnings and brace for more data that will show the extent of the fallout from the coronavirus. Oil jumped after Saudi Arabia announced a sharp cut in discounts to clients around the globe.

On Thursday morning, China unexpectedly reported that exports unexpectedly rose 3.5% in April for the first time this year as factories raced to make up for lost sales due to the coronavirus pandemic, materially above the consensus expectation of a 15.7% drop. At the same time, imports declined significantly by 14.2% yoy in April, primarily on high base, below consensus expectations signaling more trouble ahead as the global economy sinks into recession. Trade data weakened sequentially in April. In month-over-month terms, exports slowed to an increase of 4.3% sa non-annualized in April (vs. +6.0% in March), and contraction in imports widened to 2.7% sa non-annualized in April (vs. -0.1% in March).

April’s better-than-expected exports helped US equity futures and Asian shares trim early losses, but analysts say China’s trade outlook remains bleak as major economies remain in the grip of the health crisis with rising infection numbers and deaths.  Futures got a further boost overnight when Bloomberg reported thatChinese and US trade negotiators will speak as soon as next week on progress in implementing a phase-one dealafter Trump threatened to “terminate” the agreement if Beijing didn’t move to swiftly adhere to its terms.

Futures surged back to 2,880 even as data is expected to show U.S. jobless claims totaling a seasonally adjusted 3 million for the week ended May 2, down from 3.839 million in the prior week and marking the fifth straight weekly decrease in applications.

As earnings season moves along, here are some of the key corporate news:

  • Bristol-Myers Squibb gained in pre-market trading after reporting profit and revenue that exceeded Wall Street expectations.
  • Telefonica fell after agreeing with Liberty Global Plc to create the U.K.’s largest phone and internet operator. Rival BT Group Plc slumped as it canceled dividends.
  • Nintendo beat its own forecast for sales of the Switch console in the last fiscal year, reflecting surging demand for games and other entertainment during the pandemic.
  • ArcelorMittal rose even as it suspended dividend payments and withdrew its global steel outlook because of market uncertainties.
  • Lyft overcame investors’ worst expectations by pushing closer to profitability. Peloton Interactive Inc. said quarterly revenue soared 66%.
  • PayPal Holdings Inc jumped 7.7% after the payment processor said it expected a strong recovery in payments volumes in the second quarter as social distancing drives more people to shop online.

Then there is the ongoing pandemic which has crippled global growth, of course: “We remain concerned about the potential for the pandemic to have lasting effects on growth,” wrote Ron Temple, co-head of multi-asset and head of U.S. equity at Lazard Asset Management. “Countries and companies are likely to exit the crisis with significantly higher debt, curtailing their ability to invest and innovate.”

Europe’s Stoxx 600 Index gained, rising as high as 1% as most national gauges and industry sectors climbed. Asian stocks fell, led by finance and utilities, after rising in the last session. Japan’s Topix declined 0.3%, with Senshukai and Alinco falling the most. The Shanghai Composite Index retreated 0.2%, with Shangying Global and Everbright Jiabao posting the biggest slides, despite China’s surprising export surge.

Most European government bonds edged lower as Treasuries drifted. Treasuries, though little changed, are extending the curve steepening move unleashed by Wednesday’s supply announcement

In FX, A 0.2% decline for the Bloomberg Dollar Spot Index ended a four- session rally and Treasuries were little changed across the curve; the euro was steady against the dollar after attempting to rise above $1.08; bunds erased losses and Italian bonds rose after most oversubscription rates rise at Spanish, French debt sales.

The pound recovered from a two-week low and gilts slipped after the Bank of England refrained from expanding its asset purhcases and kept its policy rate unchanged in a rare early morning announcement; investors expected the central bank might add to its pledge to buy 200 billion pounds ($250 billion) of debt, though policy makers only said they stood ready to take more action. Sterling’s volatility skew was unmoved after its immediate rally against the dollar.

Norway’s krone pared a gain after Norges Bank surprisingly cut its key policy rate by 25bps to a record low of zero; losses were likely limited by the central bank’s rate path that suggested no bias for further rate cuts; the currency late yesterday posted a big drop in an erratic moves which it later reversed. The Aussie advanced after the nation reported a record trade surplus. A separate report showed China’s exports unexpectedly climbed in April. The yen fell for the first time in five days as the nation returned from the Golden Week holidays.

In Emerging Markets, the Turkish lira weakened to a record low against the dollar before spiking after the regulator banned FX trades for 3 foreign banks on a day of mixed risk sentiment across emetging markets, with investors weighing whether a rebound in emerging-market assets has room to continue. The lira led losses while the South African rand and Mexican peso rallied, extending a bout of varied performances within the asset class. Bahrain tested investor appetite with an offering of dollar-denominated bonds. Czech rate setters were set to extend their rate-cutting cycle. Turkey’s currency has been under pressure due to rate cuts from the nation’s central bank, even as state-owned lenders sold dollars to fend off depreciation.

As a sign of the risks facing developing economies, Philippine’s gross domestic product shrank by 0.2% in the first quarter, the first contraction since 1998. “The global EM environment is still mixed and discrimination is needed more than ever with some pressure points emerging,” said Guillame Tresca, a strategist at Credit Agricole SA in Paris

Crude fluctuated before climbing to more than $26 a barrel in New York after Saudi Arabia raised prices.

OIl contracts found a floor early amid reports of a phone call next week between the top US and Chinese negotiators. Looking at the oil market itself, the forward Brent curve has tightened in recent days, reflecting an ease in the oil market glut – aided by production cuts and reviving demand as economies re-open from lockdown. On that front, Saudi Aramco raised its Arab Light OSPs to Asia following two consecutive cuts – signaling resurfacing demand in the region. That being said, Equinor’s CEO does not believe in a quick rebound in the oil market and added it could take until 2022 to see oil markets back normalise. The CEO said deeper cuts would improve the situation. WTI June now resides north of USD 25/bbl, and extends its intraday range (low USD 23.41/bbl), whilst Brent July sees itself printing fresh session highs, having rebounded from a low of USD 29.22/bbl. Elsewhere, spot gold saw some impetus from a softer Buck but remains below the USD 1700/oz mark (daily range USD 1685-1693.40/oz). Copper prices meanwhile remain underpinned by the rebound in the Chinese Trade Balance, coupled with upside seen in stocks supported by the US-China headlines.

Looking at the day ahead data releases include German and French industrial production for March, Italian retail sales for March, along with the German construction PMI for April. There’ll also be the weekly initial jobless claims from the US, preliminary Q1 nonfarm productivity, and March consumer credit. Earnings releases include Bristol Myers Squibb, Danaher, Raytheon Technologies and Uber.

Market Snapshot

  • S&P 500 futures up 1.2% to 2,868.25
  • MXAP down 0.4% to 143.95
  • MXAPJ down 0.3% to 464.51
  • Nikkei up 0.3% to 19,674.77
  • Topix down 0.3% to 1,426.73
  • Hang Seng Index down 0.7% to 23,980.63
  • Shanghai Composite down 0.2% to 2,871.52
  • Sensex down 0.8% to 31,435.03
  • Australia S&P/ASX 200 down 0.4% to 5,364.20
  • Kospi down 0.01% to 1,928.61
  • STOXX Europe 600 up 0.5% to 336.13
  • German 10Y yield rose 1.6 bps to -0.491%
  • Euro up 0.06% to $1.0802
  • Italian 10Y yield rose 10.8 bps to 1.8%
  • Spanish 10Y yield rose 4.3 bps to 0.896%
  • Brent futures up 2.1% to $30.35/bbl
  • Gold spot up 0.4% to $1,692.63
  • U.S. Dollar Index little changed at 100.23

Top Overnight News from Bloomberg

  • Top Chinese and U.S. trade negotiators will speak as soon as next week on progress in implementing a phase-one deal after President Donald Trump threatened to “terminate” the agreement if Beijing wasn’t adhering to the terms
  • French Prime Minister Edouard Philippe is to unveil final details of his plan to end curbs on public life later on Thursday. The country is preparing to go back to work and reopen schools starting on Monday
  • The men who successfully challenged the European Central Bank’s asset purchase program are readying for their next target: the bank’s response to the coronavirus
  • Industrial production in the euro area’s two largest economies cratered in March, highlighting the crippling impact of just half a month of factory closures to control the spread of the deadly coronavirus
  • The ECB is “more determined than ever” to support the euro-area economy after the deadly coronavirus forced businesses shut and plunged the 19- nation region into its worst recession in decades, Vice President Luis de Guindos said

Asian equity markets traded mixed following the uninspiring handover from US where risk appetite was sapped by US-China tensions and a decline in the energy complex in which oil prices snapped a 5-day win streak, with the region also mulling over key releases from China including Caixin PMIs and the latest trade data. ASX 200 (-0.4%) was lower with the declines led by losses in energy names and gold miners due to the pressure in oil and after the precious metal gave up the USD 1700/oz status, while financials suffered with the largest bank CBA downbeat on speculation the Co. could have been impacted the worst from the coronavirus among the big 4 banks ahead of next week’s quarterly update. Nikkei 225 (+0.3%) initially underperformed on return from the 5-day Golden Week closure to take its first opportunity to digest the nationwide state of emergency extension in Japan, with index heavyweight Fast Retailing pressured pre-earnings and Softbank shared depressed after being sued by WeWork, although the losses in the index were retraced amid favourable currency moves. Hang Seng (-0.7%) and Shanghai Comp. (-0.2%) were both cautious due to the increased US-China tensions and after Caixin Services and Composite PMI figures remained in contraction territory, although losses were stemmed by the Chinese trade data which showed a higher surplus and surprise expansion in exports despite imports remaining at a significant contraction. Finally, 10yr JGBs were lower as prices tracked the recent downside in T-notes which had been weighed after a larger than expected US Treasury quarterly refunding announcement, although the losses were stemmed amid the BoJ’s presence in the market for nearly JPY 800bln of JGBs.

Top Asian News

  • Japan Biopharma Venture Has Surged Almost 400% on Vaccine Hopes
  • Turkey Stiffens Manipulation Rules With Lira at Record Low
  • China’s Forex Reserves Rise in April as Outflow Pressure Muted
  • Mizuho Say Profit Rose Less Than Expected Last Fiscal Year

European equities hold onto gains [Euro Stoxx 50 +0.8%] amid a turnaround from the mostly negative APAC session, as sentiment is underpinned amid hopes US and China will iron out their differences in a call next week among top negotiators. That being said, it is difficult to pre-judge what the sentiment will be during the call, notably due to recent rhetoric emanating from the two nations, whilst US-China trade data does not bode well regarding the Phase One deal. Nonetheless, broad-based gains are seen across Europe, albeit the SMI (+0.3%) lags the region as its heavyweight healthcare names remain in modest negative territory, potentially on a risk-move as the sector lags. Energy and Materials meanwhile show slight outperformance as the oil and base metal complexes regain ground. The sector breakdown reflects a similar performance. In terms of individual movers – Telefonica (+0.2%) gave up most of its opening gains after rising some 3% on the back of a finalised deal with Liberty Global to merge UK assets worth just over GBP 31bln, set to reshape the UK telecom market. As such, Vodafone (-0.9%) and BT (-9.6%) see losses with the latter also exacerbated by dividend cancellation alongside its earnings. The Telefonica/Liberty deal is subject to regulatory approval.  AB InBev (+2.5%) holds onto gains post-earnings after the metrics were less severe than feared, but the group expects Q2 results to be materially worse than Q1. Air France (-4.1%) shares fell following detrimental earnings, with Q2 capacity seen down 95% and no expectations of a recovery to pre-crisis levels for several years. Meanwhile, Carnival (-2.0%) remains in the red after the Co’s Princess Cruises have extended halt in global operations through to the end of 2020 summer season, whilst Seabourn has extended its pause into October and November 2020.

Top European News

  • Norway Delivers Surprise Rate Cut to Historic Low of 0%
  • Guindos Says ECB Is More Determined Than Ever to Support Economy
  • British Airways Parent IAG Taps U.K. Funds to Survive Slump
  • BT Scraps Dividends to Support Fiber Rollout Through Virus

In FX, NOK/GBP/SEK were not the biggest G10 movers, but in focus and divergent after the Norges Bank delivered an unexpected 25 bp ease to pull the benchmark depo rate back down to zero and supplemented the additional stimulus with an extension of F-loans through to the end of August. Conversely, the BoE stuck to the script on conventional policy and QE, albeit with 2 dovish MPC dissenters calling for asset purchases to be upped by Gbp 100 bn. In response, the Norwegian Krona lost momentum through resistance at 11.0527 and before the big figure to retest 11.1500+ vs the Euro amidst further declines against the Swedish Crown that retains a hawkish hold Riksbank bid to compound its outperformance relative to a weaker single currency near 10.6000, while Cable rebounded from new 2 week lows to 1.2400+ at best and Eur/Gbp retreated towards 0.8700 after extending gains further beyond the 200 DMA.

  • AUD/NZD/CAD – Already boosted by encouraging export elements in Aussie and Chinese trade data overnight, the Antipodean Dollars have welcomed reports that officials from the US and China are planning to hold a call in relation to progress on the Phase 1 trade agreement next week given that relations between the 2 countries have become increasingly strained over the coronavirus. Aud/Usd is consolidating around 0.6450 and comfortably above a hefty option expiry at 0.6415 (1.2 bn), while Nzd/Usd has regained a firm foothold over 0.6000. Elsewhere, the Loonie has pared losses vs its US counterpart following a sharp slide to a fresh wtd trough circa 1.4173 on Wednesday by a full point in similar vein to crude prices after their midweek setback, eyeing Canadian Ivey PMIs on the eve of the big NA jobs showdown.
  • JPY/EUR/CHF – The return of Japanese participants from their Golden Week holidays has dampened demand for the Yen along with the aforementioned US-China trade talk news, with Usd/Jpy bouncing from 106.00 to 106.50 or so and the base of decent 1 bn+ expiry interest at the half round number, but not reaching those sitting between 106.65-75 in the same amount. In contrast, expiries may help the Euro deeper depreciation below 1.0800 after yet more worrying Eurozone economic releases, as 1.4 bn resides from 1.0780-75, though recoveries could also be thwarted by 2.3 bn at the 1.0800 strike or 1 bn just above (1.0805-10), especially if the DXY continues to make headway on the 100.000 handle having eclipsed its pre-month peak at 100.270.
  • EM – Most regional currencies are benefiting from a broad upturn in risk sentiment and oil returning to its recovery path, but for the Lira very little respite as Usd/Try rallies through the apex of Turkey’s 2018 crisis and remains in a seemingly endless uptrend approaching 7.2600. Elsewhere, CPI data looms for the Mxn and a 50 bp rate cut for the Czk, while the Brl will soon reflect on a bigger than expected ¾ point ease to a new 3% record low for the Selic.

In commodities, WTI and Brent front month futures initially traded within a tight range relative to recent performance, with the benchmarks fluctuating between gains and losses in early trade. The contracts found a floor early-doors amid reports of a phone call next week between the top US and Chinese negotiators. Looking at the oil market itself, the forward Brent curve has tightened in recent days, reflecting an ease in the oil market glut – aided by production cuts and reviving demand as economies re-open from lockdown. On that front, Saudi Aramco raised its Arab Light OSPs to Asia following two consecutive cuts – signaling resurfacing demand in the region. That being said, Equinor’s CEO does not believe in a quick rebound in the oil market and added it could take until 2022 to see oil markets back normalise. The CEO said deeper cuts would improve the situation. WTI June now resides north of USD 25/bbl, and extends its intraday range (low USD 23.41/bbl), whilst Brent July sees itself printing fresh session highs, having rebounded from a low of USD 29.22/bbl. Elsewhere, spot gold saw some impetus from a softer Buck but remains below the USD 1700/oz mark (daily range USD 1685-1693.40/oz). Copper prices meanwhile remain underpinned by the rebound in the Chinese Trade Balance, coupled with upside seen in stocks supported by the US-China headlines.

US Event Calendar

  • 7:30am: Challenger Job Cuts YoY, prior 266.9%
  • 8:30am: Nonfarm Productivity, est. -5.5%, prior 1.2%; Unit Labor Costs, est. 4.5%, prior 0.9%
  • 8:30am: Initial Jobless Claims, est. 3m, prior 3.84m; Continuing Claims, est. 19.8m, prior 18m
  • 9:45am: Bloomberg Consumer Comfort, prior 39.5
  • 3pm: Consumer Credit, est. $15.0b, prior $22.3b

DB’s Jim Reid concludes the overnight wrap

Note that it’s a UK holiday tomorrow so there’ll be no EMR or CCD. We’ll see you again on Monday. Pity me that I’ll have to give up the cosy quiet refuse of my home office for a day looking after fighting, biting and snarling toddlers. Ahead of that pain I’ve been reading through some of the planned exit strategies from around the world and a couple of things have puzzled and intrigued me. A few countries have said you can nominate a certain number of people that you can have closer contact with going forward – maybe 10 family members and/or friends. I can’t see how this is going to be anything other than highly political or quite soul destroying. Imagine waiting by the phone or watching your WhatsApp in the expectation of being asked to be on someone else’s list and receiving no messages. Or not getting a reply when asking someone. I haven’t had that much rejection since doing internet dating a long time ago (their loss). I think I’ll just hide and let my wife work out who wants to see us. Also as a random aside the very comprehensive Irish exit strategy document has nightclubs reopening from lockdown in August but only where they can apply social distancing. Nightclubs must have changed a lot since I last went to one over a decade ago if they can apply this.

The trade war theme that dominated markets last year almost feels like a decade ago now however interestingly that made a comeback late in the US session after comments from President Trump suggesting that he was going to review China’s commitments so far towards meeting its obligations within the Phase 1 trade deal. He said he will be able to report back in a week or two. Analytically the trade agreement did have a provision for “natural disasters or other unforeseen events”. However this is politics now and it’s clear that tensions will mount between the world’s two largest economies as we approach the election and possibly beyond. So watch this space.

In terms of market moves, the S&P 500 fell -0.70% after whipsawing between gains and losses all day, before the swoon in the last half hour of the day after Trump spoke. Meanwhile the NASDAQ was able to finish positive, up +0.51% as tech stocks led the moves higher, and were able to withstand the late rout in risk. Europe didn’t have such a good day however, with the STOXX 600 down -0.35% and the DAX down -1.15%.

Overnight we’ve had China April trade data and the Caixin services PMI with the later printing at a weaker than expected 44.4 (vs. 50.1 expected and 43.0 last month). In the details the employment component fell to 47.5 from 48.0 in March, the lowest reading since the series began. There was better news in the trade data, specifically with exports which unexpectedly rose +3.5% yoy (vs. -11.0% yoy expected). Imports dropped -14.2% yoy (vs. -10.0% yoy expected), leading to a trade surplus of $45.3bn (vs. $8.68bn expected) however the positive export number could reduce some of the concern on growth if it persists.

Meanwhile, US Secretary of State Pompeo has said overnight that the US has delayed an annual report to Congress assessing Hong Kong’s autonomy and added that the postponement will “allow us to account for any additional actions that Beijing may be contemplating in the run-up to the National People’s Congress that would further undermine the people of Hong Kong’s autonomy as promised by China.” The findings of the report could trigger sanctions. So one to watch. Also, the temporary general license which was granted to Huawei amidst the trade war is set to expire on May 15 and any US action on the same will likely be closely watched.

Asian markets are mixed this morning in the wake of the data and headlines with declines for the Hang Seng (-0.55%) and ASX (-0.37%), little change for the Shanghai Comp and the Kospi (+0.50%) up. The Nikkei is also up +0.30% having reopened. Elsewhere, futures on the S&P 500 are up +0.56% as we type.

In other news, Brazil’s congress approved two stimulus bills to help support states and municipalities while also providing BRL 700bn ($122bn) of funds for the economic recovery from the pandemic. The congress also allowed the central bank to buy corporate bonds. Meanwhile, the country’s central bank reduced the Selic rate by 75bps overnight to a record low of 3%. The central bank has now cut rates in each of its past seven meetings.

This morning some market attention will turn to the Bank of England, who’ll be announcing their latest monetary policy decision at the earlier than usual time of 7am in London – so it could well already be out by the time you’re reading this unless you’re an early reader! For those of you not reading from the future our UK economists write in their preview (link here) that they don’t see a change to the BOE’s policy settings in May, given they have already lowered the Bank Rate to a record low 0.1% and expanded QE by a further £200bn. Instead, they think the BoE will ramp up QE by a further £125bn in June, with the main focus today likely to be on their latest economic projections. Investors will be closely watching for the Bank’s assessment of how deep the recession is likely to be, as well as their assumptions regarding the shape and speed of the recovery, and what that might mean for monetary policy.

Ahead of that decision, sterling was one of the worst-performing G10 currencies yesterday, falling by -0.68% against the US dollar (and down a further -0.25% this morning) and we should note that our FX strategists have turned bearish again on the pound (link here). The reason for their bearish outlook comes from the combination of slow progress on a lockdown exit strategy, the prospect of Brexit (remember that word??) risks re-emerging, as well as rising UK inflation risks threatening to put downward pressure on real yields.

Elsewhere in Europe, the single currency lost ground again yesterday following the German Constitutional Court’s ruling the previous day, with a further -0.42% decline against the US dollar. Sovereign debt sold off across the continent as well as in the US. Ten year Treasury yields rose +4.1bps on the day to 0.703%, the highest level since 15 April. The spike was party driven by news that the government was increasing the debt it planned to issue in its quarterly refunding auctions. The US will issue a record high of $96 billion to fund government expenditures as the economy slows. The US was not the only country with large issuance news as part of the bund yields rise was attributed to the news that the government is selling EUR7.5bn worth of its first ever 15-year bonds. The GCC ruling the previous day also put some pressure on bonds.

By the end of the session, yields on 10yr bunds were up +7.0bps, while those on OATs (+7.2bps) and BTPs (+10.8bps) also increased, and the Italian-German 10yr spread stood at a 2-week high of 248bps. One interesting piece of news yesterday came from the French central bank governor, Francois Villeroy de Galhau, who said that the ECB would probably need to do more to boost inflation. He said “In the very name of our mandate, we will be able to go further, and we will most likely have to go further, and thus support the recovery through low interest rates and abundant liquidity for a long time”. I suppose the only problem is that this alone hasn’t helped inflation pick up over the last decade. However a combination of this and the new higher fiscal spending if maintained when a more normal recovery returns might be more likely to generate it.

In Germany, Chancellor Merkel said that the first phase of the pandemic had passed, and that all shops would be able to reopen while the Bundesliga would also be able to resume with matches played behind closed doors. Meanwhile in the UK, Prime Minister Johnson said that he’d be outlining plans to ease the lockdown on Sunday, and that he hoped to “get going on some of these measures on Monday”.

Today we’ll get the latest round of weekly initial jobless claims from the US for the week up to May 2. Our economists are expecting a 3.1m reading, which would mark the 5th consecutive weekly decline. Ahead of that, the ADP Research Institute released their monthly private payrolls report, which showed a -20.236m decline in April, only slightly better than the -20.550m decline anticipated by the consensus. The U.K. will be on holiday tomorrow so a reminder that on payrolls DB economists are expecting nonfarm payrolls to fall by 23 million (compared to -701k previously), which would raise the unemployment rate to a post-WWII high of 18.0% (vs. 4.4%).

Looking at yesterday’s other data, the services and composite PMIs released from Europe for April were incredibly bad once again. The final composite PMI for the Euro Area came in at 13.6, a tenth higher than the flash reading, but still the lowest in the history of the series. Other composite PMIs fell to new depths, with the readings for Germany (17.4), France (11.1), Italy (10.9) and Spain (9.2) all at record lows. As is clear, the southern European economies have been among the most affected, and the European Commission’s latest economic forecasts yesterday also pointed to large declines there. In fact, in their forecasts the three largest contractions for the Euro Area countries in 2020 were seen in Greece (-9.7%), Italy (-9.5%) and Spain (-9.4%).

Concluding with the rest of the data, and the UK’s construction PMI fell to 8.2 in April, the lowest since the data series began in 1997. In Germany, factory orders fell in March by -15.6%, the largest in data going back to 1991, while Euro Area retail sales also fell by -11.2% in March.

To the day ahead now, and the highlight is likely to be the aforementioned Bank of England decision, though we’ll also hear from the ECB’s Lagarde, De Guindos, Wedimann and Mersch, as well as the Fed’s Bostic, Kashkari and Harker, and get a decision from the Norges Bank as well. Data releases include German and French industrial production for March, Italian retail sales for March, along with the German construction PMI for April. There’ll also be the weekly initial jobless claims from the US, preliminary Q1 nonfarm productivity, and March consumer credit. Earnings releases include Bristol Myers Squibb, Danaher, Raytheon Technologies and Uber.

 

3A/ASIAN AFFAIRS

i)THURSDAY MORNING/ WEDNESDAY NIGHT: 

SHANGHAI CLOSED DOWN 6.62 POINTS OR 0.23%  //Hang Sang CLOSED DOWN 156.85 POINTS OR 0.65%   /The Nikkei closed UP 55/42 POINTS OR 0.28%//Australia’s all ordinaires CLOSED DOWN .27%

/Chinese yuan (ONSHORE) closed DOWN  at 7.0882 /Oil UP TO 26.29 dollars per barrel for WTI and 31.63 for Brent. Stocks in Europe OPENED GREEN//  ONSHORE YUAN CLOSED DOWN // LAST AT 7.1092 AGAINST THE DOLLAR. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.8834 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

CHINA

naturally! China will not co-operate with the COVID 19 investigation until the “virus has been defeated

(zerohedge)

 

China Won’t Cooperate With COVID-19 Investigation Until ‘Final Victory’ Against Virus

China has refused to allow international experts into the country to investigate the source of COVID-19 until a “final victory” is secured over the virus, according to Beijing’s UN ambassador Chen Xu.

According to France 24, China’s first priority is beating the pandemic, then countering “absurd and ridiculous”claims by the United States that the virus likely escaped from a Wuhan lab known for experimenting with bat coronaviruses – which were modified for transmissibility to humans in highly criticized experiments.

“The top priority, for the time being, is to focus on the fight against the pandemic until we win the final victory,” said Chen, adding ” We need the right focus and allocation of our resources.”

Chen hit back against claims that China was against the international probe, insisting that Beijing isn’t “allergic to any kind of investigations, inquiries or evaluations,” according to the report.

“We need to race with time to save lives as much as we can,” he added. “For whether or how the invitation will take place, we need to have the right priority setting at this moment, and on the other hand, we need the right atmosphere.”

US President Donald Trump has been increasingly critical, saying last week he had seen evidence linking Covid-19 to a maximum-security virology lab in Wuhan and threatening new trade tariffs.

US Secretary of State Mike Pompeo on Wednesday renewed criticism of Beijing’s handling of the outbreak.

“China could have spared the world a descent into global economic malaise. They had a choice but instead – instead – China covered up the outbreak in Wuhan,” Pompeo told reporters.

“China is still refusing to share the information we need to keep people safe,” Pompeo added. –France 24

This past weekend, Secretary Pompeo said there was “enormous evidence” that the coronavirus escaped from the Wuhan lab. On Wednesday, China said Pompeo “doesn’t have any” evidence.

“I think this matter should be handed to scientists and medical professionals, and not politicians who lie for their own domestic political ends,” said foreign ministry spokeswoman Hua Chunying during a press briefing in Beijing.

On Monday, President Trump told the New York Post that China is to blame for their failure to stop COVID-19 from spreading.

“Well, it got out of that area, and it shouldn’t have,” he said, adding “It shouldn’t have been allowed to have gotten out because it got out and went all over the world. So that shouldn’t have taken place, and [China] should have never allowed it to happen.”

end

CHINA/USA

Initially Trump was not pressuring China to be more transparent in early January about the coronavirus outbreak

(zerohedge)

 

 

Trump Resisted Pressuring China To Be More “Transparent” About Coronavirus Outbreak Back In January: Report

In a must-read piece detailing the evolution of the US-China relationship from productive partnership to bitter rivalry, WSJ reported that back in January, President Trump resisted pressing China to be more transparent about the emerging virus, and the risks it might pose to the global community.

Since President Trump revoked funding for the WHO last month and a British newspaper appeared to confirm that western intelligence agencies (including US intelligence) were investigating the possibility that the virus might have leaked from a biolab in Wuhan, hostilities between Beijing and Washington have taken off, with China’s Foreign Ministry on Wednesday prodding Secretary of State Mike Pompeo to show ‘proof’ that the virus came from the Wuhan lab.

Before critics jump on this tidbit, and try to portray the administration’s recent rhetoric against China as cynically political, it’s worth remembering that the WHO was praising China’s response as exemplary, helping to prop up Beijing’s lies. The US was led to believe China was much more on top of things than it turned out to be. That Trump wanted to try and curry some favor after the bitterness of the trade talks isn’t all that surprising. Besides, we doubt any pressure from Trump would have averted China’s dissembling.

Even as he has presided over a China policy many see as the toughest in 40 years of relations, Mr. Trump has frequently praised President Xi and talked of their friendship—a tactic administration officials say is meant to give Chinese leaders an opening to meet U.S. demands for change.

Early this year, several of Mr. Trump’s political advisers inside and outside the campaign urged him to take on China more directly, which they argued would have bipartisan appeal. One idea they suggested was a special commission to investigate the origins of the virus and whether Beijing responded sufficiently to control the outbreak.

Mr. Trump twice declined suggestions from his team in January to press Mr. Xi for more transparency about the virus’s causes and symptoms, in one case saying that the criticism could cause Beijing to be less helpful, said White House officials.

Domestic pressures in both the U.S. and China are likely to aggravate the already strained relations. Supporters of Mr. Biden also have produced attack ads focused on China.

Mr. Xi, too, has faced criticism at home over the coronavirus, and his administration has sought to project a sense of strength in dealing with the U.S. as he tries to revitalize an economy stalled by the pandemic, manage high unemployment and quash persistent antigovernment unrest in Hong Kong.

After Barack Obama’s turn at appeasement, which saw China ramp up its efforts to steal US innovations and technology, President Trump swept into office with a promise to crack down on Beijing. Since then, the distrust has only deepened, with two-thirds of Americans saying they no longer trust China. Meanwhile, the federal government is upping the pressure on China like never before.

The Trump administration has moved to involve much of the U.S. government in a campaign that includes investigations, prosecutions and export restrictions. Nearly every cabinet and cabinet-level official either has adopted adversarial positions or jettisoned past cooperative programs with Beijing, an analysis of their policies showed.

Chinese officials, for their part, are following through on President Xi Jinping’s call last fall to resist anything they perceive as standing in the way of China’s rise. They have stepped up military activities in the contested South China Sea and intimidation of Taiwan, a U.S. ally, and state media has issued extraordinary public denunciations of Secretary of State Mike Pompeo.

The coronavirus pandemic has deepened the rancor, bringing relations between the two to a modern-day nadir. Both governments are forgoing cooperation and trying to outmaneuver each other to shape events in the post-pandemic world order.

President Trump, who has sharply criticized China for its handling of the outbreak, has said he is considering using tariffs and other ways to collect compensation for it from Beijing, though senior officials signaled this week that the administration is holding off on punishing China economically.

Once the virus has finally been subdued – however long that takes – the biggest takeaway here is that there has been a dramatic paradigm shift in US-China relations. We expect tensions will only worsen from here.

end
CHINA/USA
China threatens that it may dump USA treasuries in response to its hostility.  They are now starting their own QE/  By dumping USA treasuries they are hurting themselves more than the uSA
(zerohedge)

Beijing May Dump US Treasuries In Response To US Hostility, Start Its Own QE: Chinese Media

In response to recent media speculation that as the blame game over the origins of the coronavirus pandemic escalates the US may cancel some of its $1.1 trillion debt owed to China, the South China Morning Post reported today that China may “move to reduce its vast holdings of US Treasury securities in the coming months” in response to a resurgence in trade tensions and a war of words between the world’s two largest economies.

While analysts have also said that the US was highly unlikely to take the “nuclear option” of cancelling Chinese-held debt, with Larry Kudlow himself refuting this suggestion on several occasions last week, the “mere fact that the idea has been discussed could well prompt Beijing to seek to insulate itself from the risk by reducing its US government debt holdings”, the SCMP writes.

And while the SCMP then suggests that this “could spell trouble for the US government bond market at a time when Washington is significantly ramping up new issuance to pay for a series of programs to combat the pandemic and the economic damage it is causing”, nothing could be further from the truth: yes, the US Treasury will issue over $4 trillion in new debt this calendar year, but now that the US officially lives under central planning, courtesy of helicopter money, the Fed will monetize not just every dollar the Treasury issues, but will monetize double the net issuance.

Which means that not only does the US not need China to buy its debt ever again, the US in fact does not need anyone outside the Fed, now that open debt and deficit monetization is the endgame, with the only unknown is when this will lead to currency collapse.

Surprisingly, the Chinese still don’t get that any tactical advantage they may have had is now gone:

any move to cancel the debt owed to China – effectively defaulting on it – would be counterproductive to US interests because it would likely destroy investors’ faith in the trustworthiness of the US government to pay its bills, analysts warned.

This would send US interest rates soaring, making borrowing more costly for the government, as well US companies and consumers, and in turn strike a sharp blow to America’s already very weak economy.

Again: no. Maybe this idea had some validity when the Fed was pretending it wouldn’t do unlimited QE, but now that the Fed is purchasing hundreds of billions in US paper every month, what China may or may not do with its holdings of US debt is completely irrelevant.

“It’s such a crazy idea that anyone who has made it should really have their fitness for office reconsidered,” said Cliff Tan, East Asian head of global markets research at MUFG Bank. “We view this as largely a political ploy for [Donald Trump’s] re-election and a cynical one because it would destroy the financing of the US federal budget deficit.”

Uhm, Cliff, yes it is insane, but not because China has any leverage left: in case you missed it, the Fed purchased $2.5 trillion in debt in the past 6 weeks.

That’s more than double what China owns. So yes, if Beijing wants to dump its Treasuries, bring it on: it will cause yields to spike for an hour or two, at which point everyone will frontrun the Fed which will activate the turbo POMO and purchase every last penny that China had to sell.

China’s desperate fearmongering – as if it tries to convince itself that it has some leverage over the US continued:

China could trigger a crash in the US dollar and financial markets by flooding the market with US Treasuries for sale, which would push down US bond prices and cause yields to spike. But that would also ignite a global financial catastrophe, hurting China as well.

Two things: the financial catastrophe was already ignited when China allowed – accidentally or on purpose – a deadly pandemic escape from the Wuhan Institute of Virology. It doesn’t need the US. Second: a sale of a mere $1.1 trillion in Treasurys now that the total US debt just surpassed $25 trillion…

… of which the Fed owns $6.66 trillion, would have absolutely no impact on anything, besides long-end yields, and even there the spike would be brief as the market realizes that the Fed can and will buy everything China has to sell.

Oh, and a third thing: if China could actually crash the US dollar, both Powell and Trump would be giddy with happiness. In case someone still hasn’t figured it out, the Fed is desperate to crash the dollar because the longer it remains elevated (as a result of the infamous $12 trillion dollar margin call), the more likely it is that the coming global emerging markets collapse will crush the US as not even the Fed will have power to deflect that particular meteor.

Alas, none of this has registered with China which is dearly holding on to the myth that its sales of US paper could still have some impact:

“There’s a strong urge for countries like China, and Russia, to move away from US dollar settlements.  This is simply because the US dollar can be weaponised by the US government,” said Xu Sitao, chief economist at Deloitte China, referring to the recent practise by the US government of cutting off foreign individuals, companies and governments from the global US dollar financial transaction settlement system, greatly complicating their ability to conduct business.

“ Clearly there’s more willingness for certain countries just to diversify and move away from US dollar settlements.”

Right, sure, and just what currency does China propose to exchange its dollar-denominated reserves, which account for some 58% of its total FX holdings, into?

Maybe China is just confused because it has yet to activate a full-blown QE of the type the Fed has perfected for the past decade. Which is apropos because in a follow up article, the same SCMP reports that China’s top economic policymakers have been “engaged in heated debate over whether the country’s central bank should directly buy special bonds issued by the finance ministry to help the government’s economic support measures.”

Which, of course, is precisely what the Fed has been doing on tilt for the past two months.

According to the report, the discord reflects the differing schools of thought in China over how best to help the world’s  second largest economy recover from the coronavirus. The National People’s Congress which is due to meet in less than three weeks, is expected to provide clearer signals on Beijing’s economic policy. Liu Shangxi, president of the Chinese Academy of Fiscal Sciences, a finance ministry-affiliated think tank, kicked off the debate after he recently proposed issuing 5 trillion yuan (US$700.5 billion) in special Treasury bonds to help stabilise the economy

He called on the People’s Bank of China (PBOC) to buy them in tranches at an interest rate of zero.

It gets funnier: in China purchases of bonds are technically taboo as central bank law forbids it from directly bankrolling government spending. Well, guess what: there is another central bank whose charter forbids it from engaging in state financing and debt/deficit monetization: the ECB. And here is its balance sheet.

And while for now China is stopped by the threat of soaring inflation once it too triggers monetary financing, it is only a matter of time before China realizes that the initial phase of the coming hyperinflation only affects asset prices, while sparking broader economic deflation (of course, eventually goes vertical as faith in the currency is extinguished). So once China realizes that by starting QE, it too can achieve all of its goals, it will do precisely that.

Which also gives us a glimpse of the endgame: the four biggest economies in the world: the US, Europe, China and Japan, all directly monetizing their own debt, all hoping to crush their own currency before their peers as the only remaining way to stimulate the global economy. Then one day, something will finally snap and the entire financial system will disintegrate overnight. Until them, however, just BTFD because when every central bank in the world is telling you that fiat paper in your hand will soon be worthless so best spend it now, well, you listen

 

END

CHINA/USA

This ought to be fun:  a virtual meeting is scheduled between uSA and China where the uSA wants to know if China will implement the deal.  The Pandemic has so far interfered with the deal but now that China “has officially eradicated” the virus, Trump want them to honour their deal

(zerohedge)

 

Top Trade Negotiators From US, China To Meet As Trump Threatens To Scrap Deal

As we noted earlier, Secretary Mnuchin was clearly dealing with some serious stress last night as President Trump stormed about the possibility of cancelling the US-China trade pact, fuming about the uncertainty surrounding whether China plans to honor the agreement.

As the bilateral relationship deteriorates to its most caustic point since Nixon met Mao, Bloomberg reports that Chinese and US trade negotiators will speak as soon as next week on progress in implementing a phase-one deal after Trump threatened to “terminate” the agreement if Beijing didn’t move to swiftly adhere to its terms.

The news was broken at around 330ameT, overnight in the US, but mid-afternoon in China. It comes as Beijing once again threatens to dump its Treasury holdings, a threat that carries added weight as US borrowing soars.

The ‘virtual’ meeting will feature all the key players: Chinese Vice Premier Liu and Robert Lighthizer – the respective head negotiators for their countries – will both be on the call.

Source: BBG

The planned phone call will be the first time Liu and Lighthizer speak officially since it was signed in January, just before the global coronavirus pandemic hit the world’s two biggest economies and upended global supply chains. The deal calls for the two representatives to meet every six months; the upcoming call will be held slightly ahead of schedule.

Trump also seemed to suggest a mysterious new development might be on the horizon when he told reporters at the White House on Wednesday that he’d have a report in the next week or two about how the agreement was doing.

On Sunday, in response to a question at a town hall from a business owner who said he was losing money on the tariffs, Trump noted that the duties prompted China to promise to buy $250 billion worth of American goods.

“Now they have to buy,” the president said. “And if they don’t buy, we’ll terminate the deal, very simple.”

According to the text of the agreement signed earlier this year, China has agreed to buy an additional $200 billion in US goods and services – compared with the 2017 level – over the next 2 years, using Soviet-era centrally-planned purchases.

As we’ve noted, so far, purchases have lagged well behind where they should be to reach the first year target of a $76.7 billion increase. Given that the imports in 2019 were still well below the level from 2 years prior. In April, even with China gobbling up all the PPE and other vital supplies, exports to the US were well above what economists expected, suggesting that the American trade deficit with China will likely worsen in the coming months.

  • Chinese Exports YY* (Apr) 3.5% vs. Exp. -15.7% (Prev. -6.6%)
  • Chinese Imports YY* (Apr) -14.2% vs. Exp. -11.2% (Prev. -0.9%, Rev. -1.0%)

But given the recent frostiness in the US-China dialogue, we wouldn’t be surprised to see the US effectively sabotage the deal, upping the stakes and nudging the US toward the China hawks’ “decoupling” dream.

END

Caught in the act:  Shi altered her report 48 hrs before COVID 19 samples were destroyed

(zerohedge)

Database Of Wuhan’s ‘Batwoman’ Altered 48 Hours Before COVID-19 Samples Ordered Destroyed

As Western intelligence continues to investigate China’s handling of COVID-19 as it spread throughout Hubei province in December,disturbing evidence continues to emerge that the Chinese Communist Party (CCP) engaged in a massive cover-up of what was going on.

Now, we’ve learned that the Wuhan Institute of Virology – which was conducting controversial experiments into animal-to-human transmission of bat coronaviruses, altered their database in an apparent attempt to distance the lab from the outbreak.

“Days before the Wuhan wet market was bleached, whistleblowers were punished and virus samples were destroyed, someone at the high-security Wuhan Institute of Virology censored its virus database in an apparent attempt to disassociate the laboratory from a novel-coronavirus outbreak that would become a global pandemic,” reports the New York Post‘s Miranda Devine, citing a UK intelligence analyst who found the alterations via open-source methods.

Notably, the alteration occurred two days before a gene sequencing lab was reportedly ordered by the Health and Medical Commission of Hubei Province to destroy samplesof the new disease and withhold information.

According to the report, the alterations – conducted on the evening of Dec. 30 – were substantial, and occurred the day before the CCP notified the World Health Organization about the outbreak of a cluster of pneumonia cases in Wuhan.

The primary database contact is none other than Shi Zhengli – now known as “batwoman” for her controversial experiments, including the creation of a ‘chimeric’ coronavirus that can infect humans. According to the report, Zhengli was in Shanghai for a conference when she was summoned back to Wuhan to deal with the outbreak which had been detected in two pneumonia patients. While on the overnight train back to Wuhan, the database was altered.

Most of the changes were to delete the keywords “wildlife” or “wild animals.” This is significant, because global health researchers say the virus jumped from bats to humans via another wild animal — the crucial “missing link” in the COVID-19 transmission chain.

Shi used to boast that her bat-virus database was unique because it included data on virus variants in other wild animals.

Was her database censored to keep prying eyes away from references to cross-species transmission of viruses in wild animals?

For instance, the title of the ­database was changed that night from “Wildlife-borne viral pathogen database” to “Bat and rodent-borne viral pathogen database.”

“Wild animal” was replaced with “bat and rodent” or “bat and rat” at least 10 times in the database. Also, a reference to “arthropod vectors” was removed.

Keywords that might facilitate searches potentially connecting the database with the outbreak also were deleted. “Wild animal samples,” “viral pathogen data,” “emerging infectious diseases” and “cross-species infection” were keywords associated with the original version.

On Dec. 30 they were replaced with “bat,” “rodent” and “virus.” –New York Post

“It looks like a rushed, inconsistent effort to disassociate the project from the outbreak by ­rebranding it,” according to the UK intelligence analyst who discovered the alterations. “It’s a strange thing to do within hours of being informed of a novel-coronavirus outbreak.”

“If the WIV had found the missing link between bat virus RaTG13 and SARS-CoV-2 [the coronavirus that causes COVID-19] from an animal vector, it would have been in Shi’s database,” he added.

Read the rest of the report here.

end

4/EUROPEAN AFFAIRS

UK/BANK OF ENGLAND

Bank of England keeps rates unchanged but warns of deep economic slump..greater than in its 300 years of service..

(zerohedge)

BoE Warns Of Worst Economic Slump In 300 Years 

The Bank of England’s Monetary Policy Committee (MPC) “voted unanimously” to keep the banking rate at 0.1% and left its bond-buying program unchanged despite the country’s worst economic slump in 300 years, caused by coronavirus lockdowns.

MPC voted 7-2 to leave its bond-buying program unchanged at £645 billion. Two of its nine policymakers (Michael Saunders and Jonathan Haskel) voted to increase the program by £100 billion.

The BoE described the economic impact of COVID-19 was “having a significant impact on the United Kingdom and many countries around the world,” adding that economic activity has stumbled since 1Q20 and unemployment “has risen markedly.”

The Bank outlined an “illustrative scenario” that shows a 14% plunge in the British economy in 2020, followed by a V-shaped recovery in 2021. It said very significant monetary and fiscal stimulus is required for a recovery to play out.

 

h/t BBC

“However the economic outlook evolves, the Bank will act as necessary to deliver the monetary and financial stability that is essential for long-term prosperity and meet the needs of the people of this country,” Governor Andrew Bailey said.

“This is our total and unwavering commitment,” Bailey said, adding that, “the recovery of the economy to happen over time, though much more rapidly than the pull-back from the global financial crisis.”

The scenario was based on the government relaxing lockdown restrictions between June and September. However, if a second coronavirus wave is seen, it could quickly derail the recovery and possibly trigger prolonged shutdowns that would undoubtedly lead to a double-dip decline in the economy.

Bailey unleashed helicopter money last month, which was a historic move to counter the devastating effects of the lockdown.

Here’s the BoE forecast for unemployment – widespread job loss is expected this year with possible recovery over the next few. However, the model is showing nearly every job will be restored, we find that highly unlikely, as some will be eliminated.

 

h/t BBC 

The scenario also showed consumer prices index would fall to near zero at the start of next year, mainly because of the drop in energy prices. Then the BoE expects to meet its 2% target in the next several years.

 

h/t BBC

“The financial system was, however, in a much better position to support households and businesses through this period compared with the global financial crisis,” the BoE said.

Can the financial system handle a possible second wave of virus cases? 

end

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

RUSSIA//

Putin’s approval rating has just hit a historic low as 3 cabinet members are infected with the virus

(zerohedge)

Putin’s Approval Rating Hits Historic Low As 3 Cabinet Members Infected

Over the past decade, poll after poll in Russia has found President Vladimir Putin to be by far the most popular leader in modern Russia’s relatively short history (since the collapse of the USSR). He’s also of course been the longest ruling, currently serving his fourth 6-year presidential term.

His popularity at home is commonly attributed to the general Russian public’s desire for continued stability and the weeding out of oligarchic control and corruption in society. However, like in other parts of the world, Russia’s ‘stability’ is now under threat by the explosive spread of coronavirus — now witnessing consecutive daily record rises in cases.

 

Via AP

On Wednesday Russian health officials announced a whopping 10,559 new confirmed COVID-19 infections, bringing the national total to 165,929cases, including 1,537 deaths. This makes Russia the seventh most infected country, days ago surpassing Iran and China.

Following widespread criticism that Russia was slow in locking down the country, doing so at the very end of March significantly after European countries and the United States, a new poll from the Russian independent, non-governmental polling agency Levada Center finds that Putin’s popularity has plunged to a historic low.

This also amid fears not enough was done to insulate the economy amid a national lockdown and work “pause”.

 

Via Moscow Times

The Moscow Times reports the results of the new poll as follows:

President Vladimir Putin’s’s approval rating has hit a historic low of 59% as the country grapples with the coronavirus crisis, the independent Levada Center polling agency said Wednesday.

According to Levada’s results from a phone interview in late April, when most of the country was under enforced lockdown measures, 33% disapproved of Putin’s work.

Putin’s previous lowest approval rating since he first became president, 61%, was recorded in June 2000 and November 2013.

The latest results mark Putin’s lowest approval rating recorded by the Levada Center since September 1999, when he had a 53% approval rating shortly after being appointed prime minister.

The Kremlin downplayed the new Levada poll results, pointing to other research indicators which don’t paint as drastic a picture.

 

Russia’s culture minister, Olga Lyubimova, file image.

Meanwhile, things are looking to get worse, given days ago Russian Prime Minister Mikhail Mishustin announced he was confirmed for coronavirus.

And as of Wednesday a third cabinet minister has become infected (after also the Construction minister tested positive): Russia’s culture minister, Olga Lyubimova, has tested positive for the coronavirus, according to Reuters, citing state sources.

6.Global Issues

CORONAVIRUS UPDATE//THE GLOBE/THURSDAY

 

New Coronavirus Cases Surge To Highest Level In 2 Weeks: Live Updates

Summary:

  • New cases reported Wednesday highest in 2 weeks
  • Global case total tops 3.75 mil
  • Belgium prepares to reopen most shops Monday
  • CNN says 43 states will be ‘partially or mostly open’ by next week
  • Brazilian villages slam lack of lifesaving medical equipment
  • Moderna shares spike as 2nd phase vaccine trial set
  • Japan grants emergency approval to remdesivir
  • Teva shares explode higher
  • Nigeria extends flight ban
  • Vietnam still hasn’t reported a single death from COVID-19

*           *            *

As more US states and countries move ahead with reopening their economies, Johns Hopkins said it had recorded the largest number of new coronavirus infections worldwide on Wednesday in two weeks, the latest sign that reopening economies has led to a slight pickup in the infection rate. New confirmed infections on Wednesday topped 92,700, the most since April 24 and the 4th-highest daily total yet. With ~24,300 cases, the US accounts for about a quarter of the above total.

Total confirmed coronavirus cases are nearing the 4 million mark, with 3,772,267 reported as of Thursday, along with 264,189 deaths. 1,228,609 of those cases were from the US, along with 73,431 deaths.

In Europe, Belgium announced Thursday that shops in the country would be allowed to reopen on May 11, the latest western European country to set a date. The total number of cases confirmed in Belgium is roughly 51,500, just shy of the ‘official’ count from India.

Meanwhile, as the US prepares to confirm millions of additional job losses, at least 43 US states will have partially, or completely, reopened their economies by Sunday, according to CNN, which apparently has a different definition of “completely open” (we wouldn’t consider restrictions on the number of customers to just 50% of max capacity ‘completely’ open). And some more retail stores in LA County could reopen as soon as Friday, Mayor Garcetti announced late Wednesday.

A few days ago, we shared a heart-wrenching story about the breakdown of health-care systems in remote Brazilian villages, where the coronavirus is running rampant.

On Thursday morning, BBG shared the following video mourning a relative who died due to there being no ventilator.

Bloomberg QuickTake

@QuickTake

“She died because there was no ventilator equipment for her.”

Some family members of victims in Manaus are angry about the lack of PPEs in one of Brazil’s hotspots. Mayor @Arthurvneto has asked world leaders for help

Embedded video

Moderna shares spiked 10%+ in premarket trading Thursday as the FDA gave the drug company and vaccine-trial favorite (just as Jim Cramer) permission to move ahead with the second phase of its trials for a potential COVID-19 vaccine. Moderna, which was the first drug company to begin testing a vaccine candidate on humans. The company said it will begin phase 2 trials with 600 participants shortly and is finalizing plans for a phase 3 trial as early as this summer.

Japan on Thursday became the first developed country to approve remdesivir for treatment of COVID-19, an approval that is also being aggressively pursued by the FDA, which has already given the drug an emergency approval.

In earnings news, Teva shares exploded 10% higher after the Israeli drugmaker confirmed its full-year guidance, while posting profit and revenue figures that beat expectations thanks to sales of the company’s respiratory products.

Finally, the FT shared a survey on Thursday claiming more than 70% of likely American voters trust their state’s governor to guide the economy back to fully-operational more than they trust President Trump, a sign – the FT said – of “mounting dissatisfaction” with Trump’s handling of the outbreak.

After nearly exterminating the virus, health officials in South Korea were alarmed Thursday after a 29-year-old South Korean nightclubber tested positive in a small city just outside Seoul. The case was the only domestic infection reported on Thursday, and officials are worried that the patient may have spread the virus while visiting a nightlife district in Seoul.

In Africa, as cases climb across the continent, Nigeria says it plans to expand its ban on all flights for another four weeks from Thursday, as Africa’s most populous country (and, in urban enclaves, extremely densely so) takes more steps to crack down of the virus.

As Vietnam moves ahead with reopening, it’s worth pointing out that the tiny southeast Asian country still hasn’t reported a single death from the virus. Vietnam reported 17 new coronavirus cases on Thursday, all of whom were Vietnamese citizens infected abroad. The country has confirmed just 288 infections since the outbreak began.

end

Due to the failure to provide vaccinations during this pandemic, the authorities expect nearly 1.5 million more tuberculosis deaths to occur…

(zerohedge)

Nearly 1.5 Million More Tuberculosis Deaths Expected Due To Coronavirus Lockdowns

Since the coronavirus outbreak forced doctors and hospitals around the world to delay most other medical care to focus 100% on combating the outbreak, lapses in vaccination routines have led to the reemergence of diseases like polio and measles. Alarmed by this trend, one ER doctor and coronavirus survivor in the Bronx warned that the US might as well end its coronavirus lockdowns now due to the impending wave of ancillary health issues.

And now, the Guardian, a far-left publication that has pushed for extended lockdowns, is even reporting that tuberculosis cases around the world are expected to surge.

Up to 6.3 million more people are predicted to develop TB between now and 2025 and 1.4 million more people are expected to die as cases go undiagnosed and untreated during lockdown.This will set back global efforts to end TB by five to eight years.

“The fact that we’ve rolled back to 2013 figures and we have so many people dying, this for me is sickening,” said Lucica Ditiu, executive director of the Stop TB Partnership. “I am outraged that just by not being able to control what we do…and forgetting about programmes that exist we lose so much, starting with the loss of the lives of people.”

There is no TB vaccine for adults, only for children. Some TB specialists have taken umbrage at the reality that there are so many vaccine candidates in the works for COVID-19, while desperately needed adult TB vaccines can’t get funding because they just wouldn’t be a money-maker.

“I have to say we look from the TB community in a sort of puzzled way because TB has been around for thousands of years,” Ditiu said. “For 100 years we have had a vaccine and we have two or three potential vaccines in the pipeline. We need around half a billion [people] to get the vaccine by 2027 and we look in amazement on a disease that … is 120 days old and it has 100 vaccine candidates in the pipeline. So I think this world, sorry for my French, is really fucked up,” she said.

“The fear we have in the community is that researchers are heading towards just developing a vaccine for Covid. That’s on the agenda of everyone now and very few remain focused on the others [diseases]. We don’t have a vaccine for TB, we don’t have a vaccine for HIV, we don’t have a vaccine for malaria and out of all this, TB is the oldest. So why this reaction? I think because we are a world of idiots. What can I say?”

The data were published on Wednesday; they are based on a three-month lockdown and a 10-month period of restoring services after lockdown is lifted.The research was commissioned by the Stop TB Partnership, working with Imperial College London, Avenir Health and – get this – Johns Hopkins University (which is helping track the global outbreak and conduct research).

TB kills 1.5 million people a year, more than any other infectious disease

 

end

Mish Shedlock on the deflation/inflation debate

(Mish Shedlock)

The Problem Is Not Deflation, It’s Attempts to Prevent It

Authored by Mike Shedlock via MishTalk,

Let’s investigate the Fed’s effort to prevent price deflation.

Here’s a Tweet that caught my eye.

Real Vision

@RealVision

“We’re about to have deflation and the market hasn’t figure it out yet… when it does, the Fed is going to shit itself.” @hendry_hugh @raoulGMI
https://rvtv.io/3aWzxf4

Embedded video

Problem with deflation is- Why buy anything if you know it will be cheaper in the future.,” responded one person.

Let’s investigate that question starting with a look at the CPI basket.

CPI Percentage Weights

Why Buy Anything Questionnaire

Q: If consumers think the price of food will drop, will they stop eating?

Q: If consumers think the price of natural gas will drop, will they stop heating their homes?

Q: If consumers think the price of gasoline will drop, will they stop driving?

Q: If consumers think the price of rent will drop, will they hold off renting until that happens?

Q: If consumers think the price of rent will rise, will they rent two apartments to take advantage?

Q: If consumers think the price of taxis will rise, will they take multiple taxi rides on advance?

Q: If people need an operation, will they hold off if they think prices might drop next month?

Q: If people need an operation, will they have two operations if they expect the price will go up?

All of the above questions represent inelastic items. Those constitute over 80% of the CPI.  Let’s hone in on the elastic portion with additional Q&A.

Questions for the Fed – Elastic Items

Q: If people think the price of coats will rise will they buy a second coat they do not need?

Q: If people think the price of clothes will drop, will they stop getting dressed?

Q. The prices of TVs and electronics drop consistently. Better deals are always around the corner. Does that stop people from buying TVs and electronics?

Q. If people thought the price of TVs was about to jump, would they buy multiple TVs to take advantage?

Q. If someone needs a refrigerator, toaster, stove or a toilet because it broke, will they wait if for some reason they think prices will decline?

Q. If someone does not need a refrigerator, toaster, stove or a toilet will they buy one anyway if they think prices will jump?

For sure, some people will wait for year-end clearances to buy cars, but most don’t. And if a car breaks down, consumers will fix it immediately, they will not wait for specials.

Stupidity Well Anchored

The above questionnaires thoroughly debunk the Fed’s ridiculous spotlight on “inflation expectations”.

Yet, how many times have you heard “inflation expectations are well anchored“?

In reality, Fed stupidity is well anchored.

The one and only time inflation expectations matter is in a state of hyperinflation when it pays to buy nearly anything and barter it.

No Economic Benefit to Inflation

My Challenge to Keynesians “Prove Rising Prices Provide an Overall Economic Benefit” has gone unanswered.

There is no economic benefit to inflation but there are winners and losers. The winners are those with first access to money, namely the banks and the already wealthy.

The Fed complains about income and wealth inequality but they are the primary source.

BIS Deflation Study

The BIS did a historical study and found routine price deflation was not any problem at all.

Deflation may actually boost output. Lower prices increase real incomes and wealth. And they may also make export goods more competitive,” stated the study.

For a discussion of the BIS study, please see Historical Perspective on CPI Deflations

Asset Bubble Deflation

It’s asset bubble deflation that is damaging. When asset bubbles burst, debt deflation results.

Central banks’ seriously misguided attempts to defeat routine consumer price deflation is what fuels the destructive build up of unproductive debt and asset bubbles that eventually collapse.

end

Michael Every discusses the days events..

(Michael Every…)

Sell In May…? Rabo Warns “Expect A Deluge To Follow”

Authored by Michael Every via Rabo Bank,

There is an old market saying, “Sell in May and go away”. How true that might prove to be once again. After all, we’ve seen quite the risk-on rally in the past month and a bit, reversing much of the Covid collapse.

 

Moreover, consider the following:

If you are bearish bonds you can look to recent developments in Europe, where the German constitutional court claims superiority to the European Court of Justice among many wrinkles in this week’s shot across the ECB’s bows. That said, some bonds are still going to be favoured while this plays out – just core over periphery, one would imagine.

If you are bearish bonds you can look at the flood of supply about to hit us, especially as the US Treasury now has to issue to match the largesse being offered by Congress. USD96bn, with a 20-year maturity once again to join the curve and overall increases in long-term debt. Yet this is only May – afterwards comes the real deluge when the economy collapses in Q2 and revenues follow, while expenditure soars. 10-year US yields were up as high as 0.74% but are back at 0.69% now. However, please ignore silly-season stories about China dumping US Treasuries (again). If anyone can issue USD4 trillion in debt (or 20% of GDP) a year without smashing their bond market completely, the US can.

For example, the South China Morning Post reports an internal debate within China over its post-Covid policy response. The Finance Ministry allegedly wants the PBOC to purchase newly-issued and to-be issued special bonds, and at an interest rate of 0% according to a linked think tank; the PBOC believes that “relaxing rules could erode fiscal discipline and spending efficiency.(!) So it seems China is also torn between a ‘Germanic’ response, which implies a prolonged growth slump (so sell stocks in May…which is bullish bonds by the way), or an all-in reaction, which as we keep pointing out will see USD/CNY soar (so sell stocks in May again…which is bullish bonds). The latest news is that China might be about to drop a numerical growth target for 2020 for the first time. That would certainly show that there is no huge stimulus coming. It will also create consternation among an entire generation of China GDP forecasters given the target has always been the actual figure up until now.

The irony is that this call to fiscal discipline comes from a country with what the IMF assesses as a double-digit consolidated fiscal deficit and incredible debt even during the good times, and where the social and political good, or the hope of eventual market domination and monopoly pricing, openly outweigh the need to actually make a short-term profit. Indeed, the South China Morning Post is inadvertently hilarious when it states that in China’s case “for defenders of central bank independence, Liu’s idea [of monetary financing of debt] risks opening a Pandora’s Box…” Take a step back and ask yourself how different any of this is going to be in most other economies within months. Again, that leaves May as a nice window for action.

Another reason to think the same: the continued ratcheting up of US-China geopolitical tensions. Yesterday President Trump called Covid-19 a “worse attack” on the US than 9/11 or Pearl Harbour, and he continues to point the finger of blame at China. Secretary of State Pompeo has likewise announced he will delay a mandated report to Congress on Hong Kong’s autonomy due by 25 May “to allow us to account for any additional actions that Beijing may be contemplating in the run-up to the National People’s Congress that would further undermine the people of Hong Kong’s autonomy.” This comes after the Beijing liaison office in Hong Kong yesterday called protestors there a foreign-instigated “virus” aimed at independence, and stated the central government would not sit idly by in the face of such a threat. As the Wall Street Journal notes, “The Trump administration has moved to involve much of the US government in a campaign that includes investigations, prosecutions and export restrictions. Nearly every cabinet and cabinet-level official either has adopted adversarial positions or jettisoned past cooperative programs with Beijing, an analysis of their policies showed.” Indeed, even Steven Mnu-China has stated Beijing must stick to the terms of the recently-agreed “phase one trade deal” or face “very significant consequences”. In short, there are no doves left in the coop, it would seem, only China hawks. So sell CNY in May then?

Let’s recall that other key emerging markets continue to be extremely bold in their policy choices, to an extent that usually sees them punished eventually: Brazil has just slashed interest rates a further 75bp, more than we or the consensus had expected, to a new historical low of 3.0% and is considering one more final cut in this easing cycle; Turkey’s policy response to a slumping economy and virus problems is already seeing TRY at a record low of 7.2077 at time of writing. Lots of selling and it’s still early May.

Lastly, we have the recent data. Australia ran a huge trade surplus of AUD10,062m in March, up 15% m/m and far more than expected, which will provide the usual fillip to very weak Q1 domestic demand, with imports -4% (matching a local services PMI of 27.1). However, China’s Caixin services PMI at 44.4 vs. hopes of 50.1 says no recovery ahead. China’s trade data also shows April exports 8.2% y/y, which is very hard to believe even given the rush on PPE, and imports -10.2% y/y, which is depressingly easy to believe – and again says no recovery ahead. Australia and AUD should take note.

For all of us, as we re-open May will show us just how many firms are going to fail in this new post-lockdown normal. US ADP jobs printing at minus 20 million yesterday and media reports that temporary job furloughs are becoming permanent ones says we should expect a deluge to follow.

end

7. OIL ISSUES

Oil surges after the Saudis raise their prices by slashing price discounts.  They want to prop up the markets

(zerohedge)

Oil Surges After Saudis Slash Price Discounts In Bid To Prop Up Market

After slumping much of yesterday, Brent soared on Thursday morning, after Saudi Arabia stepped in to prop up the recovery in the energy market by raising crude prices for its customers worldwide. Saudi Aramco increased pricing for most of its grades for shipment in June.

According to a price list seen by Bloomberg, Aramco raised its official selling price for flagship Arab Light crude to buyers in Asia by $1.40 a barrel, to a discount of $5.90 below the Middle East benchmark. The company was expected to reduce its official pricing by $2.50 a barrel, to a discount of $9.80, according to the median estimates in a Bloomberg survey of seven traders and refiners. By increasing pricing for Asia, Aramco is also indicating it sees demand beginning to recover in its largest regional market. The company is reversing three consecutive months of reductions in pricing for the world’s largest oil-consuming region.

Saudi Arabia – which at the start of March launch an unprecedented price war that crashed the market – is now telegraphing that it will “do whatever it takes” to support an oil price recovery. The kingdom narrowed discounts most notably for Europe and the Mediterranean, the main market for Russian crude. That appears to be a signal to the Kremlin after Riyadh and Moscow agreed last month to work together again through the OPEC+ alliance and bring the price war to an end.

The price hike takes place as the world’s biggest exporter is also cutting production as part of a global pact aimed at tightening supply and buttressing prices. Brent gained as much as 7%, rising by more than $2/barrel, and was last trading at $31.60.

As a reminder, Saudi Arabia began paring production late last month, after the Organization of Petroleum Exporting Countries and its partners, including Russia, agreed to slash output by 9.7 million barrels a day starting May 1. Oil prices have plunged this year and many drillers may stop pumping at wells that are no longer profitable.

As Bloomberg notes, raising prices to the U.S. will make Saudi barrels less attractive in a market where the main crude benchmark went negative last month. Selling less in the U.S. may also help appease President Donald Trump who helped orchestrate last month’s historic production-cutting agreement and who has threatened tariffs against Saudi crude imports. Trump is keen on protecting U.S. jobs in the oil industry in an election year. Of course, it also means that US shale producers will sense a shift in the tide and aggressively pursue maximum output which, ironically, may lead to another glut if demand does not rebound as fast.

END

Deadly:  USA is to remove the patriot missile protection from Saudi Arabia amid the huge drop in oil prices.  Trump angry that Saudi Arabia targeted the shale boys

(zerohedge)

US To Remove Patriot Missile Protection From Saudi Arabia Amid Oilpocalypse

Petrodollar panic?

As tensions between OPEC (cough – the Saudis – cough) and Washington rise over the supply (and price) of oil globally amid a pandemic-driven demand collapse, it would appears President Trump may have just gone ‘nuclear’.

“…there will be blood.”

The Wall Street Journal reports that The U.S. is removing Patriot anti-missile systems from Saudi Arabia and is considering reductions to other military capabilities – marking the end, for now, of a large-scale military buildup to counter Iran, according to U.S. officials.

As a reminder, OilPrice.com’s Simon Watkins warned last week that President Donald Trump was considering all options available to him to make the Saudis pay for the oil price war as the crash that followed has done significant damage to the U.S. oil industry.

With last month having seen the indignity of the principal U.S. oil benchmark, West Texas Intermediate (WTI), having fallen into negative pricing territory, U.S. President Donald Trump is considering all options available to him to make the Saudis pay for the oil price war that it started, according to senior figures close to the Presidential Administration spoken to by OilPrice.com last week. It is not just the likelihood that exactly the same price action will occur to each front-month WTI futures contract just before expiry until major new oil production cuts come from OPEC+ that incenses the U.S. nor the economic damage that is being done to its shale oil sector but also it is the fact that Saudi is widely seen in Washington as having betrayed the long-standing relationship between the two countries. Right now, many senior members on Trump’s closest advisory circle want the Saudis to pay for its actions, in every way, OilPrice.com understands.

This relationship was established in 1945 between the U.S. President Franklin D. Roosevelt and the Saudi King at the time, Abdulaziz, on board the U.S. Navy cruiser Quincy in the Great Bitter Lake segment of the Suez Canal and has defined the relationship between the two countries ever since.

As analysed in depth in my new book on the global oil markets, the deal that was struck between the two men at that time was that the U.S. would receive all of the oil supplies it needed for as long as Saudi Arabia had oil in place, in return for which the U.S. would guarantee the security of the ruling House of Saud.

The deal has altered slightly since the rise of the U.S. shale oil industry and Saudi Arabia’s attempt to destroy it from 2014 to 2016 in that the U.S. also expects the House of Saud to ensure that Saudi Arabia not only supplies the U.S. with whatever oil it needs for as long as it can but also that it also allows the U.S. shale industry to continue to function and to grow.

For the U.S., if this means that Saudi Arabia loses out to U.S. shale producers by keeping oil prices up but losing out on export opportunities to U.S. firms then that is just the price that the House of Saud must pay for the continued protection of the U.S. – politically, economically, and militarily.

And now, as The Journal reportsthe U.S. is removing four Patriot missile batteries from Saudi Arabia along with dozens of military personnel sent following a series of attacks on the Saudi oil facilities last year, according to several U.S. officials. The attacks were part of hostilities that took place over several months.

President Donald Trump has made clear whenever he has sensed a lack of understanding on the part of Saudi Arabia for the huge benefit that the U.S. is doing the ruling family:

“He [Saudi King Salman] would not last in power for two weeks without the backing of the U.S. military.”

Trump has a very good point, as it is fair to say that without U.S. protection, either Israel or Iran and its proxy operatives and supporters would very soon indeed end the rule of the House of Saud, even though The Journal reports that The Pentagon’s removal of the Patriot antimissile batteries from Saudi Arabia, as well as the other reductions, are based on assessments by some officials that Tehran no longer poses an immediate threat to American strategic interests.

In a U.S. presidential election year, the last thing that a U.S. president wants is increasing diesel prices or shortages making a coronavirus-hit economy even worse. It is a fact that since the end of the First World War, the sitting U.S. president has won re-election 11 times out of 11 if the U.S. economy was not in recession within two calendar years ahead of an election whilst presidents who went into a re-election campaign with the economy in recession over the same time-frame won only once out of seven.

This said, it may be that Trump will use the threat of such military asset removals from Saudi Arabia, as his mercurial reputation may work to convince the Saudis that he is unpredictable enough to do just that, regardless of the short-term economic consequences. 

end

8 EMERGING MARKET ISSUES

 

 

 

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

Euro/USA 1.0780 DOWN .0019 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 /GREEN

 

 

USA/JAPAN YEN 106/57 UP 0.358 (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 1.2328   UP   0.0004  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/

 

USA/CAN 1.4075 DOWN .0088 CANADA WORRIED ABOUT TRADE WITH THE USA WITH TRUMP ELECTION/ITALIAN EXIT AND GREXIT FROM EU/(TRUMP INITIATES LUMBER TARIFFS ON CANADA/CANADA HAS A HUGE HOUSEHOLD DEBT/GDP PROBLEM)

Early THIS  TUESDAY morning in Europe, the Euro FELL BY 19 basis points, trading now BELOW the important 1.08 level FALLING to 1.0780 Last night Shanghai COMPOSITE CLOSED DOWN 6.62 POINTS OR 0.23% 

 

//Hang Sang CLOSED DOWN 156.85 POINTS OR 0.65%

/AUSTRALIA CLOSED DOWN 0,27%// EUROPEAN BOURSES ALL GREEN

 

Trading from Europe and Asia

EUROPEAN BOURSES ALL GREEN 

 

 

2/ CHINESE BOURSES / :Hang Sang CLOSED DOWN 156.85 POINTS OR 0.65%

 

 

/SHANGHAI CLOSED DOWN 6.62 POINTS OR 0.23%

 

Australia BOURSE CLOSED DOWN. 27% 

 

 

Nikkei (Japan) CLOSED UP 55.42  POINTS OR 0.28%

 

 

 

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1694.90

silver:$15.03-

Early THURSDAY morning USA 10 year bond yield: 0.70% !!! DOWN 1 IN POINTS from WEDNESDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

 

The 30 yr bond yield 1.40 UP 0  IN BASIS POINTS from WEDNESDAY night.

USA dollar index early THURSDAY morning: 100.22 UP 13 CENT(S) from  WEDNESDAY’s close.

This ends early morning numbers THURSDAY MORNING

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And now your closing  THURSDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 0.94% DOWN 4 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: -.00%  UP 2   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.82%//DOWN 3 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:1,90 DOWN 7 points in basis points yield from yesterday./

 

 

the Italian 10 yr bond yield is trading 102 points higher than Spain.

 

GERMAN 10 YR BOND YIELD: FALLS TO –.55% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 2.45% AND NOW ABOVE THE  THE 3.00% LEVEL WHICH WILL IMPLODE THE ENTIRE ITALIAN BANKING SYSTEM. AT 4% SPREAD THERE WILL BE A HUGE BANK RUN…

 

END

IMPORTANT CURRENCY CLOSES FOR THURSDAY

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

Euro/USA 1.0784  DOWN     .0014 or 14 basis points

USA/Japan: 106.48 UP .264 OR YEN DOWN 26  basis points/

Great Britain/USA 1.2295 DOWN .0029 POUND DOWN 29  BASIS POINTS)

Canadian dollar UP 160 basis points to 1.4004

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

The USA/Yuan,CNY: AT 7.0843    ON SHORE  (DOWN)..GETTING DANGEROUS

THE USA/YUAN OFFSHORE:  67.1063  (YUAN DOWN)..GETTING REALLY DANGEROUS

TURKISH LIRA:  7.1555 EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield closed at -.00%

 

Your closing 10 yr US bond yield DOWN 4 IN basis points from WEDNESDAY at 0.66 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield:1.36 DOWN 4 in basis points on the day

Your closing USA dollar index, 100.24 UP 15  CENT(S) ON THE DAY/1.00 PM/

 

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

London: CLOSED UP 76.55  1.31%

German Dax :  CLOSED UP 120.73 POINTS OR 1.14%

 

Paris Cac CLOSED UP 58.31 POINTS 1.32%

Spain IBEX CLOSED UP 45.20 POINTS or 0.68%

Italian MIB: CLOSED UP 3.58 POINTS OR 0.02%

 

 

 

 

 

WTI Oil price; 25/85 12:00  PM  EST

Brent Oil: 30.86 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    73.85  THE CROSS LOWER BY 0.65 RUBLES/DOLLAR (RUBLE HIGHER BY 65 BASIS PTS)

 

TODAY THE GERMAN YIELD FALLS  TO –.55 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 :  23.11//

 

 

BRENT : 29.24

USA 10 YR BOND YIELD: … 0.63…down 8 basis points…

 

 

 

USA 30 YR BOND YIELD: 1.32..down 8 basis points..

 

 

 

 

 

EURO/USA 1.0828 ( UP 29   BASIS POINTS)

USA/JAPANESE YEN:106.30 UP .086 (YEN DOWN 9 BASIS POINTS/..

 

 

USA DOLLAR INDEX: 99.87 DOWN 22 cent(s)/

The British pound at 4 pm   Britain Pound/USA:1.2356 UP 32  POINTS

 

the Turkish lira close: 7.1075

 

 

the Russian rouble 74.09   UP 0.41 Roubles against the uSA dollar.( UP 41 BASIS POINTS)

Canadian dollar:  1.4004 UP 159 BASIS pts

 

German 10 yr bond yield at 5 pm: ,-0.55%

 

The Dow closed UP 211.25 POINTS OR 0.89%

 

NASDAQ closed UP 125.28 POINTS OR 1.41%

 


VOLATILITY INDEX:  32.04 CLOSED DOWN 2.08

LIBOR 3 MONTH DURATION: 0.447%//libor dropping like a stone

LIBOR/OIS:  .385%  DROPPING

TED SPREAD:  LIBOR VS 3 MONTH TREASURY BILL RATE:  .335%

 

USA trading today in Graph Form

As Nasdaq Erases 2020 Losses, Negative Rate Forecasts Send Yields To Record Lows

What’s wrong with this picture…

33 million Americans have gone on the dole in the last seven weeks…

2Y Treasury yields broke down to record lows (as did 5Y)…

Source: Bloomberg

Negative rates are now being priced in for Q4 2020…

Source: Bloomberg

And Nasdaq Composite is now in the green for 2020…

Source: Bloomberg

So COVID-19 is “the worst of times” for Main Street and “the best of times” for Wall Street?

“Who care about COVID-19 anyway for Christ’s sake…”

By the close, The Nasdaq Composite had actually fought for that 8972.64 closing 2029 level…

On the day, US stocks were higher but well off the European close highs intraday…

Stocks were weak once again in the last hour or so of the day…

 

Source: Bloomberg

S&P Futs seem unable to break that 2880 level convincingly (which just happens to be the neutral gamma level)…

Bank stocks rolled over as the ED futs signaled negative rates (but remained higher on the day thanks to the early panic bid)

Source: Bloomberg

FANG Stocks made a new record high today…

Source: Bloomberg

The Internet stocks are soaring (and if you don’t know, “you’re too old to understand…” just buy ’em remember, nothing can go wrong)

Source: Bloomberg

Treasury ‘VIX’ jumped notably today as S&P ‘VIX’ drifted lower…

Source: Bloomberg

Treasury yields all tumbled today with the long-end outperforming (30Y -8bps, 2Y -5bps)

Source: Bloomberg

The dollar was also dumped as ED futs flipped negative…

Source: Bloomberg

As the dollar dropped, cryptos were bid but once again the rotation from alt-coin to bitcoin is clear…

Source: Bloomberg

And Bitcoin soared up towards $10,000

Source: Bloomberg

And gold was bid…

 

Another chaotic day in crude oil land but for once, WTI actually ended the day lower…

 

Finally, bonds and stocks have become drastically decoupled from one another…

Source: Bloomberg

But the big theme was the surge in Bitcoin and Bullion as NIRP came into play…

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

MARKET TRADING//USA

a)Market trading/THIS MORNING/USA

WHAT A JOKE!

“Mission Accomplished”? Nasdaq Composite Surges Into Green For 2020

73,400 dead…

33 million jobless…

Earnings in the gutter…

Buy mega-tech stocks to the moon alice…

“Mission Accomplished”?

END

b)MARKET TRADING/USA/AFTERNOON

2Y Treasury Yield Plunges To Record Low, Gold Spikes As “Fatal” NIRP Reality Dawns

With short-dated futures now signaling negative-rates…

Source: Bloomberg

the Treasury curve is tumbling with the short-end breaking down to record lows.

Source: Bloomberg

That is below the lowest 2Y rate in US history…

Source: Bloomberg

And Nordea’s  simple OLS-model has even started to ponder whether negative long USD yields could be the name of the game. It both sounds and looks far-fetched and we don’t really trust the below signal, which to a large extent is the result of an unprecedented low in the Global PMI, but none the less it showcases the growth-based downside pressure that long bond yields face.

Overall, we tend to think that the Fed will have to re-increase the daily purchase tempo to really reignite the global credit cycle, since USD scarcity will remain an issue (in particular in the EM space) unless the Fed outprints the US Treasury issuance.

The dollar is diving (for now)…

Source: Bloomberg

And as rates re-plunge and negative rates resurge, gold is bid…

Source: Bloomberg

Suggesting negative yielding debt is about to explode again…

 

Of course, the Ivy League academics know better, as Ken Rogoff recently demanded “deeply negative rates” and “controls on hording cash” as the ‘final solution’…

For those who viewed negative interest rates as a bridge too far for central banks, it might be time to think again. Right now, in the United States, the Federal Reserve – supported both implicitly and explicitly by the Treasury – is on track to backstop virtually every private, state, and city credit in the economy. Many other governments have felt compelled to take similar steps. A once-in-a-century (we hope) crisis calls for massive government intervention, but does that have to mean dispensing with market-based allocation mechanisms?

A number of important steps are required to make deep negative rates feasible and effective. The most important, which no central bank (including the ECB) has yet taken, is to preclude large-scale hoarding of cash by financial firms, pension funds, and insurance companies. Various combinations of regulation, a time-varying fee for large-scale re-deposits of cash at the central bank, and phasing out large-denomination banknotes should do the trick.

Emergency implementation of deeply negative interest rates would not solve all of today’s problems. But adopting such a policy would be a start. If, as seems increasingly likely, equilibrium real interest rates are set to be lower than ever over the next few years, it is time for central banks and governments to give the idea a long, hard, and urgent look.

We give the last word to DoubleLine CEO Jeff Gundlach who summed things up perfectly if this is really the plan…

Jeffrey Gundlach

@TruthGundlach

These Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell has stated in plain English he is opposed to negative interest rates. Yet the pressure to go negative on Fed Funds will build as short term borrowing explodes and dominates. Please, no. Rates < 0 = Fatal.

end

Fatal, indeed. Bank stocks and the rest just haven’t realized it yet!

end

oh oh!!  Early afternoon/shortly before comex closes:

Historic Eurodollar Panic: Negative Rates Now Expected As Soon As November

We, as well as every Short-Term Interest Rate trader on Wall Street (or rather at home) is speechless at the insane action in the Eurodollar futures complex, where shortly after the Jan 2021 implied fed funds rate turned negative, the cascade of buying in ED futures has tripped above 100 in both Dec and moments ago, November 2020, meaning that the market is now expecting negative rates as soon as November.

And if one waits just a few more minutes, the Sept 2020 contract is about to flip negative too, as the market now expects the Fed to go NIRP in as soon a 4 months!

Needless to say, for ED traders to expect negative rates in months if not weeks, means that the economy is about to implode, and it appears bank stocks are starting to wake up to just how bad this news is…

 

How that is still positive for stocks we leave to Jerome Powell to explain who is about to have the worst summer/fall of his life.

end

 

ii)Market data/USA

JOBLESS REPORT

COVID-America: 73,400 Dead; 33 Million Jobless; Stocks Soaring

Following a 1576.9% YoY surge in job cuts, according to Challenger, Gray, and Christmas…

Source: Bloomberg

It’s not a huge surprise that the string of huge spikes in jobless claims continues. In the last week 3.169 million Americans filed for unemployment benefits for the first time (slightly worse than the 3.00 million expected).

Source: Bloomberg

That brings the seven-week total to 33.48 million, which is over 12 times the prior worst five-week period in the last 50-plus years.

And of course,last week’s “initial” claims and this week’s “continuing” claims… the highest level of continuing claims ever

Source: Bloomberg

Breaking down the jobless claims by state shows some odd aberrations with a major drop in Florida as Maryland, Oklahoma, and new Jersey lead the rise…

And as we noted previously, what is most disturbing is that in the last seven weeks, far more Americans have filed for unemployment than jobs gained during the last decade since the end of the Great Recession… (22.13 million gained in a decade, 33.48 million lost in 7 weeks)

Worse still, the final numbers will likely be hurt even more 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 360 jobs for every confirmed US death from COVID-19 (73,431).

Was it worth it? Well of course it was – US equity markets are roaring higher…

end

Kashakri states the real unemployment rate is not 16% but really as high as 24%

(zerohedge)

“It’s Devastating”: Kashakri Says Real Unemployment Rate Is As High As 24%

Minneapolis Fed president, Neel Kashkari, said that Friday’s jobs report will likely understate the real unemployment picture as it will only reflect people who are “actively looking for work”, a nearly impossible task in a time of nationwide lockdowns, and that the country should steel itself for a “long, gradual” recovery.

“It asks people are you actively looking for work? And a lot of people who have just lost their jobs and were all sheltering in place — they’re not actively looking for work,” Kashkari, who oversaw the Treasury bank bailout program after the 2008 Wall Street crash, said on NBC’s “Today” show.

He said the Friday jobs report that covers April will likely show an unemployment rate of 16% or 17%, but that the real number is around 23% or 24%, adding that “it’s devastating.”

“I’m hopeful that we can bounce back,” he said. “I don’t think we’re actually headed for another Great Depression.”

Kashkari’s comments came shortly before the DOL reported that another 3.2 million Americans had filed initial jobless claims, bringing the seven-week total to a staggering 33.48 million.

Looking ahead Kashkari said the U.S. is likely in for a “long, gradual recovery”, one which if the uber-dove had his way – and he certainly will try – would lead to negative rates, which according to bond king Jeff Gundlach would lead to a “fatal” outcome:

These Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell has stated in plain English he is opposed to negative interest rates. Yet the pressure to go negative on Fed Funds will build as short term borrowing explodes and dominates.  Please, no.  Rates < 0 = Fatal.

Jeffrey Gundlach

@TruthGundlach

These Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell has stated in plain English he is opposed to negative interest rates. Yet the pressure to go negative on Fed Funds will build as short term borrowing explodes and dominates. Please, no. Rates < 0 = Fatal.

end

iii) Important USA Economic Stories

US National Debt Spiked by $1.5 trillion in 6 Weeks, to $25 trillion. Fed Monetized 90% | Wolf Street

US National Debt Spiked by $1.5 trillion in 6 Weeks, to $25 trillion. Fed Monetized 90%

by Wolf Richter • May 6, 2020 • 96 Comments

 •

I’d never imagined I’d ever see this sort of spike, though in recent years I added an upward arrow with “Debt out the wazoo” to my charts, not realizing just how factually accurate this technical term would become.

By Wolf Richter for WOLF STREET.

The US gross national debt – the total of all Treasury securities outstanding – jumped by $1.05 trillion with a T in the four weeks since April 7 and by $1.54 trillion in the six weeks since March 23, to $25.06 trillion, the Treasury department reported today.

Those trillions are whizzing by so fast it’s hard to even seen them. WOOSH… What was that? Oh, just another trillion. The flat spots in the chart are the periods when the debt bounced into the debt ceiling. Yeah, those were the days!

I’ve been lamenting and lambasting the stupendous growth of the US national debt since 2011, the beginning of my illustrious career as a gnat in the big world of financial media. And through all these years, I’d never imagined that I’d ever see this sort of spike in the US debt, though in recent years I’ve been adding an upward arrow and the green label “Debt out the wazoo” to these charts, not realizing just how factually accurate this technical term would become.

The US debt was even surging at an accelerating rate during the “Best Economy Ever,” when there should have been a surplus and a reduction in the debt, so that the government can go into debt during bad times.

I wrote back then, for example on February 19, when the debt had spiked by $1.3 trillion over the past 12 months to $23.3 trillion: “But these are the good times. And we don’t even want to know what this will look like during the next economic downturn.”

Whether we want to know it or not, we now know it and cannot un-know it.

And we didn’t even have to sit on the edge of our collective chair for long for that next economic downturn to arrive. It’s more than just a downturn. It’s the big one. The nightmare has become a reality. And waking up or looking away no longer helps.

The government has now signed into law a series of stimulus packages totaling $2.8 trillion or thereabouts.

Phase 1: $8 billion, enacted on March 6. To fight the spread of The Virus

Phase 2: $100 billion, enacted on March 18. Tax credits for employers offering paid sick leave, plus increases to unemployment benefits and food assistance.

Phase 3: $2.1 trillion, enacted on March 27. Largest stimulus package ever, dwarfing the 2009 stimulus package of a mere $800 billion. The CARES Act includes provisions to bail out the investors of Corporate America and financial markets more generally, directly and also indirectly via the Fed’s Special Purpose Vehicles (SPVs) to which taxpayers provide the equity capital to take the first loss.

The package includes extra unemployment benefits, free money for taxpayers and retirees, funds for the healthcare system, some money for “small businesses” under the Payroll Protection Program (PPP) that quickly tended to flow to well-connected not-so-small businesses, etc. etc. This is a huge massive complex bill with lots of goodies in it.

Phase 3.5 or 4: $484 billion, enacted on April 28. Refills the PPP and the Economic Injury Disaster Loans, plus sends money to health care providers, hospitals, and for coronavirus testing.

Phases 5 – umpteen: to be enacted soon.

So about $2.7 trillion for now. At first, there was a mad scramble of lobbying to get all the favorite provisions into the bills. Now a mad scramble has ensued to siphon out this money. Billionaires and millionaires will be printed, especially if they’re well-connected.

And lobbyists are highly motivated to get even more stimulus packages through Congress. This is a once-in-a-life-time opportunity.

And while these trillions sally forth into the wild yonder, tax revenues are collapsing. The difference has to be made up with borrowing. The Congressional Budget Office has jacked up its estimate for the fiscal 2020 deficit to $3.7 trillion. There are only five months left in this fiscal year. So these trillions are going to have to be borrowed in a hurry.

Fed steps up to the plate, monetizes 90% of the additional debt.

From March 11 through its balance sheet released last Thursday, the Fed added $1.39 trillion in Treasury securities to its assets. Over the same period, the Treasury Department added $1.54 trillion to the outstanding debt. In other words, the Fed has – indirectly, as is the iron rule in the US – monetized 90% of this additional debt. We’re living off printed money, pure and simple.

But this was heavily frontloaded, with the Fed buying $1.1 trillion in Treasuries over the first 3.5 weeks. The Fed has since backed off. Last week, it bought only $62 billion. And it looks like the market will be tasked to digest more of this debt.

On its last balance sheet, the Fed shed MBS, loans to “SPVs” were flat for the fifth week, and repos fell into disuse. Fed still hadn’t bought junk bonds, stocks, or ETFs. But it sure sent Wall Street dreaming. Read..Fed Drastically Slashed Helicopter Money for Wall Street. QE Down 86% From Peak Week in March

Enjoy reading WOLF STREET and want to support it? Using ad blockers – I totally get why – but want to support the site? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:

END

Last night we heard from Sam Zell and others to expect a biblical wave of bankruptcies..a very important read…

(zerohedge)

“Biblical” Wave Of Bankruptcies Is About To Flood The US

One of the silver linings of the coronacrisis to date is that despite the unprecedented collapse in the broader economy and the 30 or so million unemployed, the pace of bankruptcy filings has been relatively steady compared to the pre-covid levels, as the following Goldman chart shows.

Unfortunately the relative calm is not meant to last, because as we observed last month, Moody’s recently expanded its “B3 Negative and lower list” which soared to its highest tally ever — 311 companies. That tops a former peak of 291 companies, reached during the credit crisis of 2009 and the commodity-related downturn in April 2016. At 20.7% of the total rated spec-grade population, the list also shot up above its long-term average of 14.8%, and closing in on its all-time high of 26.1%This spike is the result of the confluence of a coronavirus outbreak, plunging oil prices, and mounting recessionary conditions, which created severe and extensive credit shocks across many sectors, regions and markets, the effects of which are unprecedented.

And it’s not just junk: a record number of investment grade names have been

or are about to be cut to junk, unleashing the long-awaited flood of fallen angels:

Of course, downgrades first to junk and then to deep junk are just the first step in a painful voyage which ends with bankruptcy.

And while many borrowers are actively pulling levers to preserve cash by cutting payrolls, capex, and dividends, in some cases even these drastic actions are not enough to avoid failures. Indeed, as the latest default tracker from Bank of America shows, there has already been a surge in recently defaulted names and deeply distressed names, with April defaults surging to $17bn while another $27bn in issuers now on the bank’s default watchlist – issuers that are currently in grace period for missed payment, recently initiated distress exchanges, or other actions that could lead to potential default – and finally an additional $25bn in deep distress, whose bonds are currently trading below 50 cents on the dollar and have experienced price plunge by 50% from their maximum price within last 6 months.

Finally, if the following charts from Deutsche Bank’s Torsten Slok is any indication, the wave of Chapter 11 bankruptcies…

… and loan delinquencies

… that is about to flood the US will be nothing short of biblical.

And none other than the CEO of the world’s biggest asset manager confirmed as much: speaking on a call with clients, Larry Fink who runs the $7.5 trillion Blackrock, said that bankers told him they expect a cascade of bankruptcies to hit the American economy.”

END

Neiman Marcus Files For ‘Prepack’ Bankruptcy, Joining J Crew

Just three days ago, we reported that Neiman Marcus – aka “Needless Markups” – was on the cusp of striking a deal with creditors for financing that would help tide it over through bankruptcy.

Well, it looks like the big day has finally arrived. Bloomberg reports that Neiman Marcus Group has officially entered into a Restructuring Support Agreement with a significant majority of its creditors to undergo a financial restructuring and file for “voluntary prearranged” bankruptcy protection.

Here’s a summary of the deal (courtesy of BBG):

  • Secures $675 million debtor-in-possession loan and commitment to fulfill $750m exit financing package from creditors
  • Commences voluntary prearranged Chapter 11 proceedings
  • Sees to emerge from process in early fall 2020
  • Creditors have committed to fulfill a $750m exit financing package that would fully refinance the DIP financing and provide additional liquidity for the business
  • Commences voluntary prearranged Chapter 11 proceedings in U.S. Bankruptcy Court for the Southern District of Texas, Houston Division
  • Upon emergence, planned capital structure is seen to be long dated with no near-term maturities and to eliminate approximately $4b of its existing debt
  • CEO says pandemic has placed “inexorable pressure” on the business
  • Company says transaction is supported by existing holders and, pursuant to the agreement, creditors participating in the RSA will become majority owners

Of course, NM is just the latest retail name to go under. And like many of its peers, its cashflows have been swallowed up by the company’s enormous debt load, most of which was acquired thanks to two LBOs.

The latest weekly report on the number of Americans filing for unemployment benefits showed that more than 30 million jobs have now been destroyed thanks to the outbreak.

And as we noted earlier, the looming wave of bankruptcies – caused by a confluence of the virus, low oil prices, prevailing recessionary conditions, and a massive overhang of corporate debt that will soon lead to a tidal wave of downgrades, bankruptcies and liquidations.

It goes without saying that job losses are likely only just ramping up.

And just like that – another name gets crossed off “the list”.

As expected, the bonds are getting hammered.

Will JCPenney be next?

END

In a hit of humour, today, the IRS ordered the dead to return the stimulus money that it received. However our dead will be allowed to vote in the next election

(zerohedge)

IRS Orders The Dead To Return Stimulus Money

One week after Treasury Secretary Steven Mnuchin said that dead people aren’t eligible for stimulus check after it emerged that an unknown number of recently deceased Americans had received a $1200 tax credit as part of the coronavirus helicopter money package, the Internal Revenue Service made sure that the dead will only be allowed to vote instead of stimulating the economy, when it announced that individuals who got a $1,200 stimulus payment intended for someone who’s deceased or incarcerated should return the money. It wasn’t clear how the IRS will “enforce” collecting from the dead or their relatives.

The $1,200 stimulus payments for adults earning as much as $75,000 and $500 for their children began hitting bank accounts in April. The IRS is still processing tens of millions more checks to be distributed in the coming weeks.

Instructions posted to the IRS’s website Wednesday said recipients of what the Treasury Department calls “inadvertent” payments should write void on paper checks and mail them back (sure, they’ll get right on it). Even more amusing were instructions to those who received direct-deposit payments or have already cashed the payments: they should send a personal check or money order to the IRS for the amount of the payment.

Treasury Department

@USTreasury

Deceased and incarcerated individuals do not qualify to receive Economic Impact Payments. See FAQ #41 to learn how to return an inadvertent payment: https://www.irs.gov/coronavirus/economic-impact-payment-information-center 

IRS logo

Economic Impact Payment Information Center | Internal Revenue Service

For additional questions regarding the Get My Payment application check out our Get My Payment FAQs.

irs.gov

As Bloomberg notes, the instructions don’t say whether recipients are required to return the payments or what will happen to them if they don’t send the money back. The IRS didn’t immediately respond to a request for comment about how it plans to enforce the guidelines.

The IRS excessive generosity was noticed last month, when  people in prison and family members of individuals who had died in the past several months were receiving payments. The reason is that while the federal government regularly updates taxpayer rolls with death certificate information, the IRS was relying on data that in some cases was from as long ago as 2018 for processing the payments.

Taking a step back, some were curious why the IRS is wasting it time with this stupidity, or why the IRS still exists when the Fed will just monetize all the US deficits going forward in perpetuity and nobody needs to pay taxes, period, was not immediately clear.

end
I never thought I would see this:  for the first time, USA implied Fed funds price negative interest rates starting Jan 2021.  This will blow up the banks
(zerohedge)

It Begins: For The First Time Ever, US Fed Funds Price “Fatal” Negative Interest Rate Starting Jan 2021

Back in 2015, when the Fed set off on its first tightening cycle in a decade and was set to hike rates for the next three years, we wrote in an article that in retrospect would be proven 100% correct, in which we warned that by hiking rates the Fed is engaging in a massive policy error, because according to our calculations at the time, r* (r-star), or the natural rate of interest in an economy where total debt/GDP was 350% and rising, and where GDP was 2% and falling, the short-run equilibrium real interest rate was a paltry 0.57%…

… which also meant that any attempts to push rates notably higher – as the Fed was doing then – would result in catastrophe (recall the Ghost of 1937 when the Fed engaged in an identical policy error), forcing the Fed to promptly cut rates, if not go negative. This is precisely what the Fed figured out three years later, in late 2018 when it gave up on any hopes of interest rate normalization and proceeded to cut rates again.

Fast forward to today, when the US debt is far greater, while GDP growth is, well nobody really knows but as of this moment is imploding and deeply negative. Logically, that would mean that r* is far, far lower than it was back in 2015. And just last week, Deutsche Bank confirmed as much, when its credit strategists concluded that despite the massive intervention by the Fed to date, it will need to do more to catch down to r*.

As DB’s Stuart Sparks wrote on April 26, “there is ample evidence that policy must ease further in a variety of asset markets. One of these is the currency market. The trade weighted dollar is stronger than it was before the Covid-19 shock, and is stronger than it was when effective funds were more than 225 bp higher last year. Another clear reflection of further need for policy easing is in commodity markets. Oil has nearly monopolized commodityrelated headlines, but are only part of the story:  agricultural commodities and metals are significantly lower on the year. We can see this in breakevens, where our model fair value is roughly 1% and clearly no where near the context of Fed policy objectives.

As Sparks further explain, if indeed policy is not easy enough, precisely how easy should it be? What is the optimal level of real short rates, or r*? While market dynamics can suggest that policy remains too tight, r* is not directly observable in real time. We frame this discussion with an estimate of r* developed by our colleague Francis Yared in a recent piece in which he presents evidence from equity/fixed income correlations that suggests r*is approximately -1%.

As the DB strategist then concludes, “given observable correlations and Treasury yields, we can infer the level of r* implicit in market behavior.

The conclusion is scary: despite everything the Fed has done – which includes trillions in explicit liquidity injections and implicit funding backstops – not only does the Fed need to do more, but it would in fact have to cut rates to negative to offset pent up market imbalances.

Deutsche Bank wasn’t alone in its dire assessment: in a report published today Nordea’s FX strategist Andreas Steno Larsen went even further than the German Bank, writing that according to the bank’s model, “negative long USD yields could be the name of the game” and references the following chart correlating 10Y Treasurys with its implied yield which uses inputs from the global business cycle, inflation, Fed Funds, and the Fed’s long-term dot.

Of course, earlier this week we got Ken Rogoff writing a Project Syndicate piece earlier this week, “The Case for Deeply Negative Interest Rates” in which he wrote “imagine that, rather than shoring up markets solely via guarantees, the Fed could push most short-term interest rates across the economy to near or below zero. Europe and Japan already have tiptoed into negative rate territory. Suppose central banks pushed back against today’s flight into government debt by going further, cutting short-term policy rates to, say, -3% or lower.

Facing this barrage of negative rate commentary and forecasts, the market appears to have finally relented and moments ago the Bloomberg WIRP function showed something that has never happened before: the January 2021 implied rate is now a negative -0.02%…

… the first time this series has dipped into the negative!

Understandably, the volume of bets on NIRP by end of 2021 has been surging, and sure enough the market finally cracked in what is the most serious test of the Fed’s conviction to not impose negative rates.

What does a negative interest rate mean, aside from the obvious death sentence for banks? We have written thousands of articles (literally) why sliding into this monetary twilight zone – where both Japan and Europe already are to be found, frozen in monetary carbonite – means game over, but instead of recapping them all, we will give the final word to the bond king Jeff Gundlach himself, who conveniently summarized it best last night when he tweeted that a rate < 0 is “fatal”.

Jeffrey Gundlach

@TruthGundlach

These Trillions Treasury is borrowing is heavily in T-Bills. Chair Powell has stated in plain English he is opposed to negative interest rates. Yet the pressure to go negative on Fed Funds will build as short term borrowing explodes and dominates. Please, no. Rates < 0 = Fatal.

end
Sysco warns of unprecedented times as the COVID crushes all restaurants
(zerohedge)

Sysco Warns Of “Unprecedented Times” As COVID Crushes Restaurants 

America’s largest foodservice distributor, Sysco Corporation, warned in its latest quarterly report that coronavirus-related shutdowns of the restaurant industry are the worst it has ever seen:

“Over the last 50 years, Sysco has weathered its share of exogenous shocks and economic crises, and each time Sysco has remained a resolute foodservice industry leader. The extent of the COVID-19 crisis is more substantial than any other throughout the company’s history.”

Earlier this week, the company reported a sales decline of 6.5% to $13.7 billion in its third quarter, which ended on March 28. This was one of the most significant quarterly reductions since 2009.

Sysco said sales were down 60% from a year earlier in late March. About two-thirds of the company’s sales are to restaurants, with the remaining sales going to hospitals, nursing homes, and schools. Here is how it describes the last several weeks of the quarter that captured the start of the lockdowns:

“The exit rate of the third quarter saw a dramatic decline in volume, sales, and gross profit across all of the business segments as a result of the pandemic.”

As the restaurant industry collapses, the company has prepared to slash nearly half-billion dollars in expenses, including furloughing and laying off 33% of its workforce.

“… difficult decision to reduce our staffing levels by approximately 33% through a combination of temporary workforce furloughs and permanent reductions in force.”

While many restaurants are still closed, some may never reopen again, Sysco has reduced “miles driven” of its refrigerated truck fleet.

“In addition, we have substantially reduced miles driven by rerouting our transportation fleet and have implemented productivity improvements in our operating companies.”

The company has had to quickly rework supply chains away from restaurants to a business model that works in a post-corona world, such as one that caters directly to consumers and grocery stores. The company has also secured a new contract under the USDA’s Coronavirus Food Assistance Program.

Sysco President and CEO Kevin Hourican said the company’s food supply network makes it an asset during the public health crisis, able to shift food where it is needed.

“Simply put, the food supply chain in this country does not work without Sysco,” Hourican said.

Sysco may have hit a low point in terms of sales and profits, as it appears there are some signs of life in the restaurant industry.

 

h/t Thomas Costerg

Driving seems to be picking up as well

 

h/t Thomas Costerg

The timing of the restaurant industry recovery could take some time. For more color on when a recovery could be seen, read “Global Economic Activity May Have ‘Bottomed’ But Don’t Expect Any ‘V-Shaped’ Recovery; Fathom.”

end
The USA consumer decided en masse to pay down on their record debt…very strange!  They should have behaved like the country and spend like crazy
(zerohedge)

US Consumer Credit Unexpectedly Crashes As Americans Repay A Record Amount Of Credit Card Debt

Heading into today’s consumer credit print we already learned last week that in March, with US consumer spending crashing the most on record as a result of complete economic halt due to the coronavirus pandemic…

… the US savings rate exploded to highest on record, and 13.1% of disposable income it was even higher than the peak of the Lehman crisis.

Now, thanks to the latest consumer credit data released on Thursday by the Fed, we know what much of that saving went to: paying down debt.

But not just any debt: according to the Fed’s latest G.19 statement, in March total consumer credit plunged by a record $12 billion, obliteration expectations of a $15 billion increase, and the second biggest drop on record, plunging by $32 billion from February’s $19.9 billion increase, runner up only to an $18.5 billion drop in June of 2019.

That said, if one looked only at non-revolving debt – i.e., auto and student loans – there was barely a move. In fact, at $16.1BN, non-revolving debt was practically unchanged from last month’s $16.6 billion print. In other words, there was barely any decline when it comes to US spending on cars and “college tuitions” (because as everyone knows by know “student debt” is spent on anything but tuition, room and board and represents one of the biggest stealthy government handouts over the past decade).

Actually, there was something of note to add here: breaking down total non-revolving credit reveals that while student loans exploded by $42BN in the first quarter of 2020, the biggest quarterly increase in year, and rising to a new record of $1.683 trillion, auto loans actually dipped, declining by $1.3 billion from $1.196 trillion to $1.195 trillion, the first sequential decline since Q4 2015 when the US found itself in a minim manufacturing recession.

However, what was truly remarkable about the March consumer credit report is that one look at revolving credit, i.e., credit card usage or repayment, shows something striking: in March, Americans repaid a record $28.2 billion on their credit card bills as US consumer society literally went into reverse and instead of spending wildly as it does every other month, usually spending what it can’t afford, consumers repaid the most on their credit cards ever.

 

And that’s how the US consumer died with a bang: because as long as there is no visibility on the economy and job prospects, and certainly as long as there is a pandemic with ongoing state shutdowns and everyone working from home there will be no visibility, instead of spending Americans will go into credit paydown mode, crippling an economy which is 70% a direct result of the relentless US consumer spending. and needless to say, the 33 million in Americans who have lost their jobs are not going to go out and spend like drunken sailors any time soon.

So how long until this shocking plunge in consumer spending reverses? The true answer is that nobody knows, but until US consumers feel comfortable enough to once again use their credit cards, there can be no recovery.

What we find most surprising, however, is that in this day and age when the Fed has effectively institutionalized moral hazard and where failure is no longer punished as capitalism is now officially dead and zombie existence is rewarded, Americans still care enough about their credit rating to pay down their own debt even as corporations and the country go on one last spending spree which everyone knows will never be repaid.

Our advice to Americans with credit cards: go crazy, after all if everyone defaults it’s the same as nobody defaulting.

END

iv) Swamp commentaries)

Rosenstein asked for Mueller to investigate the already discredited Steele dossier according to a new memo released.

(John Solomon)

Rosenstein Asked Mueller To Investigate Already-Discredited Steele Dossier Allegations, Memo Reveals

Authored by John Solomon via JustTheNews.com,

Allegations in August 2017 scoping memo instructing special prosecutor to investigate Carter Page came from dossier that had already been discredited…

Then-Deputy Attorney General Rod Rosenstein instructed Special Counsel Robert Mueller in August 2017 to investigate allegations against former Trump campaign adviser Carter Page that originated with the Steele dossier and had already been discredited by the FBI, a newly declassified memo showed Wednesday night.

The Justice Department’s release of the unredacted version of Rosenstein’s so-called investigative scoping memo provided the first declarative evidence that Mueller was asked to investigate widely suspect allegations from Christopher Steele’s opposition research conducted for the Clinton campaign and Democratic Party back in 2016.

Specifically, Rosenstein’s memo instucted Mueller to investigate “allegations that Carter Page committed a crime or crimes by colluding with Russian government officials with respect to the Russian government’s efforts to interfere with the 2016 election for President of the United States, in violation of United States law.”

By the time that instruction was given, the FBI had fired Steele as an informant for leaking, interviewed Steele’s sub-source who disputed information attributed to him and had ascertain that allegations Steele had given the FBI specifically about Page were inaccurate and likely came from Russian intelligence sources as disinformation, recently declassified evidence showed.

In addition, the CIA had informed the FBI repeatedly that Page was not a Russian stooge but rather a cooperating intelligence asset for the United States government.

Former House Intelligence Committee Chairman Devin Nunes, who long called for the release of the unredacted scoping memo, said Wednesday’s development confirmed his worst suspicions. He accused prior officials of the Justice Department of unnecessarily hiding the evidence from Congress and the American people before Attorney General William Barr intervened.

“This information was redacted until now for one single reason – to hide the fact that false allegations from the Steele dossier were included in Mueller’s scoping memo,” Nunes told Just the News.

In other words, a bunch of lies paid for by the Democrats were used to engineer the appointment of a Special Counsel to drag the Trump administration through the mud for years. The Russia collusion hoax was a disgrace, and we can’t let anything like it ever be repeated.”

The degree to which the FBI had discredited Steele’s intelligence reporting on Page — including allegations he colluded with Russia — only recently came into focus with the release of DOJ Inspector General Michael Horowitz’s report on FBI abuses of the FISA surveillance that targeted Page. In addition, just-declassified evidence showed the FBI had learned by February 2017 that Steele’s information on Page was likely disinformation from Russian intelligence planted with Steele.

“Most relevant to the Carter Page FISA applications, the specific substantive allegations contained in Reports 80, 94, 95, and 102, which were relied upon in all four FISA applications, remained uncorroborated and, in several instances, were inconsistent with information gathered by the team,” Horowitz wrote back in December in debunking key allegations against Page.

More recently, declassified footnotes made clear Steele’s claim he had met with a senior Russian back in 2016 named Igor Sechin and had been offered a lucrative finders fee had been debunked by the FBI by February 2017, or months before Mueller was appointed. In fact Steele’s own source challenged the veracity of the information attributed to him inside the dossier.

“The Primary Sub-source told the FBI that one of his/her sub-sources furnished information for that part of Report 134 through a text message, but said that the sub-source never stated that Sechin had offered a brokerage interest to Page,” Horowitz reported.

“The Primary Sub-Source also told the FBI at these interviews that the sub-source who provided the information about the Carter Page-Sechin meeting had connections to Russian Intelligence Services (RIS),” he added.

end
What took them so long!  Dept of Justice abandons Flynn criminal case after more newly discovered information
(zerohedge)

DoJ Abandons Flynn Criminal Case After “Newly Discovered Information”

Shortly after Brandon Van Grack, the chief of the Justice Department’s Foreign Agents Registration Act division, filed a notice of his withdrawal in federal court in Washington, The Justice Department has this morning said it is dropping the criminal case against President Donald Trump’s first national security adviser, Michael Flynn, abandoning the critical leg of many leftists’ belief in the Russia collusion bullshit.

This move comes less than a week after unsealed documents in the case fueled renewed claims by Flynn that FBI agents had cooked up a bogus case against him, and as AP reports, is a stunning reversal for one of the signature cases brought by special counsel Robert Mueller.

In court documents being filed Thursday, the Justice Department said it is dropping the case “after a considered review of all the facts and circumstances of this case, including newly discovered and disclosed information.”

The documents were obtained by The Associated Press.

The Justice Department said it had concluded that Flynn’s interview by the FBI was “untethered to, and unjustified by, the FBI’s counterintelligence investigation into Mr. Flynn” and that the interview on January 24, 2017 was “conducted without any legitimate investigative basis.”

It comes even though prosecutors for the last three years had maintained that Flynn had lied to the FBI about his conversations with the Russian ambassador in a January 2017 interview. Flynn himself admitted as much, and became a key cooperator for Mueller as he investigated ties between Russia and the 2016 Trump campaign.

 

We are sure it will not take long before Trump tweet-celebrates, as has relentlessly tweeted about the case, and just last week pronounced Flynn “exonerated.”

end

jailed Salon Owner Freed By TX Supreme Court; Rakes In $500K From GoFundMe Donations

Texas salon owner Shelley Luther has been ordered to be released by the state Supreme Court after a she stood up to a judge who called her “selfish” for keeping her business open during the statewide coronavirus lockdown, before sentencing her to seven days in jail.

Jason Howerton

@jason_howerton

BREAKING: Dallas salon owner Shelley Luther ORDERED released by the Supreme Court of Texas.

View image on Twitter

Before sentencing the 46-year-old Luther, Judge Eric V. Moyé of 14th Civil District Court in Dallas County said she acted selfishly when she resumed operations, and demanded that she apologize to elected officials whose orders she disobeyed. Moyé, who must moonlight as an epidemiologist, said that citizens must obey orders until a vaccine is found.

Caleb Hull

@CalebJHull

Shelley Luther just walked out jail and broke down in tears:

Embedded video

“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.”

Luther pushed back, saying in the 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

In response, Governor Greg Abbott – whose order Luther violated, and TX Attorney General Ken Paxton said the sentence was excessive and called for her immediate release.

Greg Abbott

@GregAbbott_TX

See the statements from @TXAG and me on the jailing of Dallas Salon Owner Shelley Luther.

View image on TwitterView image on Twitter

Meanwhile, a GoFundMe account established for Luther has raised over $500,000, and new donations are no longer being accepted.

END

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

Gloom Grips U.S. Small Businesses, with 52% Predicting Failure – Just over a third of small firms expect that they can continue to operate more than 6 months, while 14% are uncertain, according to the Society for Human Resource Management survey…

https://www.msn.com/en-us/finance/smallbusiness/gloom-grips-us-small-businesses-with-52-25-predicting-failure/ar-BB13HFZg

 

Layoffs Start Turning From Temporary to Permanent across America

Even as they hope for a speedy recovery, companies plan for a slow one.

    The new permanent layoffs are hitting a wide swath of the economy both geographically and sectorally…In such industries as aviation, companies large and small are resorting to permanent layoffs. On April 29, Boeing announced it will cut about 16,000 employees, approximately 10% of its workforce, this year. CEO David Calhoun said he anticipates it will take about three years for the aviation industry to see demand return to 2019 levels amid a global collapse in air travel…

https://www.bloombergquint.com/businessweek/temporary-coronavirus-layoffs-are-turning-permanent-around-u-s

Hundreds of Earnings Calls Show Companies More Scared Than 2008

Some 42% of American non-financial public companies are discussing slashing investments, 27% are talking about equity payouts and 17% are focused on drawing down on credit lines, conclude economists Andrew Y. Chen and Jie Yang. At the peak of the last recession the figures were 25%, 11% and 7%, respectively… All that belies the stock market rebound. The S&P 500 is up more than 25% from its March trough on hopes of an economic recovery aided by an easing outbreak and unprecedented stimulus… https://www.msn.com/en-us/finance/markets/hundreds-of-earnings-calls-show-companies-more-scared-than-2008/ar-BB13H7KH

Bonds got hammered on Wednesday due to the massive new debt offerings by the US Treasury.

U.S. Debt Sales to Hit Record with Deficit Headed to $4 Trillion

The U.S. Treasury is boosting the amount of debt it plans to issue in the coming [next week] quarterly refunding auctions to a record $96 billion… it anticipates auctioning the first re-booted 20-year bond on May 20, with an expected initial offering size of $20 billion — larger than most analysts projected…

https://ca.finance.yahoo.com/news/u-boosts-debt-sales-record-123000493.html

TBAC [Treasury Borrowing Advisory Committee] Sees “Perfect Storm” In Bond Market, Warns Flood in New Debt May Impair “Market Functioning

https://www.zerohedge.com/markets/tbac-sees-perfect-storm-bond-market-warns-flood-new-debt-may-impair-market-functioni

 

Minutes of the Meeting of the Treasury Borrowing Advisory Committee of the Securities Industry and Financial Markets Association May 5, 2020

Director of the Office of Debt Management Fred Pietrangeli indicated that based on current estimates, borrowing needs would likely total $4.5 trillion in FY 2020… The presenting member highlighted how liquidity pressures were exacerbated by the large demand for cash and cash-like instruments and reviewed potential sources of Treasury demand in the context of dealer balance sheet constraints… The presenting member concluded that the current challenge for Treasury is to increase issuance to finance the policy response while avoiding a decline in market functioning

https://home.treasury.gov/news/press-releases/sm1003

Liberal law prof. @JonathanTurley: De Blasio just said on CNN that New York cannot open because it has no money to do so. That is the first direct call for the federal government to actually fund the operation of major cities. He is talking about roughly $7 billion and suggesting that NYC simply cannot reopen… De Blasio justified his demand for billions on the simple fact that Washington is “the only place that prints money.”  De Blasio seems to have dispensed with Adam Smith in favor of Bob Hope to “simplify” taxes: “Why don’t they just print our money with a return address on it?”  DeBlasio’s suggestion to simply wipe out his city’s debt by printing more money is chilling. “Print baby print” is the siren’s call that led to economic disasters from the Weimar Republic to Venezuela. It is an invitation to runaway inflation like blowing a dam to put out fires

95% of Democrats in 6 key battleground states have serious concerns about coronavirus, compared with 39% of Republicansaccording to a new CNBC/@ChangePolls survey.   https://cnb.cx/2W8DjxV

CNBC: An early look at data from 100 New York hospitals shows that 66% of new coronavirus-related admissions were people who were at home, Gov. Cuomo said. [Shutdown was ineffective & unnecessary]

Cuomo says it’s ‘shocking’ most new coronavirus hospitalizations are people who had been staying home – a majority of the cases in New York City are minorities, with nearly half being African American or Hispanic… 84% of the hospitalized cases were people who were not commuting to work through car services, personal cars, public transit or walking… 73% of the admissions were people over age 51…

https://www.cnbc.com/2020/05/06/ny-gov-cuomo-says-its-shocking-most-new-coronavirus-hospitalizations-are-people-staying-home.html

The greatest Covid-19 transmissions appear to be intrafamilial and in densely-packed living conditions.

Nursing home industry pushes for immunity from lawsuits during coronavirus emergency

Patient advocates worry that nursing homes accused of extreme neglect could avoid liability…

https://www.nbcnews.com/health/health-care/nursing-home-industry-pushes-immunity-lawsuits-during-coronavirus-emergency-n1192001

@Project_Veritas: “To be honest with you, all of the death certificates, they’re writing COVID on all the death certificates. Whether they had a positive test, whether they didn’t.” – Michael Lanza Funeral Director, Colonial Funeral Home

Trump and some top aides question accuracy of virus death toll

Some members of the president’s team believe the government has created a distorting financial incentive for hospitals to identify coronavirus cases, the official also said… Medicare is giving hospitals a 20% bonus for their treatment of coronavirus patients… Intentionally misdiagnosing patients with coronavirus would be fraud… https://www.axios.com/trump-coronavirus-death-toll-d8ba60a4-316b-4d1e-8595-74970c15fb34.html

NY Gov Cuomo on Tuesday told reporters to take some Covid-19 death figures ‘with a grain of salt’.

This nursing home disaster is on you, Gov. Cuomo: Goodwin

Two weeks ago, Gov. Andrew Cuomo was first asked about his policy that forced nursing homes to admit ­patients infected with the coronavirus. “That’s a good question, I don’t know,” the governor answered… On Tuesday, Cuomo was asked about a report from the Associated Press that his team had added more than 1,700 deaths to the count of those who died in nursing homes, bringing the total to at least 4,813.  “I don’t know the details, frankly,” the governor answered, turning to an aide…     Finally, on Tuesday, after an aide tried to explain the differences between “confirmed” and “probable” death counts, the governor interjected that “I would take all the numbers now with a grain of salt.”…

https://nypost.com/2020/05/05/this-nursing-home-disaster-is-on-you-gov-cuomo-goodwin/

When death counts advance an agenda, embellish them.  When deaths counts produce a negative political impact, question the veracity of the counts.

Today – The last-hour tumbles of the last two sessions indicate that traders are getting caught long and there are few organic buyers or greater fools to absorb their day-trading longs.  Unless real buyers appear soon, a retreat will materialize.  When FANGs can no longer rally, the equity market will be in trouble.

If Initial Jobless Claims are in line or less than the expected 3 million, a rally should develop.

The most disconcerting dynamic of Wednesday action was financial stocks tumbled.  They opened on the highs and closed on the lows.  Low interest rates are anathema to banks, especially when there will be an unfathomable amount of defaults on loans, mortgages and credit cards.

 

Unless one has non-public information, there is no reason to be long going into the release of the April Employment Report at 8:30 ET on Friday.  A loss of 21.25 million jobs is consensus.  Therefore, the late going today should be quiet.  If stocks rally at midday or in the early afternoon, be alert for another last-hour decline on employment report trepidation.

Joe Biden: “The pandemic is that this President has no intercourse whatsoever with the rest of the world on dealing with these things.  We led; Barack Obama led on the corona, excuse on the pandemic that occurred when we were in office.  It was checked in Africa.  We organized the world…”

https://twitter.com/Breaking911/status/1257858123576029184

DNI Grenell Will Release Declassified Russia Probe Transcripts, If Schiff Continues to Block

https://saraacarter.com/dni-grenell-will-release-declassified-russia-probe-transcripts-if-schiff-continues-to-block/

Rosenstein Scope Memo for Mueller Peddled Steele Dossier, Logan Act Conspiracy Theories

A newly declassified memorandum from Rod Rosenstein shows that the former deputy attorney general used bogus claims from discredited Clinton campaign operative Christopher Steele to justify Robert Mueller’s investigation of the Trump campaign Rosenstein’s memo also peddled discredited legal theories about the Logan Act, a 1799 law criminalizing political speech by American citizens that has never been successfully prosecuted, to justify investigations of former White House National Security Adviser (NSA) Michael Flynn [The weaselly Rosenstein could be on Durham’s naughty list.]

https://thefederalist.com/2020/05/06/rosenstein-scope-memo-for-mueller-peddled-steele-dossier-logan-act-conspiracy-theories/

White House press secretary turns tables, asks media about headlines downplaying coronavirus threat – ‘Does The Washington Post want to take back that they told Americans to ‘Get a grip America. The flu is bigger than the coronavirus’?… Does Vox want to take back that they proclaimed that the coronavirus would not be a deadly pandemic? … Does The Washington Post likewise want to take back that ‘our brains are causing us to exaggerate the threat of the coronavirus’…

  “In Europe, Fear Spreads Faster Than the Coronavirus Itself,” from The New York Times

  “Worried About Catching The New Coronavirus? In The U.S., Flu Is a Bigger Threat,” from NPR

  “Why we should be wary of an aggressive government response to coronavirus,” from The Washington Post… https://justthenews.com/politics-policy/coronavirus/white-house-press-secretary-turns-tables-asks-media-about-headlines

New Jersey Reviewing Care at Nursing Homes, Site of Half Virus Deaths

https://www.bloomberg.com/news/articles/2020-05-06/n-j-reviewing-care-at-nursing-homes-site-of-half-virus-deaths

‘CBS News This Morning’ Aired Faked COVID-19 Drive-Through Testing Site Line of Cars

A CBS News crew pulled medical professionals off the floor at the Cherry Medical Center in Grand Rapids, Michigan, to line up in their vehicles so a CBS film crew would have a long line for their COVID-19 coverage…  [CBS denied that any of its staff staged this event.]

@CBS11Andrea: Shelley Luther, a Dallas hair salon owner who opened in violation of the governor’s executive order, sentenced to 7 days in jail for civil / criminal contempt of court and fined

Attorney General Ken Paxton @KenPaxtonTX: Shelley Luther should immediately be released from jail. Locking her up is a misguided abuse of power, especially considering Dallas County released real criminals to “protect them from COVID-19.” Release her now so she can return to her family.

@Liz_Wheeler: A hair salon owner jailed for 7 days for providing for her kids.  A SWAT team sent to a bar that reopened.  Helicopters patrolling… a beach.  Chinese made drones taking temperatures. Snitch hotlines to tattle on each other. And politicians telling us this is the “new normal.”

President Trump Hires Pro-Jeb Bush Swamp Rat to Lead His Domestic Policy Council

Throughout Trump’s tenure in the White House, establishment hacks and “Never Trump” forces have been appointed to many different influential roles within the administration. The two primary enablers of this phenomenon have been Trump son-in-law Jared Kushner and Secretary of State Mike Pompeo…

https://bigleaguepolitics.com/embarrassing-president-trump-hires-pro-jeb-bush-swamp-rat-to-lead-his-domestic-policy-council/

Well that is all for today

I will see you FRIDAY night.

 

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