FEB 10/GOLD UP $5.30 TO $1836.60//SILVER DOWN 44 CENTS TO $27.04//GOLD TONNAGE STANDING AT THE COMEX; 104.3 TONNES/IN SILVER 9.78 MILLION OZ STANDING//PLATINUM METAL BREAKS THROUGH $1200 TO FINISH AT $1278.00 PER OZ//PALLADIUM AT $2178.00 PER OZ// SEEMS ALL COMMODITIES ARE ON A TEAR EXCEPT SILVER AND GOLD//CORONAVIRUS UPDATES//VACCINE UPDATES//NEW ISRAELI DRUG WORKS WELL DEFEATING THE CYTOKINE STORM//CHINA VS USA// CHINA’S ECONOMY NOT DOING SO WELL!//IRAN REPORT LEAKED SHOWING THAT THEY HAVE PRODUCED URANIUM METAL (ENRICHED) WHICH IS A KEY COMPONENT OF A NUCLEAR REACTOR AND A NUCLEAR BOMB//USA 2021 BUDGET DEFICIT FOR JAN RISES BY A HUGE 163 BILLION DOLLARS//DEFICIT FOR 4 MONTHS: $736 BILLION DOLLARS//BIDEN NOT THROUGH YET: WANTS TO SHOWER STATE AND LOCAL GOVERNMENTS WITH A $350 BILLION AID PKG//THAT WILL BREAK THE USA DOLLAR//

GOLD:$1841.90 UP  $5.30   The quote is London spot price

Silver:$27.04. DOWN  $0.44   London spot price ( cash market)

your data…

 

Closing access prices:  London spot

i)Gold : $1842.90  LONDON SPOT  4:30 pm

ii)SILVER:  $27.00//LONDON SPOT  4:30 pm

Physical coins on the move, with or without the derivative price

Gold Eagles now showing +$162 to spot. Silver Eagles show +$8.50 to spot. 

 

Editorial of The New York Sun | February 1, 2021

end

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COMEX DATA

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

receiving today: 157/371

EXCHANGE: COMEX
CONTRACT: FEBRUARY 2021 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,835.300000000 USD
INTENT DATE: 02/09/2021 DELIVERY DATE: 02/11/2021
FIRM ORG FIRM NAME ISSUED STOPPED
____________________________________________________________________________________________
072 C GOLDMAN 333 3
104 C MIZUHO 18
118 H MACQUARIE FUT 1
332 H STANDARD CHARTE 41
435 H SCOTIA CAPITAL 1
555 H BNP PARIBAS SEC 2
624 H BOFA SECURITIES 51
657 C MORGAN STANLEY 53
661 C JP MORGAN 100
661 H JP MORGAN 57
686 C STONEX FINANCIA 8
690 C ABN AMRO 10 1
709 H BARCLAYS 38
800 C MAREX SPEC 10 2
880 C CITIGROUP 9
905 C ADM 4
____________________________________________________________________________________________

TOTAL: 371 371
MONTH TO DATE: 28,370

issued  0

GOLDMAN SACHS STOPPED 3 CONTRACTS.

 
 

NUMBER OF NOTICES FILED TODAY FOR  FEB. CONTRACT: 371 NOTICE(S) FOR 37100 OZ  (1.1539 tonnes)

TOTAL NUMBER OF NOTICES FILED SO FAR:  28,370 NOTICES FOR 2,837,000 OZ  (88.242 tonnes) 

SILVER//FEB CONTRACT

 

0 NOTICE(S) FILED TODAY FOR NIL  OZ/

total number of notices filed so far this month: 1625 for 8,125,000  oz

BITCOIN MORNING QUOTE  $45,856   DOWN 1384 dollars

BITCOIN AFTERNOON QUOTE.:$44,604  DOWN 2636 DOLLARS .

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

GLD AND SLV INVENTORIES:

WITH GOLD UP $5.30  AND NO PHYSICAL TO BE FOUND ANYWHERE:

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

WHAT ON EARTH IS GOING ON? ANOTHER 4.09 TONNE WITHDRAWAL WITH THE PRICE GOING HIGHER

WE NOW HAVE HAD 4 DAYS OF RISING GOLD PRICES AND 4 DAYS OF FALLING GLD INVENTORIES!!

GLD: 1,148.34 TONNES OF GOLD//

WITH SILVER DOWN $.44 TODAY: AND WITH NO SILVER AROUND

NO CHANGE IN SILVER INVENTORY AT THE SLV..

INVENTORY RESTS AT:

SLV: 636.844  MILLION OZ./

 

XXXXXXXXXXXXXXXXXXXXXXXXX

 

Let us have a look at the data for today

THE COMEX OI IN SILVER ROSE BY A SMALL SIZED 479 CONTRACTS FROM 178,809 UP TO 179,288, AND CLOSER TO OUR NEW RECORD OF 244,710, (FEB 25/2020. THE GAIN IN OI OCCURRED DESPITE OUR  $0.19 FALL IN SILVER PRICINGAT THE COMEX. IT SEEMS THAT THE GAIN IN COMEX OI IS  DUE TO HUGE BANKER AND ALGO  SHORT COVERING..  COUPLED AGAINST A FAIR EXCHANGE FOR PHYSICAL ISSUANCE. WE ALSO HAD ZERO LONG LIQUIDATION, AND A TINY LOSS IN STANDING FOR SILVER OUNCES STANDING AT THE COMEX FOR FEB.  WE HAD A STRONG NET GAIN IN OUR TWO EXCHANGES OF 1091 CONTRACTS  (SEE CALCULATIONS BELOW).

WE WERE  NOTIFIED  THAT WE HAD A FAIR  NUMBER OF  COMEX LONGS TRANSFERRING THEIR CONTRACTS TO LONDON THROUGH THE EFP ROUTE:  470,, AS WE HAD THE FOLLOWING ISSUANCE:  MARCH  470 MAY: 0 AND ZERO ALL  OTHER MONTHS  AND THEREFORE TOTAL ISSUANCE 470 CONTRACTS. THE BANKERS ARE NOW BEING BITTEN BY THOSE SERIAL FORWARDS (EFP’S CIRCULATING IN LONDON)AS THEY ARE NOW BEING EXERCISED AND COMING BACK TO NEW YORK FOR REDEMPTION OF METAL.  THE COST TO SERVICE THESE SERIAL FORWARDS IS HIGH TO OUR BANKERS  BUT THEY HAVE NO CHOICE BUT TO ISSUE A FEW OF THEM!

HISTORY OF SILVER OZ STANDING AT THE COMEX FOR THE PAST 26 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

45.220 MILLION OZ FINAL STANDING FOR MAY

2.205  MILLION OF FINAL STANDING FOR JUNE

86.470 MILLION OZ FINAL STANDING IN JULY.

6.475 MILLION OZ FINAL STANDING IN AUGUST

55.400 MILLION OZ FINAL STANDING IN SEPT

8.900 MILLION OZ INITIALLY STANDING IN OCT.

3.950 MILLION OZ FINAL STANDING IN NOV.

46.685 MILLION OZ FINAL STANDING FOR DEC.

6.890 MILLION FINAL STANDING FOR JAN 2021

10.780  MILLION OZ INITIAL STANDING FOR FEB 2021

TUESDAY, 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 $0.19) ).. AND, OUR OFFICIAL SECTOR/BANKERS WERE  UNSUCCESSFUL IN THEIR ATTEMPT TO FLEECE ANY SILVER LONGS AS WE HAD A STRONG GAIN IN OUR TWO EXCHANGES (949 CONTRACTS). NO DOUBT THE TOTAL GAIN IN OI IN OUR TWO EXCHANGES WERE DUE TO i) HUGE BANKER/ALGO SHORT COVERING.  WE ALSO HAD  ii)  A FAIR ISSUANCE OF EXCHANGE FOR PHYSICALS 2) A SMALL DECREASE STANDING IN SILVER OZ  STANDING  FOR FEB, iii) FAIR COMEX GAIN AND iv) ZERO LONG LIQUIDATION. YOU CAN BET THE FARM THAT OUR BANKERS  ARE DESPERATE TO LIQUIDATE THEIR HUGE SHORT POSITIONS IN SILVER..

WE ARE BEGINNING TO WITNESS A LACK OF EXCHANGE FOR GOLD PHYSICALS UNDERWRITTEN DUE TO PREMIUMS STARTING TO REAPPEAR IN THE FUTURE PRICE OF GOLD VS LONDON SPOT. THE COST TO THE BANKERS IS JUST TOO GREAT TO ENGAGE IN THESE VEHICLES ONCE THIS OCCURS.

We have now switched to SILVER for our spreaders!!

 

FOR DETAILS ON THE SPREADING EXERCISE HERE IS A BRIEF OUTLINE:

 

SPREADING OPERATIONS/NOW SWITCHING TO SILVER  (WE SWITCH OVER TO GOLD ON NOV  1)

SPREADING OPERATION FOR OUR NEWCOMERS:

FOR NEWCOMERS, HERE ARE THE DETAILS:

SPREADING LIQUIDATION HAS NOW COMMENCED IN SILVER  AS WE HEAD TOWARDS THE  NEW ACTIVE FRONT MONTH OF MAR.

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

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

 

THE SPREADING LIQUIDATION OPERATION IS NOW OVER FOR GOLD..AND WE WILL NOW MORPH INTO AN ACCUMULATION PHASE OF SPREADING CONTRACTS FOR 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 SILVER AS THEY INCREASE THE OPEN INTEREST FOR THE SPREADERS. THE TOTAL COMEX GOLD 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 FEB. HEADING TOWARDS THE  ACTIVE DELIVERY MONTH OF MAR FOR SILVER:

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST  STARTS TO RISE IN THIS NON ACTIVE MONTH OF FEB. BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN SILVER WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING  ACTIVE DELIVERY MONTH (MAR), 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

FEB

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

30,395 CONTRACTS (FOR 8 TRADING DAY(S) TOTAL 30,395 CONTRACTS) OR 151.975 MILLION OZ: (AVERAGE PER DAY: 3799 CONTRACTS OR 18.99 MILLION OZ/DAY)

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF FEB: 151.975 MILLION PAPER OZ HAVE MORPHED OVER TO LONDON.

TO GIVE YOU AN IDEA AS TO THE HUGE SUPPLY THIS MONTH IN SILVER:  SO FAR THIS MONTH OF FEB: 151.975. MILLION PAPER OZ HAVE MORPHED OVER TO LONDON.

JAN EFP ACCUMULATION FINAL:  113.735 MILLION OZ

FEB EFP ACCUMULATION FOR FAR:   151.975 MILLION OZ (RAPIDLY INCREASING AGAIN)

RESULT: WE HAD A FAIR SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 621, DESPITEOUR  $0.19 FALL IN SILVER PRICING AT THE COMEX ///TUESDAY.THE CME NOTIFIED US THAT WE HAD A FAIR SIZED EFP ISSUANCE OF 470 CONTRACTS WHICH  EXITED OUT OF THE SILVER COMEX  TO LONDON  AS FORWARDS.

TODAY WE GAINED AN STRONG SIZED 1091 OI CONTRACTS ON THE TWO EXCHANGES (DESPITE OUR $0.19 RISE IN PRICE)//

THE TALLY//EXCHANGE FOR PHYSICALS

i.e 470 OPEN INTEREST CONTRACTS HEADED FOR LONDON  (EFP’s) TOGETHER WITH A SMALL SIZED INCREASE OF 479 OI COMEX CONTRACTS. AND ALL OF THIS DEMAND HAPPENED WITH OUR $0.19 FALL IN PRICE OF SILVER/AND A CLOSING PRICE OF $27.29 // TUESDAY’S TRADING. YET WE STILL HAVE A STRONG AMOUNT OF SILVER STANDING AT THE COMEX FOR DELIVERY. 

FOR THE NEW FEB.  DELIVERY MONTH/ THEY FILED AT THE COMEX: 0 NOTICE(S) FOR NIL OZ OF SILVER.

IN SILVER,PRIOR TO TODAY, WE  SET THE NEW COMEX RECORD OF OPEN INTEREST AT 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 WAS SET WITH A PRICE OF: 18.91 (FEB 25/2020)

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 SURPRISINGLY FELL AGAIN BY A SMALL 570 CONTRACTS TO 506,741 AND FURTHER FROM  OUR NEW RECORD (SET JAN 24/2020) AT 799,541 AND  PREVIOUS TO THAT: (SET JAN 6/2020) AT 797,110.

THE SMALL SIZED DECREASE IN COMEX OI DESPITE WITH OUR  GAIN IN PRICE  OF $4.00/// COMEX GOLD TRADING// TUESDAY.WE PROBABLY HAD HUGE BANKER/ALGO SHORT COVERING  ACCOMPANYING OUR FAIR EXCHANGE FOR  PHYSICAL ISSUANCE. WE  HAD ZERO LONG LIQUIDATION. WE HAD A GOOD GAIN IN GOLD STANDING  AT THE COMEX TO 104.320 TONNES FOR FEBRUARY..AS OUR BANKERS ORCHESTRATE ANOTHER QUEUE JUMP SEARCHING FOR METAL OVER HERE I AM PRETTY SURE THAT THE FALL IN COMEX OI IS DUE TO BANKERS RUNNING OUT OF DODGE..THEY MUST COVER THEIR SHORTFALL QUICKLY.....THIS ALL HAPPENED WITH OUR RISE IN PRICE OF $4.00!!!.

WE HAD A VOLUME OF 0    4 -GC CONTRACTS//OPEN INTEREST  5//

WE HAD A TINY GAIN  OF 40 CONTRACTS  (0.1244 TONNES) ON OUR TWO EXCHANGES..

E.F.P. ISSUANCE

THE CME RELEASED THE DATA FOR EFP ISSUANCAND IT TOTALED A FAIR SIZED 4284 CONTRACTS:

CONTRACT . FEB:0,  APRIL:  610 AND JUNE:  0  ALL OTHER MONTHS ZERO//TOTAL: 4285.  The NEW COMEX OI for the gold complex rests at 506,741. 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 EXCHANGE 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 SMALL SIZED INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 40 CONTRACTS: 570 CONTRACTS DECREASED AT THE COMEX AND 610 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN OF 40 CONTRACTS OR 0.1244 TONNES.

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES:

WE HAD A FAIR SIZED ISSUANCE IN EXCHANGE FOR PHYSICALS (610) ACCOMPANYING THE SMALL SIZED LOSS IN COMEX OI  (570 OI): TOTAL GAIN IN THE TWO EXCHANGES:  40 CONTRACTS. WE NO DOUBT HAD 1 ) HUGE BANKER SHORT COVERING AS OUR BANKERS ARE RUNNING FROM DODGE AND CONSIDERABLE ALGO SHORT COVERING ,2.)GOOD INCREASE STANDING AT THE GOLD COMEX FOR THE FRONT FEB. MONTH RISING TO 104.320 TONNES3) ZERO LONG LIQUIDATION/// ;4) SMALL COMEX OI LOSS  AND 5) FAIR ISSUANCE OF EXCHANGE FOR PHYSICAL  ...ALL OF THIS WAS COUPLED WITH OUR  GAIN IN GOLD PRICE TRADING//TUESDAY//$4.00!!.

WE ARE BEGINNING TO WITNESS A LACK OF EXCHANGE FOR GOLD PHYSICALS UNDERWRITTEN DUE TO PREMIUMS STARTING TO REAPPEAR IN THE FUTURE PRICE OF GOLD VS LONDON SPOT. THE COST TO THE BANKERS IS JUST TOO GREAT TO ENGAGE IN THESE VEHICLES ONCE THIS OCCURS.

 
 

HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS IN 2020 INCLUDING TODAY

FEB

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF FEB : 27,456, CONTRACTS OR 2,745,600 oz OR 85.40 TONNES (8 TRADING DAY(S) AND THUS AVERAGING: 3432 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE  SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 8 TRADING DAY(S) IN  TONNES: 85.40 TONNES

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

THUS EFP TRANSFERS REPRESENTS 85.40/3550 x 100% TONNES =2.35% OF GLOBAL ANNUAL PRODUCTION

ACCUMULATION OF GOLD EFP’S YEAR 2021 TO DATE:
 
 
JANUARY: 265.26 TONNES (RAPIDLY INCREASING AGAIN)
 
FEB  :  85.40 TONNES SO FAR

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 477 CONTRACTS FROM 178,809 UP TO 179,288 AND CLOSER TO OUR COMEX RECORD //244,710(SET FEB 25/2020).  THE LAST RECORDS WERE SET  IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD TO THAT WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD  WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER  2 3/4 YEARS AGO.  THE PRICE OF SILVER ON THAT DAY: $17.89.

THE STRONG SIZED GAIN IN OI SILVER COMEX WAS PRIMARILY DUE TO 1) HUGE BANKER SHORT COVERING//ALGO SHORT COVERING , 2) A FAIR ISSUANCE OF EXCHANGE FOR PHYSICALS (SEE BELOW), 3) A SMALL DECREASE IN  STANDING FOR SILVER  AT THE COMEX FOR FEB., AND 4) ZERO LONG LIQUIDATION 

EFP ISSUANCE 470 CONTRACTS

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

 MARCH:  470 ; MAY: 0 AND ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 470 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 479 CONTRACTS TO THE 470 OI TRANSFERRED TO LONDON THROUGH EFP’S,  WE OBTAIN A STRONG SIZED GAIN OF 949 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES. THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES 4.745 MILLION  OZ, OCCURRED DESPITE OUR $0.19 LOSS IN PRICE///

 

BOTH THE SILVER COMEX AND THE GOLD COMEX ARE IN STRESS AS THE BANKERS SCOUR THE BOWELS OF THE EXCHANGE FOR METAL..THE EVIDENCE IS CLEAR: HUGE AMOUNTS OF PHYSICAL STANDING FOR BOTH  SILVER AND GOLD .

 

(report Harvey)

 

2 ) Gold/silver trading overnight Europe, Goldcore

(Mark O’Byrne/zerohedge

and in NY: Bloomberg

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 51.60 PTS OR 1.43%   //Hang Sang CLOSED UP 562.53 PTS OR 1.91%    /The Nikkei closed UP 57.00 POINTS OR 0.19%//Australia’s all ordinaires CLOSED UP 0.45%

/Chinese yuan (ONSHORE) closed DOWN AT 6.4513  /Oil UP TO 58.74 dollars per barrel for WTI and 61.42 for Brent. Stocks in Europe OPENED ALL MOSTLY RED//  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.4513. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.4286 TRADE TALKS STALL//YUAN LEVELS //TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED//CORONAVIRUS/PANDEMIC/TRUMP TESTS POSITIVE FOR COVID 19  : /ONSHORE YUAN TRADING BELOW 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 SURPRISINGLY FELL AGAIN BY BY A TINY 570 CONTRACTS TO 506,741 MOVING FURTHER FROM THE RECORD THAT WAS SET IN JANUARY/2020: {799,541  OI(SET JAN 16/2020)} AND  PREVIOUS TO THAT: 797,110 (SET JAN 7/2020).  AND THIS SMALL COMEX DECREASE OCCURRED DESPITE OUR  GAIN OF $4.00 IN GOLD PRICING /TUESDAY’S COMEX TRADING/)… WE ALSO HAD A SMALL EFP ISSUANCE (610 CONTRACTS).   WE  ALSO PROBABLY HAD AGAIN  1)  HUGE BANKER SHORT COVERING//ALGO SHORT COVERING,  2)  ZERO  LONG LIQUIDATION  AND 3)  LARGE INCREASE STANDING AT THE GOLD  COMEX//FEB. DELIVERY MONTH(104.320 TONNES) (SEE BELOW) …  AS WE ENGINEERED A SMALL SIZED GAIN ON OUR TWO EXCHANGES OF 597 CONTRACTS. WE HAVE LATELY WITNESSED THE EXCHANGE FOR PHYSICALS ISSUED BEING SMALL….. AS IT JUST TOO COSTLY FOR THEM TO CONTINUE SERVICING THE COSTS OF SERIAL FORWARDS CIRCULATING IN LONDON. HOWEVER, MUCH TO THE ANNOYANCE OF OUR BANKERS, THE COMEX IS THE SCENE OF AN ASSAULT ON GOLD AS LONDONERS, NOT BEING ABLE TO FIND ANY PHYSICAL ON THAT SIDE OF THE POND, EXERCISE THESE CIRCULATING EXCHANGE FOR PHYSICALS IN LONDON AND FORCING DELIVERY OF REAL METAL OVER HERE AS THE OBLIGATION STILL RESTS WITH NEW YORK BANKERS.

(SEE BELOW)

WE  HAD 0    4 -GC VOLUME//open interest REMAINS AT   5

EXCHANGE FOR PHYSICAL ISSUANCE

WE ARE NOW IN THE NON  ACTIVE DELIVERY MONTH OF JAN..  THE CME REPORTS THAT THE BANKERS ISSUED A FAIR SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS., THAT IS 4284 EFP CONTRACTS WERE ISSUED:  ; FEB// ’21  0 AND APRIL:  610, JUNE:  0 & ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE: 610  CONTRACTS.

YOU WILL FIND THAT WHEN WE HAVE A GOOD PREMIUM IN THE FUTURES/SPOT, THEN THE NUMBER OF EXCHANGE FOR PHYSICALS DECLINE IN NUMBERS.  THE COST IS JUST TOO MUCH FOR THEM TO ISSUE. TODAY THAT PREMIUM WAS SMALL AND THUS A LITTLE MORE THAN USUAL OF EXCHANGE FOR PHYSICALS WERE ISSUED.

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A SMALL 40 TOTAL CONTRACTSIN THAT 610 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE LOST A SMALL SIZED  COMEX OI  OF 570 CONTRACTS.  WE HAVE A HUGE AMOUNT OF GOLD STANDING FOR FEB (104.320 TONNES) FOLLOWING OUR STRONG LEVEL OF JAN 2021 GOLD CONTRACTS STANDING FOR DELIVERY. ((6.500 TONNES).  IF YOU INCLUDE  NOVEMBER’S HUGE 34.7 TONNES, AND DEC. 93.589 OUR COMEX IS OFFICIALLY UNDER ASSAULT.

THE BANKERS WERE UNSUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT ROSE $4.00)., AND WERE   UNSUCCESSFUL IN FLEECING ANY LONGS  AS THE TOTAL GAIN ON THE TWO EXCHANGES REGISTERED 0.1244 TONNES, ACCOMPANYING OUR HUGE GOLD TONNAGE STANDING FOR FEB (104.320 TONNES)..I  STRONGLY BELIEVE THAT OUR BANKER FRIENDS ARE GETTING QUITE NERVOUS.  THE LOSS OF COMEX OI IS DUE TO BANKER SHORT COVERING IN A BIG WAY.  THEY ARE LOOKING OVER THEIR SHOULDERS AND WITNESSING MASSIVE SILVER SHORTAGES THAT CANNOT BE COVERED. THEY ARE TRYING TO FLEE IN HASTE “FROM DODGE”. 

NET GAIN ON THE TWO EXCHANGES :: 597 CONTRACTS OR  59,700 OZ OR  1.856  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:  506,741 TOTAL OI CONTRACTS X 100 OZ PER CONTRACT = 50.73 MILLION OZ/32,150 OZ PER TONNE =  1576 TONNES

THE COMEX OPEN INTEREST REPRESENTS 1576/2200 OR 71.64% OF ANNUAL GLOBAL PRODUCTION OF GOLD.

 
 

Trading Volumes on the COMEX TODAY:174,701 contracts// volume extremely poor/

CONFIRMED COMEX VOL. FOR YESTERDAY:  162,518 contracts//  volume:extremely poor //most of our traders have left for London

 

FEB 10 /2021

 
INITIAL STANDINGS FOR FEB COMEX GOLD
 
 
 
 
 
 
 
 
Gold Ounces
Withdrawals from Dealers Inventory in oz nil oz
Withdrawals from Customer Inventory in oz
 
4243.932 OZ
 
 
 
Brinks
 
(132 kilobars)
 
 
 
 
 
 
 
 
Deposits to the Dealer Inventory in oz 32,118.849 oz

 

Brinks

999 kilobars

Deposits to the Customer Inventory, in oz
1876.55
 
Oz
Delaware
 
 
 
 
 
 
 
 
 
No of oz served (contracts) today
371 notice(s)
37100 OZ
(1.1539 TONNES
 
 
 
No of oz to be served (notices)
85487 contracts
854,8700 oz)
 
26.59 TONNES
 
 
 
Total monthly oz gold served (contracts) so far this month
28,370 notices
 
2,837,000 OZ
88.242 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
 

Withdrawals from Dealers Inventory NIL oz

We had 1 deposit into the dealer

i) Into Brinks dealer:  32,118.849 oz
999 kilobars
 
 
 
 
total deposit:  32,118.849  oz
 
 
 

total dealer withdrawals: nil oz

 

we had  1 deposits into the customer account

i) Into Delaware: 1846.55oz
 
 

we had  1 gold withdrawals from the customer account:

i)Out of Brinks:  4243.932 iz
(132 kilobars)
 
 
 

We had 2  kilobar transactions

ADJUSTMENTS:  dealer to customer BRINKS

(dealer to customer)

BRINKS  23,148.720  OZ

The front month of FEB registered a total of 5540 CONTRACTS FOR A LOSS OF 2698 CONTRACTS.  WE

HAD 2751 CONTRACTS FILED ON MONDAY SO WE GAINED A GOOD 53 CONTRACTS OR 5300 OZ REFUSED TO MORPH INTO LONDON BASED FORWARDS AND AS SUCH NEGATED A FIAT BONUS.  IT IS NOW OUR BANKERS TURN TO FIND BADLY NEEDED PHYSICAL. QUEUE JUMPING NOW BECOMES THE NORM AT THE GOLD COMEX AS BANKERS ARE IN URGENT NEED OF PHYSICAL METAL.

 

MARCH LOST 75 contracts to stand at 2172

APRIL GAINED 1858 contracts to stand at 395,819

We had 371 notice(s) filed today for 37,100 oz

FOR THE FEB 2021 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 371  contract(s) of which 100  notices were stopped (received) by j.P. Morgan dealer and 57 notice(s) was (were) stopped/ Received) by J.P.Morgan//customer account and 3 notices received (stopped) by the squid  (Goldman Sachs)
 

To calculate the INITIAL total number of gold ounces standing for the FEB /2021. contract month, we take the total number of notices filed so far for the month (28,370) x 100 oz , to which we add the difference between the open interest for the front month of  (FEB 5540 CONTRACTS ) minus the number of notices served upon today (371 x 100 oz per contract) equals 3,353,900 OZ OR 104.320 TONNESthe number of ounces standing in this  active month of FEB

thus the INITIAL standings for gold for the FEB/2021 contract month:

No of notices filed so far (28,370 x 100 oz  PLUS 5540 OI) for the front month minus the number of notices served upon today (371} x 100 oz which equals 3,353,900 oz standing OR 104.320 TONNES in this active delivery month of FEBRUARY. This is a HUGE amount  standing for GOLD IN  FEB

WE GAINED A GOOD 53 CONTRACTS OR 5300 OZ REFUSED TO MORPH INTO LONDON BASED FORWARDS AS NOW OUR BANKER FRIENDS WILL TRY THEIR LUCK TO FIND METAL ON THIS SIDE OF THE POND.  

NEW PLEDGED GOLD:  

461,317.475 oz NOW PLEDGED  SEPT 15.2020/HSBC  14.34 TONNES

121,233.331 PLEDGED  APRIL 3/2020: SCOTIA:3.7708 TONNES

290,795.495 oz  JPM  9.04 TONNES

1,048,677.37 oz pledged June 12/2020 Brinks/32.618 TONNES

94,500.934 oz Pledged August 21/regular account 2.93 tonnes JPMORGAN

180,158,329 oz Pledged Nov 27.2021 MANFRA  5.60 TONNES

6,308.08 oz International Delaware:  .196 tonnes

192.06 oz Malca

168,811.741 Manfra

total pledged gold:  2,191,837.332 oz                                     68.17 tonnes

 

SURPRISINGLY WE HAVE BEEN WITNESSING NO REAL PHYSICAL GOLD ENTERING THE COMEX VAULTS FOR THE PAST YEAR!! ..ONLY PHONY KILOBAR ENTRIES…. WE HAVE 540.63 TONNES OF REGISTERED GOLD WHICH CAN SETTLE UPON LONGS i.e. 104.320 tonnes

CALCULATION OF REGISTERED THAT CAN BE SETTLED UPON:

total registered or dealer  19,573,135.781 oz or 608.80- tonne
 
 
total weight of pledged:  2,191,837.332 oz or 68.17 tonnes
 
 
thus:
 
registered gold that can be used to settle upon: 17,381,298.0  (540,63 tonnes)
 
 
 
true registered gold  (total registered – pledged tonnes  17,381,298.0 (540.63 tonnes)
 
 
 
total eligible gold: 19,929,516.132 , oz (619.89 tonnes)
 
 

total registered, pledged  and eligible (customer) gold  39,502,651.913 oz 1,228.69 tonnes (INCLUDES 4 GC GOLD)

total 4 GC gold:   126.34 tonnes

total gold net of 4 GC:  1102.35 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 July 2018. and it continues to present day.

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.

 
 
THE DATA AND GRAPHS:
 
 
 
 
 
 
 
END

 

 
 
FEB 10/2021

And now for the wild silver comex results

 
 

And now for the wild silver comex results

INITIAL STANDING FOR SILVER/FEB

FEB. SILVER COMEX CONTRACT MONTH//INITIAL STANDING

Silver Ounces
Withdrawals from Dealers Inventory NIL oz
Withdrawals from Customer Inventory
1,197,689.450 OZ
 
CNT
SCOTIA
 
 
 
 
 
 
 
 
 
 
Deposits to the Dealer Inventory
nil oz
 
 
 
 
 
 
 
 
Deposits to the Customer Inventory
43,766.314 oz
Delaware
 
 
 
 
 
 
 
 
 
 
 
 
 
 
No of oz served today (contracts)
0
 
CONTRACT(S)
(NIL OZ)
 
No of oz to be served (notices)
531 contracts
 2,655,000 oz)
Total monthly oz silver served (contracts)  1625 contracts

 

8,125,000 oz)

Total accumulative withdrawal of silver from the Dealers inventory this month NIL oz
Total accumulative withdrawal of silver from the Customer inventory this month
 
We had 0 deposits into the dealer:
 
 
 
 

total dealer deposits: nil        oz

i) We had 0 dealer withdrawal

total dealer withdrawals: nil oz

we had 1 deposits into the customer account (ELIGIBLE ACCOUNT)

i) Into DELAWARE  43,766.314 oz

 
 
 
 

JPMorgan now has 193.906 million oz of  total silver inventory or 49.04% of all official comex silver. (193.906 million/395.391 million

total customer deposits today: 43,766.314    oz

we had 2 withdrawals:

 
 
i) out of CNT: 595,472.790  OZ
ii) out of SCOTIA:  602,216.660 oz
 
 
 
 
 
 

total withdrawals 1,197,689..450   oz

We had 1 adjustments: dealer to customer/CNT

20,464.000 oz

Total dealer(registered) silver: 150,824million oz

total registered and eligible silver:  395.391 million oz

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

 

FEBRUARY saw a LOSS of 5 contracts to stand at 531. We had 1 notice filed on TUESDAY. So we LOST 4 contracts or an additional 20,000 oz will NOT stand for delivery on this side of the pond as they morphed into London based forwards and received a fiat bonus for their efforts.. 

MARCH LOST 6248 contracts DOWN to 102,132.April lost another 1 contracts to stand at 234

The total number of notices filed today for FEB 2021. contract month is represented by 0 contract(s) FOR 5,000 oz

To calculate the number of silver ounces that will stand for delivery in FEB we take the total number of notices filed for the month so far at  1625 x 5,000 oz = 8,120,000 oz to which we add the difference between the open interest for the front month of FEB (531) and the number of notices served upon today 0 x (5000 oz) equals the number of ounces standing.

Thus the FEB standings for silver for the FEB/2021 contract month: 1625 (notices served so far) x 5000 oz + OI for front month of FEB(531)- number of notices served upon today (0) x 5000 oz of silver standing for the Jan contract month .equals 10,780,000 oz. ..VERY STRONG FOR A NON ACTIVE  FEB MONTH.

We lost 4 contracts or an additional 20,000 oz will not stand for delivery over here.

TODAY’S ESTIMATED SILVER VOLUME :83,375 CONTRACTS // volume very good/

FOR YESTERDAY  107,614  ,CONFIRMED VOLUME//high 

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

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

end

NPV for Sprott

1. Sprott silver fund (PSLV): NAV  RISES TO +0.88% ((FEB 10/2021)

2. Sprott gold fund (PHYS): premium to NAV  RISES TO -0.69% to NAV:   (FEB 10/2021 )

Note: Sprott silver trust back into NEGATIVE territory at +%-/Sprott physical gold trust is back into POSITIVE/0.88%(FEB 9/2021)

(courtesy Sprott/GATA

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

NAV 19.74 TRADING 19.21///NEGATIVE 2.67

END

And now the Gold inventory at the GLD/(this vehicle is a fraud as there is no gold behind them!)

FEB 10/WITH GOLD UP $5.30 TODAY: ANOTHER HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.09 TONNES FROM THE GLD///INVENTORY RESTS AT 1148.34 TONNES

FEB 9/WITH GOLD UP $4.00 TODAY; A HUGE CHANGE IN GOLD INVENTORY AT THE GLD//: A WITHDRAWAL OF 4.08 TONNES FROM THE GLD//INVENTORY RESTS AT 1152.43 TONNES.

FEB 8/WITH GOLD UP $20.80 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD//: A WITHDRAWAL OF 3.33 TONNES FROM THE GLD//INVENTORY RESTS AT 1156.51 TONNES

FEB 5/WITH GOLD UP $20.10 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1159.84 TONNES

FEB 4/WITH GOLD DOWN $42.05 TODAY: STRANGE: HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 2.34 TONNES ADDED INTO THE GLD///INVENTORY RESTS AT 1159.84 TONNES

FEB 3/WITH GOLD DOWN 20 CENTS TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1157.50 TONNES

FEB 2/WITH GOLD DOWN $27.60 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD// A WITHDRAWAL OF 2.63 TONNES FROM THE GLD//.INVENTORY RESTS AT 1157.50 TONNES

FEB 1/WITH GOLD UP $12.45 TODAY: A HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.5 TONNES FROM THE GLD///INVENTORY RESTS AT 1160.13 TONNES

JAN 29/WITH GOLD UP $9.65 TODAY; A HUGE CHANGE IN GOLD INVENTORY AT THE GLD/: A WITHDRAWAL  OF 4.37 TONNES FROM THE GLD//INVENTORY RESTS AT 1164.80 TONNES

JAN 28/WITH GOLD DOWN $6.90 TODAY: A HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.71 TONNES LEAVES THE GLD////INVENTORY RESTS AT 1169.17 TONNES

JANUARY 27/WITH GOLD DOWN $9.85 TODAY; A SMALL CHANGE IN GOLD INVENTORY AT THE GLD A WITHDRAWAL OF .87 TONNES FROM THE GLD///INVENTORY RESTS 1172.38 TONNES

JAN 26/WITH GOLD DOWN $4.15 TODAY:NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 1173.25 TONNES

JAN 25.WITH GOLD DOWN 20 CENTS TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1173.25 TONNES

JAN 22/WITH GOLD DOWN (9.50 TODAY:A SMALL CHANGE IN GOLD INVENTORY AT THE GLD/: A WITHDRAWAL OF .88 TONNES FROM THE GLD//NVENTORY RESTS AT 1173.25 TONNES

JAN 21/WITH GOLD DOWN $0.40 TODAY; NO CHANGES IN GOLD INVENTORY AT THE GLD: ////INVENTORY RESTS AT 1174.13 TONNES

JAN 20/WITH GOLD UP $25.20 TODAY; A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.5 TONNES OF GOLD FROM THE GLD////INVENTORY RESTS AT 1174.13 TONNES

JAN 19/WITH GOLD UP $10.90 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A MASSIVE DEPOSIT OF 16.63 TONNES INTO GLD////INVENTORY RESTS AT 1177.63 TONNES

JAN 15/WITH GOLD DOWN $22.40 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD//: A WITHDRAWAL OF 10.21 TONNES FROM THE GLD///INVENTORY RESTS AT 1161.00 TONNES

JAN 14.WITH GOLD DOWN $2.75 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 10.50 TONNES FROM THE GLD.//INVENTORY RESTS AT 1171.21 TONNES

JAN 13/WITH GOLD UP $11.65 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1181.71 TONNES

JAN 12/WITH GOLD DOWN $6.70  TODAY;A HUGE CHANGES IN GOLD INVENTORY AT THE GLD// A WITHDRAWAL OF .400 TONNES FROM THE GLD..//INVENTORY RESTS AT 1181.71 TONNES

JAN 11/WITH GOLD UP $14.30 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1182.11 TONNES

JAN 8//WITH GOLD DOWN $75.70 : A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.57 TONNES FROM THE GLD//INVENTORY RESTS AT 1182.11 TONNES

JAN 7/WITH GOLD UP $5.70 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1186.78 TONNES

JAN 6/WITH GOLD DOWN $44.25 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.17 TONNES//INVENTORY RESTS AT 1186.78 TONNES

JAN 5/WITH GOLD UP $10.05 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD:A DEPOSIT OF 17.21 TONNES OF GOLD INTO THE GLD////INVENTORY RESTS AT 1187.95 TONNES

JAN 4/WITH GOLD UP $49.70 TODAY: A SMALL CHANGE IN GOLD INVENTORY AT THE GLD; A DEPOSIT OF 0.88 TONNES INTO THE GLD/////INVENTORY RESTS AT 1170.74 TONNES

DEC 31/WITH GOLD UP $1.45 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 1169.86 TONNES

DEC//30//WITH GOLD UP $13.30 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1169.86 TONNES

DEC.29//WITH GOLD UP $1.65 TODAY: A DEPOSIT OF  2.53 TONNES  CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1169.86 TONNES.

DEC 28WITH GOLD DOWN $3.00 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1167.53 TONNES

DEC 24/WITH GOLD UP $6.15 TODAY; NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1167.53 TONNES

DEC.23/WITH GOLD UP $7.40 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD/: A WITHDRAWAL OF 2.33 TONNES FROM THE GLD//INVENTORY RESTS AT 1167.53 TONNES

DEC 22/WITH GOLD DOWN $12.00 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPSOIT OF 2.04 TONNES INTO THE GLD//INVENTORY RESTS AT 1169.86 TONNES

DEC 21/WITH GOLD DOWN $5.60 TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 1167.82 TONNES

DEC 18/WITH GOLD DOWN 90 CENTS TODAY: NO CHANGE IN GOLD INVENTORY AT THE GLD////INVENTORY RESTS AT 1167.82 TONNES

DEC 17 WITH GOLD UP $39.35 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.33 TONNES FROM THE GLD////INVENTORY RESTS AT 1167.82 TONNES

DEC 16/WITH GOLD UP $2.55 TODAY A HUGE  CHANGE IN GOLD INVENTORY AT THE GLD: ANOTHER WITHDRAWAL OF 1.17 TONNES FORM THE GLD..//INVENTORY RESTS AT 1170.15 TONNES

DEC 15/ WITH GOLD UP $23.75 TODAY: A HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.67 TONNES FROM THE GLD//INVENTORY RESTS AT 1171.32 TONNES//

DEC 14//WITH GOLD DOWN $10.45 TODAY: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD:: A WITHDRAWAL OF 3.79 TONNES FROM THE GLD//INVENTORY RESTS AT 1175.99 TONNES

DEC 11/WITH GOLD UP $5.70 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 1179.78 TONNES

 

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

Inventory rests tonight at:

 

FEB 10 / GLD INVENTORY 1148.34 tonnes

LAST;  997 TRADING DAYS:   +213.62 TONNES HAVE BEEN ADDED THE GLD

LAST 897 TRADING DAYS// +  381.87TONNES HAVE NOW BEEN ADDED INTO  THE GLD INVENTORY

end

Now the SLV Inventory/(this vehicle is a fraud as there is no physical metal behind them!)

FEB 10/WITH SILVER DOWN 44 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 636.844 MILLION OZ//

FEB 9/WITH SILVER DOWN $0.19 TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV/: MASSIVE WITHDRAWAL OF 17.882 MILLION OZ FROM THE SLV///INVENTORY RESTS AT 636.844 MILLION OZ//

FEB 8/WITH SILVER UP $0.53 TODAY: A HUGE PAPER WITHDRAWAL OF 4.451 MILLION OZ FROM THE SLV// //INVENTORY RESTS AT 654.726 MILLION OZ//

FEB 5/WITH SILVER UP 70 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 659.278 MILLION OZ

FEB 4/WITH SILVER DOWN 0.54 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A PAPER WITHDRAWAL OF 10.079 MILLION OZ FROM THE SLV..//INVENTORY RESTS AT 659.278 MILLION OZ//

FEB 3/WITH SILVER UP 38 CENTS TODAY: A MIND NUMBING: 56.784 MILION OZ “DEPOSIT” INTO THE SLV at 3 pm AND A WITHDRAWAL OF 7.99 MILLION OZ FROM THE SLV AT 5 PM//WITH THESE CHANGES IN SILVER INVENTORY AT THE SLV INVENTORY RESTS AT 669.357 MILLION OZ//

FEB2//WITH SILVER DOWN  $2.81 TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: AN UNBELEIVABLE DEPOSIT OF 18.627 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 620.563 MILLION OZ//

FEB 1/WITH SILVER UP $2.56 TODAY: A FAIRY TALE DEPOSIT OF 34.419 MILLION OZ INTO  SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 601.936 MILLION OZ//

JAN 29/WITH SILVER UP 58 CENTS TODAY: A HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 4.366 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 567.517 MILLION OZ//

JAN 28/WITH SILVER UP 44 CENTS TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.393 MILLION OZ//INVENTORY RESTS AT 571.883 MILLION OZ/

JAN 27/ WITH SILVER DOWN 10CENTS TODAY; A HUGE CHANGE IN SILVER INVENTORY AT THE SLV.: A XXXWITHDRAWAL OF 3.022 MILLION OZ OF IMAGINARY SILVER// INVENTORY RESTS AT 573.277 MILLION OZ/

JAN 26/WITH SILVER UP 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 576.299 MILLION OZ///

JAN 25/WITH SILVER DOWN 5 CENTS A HUGE CHANGE IN SILVER INVENTORY: A DEPOSIT OF 2.044 MILLION XXXXOZ INTO THE SLV// INVENTORY RESTS AT 576.299 MILLION OZ./.

 
 
XXXXXXXXXXXXXX
 
 
 
 
 
FEB 10/2021

SLV INVENTORY RESTS TONIGHT AT

 


 


636.844 MILLION OZ

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

ii) Important gold commentaries courtesy of GATA/Chris Powell

Mining is the major industry in Elko and the town folk are resisting government’s efforts to raise  mining taxes

(Jeremias/Deseret News/Salt lake/GATA)

Elko resists drive by Nevada’s sinking gambling industry to raise mining taxes

 
 Section: 

 

Life in a Gold-Mining Town

By Sofia Jeremias
Deseret News, Salt Lake City
Monday, February 8, 2021

ELKO, Nevada — In late January, snow dusts the open land as the backs of cattle grazing peek out of the scrubland that surrounds the section of Interstate 80 crossing Nevada.

The road is straight and flat, cars traveling to Salt Lake City, Utah, or West to the Sierra Nevadas speed by at 85 or 90 miles per hour while the big rigs that dominate the highway keep at a more respectable 80 — the official speed limit.

This region of basins and ranges, of pinyon juniper forests perilously clinging to mountain passes, is defined by a sense of emptiness, sameness.

People stop in the towns lining I-80 to fill up their gas tank, eat a quick bite, and then keep driving.

In this city of roughly 20,000 people at 5,000-foot elevation, locals would prefer you keep on driving. Unlike Las Vegas or Reno, tourism is not the biggest industry in town, and that’s fine by the people of Elko — where gold mining rules the economy.

Although the state as a whole has been hit especially hard by the economic fallout of the pandemic, in Elko people are still working, restaurants are bustling, and aside from the rules mandated by Democratic Gov. Steve Sisolak, life is normal — a state of reality that can be disorienting for those arriving from harder hit regions. …

… For the remainder of the report:

https://www.deseret.com/indepth/2021/2/8/22249143/why-nevada-lawmakers-s…

.END

Stefan Gleason comments on precious metals can generate positive real returns despite the constant whacking

Stefan Gleason/MME/GATA

Stefan Gleason: How precious metals generate positive real returns

 
 Section: 

 

By Stefan Gleason
Money Metals Exchange, Eagle, Idaho
Monday, February 8, 2021

One of the most bullish backdrops for precious metals is an environment of negative real interest rates – that is, when bonds and cash yield less than the inflation rate.

With inflationary pressures picking up and the Federal Reserve showing no signs of lifting its benchmark rate anytime soon, real short-term rates could fall even further into negative territory in the months ahead.

Long-term yields, however, have been moving slightly higher in nominal terms.

Higher bond yields have helped lift the U.S. Dollar Index and restrain gold and silver prices so far in 2021.

The 30-year yield rose to nearly 2% on Friday. While still quite low historically, a breakout above 2% could be psychologically important for markets.

The Fed has long spouted a 2% inflation target. It now aims to engineer a slight overshoot for an indefinite period. (And don’t forget that the government-reported inflation rate underreports true inflation. A 2% rate generally means we have 4% or higher inflation in the real economy.)

But if bond yields overshoot inflation, that would defeat the central bank’s purpose. One of the Fed’s goals is to help the U.S. government and other large debtors steadily chip away at their real obligations. …

… For the remainder of the analysis:

https://www.moneymetals.com/news/2021/02/08/return-potential-of-precious…

end

Legislation in Idaho allows their state treasurer to invest in gold and silver

(Associated Press/GATA)

Legislation would let Idaho state treasurer invest in gold, silver

 
 Section: 

 

By Keith Ridler
Associated Press
via The Island Packet, Bluffton, S.C.
Tuesday, February 9, 2021

BOISE, Idaho — Legislation to allow the Idaho treasurer to invest in gold and silver that must be physically stored in Idaho headed to the full House on Tuesday.

The House State Affairs Committee approved the legislation that Republican Rep. Ron Nate said is a great way to protect against inflation.

“With new concerns about financial instability, it makes sense for investors, and it makes sense for states, to turn to real assets, especially in terms of precious metals, to protect investments of their funds,” he told the committee.

Opponents said that precious metals as an investment are volatile, and there are much better investments to protect against inflation. The opponents also said it will cost money to get the gold and silver to Idaho and then have ongoing costs to store it in a safe place. …

… For the remainder of the report:

https://www.islandpacket.com/news/business/article249134130.html

end

This is why we continually have raids as the BIS is desperately trying to cover its high 523 tonnes of gold swaps. A must read..

Robert Lambourne/GATA

Robert Lambourne: BIS gold swaps fall slightly in January but remain high

 
 Section: 

 

By Robert Lambourne
Tuesday, February 9, 2021

The recently reported January statement of account of the Bank for International Settlements —

https://www.bis.org/banking/balsheet/statofacc200131.pdf

— discloses that the bank’s use of gold swaps decreased by an estimated 22 tonnes to around 523 tonnes, which is still close to the record high reported at the end of December.

Hence in a month that saw a decline of about $50 in the gold price, from $1,898.60 at December 31, there was a relatively small decrease in the use of gold swaps by the BIS. As Table B below highlights, the BIS seems to trade significant amounts of gold swaps on a regular basis.

To put this into context, the current volume of gold swaps remains larger than the 504.8 tonnes of gold held by the European Central Bank and about 89 tonnes less than the reported gold reserves of the tenth largest national gold holding, the 612.4 tonnes of the Netherlands.

No explanation for this continuing high level of swaps has been published by the BIS. Indeed, no comment on the bank’s use of gold swaps has been offered since 2010. (See below.)

This gold is supplied by bullion banks via the swaps to the BIS. The gold is then deposited in BIS gold sight accounts at major central banks, such as the Federal Reserve.

The BIS’ use of gold swaps and derivatives has been extensive so far this year, with the level reported in recent months being the highest since August 2018, as highlighted in Table B below. By contrast, in May 2019 the bank was exposed to only 78 tonnes in swaps.

As can be seen in Table A below, the BIS has used gold swaps extensively since its financial year 2009-10. The January 2021 estimate of the bank’s gold swaps (523 tonnes), like the record high seen in December 2020, remains higher than any level of swaps reported by the BIS at its March year-end since March 2010.

Based on a review of the bank’s annual reports, it seems that the BIS was not involved in gold swaps for at least 10 years prior to 2010.

Table A

Swaps reported in BIS Annual Reports

March 2010 … 346 tonnes
March 2011 … 409 tonnes
March 2012 … 355 tonnes
March 2013 … 404 tonnes
March 2014 … 236 tonnes
March 2015 ….. 47 tonnes
March 2016 …… 0 tonnes
March 2017 … 438 tonnes
March 2018 … 361 tonnes
March 2019 … 175 tonnes
March 2020 … 326 tonnes

—–

The BIS rarely comments publicly on its banking activities, but its first use of gold swaps was considered important enough to cause the bank to give some background information to the Financial Times for an article published on July 29, 2010, coinciding with publication of the bank’s 2009-10 annual report.

The general manager of the BIS at the time, Jaime Caruana, said the gold swaps were “regular commercial activities” for the bank, and he confirmed that they were all carried out with commercial banks and so did not involve other central banks.

Hence it is likely that the recent level of gold swaps is the highest ever use of them by the BIS for at least 20 years. It also seems likely that the swaps are still all made with commercial banks because the BIS Annual Report has never disclosed a gold swap between the BIS and a major central bank.

The swap transactions potentially create a mismatch at the BIS, which conceivably ends up being long unallocated gold (the gold held in BIS sight accounts at major central banks) and short allocated gold (the gold required to be returned to swap counterparties). This possible mismatch has not been reported by the BIS.

The table below reports the estimated swap levels since August 2018. It can readily be seen that the BIS is actively trading gold swaps and other gold derivatives with some changes from month to month reported in excess of 100 tonnes in this period.

—–

Table B

Swaps estimated by GATA
from monthly statements of account

Month ….. Swaps
& year … in tonnes

Jan-20…… / 523
Dec-20….. / 545
Nov-20 …. / 520
Oct-20 …. / 519
Sep-20….. / 520
Aug-20….. / 484
Jul-20 ….. / 474
Jun-20 …. / 391
May-20 …. / 412
Apr-20 …. / 328
Mar-20 …. / 326*
Feb-20 …. / 326
Jan-20 …. / 320
Dec-19 …. / 313
Nov-19 …. / 250
Oct-19 …. / 186
Sep-19 …. / 128
Aug-19 …. / 162
Jul-19 ….. / 95
Jun-19 …. / 126
May-19 …. / 78
Apr-19 ….. / 88
Mar-19 …. / 175
Feb-19 …. / 303
Jan-19 …. / 247
Dec-18 …. / 275
Nov-18 …. / 308
Oct-18 …. / 372
Sep-18 …. / 238
Aug-18 …. / 370

* The estimate originally reported by GATA was 332 tonnes, but the BIS Annual Report states 326 tonnes. It is believed that this difference arose because the gold price used to calculate GATA’s estimate was lower than the price used by the BIS. GATA uses gold prices quoted by USAGold.com to estimate the level of gold swaps held by the BIS at month-ends.

—–

As noted already, the BIS in recent times has refused to explain the reasons for its activities in the gold market, nor for whom the bank is acting:

http://www.gata.org/node/17793

Despite this reticence the BIS is almost certainly acting on behalf of central banks in taking out these swaps, as the central banks are the BIS’ owners and control its Board of Directors.

This refusal to explain prompts some observers to believe that the BIS acts as an agent for central banks intervening surreptitiously in the gold and currency markets, providing those central banks with access to gold as well as protection from exposure of these interventions.

One possibility is that the swaps provide a mechanism for bullion banks to return gold originally lent to them by central banks when the bullion banks needed to cover shortfalls of gold. Some observers of the gold market have suggested that some gold held by exchange-traded funds and managed by bullion banks is sourced directly from central banks.

—–

Robert Lambourne is a retired business executive in the United Kingdom who consults with GATA about the involvement of the Bank for International Settlements in the gold market.

* * *

end

A first, Daniela Cambone formally of Kitco interviews for the first time Ted Butler on silver manipulation.

(Cambone/ted Butler GATA)

Strange days: Daniela Cambone interviews Ted Butler about silver market manipulation

 
 Section: 

 

10:40p ET Tuesday, February 9, 2021

Dear Friend of GATA and Gold (and Silver):

“Dogs and cats living together,” as they said in “Ghostbusters” — for today Daniela Cambone of Stansberry Research interviewed silver market analyst Ted Butler about silver market manipulation … for the first time in his 30 years complaining about it.

Butler discusses the huge amounts of silver reportedly bouncing around the exchange-traded funds lately, metal that, Butler says, seems to have been leased and effectively short-sold. The downward manipulation of the silver market, Butler says, is the best reason to own the metal, since the price suppression will have to end someday.

It’s strange, Butler says, that all other commodities are soaring but silver isn’t.

Cambone’s interview with Butler is 19 minutes long and can be viewed at YouTube here:

https://www.youtube.com/watch?v=gL0VfudSx3M

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

iii) Other physical stories:

JPMorgan again tries and fails to slam bitcoin. Their major problem, they cannot get their hands on real bitcoin to short.

(zerohedge)

JPMorgan Again Tries To Slam Bitcoin, Fails Spectacularly

 
TUESDAY, FEB 09, 2021 – 22:25

With Bitcoin hitting a new all time high again today, rising above $48,000 before easing back a little, it was clearly time for JPMorgan to publish its latest hit piece against the cryptocurrency.

In its now fourth attempt to talk down bitcoin in the past two months (see here for failed attempt #1attempts #2, and attempt #3), JPMorgan has published a new report, this time aimed at all those bitcoin fans who buy the currency because other major corporations or funds may follow in Tesla’s footsteps , and purchase millions (or billions) of the cryptocurrency because “while bitcoin got another boost with Tesla’s announcement this week, the 8% allocation of its cash reserves to bitcoin is unlikely to be followed by more mainstream corporates”.

We disagree completely not least of all because one month ago we predicted exactly that not only would Tesla buy bitcoin following the brilliant example set by Microstrategy, but that many more companies would follow in Elon Musk’s footsteps. As a reminder, this is what we said:

One such company which we are convinced will announce it is converting billions of its existing cash into bitcoin, is none other than Tesla, whose CEO Elon Musk was urged by MSTR CEO Saylor to make a similar move with Tesla’s money. And since Musk, already the world’s richest man thanks to the most aggressive financial engineering on the planet, has never been one to shy away from a challenge, we are absolutely confident that it is only a matter of time before Tesla announces that it has purchased a few billion in bitcoin.

But before we demolish the latest joke of an argument presented by JPMorgan, we would like to remind readers of the joke of a thesis that JPM laid out just over two weeks ago, when Bitcoin rose above $40,000 for the first time, and when the largest US bank once again tried to convince its clients that it would not go any higher. In a nutshell, the company warned that because bitcoin now correlates with risk assets, it does not provide “diversification” to investors who seek a safe haven from conventional risk exposure.

To this our counterargument was simple:

… so bitcoin sells off as much as or more than stocks do during risk off periods. But why is that any news? And why does JPM even care about bitcoin’s diversification abilities, when instead one should look at it from a very different lens: bitcoin – and all crypto – are merely extremely volatile, ultra-high beta assets which rise much more than stocks during times of massive liquidity injection and drop at or near the pace that stocks drop when liquidity is withdrawn. Over the long run, this means that bitcoin will always win. There is no advanced calculus that one needs to figure this out.

Indeed, if one want a truly diversified and safe asset one would just buy gold. But that’s not why anyone is buying bitcoin, least of all corporate CFOs and Treasurers, who have made their case for the crypto very clearly: in a world in which just under 1% of US GDP enters the market in the form of newly created central bank liquidity, bitcoin is becoming an asset that while not safe from high beta correlation to other risk assets, is certainly a hedge to not just infinite monetary dilution but to outright fiat and monetary collapse. Ironically, it was JPM itself that admitted this:

Relative to any other asset class or portfolio hedge, cryptocurrencies would uniquely protect portfolios against a simultaneous loss of faith in a country’s currency and its payments system, because they are produced and they circulate outside conventional and regulated channels.

Well… yeah, that’s exactly the point guys. And the in the biggest headscrather, JPM itself admitted what Elon Musk just did, namely that as insurance (or a lottery ticket) against dystopia, some exposure to these assets could be always justified irrespective of liquidity and volatility concerns.

Our conclusion was simple:

Well, in this insane world where everyone should be seeking insurance against “dystopia”, we would be delighted to own as much of the cryptocurrency as we possibly can, “irrespective of liquidity and volatility concerns”. So just like your boss back in 2017, thanks for making the decisive case for bitcoin yet again, John.

But the clearest and simplest reason why JPM was dead wrong is that since JPM’s latest hit piece was written on Jan 21, bitcoin is up a whopping 50% and anyone who shorted it on bitcoin’s latest “advise” has suffered terminal losses.

That particular JPM report was written by the head of the bank’s cross-asset strategy, John Normand. A similar bitcoin hitpiece was written just days prior by one of the bank’s quants, the author of the popular Flows and Liquidity newsletter, Nick Panigirtzoglou, whose argument was more technical: with bitcoin failing to breach $40K, CTAs, trend followers and momentum-chasing algos and quants would no longer pursue it. Needless to say that argument was also absolutely dead wrong because while momentum-chasing quants may or may not have been long, bitcoin did find enough marginal buyers to push it up from the $30,000 level to just shy of $50,000. Not only that, but in the process it forced short-covering amid what was until recently a record short base…

… with much more squeeze pain coming (incidentally those short bitcoin, are the same people who listened to JPM in the past three months when the megabank was bashing crypto at every opportunity). Which is sad because it was Panigirtzoglou that first came out with the (quite credible) forecast that bitcoin would hit $140,000 as it becomes the millennials’ “digital gold” and keeps rising until the value of gold and bitcoin reach rough parity. Clearly, since then JPM’s Greek quant got the infamous tap on the shoulder, although it remains unclear why: because he truly believes that bitcoin should be lower (why, when even his colleague Normand made the case that bitcoin is the ultimate “dystopia insurance”), or because JPM’s prop traders are hoping to get in and are eager to buy anything that JPM’s clients will sell.

In any case, fast forwarding to today, when the same Nikolas Panigirtzoglou switched places with John Normand to became the latest JPM banker tasked with sparking at least a model selloff in bitcoin. His argument: try to build a persuasive case against the latest prevailing narrative – as laid out yesterday by Mike Novogratz who in turn took it verbatim from us one month earlier, when we explained that this is the way bitcoin hits $100,000 – that an avalanche of companies will follow in Tesla’s footsteps and buy bitcoin. This is how the JPM quant lays out his argument:

Tesla’s announcement this week that it has invested $1.5bn in bitcoin or 8% of its corporate cash reserves surprised markets by the magnitude of the purchases and re-invigorated expectations that other corporates will follow with their cash reserves.

It may have surprise you, Nick, but our readers were warned one month in advance that this is precisely the next key catalyst that will send bitcoin much higher. As for expectations that “other corporates” will buy bitcoin, that’s precisely what they will do. But not according to JPM because…

… In our opinion, the main issue with the idea that mainstream corporate treasures will follow the example of Tesla is the volatility of bitcoin. The typical portfolio of a corporate treasury consists of bank deposits, money market funds and short-dated bonds. As a result, the annualized vol of a typical corporate treasury portfolio is around 1%.

This to JPM implies that even small allocations of 1% to bitcoin “would cause a big increase in the volatility of the overall portfolio. For example, if a corporate treasurer allocates 1% of her 1% vol portfolio to bitcoin, the overall portfolio volatility will rise from 1% to 8%. This is because of the large 80% annualized vol of bitcoin.”

On its surface this argument – which comes from the man who recently predicted that bitcoin would run out of buying power because it had somehow lost momentum when it was down for a day or two – is reasonable unfortunately it is also dead wrong, because no corporate treasurer is buying (or not buying) bitcoin because of its potential volatility. The reason why they would be buying bitcoin is also the main reason why corporate officers do anything: to boost their stock price. And as the case of MicroStrategy (MSTR), which was the first company to convert most of its cash into bitcoin demonstrates so vividly, there is a lot of stock price upside once companies load up on bitcoin.

In fact, we are certain that this is one of the two key reasons behind Musk’s decision to buy bitcoin, especially after he and MSTR CEO Michael Saylor had a conversation in late December, in which Saylor told Musk “If you want to do your shareholders a $100 billion favor, convert the $TSLA balance sheet from USD to #BTC . Other firms on the S&P 500 would follow your lead & in time it would grow to become a $1 trillion favor.”

While Panigirtzoglou clearly missed this exchange, Musk did not… and did precisely as instructed. And it’s only a matter of time before countless other companies do precisely as Musk has done, now that he has shown that it is perfectly acceptable to convert as much as 8% of one’s cash reserves into the cryptocurrency.

There is another reason why companies will want to buy bitcoin and it is precisely the one mentioned by the JPM quant, only for a diametrically opposite rationale. By having such a volatile asset on their books, whose mark-to-market swings have to be captured in the net income line, it gives companies enough of a diversionary buffer which, when applied to some creative accounting, will allow them to either always beat bottom line estimates, or otherwise blame any miss on “one-time” bitcoin volatility. Meanwhile, thanks to having bitcoin on their books, not only do CFOs stand to benefit greatly from its appreciation (see the price of MSTR), but it makes them publicly traded proxies for bitcoin.

Yes, in a country in which there is still no bitcoin ETF, companies who are loaded to the gills with bitcoin are a perfectly acceptable, DTCC-validated proxy for bitcoin exposure! It wouldn’t surprise us if Musk announced another $1.5 billion bitcoin purchase, and then another… as he hopes to make TSLA a company that becomes a publicly-traded proxy for bitcoin. And that’s why countless other companies will follow suit, perhaps even Apple, which RBC predicted yesterday could buy as much as $5BN in bitcoin as part of launching an “apple exchange” where bitcoin is one of the permitted currencies.

In short: buying bitcoin is a win-win for all companies involved.

* * *

Perhaps knowing in the back of his head that his latest attempt to hammer bitcoin will crash spectacularly (again), Panigirtzoglou concedes that his previous skepticism was wrong, and that perhaps he is wrong this time too…

there is no doubt that this week’s announcement changed abruptly the near-term trajectory for bitcoin by bolstering inflows and by helping bitcoin to break out above $40k. This reduces one downside risk that we saw previously with bitcoin, i.e. the idea that if its price fails to break out above $40k, the momentum signals would keep decaying till the end of March, inducing further unwinding by momentum traders. The opposite is now happening.

Yes, Nick, precisely the opposite of what you predicted is now happening. And we suggest you get used to saying that if you plan on continuing to bash bitcoin. As for what this particular “opposite” is…

With bitcoin breaking out above $40k, momentum traders are forced to amplify the current up move by rebuilding their long bitcoin  futures positions.

Not only that but those shorts who built up a record bearish position in bitcoin futs as recently as the end of 2020 are now forced to cover at ever higher prices in a market in which the bitcoin float keep shrinking day after day (because every incremental institutional purchase just leaves less tokens freely traded). JPM admits this as well:

Indeed, our position proxy based on CME bitcoin futures, the preferred vehicle of momentum traders and other speculative investors, saw a sharp almost $1bn increase this week pointing to intense buildup of futures positions.

Obviously, the above observation does not help his case, so the JPMorganite needs to goalseek at least one argument in his behaf which he did by pulling the “flow” pace in the GBTC (grayscale bitcoin trust), the closest thing to an ETF, and which according to the JPM quant has seen a much “subdued” inflow of “$300m per week relative to the torrid $500m per week pace seen in December.” This to Panigirtzoglou suggests that “the additional flow impulse that helped bitcoin to break out above $40k came from more speculative institutional investors like those behind bitcoin futures rather than the ones behind the Grayscale Bitcoin Trust.”

Well that… and also major corporations like Tesla, which bought bitcoin outright and not via the GBTC and in fact, the whole point of the argument is that as more companies buy bitcoin – as in tokens, not trusts or paper futures – they themselves become bitcoin proxies for others.

In fact, we are shocked that Panigirtzoglou fails to grasp this simplest counterargument to his entire narrative. It’s shocking because even retail investors now get it, as the JPM analysts points out as well:  “In addition, there appears to have been an increase in the flow impulse by retail investors also this week, as suggested by the spike in volumes at itBit i.e. the exchange via which retail purchases via Paypal are routed.”

So momentum chasers are buying, Elon Musk is buying, retail is buying, companies such as MSTR buy it and see their stock price explode 10 fold but… other companies won’t buy it. Well, that’s pretty much the gist of JPM’s argument:

In all, while bitcoin got another boost with Tesla’s announcement this week, the 8% allocation of its cash reserves to bitcoin is unlikely to be followed by more mainstream corporates.

At this point it makes the most sense to just agree to check back in a month and see just how off the JPMorgan strategist was… again. Amusingly, at the very end of his note, the quant himself realizes that his entire argument is as hollow as the Marriner Eccles building, and does a “yes but…”:

Irrespective of how many corporates eventually follow Tesla’s example, there is no doubt that this week’s announcement changed abruptly the near-term trajectory for bitcoin by bolstering speculative institutional flows via bitcoin futures as well as retail flows. How sustained this week’s price surge becomes would depend in our opinion on whether less speculative institutional flows like those behind the Grayscale Bitcoin Trust follow suit.

No, Nick, you are painfully wrong again… just like you were wrong the last time you looked at your favorite GBTC as a proxy of… something… and predicted that bitcoin would drop. It did not. Furthermore, it’s not “irrespective of how many corporates follow Tesla’s example” – that’s precisely the ballgame right there. Once we get two more companies, then 4, then 8, well even quants know what sequences that is.

But while we have no question that many more companies – including blue chip names like Apple – will eventually buy bitcoin, the real question we have is when JPM’s biggest clients, like Bridgewater for example, will announce that they too have bought bitcoin. And Bridgewater will. And since Nick completely missed the Tesla purchase of bitcoin when he could have simply read our post on the matter (as a reminder, JPMorgan analysts, you guys are paid to predict the future, as in what will happen, not explain the past and yet that’s all you’ve been doing here for the past three months) we will be helpful and point Mr. Panigirtzoglou to what Ray Dalio said just two weeks ago:

“I and my colleagues at Bridgewater are intently focusing on alternative storehold of wealth assets and expect Bridgewater to soon offer an alt-cash fund and a storehold of wealth fund in order to better deal with the devaluation of money and credit that we consider to be a major risk and opportunity, and Bitcoin won’t escape our scrutiny.”

And the punchline:

It seems to me that Bitcoin has succeeded in crossing the line from being a highly speculative idea that could well not be around in short order to probably being around and probably having some value in the future….To me Bitcoin looks like a long-duration option on a highly unknown future that I could put an amount of money in that I wouldn’t mind losing about 80% of.”

Translation: in the next few weeks, Bridgewater will announce on its own or in response to external prodding…

… that it has bought billions worth of bitcoin, and that will be the catalyst that sends the crypto above $50,000, $60,000 or perhaps even $100,000. Meanwhile, JPM will still be looking at the GBTC and scratching its head wondering how it could give its clients such terrible advice… again.

end
URANIUM
 

Uranium Stocks Soar To 6 Year Highs On Blowout Cameco Earnings, Hugh Hendry Reco

 
WEDNESDAY, FEB 10, 2021 – 10:00

The recent surge in Uranium stocks continued this morning after Cameco smashed Q4 estimates and provided positive sector outlook.

Cameco, which last week jumped on what a TD Securities analyst said was a residual Reddit short squeeze, reported 4Q adjusted EPS C$0.12, smashing the estimated loss/share of C$0.02.More importantly, the company – which is the operator of the largest uranium-producing mine in the world, Cigar Lake in Saskatchewan – said that heading into 2021, it remains positive about the long-term fundamentals for the uranium market, citing focus on electrification globally and Biden administration support for nuclear power. It added that demand for nuclear power is growing for traditional and non-traditional uses.

“These are the fundamentals that give us growing confidence the uranium market will undergo a transition similar to the conversion and enrichment markets,” CEO Tim Gitzel said.

On the other hand, Cameco said that its Cigar Lake production remains suspended due to Covid-19 pandemic, resulting in uncertain production plan for 2021, and expects to incur C$8 million to C$10 million per month in care and maintenance costs. Paradoxically, this remains positive for the industry as it means there is far less supply which in turn is pushing prices higher, and lifting stocks.

The strong earnings followed a note from Bank of America published in early February according to which nuclear reactor closures in 2021-2030 could be delayed to beyond 2030, which would lead to “an additional 26Mlbs of global uranium (U3O8) demand over that period.”

The uranium sector was further buoyed by a tweetstorm from iconic investor Hugh Hendry, who on Sunday tweeted “A lot of you are invested in uranium. I commend you. I wish I was. Uranium is the rockstar of commodities. It doesn’t mess around – bull and bear markets are of epic proportions.

To our readers, Hendry said nothing new, as we have previously repeatedly laid out the bullish case for uranium stocks in general, and Cameco (CCJ) – which controls the world’s largest high-grade uranium reserves and low-cost operations and is one of the largest global providers of the uranium fuel – in particular (here, herehere and here),

There was some actual news yesterday when Power Magazine reported that Honeywell announced its plans to reopen its sole US uranium plant (i.e., Metropolis Works in Illinois – i.e., the US’ sole uranium conversion facility).

“As the only domestic uranium conversion facility, Honeywell’s Metropolis Works facility has been an important national strategic asset, well-positioned to satisfy UF6 demand both in the U.S. and abroad,” the company said on Tuesday.

Commenting on this development, GLJ Research overnight published a note, stating that “with our model pointing to a sizeable deficit in uranium supply emerging in 2020 – driven by near-record-low uranium spot prices, as present, which has rendered the bulk of the world’s uranium supply loss-making – any spike in demand for uranium substrate would, we believe, result in substantially higher prices (our bull thesis on the global uranium space is supported, in part, by the fact that uranium demand is largely inelastic to price [i.e., utilities will buy, no matter what the price]).”

The conclusion:

The Uranium sector supply/demand balance is the tightest we’ve seen since pre-Fukushima. Furthermore, producers who account for over 50% of global supply are keeping capacity at bay for the sole purpose of driving Uranium prices higher. When you add to this the Uranium stocks are now gaining attention from ESG investors due to their low GHG footprint and quintessential role as a clean energy alternative, we see the set-up for incremental/new Uranium investments as opportune. Under this backdrop, we prefer Cameco given its low-cost industry positioning and solid balance sheet – Cameco currently boasts a cash-to-debt ratio of 79.5%, which was enabled by the company fortifying its balance sheet during the most recent downturn.

And on the back of CCJ’s blowout earnings, the Hugh Hendry reco, the growing industry optimism and rumbling that there may be an ESG push behind the scenes, it is now wonder that the uranium sector is surging this morning, with CCJ surging 5.7%, rising above $16 to a six year high, with UUUU +4.7%, UEC +5%, and DNN +8%.

end

Platinum on the rise:

LAWRIE WILLIAMS: Gold, Silver and Platinum all on the up

Last week’s volatility in the precious metals markets – presumably in part due to the aftermath of the GoldStop, and other short-sold stocks, price surges in the equities markets – seems to have been replaced by something of an upsurge in gold, silver and platinum prices so far this week. The initial success of the short squeeze on some equities, in turn, led to the relatively seemingly mostly unsuccessful tilt at similar attacks on the short positions in silver in particular. All the precious metals, after the silver attacks had been repulsed, had been subsequently marked down, but now seem to have been making something of a recovery. Platinum in particular has risen sharply and gold and silver are also up, although palladium seems to have been left out of the upsurge – but is potentially the most volatile of all.

Whether this is the start of a general precious metals price recovery still remains to be seen. Silver and platinum have both gained in price since the beginning of the year – the latter significantly so – but gold has been somewhat in the doldrums losing around $60 so far in the first six weeks of the year.

How does all this tie in with the more general expectation that precious metals prices will, for the most part, end the year higher. Our own prediction has been for gold to reach $2,225 some time in Q4, silver to reach $32.25 and platinum $1,285. We also predicted palladium would be at around $2,175 in Q4 – somewhat below its current price which may prove to be a miscalculation should sales of light gasoline (petrol) powered automobiles pick up. Given that U.S. equities continue to mostly move higher, expectations are presumably that the world’s largest economy is doing rather better than we have been anticipating. Nevertheless we still do see a major equities crash ahead, but the way things are going this may only come further into the future than we had been predicting.

Silver and platinum both appear to be on track to meet our Q4 price targets – indeed platinum is running well ahead – but gold seems to have been underperforming so far. But we would also point out that it’s still early days yet. We are only into the second week of February so there is plenty of time for these target prices to be reached, or even perhaps exceeded – and as I write gold does seem to be making something of a recovery, but still has a long way to go to even catch up with its 2020 high point achieved back in August.

There are, of course, some contrary views out there. Harry Dent, for example in a couple of video interviews, has been predicting a huge equities market crash, occurring as soon as April, citing the enormous central bank inspired global debt build-up as the trigger for the market meltdown. He sees gold falling back quite drastically too – perhaps by as much as 50% – somewhat less than the 90% fall he is predicting for equities – and he’s even more pessimistic on silver and bitcoin prices too. Let’s hope it doesn’t come to that. If it does occur we will be in a depression to more than match that of the 1930s.

Our own prediction has indeed been for what we see as an inevitable sharp fall in equity prices at some time in the future given the Covid-19 impact on global economies. Current equity market strength seems to deny the fact that a huge number of businesses have been decimated by the pandemic and millions of people thrown out of work. But we are also seeing some sea-changes in investment activity with a huge new group of mostly younger investors impacting the markets in ways the traditional investment community had never reacted. This influx of new young money, influenced by social media and no-cost online investment brokerages, may well be sufficient to counter any tendency towards massive market falls. If the markets don’t crash then precious metals should meet our Q4 targets, and perhaps exceed them.

10 Feb 2021

-END

Platinum Soars 10% on Eskom Power Cuts, Gold Up $10 on Weak US Inflation

Wednesday, 2/10/2021 14:12

GOLD PRICES jumped $10 to new 1-week highs above $1854 per ounce on Wednesday after new US data said consumer- price inflation in the world’s largest economy slowed to 1.4% in January, just below analyst forecasts for ‘core’ inflation excluding volatile fuel and food costs.

Silver failed to follow, ticking up to $27.45 per ounce.

But its fellow industrial-precious metal platinum leapt once again, gaining over $70 from the start of Asian trade to touch $1253 at lunchtime in London – the highest spot bullion price since March 2015 – as the white metal’s No.1 mining nation South Africa was hit by electricity cuts from scandal-hit state-owned energy monopoly Eskom.

Inflation turned negative in January in world No.2 economy China, Beijing said earlier, with consumer prices deflating by 0.3% even as new bank lending tripled last month from December’s total.

Inflation expectations in the US Treasury bond market held however above 2.2% for the next decade, the highest since August 2014, while global stock markets extended their gains into the 8th session running, led by 2.1% gains in China’s CSI300 index.

With China’s financial markets now closed for the Lunar New Year of the Ox holidays until Thursday next week, Wednesday’s gains took the CSI almost one-half higher from this time last year, when the Covid-19 outbreak starting in central-city Wuhan began making headlines and crushing financial markets worldwide.

New York’s Nasdaq index of US-listed tech stocks comes a close second, gaining 45.5% from 12 months ago and setting new all-time highs on 55 of those 253 trading days, including the last 4 sessions.

Chart of Nasdaq Composite vs. Dollar gold prices. Source: St.Louis Fed

“The platinum market remained in deficit in 2020,” says technology specialist Johnson Matthey in its new PGM Market Report, “with sharply lower supplies, and strong investment demand.

Platinum’s shortfall of supply over demand came even as autocatalyst consumption “plunged by 22%, with steep falls in European diesel car production,” says JM.

Sinking to 2002 levels in last March’s Covid Crash across all financial markets, platinum prices traded 10.6% higher for the week so far after South Africa’s struggling power utility Eskom imposed a fresh round of electricity cuts – extending a run starting last Saturday – on households and business, running from 1pm through to 6am Thursday local time.

“The mining industry is heavily reliant on electric output,” notes the precious metals team at French bank and London bullion market makers BNP Paribas, “and so is likely to suffer production slowness.

“That obviously translates into higher prices of PGMs today.”

Eskom is currently the subject of South Africa’s official Kondo enquiry into “state capture” by multi- national businesses aided by corrupt politicians, with global consultancy giant McKinsey agreeing in December to repay US$40m in fees to Pretoria and the People’s Assembly yesterday demanding answers over Eskom’s “fruitless and wasteful” spending on unfinished accommodation for its workers at the Kusile power plant, 70 miles north-east of Johannesburg.

Looking ahead to 2021, “PGM supply and demand are forecast to bounce back in a V-shaped recovery,” says Johnson Matthey’s new report.

“Autocatalyst demand will recover strongly on higher car output and stricter emissions limits for trucks in China. Industrial consumption will remain robust, with PGM use in chemicals [manufacturing] set to reach an all-time high.”

Shanghai gold prices meantime ended the fateful Year of the Rat at an $8 per ounce premium to London quotes, inviting new imports and showing a solid balance of demand over supply in the precious metal’s No.1 consumer market ahead of China’s week-long peak gold-buying season after 2020’s historic glut and discounts.

-END-

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

i) Chinese yuan  vs USA dollar/CLOSED DOWN AT 6.4513 /

//OFFSHORE YUAN:  6.4286   /shanghai bourse CLOSED UP 51.60 PTS OR 1.43%

HANG SANG CLOSED UP 562.53 PTS OR 1.91%

2. Nikkei closed UP 57.00 POINTS OR 0.19%

3. Europe stocks OPENED ALL MOSTLY RED EXCEPT ITALY/

USA dollar index DOWN TO 90.44/Euro RISES TO 1.2125

3b Japan 10 year bond yield: RISES TO. +.08/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 104.75/ 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:: 58.74 and Brent: 61.42

3f Gold UP/JAPANESE Yen DOWN CHINESE YUAN:   ON -SHORE CLOSED 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 -.43%/Italian 10 yr bond yield UP to 0.51% /SPAIN 10 YR BOND YIELD UP TO 0.15%…ITALIAN 10 YR BOND YIELD/GERMAN BUND: 0.94: DANGEROUS FOR THE ITALIAN BANKING SYSTEM

3j Greek 10 year bond yield RISES TO : 0.78

3k Gold at $1853.80 silver at: 27.50   7 am est) SILVER NEXT RESISTANCE LEVEL AT $30.00

3l USA vs Russian rouble; (Russian rouble UP 8/100 in roubles/dollar) 73.84

3m oil into the 37 dollar handle for WTI and 39 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 104.75 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 .8909 as the Swiss Franc is still rising against most currencies. Euro vs SF is 1.0802 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 0.43%

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 1.175% early this morning. Thirty year rate at 1.966%

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

6.  TURKISH LIRA:  UP  TO 7.05..

Futures Rise For 8th Day In A Row, Hit All Time High Ahead Of CPI, Powell

 
WEDNESDAY, FEB 10, 2021 – 7:58

Global shares continued their euphoric ways, rising for the eighth day in a row, reaching record highs as market sentiment was improved by the prospect of U.S. fiscal stimulus and vaccine rollouts. U.S. stock futures also rose to new all time highs, hitting 3,924 before paring some gains, suggesting a resumption of gains after a one-day break as earnings and optimism over improving virus trends helped support sentiment while investors looked to inflation data and a speech by Federal Reserve Chair Jerome Powell for clues on the pace of an economic rebound.

Tilray Inc. led gains in the premarket session, climbing 31% in an extension of Tuesday’s 41% surge after the company signed a deal to distribute medical cannabis products in the U.K. Eli Lilly and Co became the latest drugmaker to receive an emergency use authorization from the U.S. Food and Drug Administration for its combination antibody therapy to fight COVID-19. Its shares rose 2.1% in premarket trading. The reflation trade continued to be the main investment theme.

Closely watched CPI Data at 8:30 a.m. ET is expected to show U.S. consumer prices rose 0.3% in January following a 0.4% increase in December. But that is unlikely to have an impact on the Fed, which has signaled it would tolerate higher prices “for some time” as the economy climbs out of a coronavirus-driven recession. Powell will be speaking about the state of the U.S. labor market in a webinar at 2 p.m. ET.

Buoyed by hopes for a bigger Biden stimulus even as the Fed remains on hold for years, the MSCI world equity index was up 0.3% in morning trading, having touched new peaks earlier in the session.

European indexes strengthened after a shaky start, with the STOXX 600 up 0.2% and London’s FTSE 100 up 0.4%. Miners, banks and insurance names trade well, oil & gas, household & personal goods and real estate provide a drag. The Stoxx Europe 600 Energy index fell as much as 0.9%, declining more than any other sector in Europe, as oil trades steady after the longest run of gains in two years and Equinor drops following an unexpected 4Q loss. Equinor fell 2.1% after posting an adjusted net loss of about $550 million in 4Q, missing the average analyst estimate for a profit of $504 million. Here are some of the biggest European movers today:

  • Adyen shares surge as much as 12% to a record after results that beat analyst expectations, with brokers highlighting that the payments firm raised its long-term margin guidance to above 65%.
  • Natixis shares jump as much as 7.7% to their highest in almost a year after BPCE offered to buy out minority shareholders in the company’s listed investment-banking unit.
  • Genfit climbs as much as 49%, the most since Sept. 28, after previously disclosed data was published in the Journal of Hepatology late Tuesday.
  • The Stoxx Europe 600 Basic Resources Index (SXPP) rises as much as 1.7% as copper nears longest rally on record, while steelmakers get a boost from Thyssenkrupp’s earnings.
  • Heineken shares fall as much as 3%, their steepest decline in more than 7 weeks, after the Dutch brewer reported 4Q results that missed estimates and gave an outlook for 2023 that several analysts said was disappointing.

Earlier in the session, MSCI’s ex-Japan Asian shares index also broke above its previous high in January as Asian stocks rose for a fourth day, with the benchmark gauge up 0.7% extending gains after reaching yet another record high on Tuesday, although volumes dwindled ahead of the Lunar New Year holidays. The Hang Seng Index rallied 1.9%, with Tencent Holdings among the biggest boosts, after the company won Chinese regulators’ approval to roll out a blockbuster game. Equity benchmarks in China also jumped. China’s CSI 300 Index saw gains accelerate in Wednesday afternoon trade, rising as much as 2.3% to approach an all-time closing high. The index trades at 5,817.17 points as of 2:33 p.m. in Shanghai, that took it to about 1% from a record closing high of 5,877.20 set in October 2007.

Consumer discretionary and communication services were the best-performing sectors on the MSCI Asia Pacific Index, which climbed 0.7%. In Japan, automakers jumped on signs of an improving outlook. Honda Motor rallied 5.1% after boosting its operating profit target for the current fiscal year on Tuesday, while Nissan rose 3.7% after the company trimmed its loss forecast for the fiscal year. Toyota Motor gained 1.7% after raising its profit outlook by more than 50%. The Philippine Stock Exchange Index advanced for a fifth day, its longest winning run since November, amid optimism the nation may resume a gradual reopening in its capital next month if virus cases continue to stabilize. Equities also rose in Malaysia as the country eased movement restrictions after a month-long lockdown.

China’s consumer price index fell more than expected, but factory prices posted their first year-on-year rise in 12 months, suggesting gathering momentum in the industrial sector.

Recent stock gains stem from a combination of the market pricing in increased U.S. fiscal stimulus, as well as some relief that the retail trading frenzy in certain stocks appears to be over in the short-term, said Kiran Ganesh, multi-asset strategist at UBS.

“The prospects for fiscal stimulus in the U.S. seem to be getting revised upward … Now, Biden is talking about $1.9 trillion,” he said — around 9% of U.S. GDP. UBS expects that after negotiations with Republicans the stimulus will come to around $1.5 trillion. “There’s still plenty of excitement to get priced in around the stimulus,” he said. “The path of least resistance still seems to be upward at this stage.”

In rates, Treasuries were slightly cheaper across long-end of the curve ahead of 10-year new issue auction during U.S afternoon. Yields were cheaper by ~1bp across 10- to 30-year part of the curve, with gilts underperforming by ~1bp and S&P 500 futures up 0.3% at record highs. Following muted Asia session ahead of Thursday’s Japan holiday, gilts sagged in London trading into a 20-year auction. Refunding resumes with $41b 10-year auction at 1pm ET, follows Tuesday’s solid 3-year note sale; cycle concludes with $27b 30-year Thursday. In Europe, the benchmark 10-year German Bund yield was steady at -0.442%. Italian borrowing costs hit a one-month low on Tuesday as Mario Draghi made progress in his attempt to form a government.

In FX, the dollar was little changed as trading in Group-of-10 currencies was muted, with investors gearing up for the Lunar New Year holiday, which starts Thursday in some parts of Asia. The Bloomberg Dollar Spot Index erased an earlier decline to read little changed, while the New Zealand dollar underperformed.The euro was little changed at $1.2123, having reached its highest in nine days. Sweden’s central bank said the severity of the current crisis means it will take years before inflation is even close to its target, requiring continued “extensive” monetary support. EUR/SEK traded down at 10.0674, after hitting a session low of 10.0413 shortly before the decision amid foreign selling of the pair. JPY drops after local press speculation about the BOJ’s March policy review.

In commodities, oil prices extended their rally for the ninth consecutive day — the longest winning streak in two years — supported by producer supply cuts and expectations that vaccine rollouts will drive a recovery in demand. But Eric Vanraes, a portfolio manager at Eric Sturdza Investments, said bond and equity markets were too optimistic. Crude futures popped through Tuesday’s highs. WTI rises 0.5% near $58.75, Brent trades highs of $61.59 so far. Spot platinum outperforms other precious metals, rallying over 3.5%. Spot gold holds around the middle of Tuesday’s range near $1,842/oz, silver little changed. Base metals are well bid with the exception of LME tin; copper leads.

“There is a lot of optimism in markets about the end of the crisis. But nobody knows when that will be — we don’t want this scenario to take place but cannot totally exclude that later this year we could still be with this pandemic with the same problems of lockdowns,” he said.

Elsewhere, bitcoin was trading around $46,575 and Ethereum hit record highs.

Looking ahead, CPI data is due later in the session. Also in focus in a webinar in which the Fed’s Powell will speak about the state of the U.S. labour market at 1900 GMT.

“Markets will probably be looking out for any comments around inflation because that is something that is likely to rise quite substantially in the near term at least, because of year-over-year comparisons,” said UBS’s Ganesh. “Markets are going to be looking for reassurance that the Fed is not going to jump or overreact to a temporary period of higher inflation.”

Market Snapshot

  • S&P 500 futures up 0.4% to 3,919.25
  • MXAP up 0.8% to 217.70
  • MXAPJ up 0.9% to 730.84
  • Nikkei up 0.2% to 29,562.93
  • Topix up 0.3% to 1,930.82
  • Hang Seng Index up 1.9% to 30,038.72
  • Shanghai Composite up 1.4% to 3,655.09
  • Sensex down 0.2% to 51,235.30
  • Australia S&P/ASX 200 up 0.5% to 6,856.90
  • Kospi up 0.5% to 3,100.58
  • German 10Y yield rose 0.7 bps to 0.443%
  • Euro little changed at $1.2121
  • Brent Futures up 0.5% to $61.37/bbl
  • Brent Futures up 0.5% to $61.38/bbl
  • Gold spot up 0.3% to $1,843.41
  • U.S. Dollar Index little changed at 90.39

Top Overnight News from Bloomberg

  • One dose of the Pfizer-BioNTech vaccine offers two- thirds protection against coronavirus, data seen by the U.K. government suggests
  • The reflation trade has reached Japan. Global funds are driving yen interest-rate swaps to the highest level in almost two years as they position for a pick-up in the world economy. Long-end sovereign bond yields are also rising, albeit by a lesser degree
  • Reserve Bank of New Zealand Gov. Orr said to nation’s parliament’s finance and expenditure select committee that New Zealand economy is recovering but many risks “are still with us.” Adds he is concerned about the risk of sharp correction in the housing market and the harm this could do
  • The Bank of Japan’s current framework is working but adjustments to make policy more sustainable may be desirable, board member Toyoaki Nakamura says in a speech ahead of a March policy review
  • German Chancellor Angela Merkel wants a gradual reopening of stores and hotels next month, as long as the infection rate continues to fall and reaches manageable levels
  • The Bank of Italy’s Daniele Franco is emerging as a possible candidate to take over as the country’s next finance minister, as the race intensifies over who will be premier-designate Mario Draghi’s pick to start reviving the staggering economy
  • Oil was steady after the longest run of gains in two years as an industry report pointed to another decline in U.S. crude stockpiles
  • One dose of the Pfizer-BioNTech vaccine offers two-thirds protection against coronavirus, data seen by the U.K. government suggests. The data is due to be released within days. Eli Lilly & Co.’s combination antibody drug for Covid-19 was cleared for emergency use by U.S. regulators
  • Global funds are driving yen interest-rate swaps to the highest level in almost two years as they position for a pick-up in the world economy. Long-end sovereign bond yields are also rising, albeit by a lesser degree

A quick look at global markets courtesy of NewSquawk

Asian equity indices mostly traded with cautious gains as participants digested a heavy slate of corporate earnings, with the region kept tentative amid a lack of fresh macro drivers and heading into the mass holiday closures beginning tomorrow. ASX 200 (+0.5%) was led higher by outperformance in tech and with an improvement in Westpac Consumer Sentiment data adding to the constructive mood, although upside was capped by earnings with financials lacklustre after a decline in earnings from Australia’s largest lender CBA and with multi-national contractor CIMIC plunging despite returning to the black for the year, as it also reported lower revenues and that two executives were jailed in Qatar. Nikkei 225 (+0.2%) remained indecisive throughout the session due to a mixed currency and with newsflow dominated by earnings including automakers Toyota, Nissan and Honda which were boosted despite printing weaker 9-month results, as they all upgraded their FY guidance, while Japan Tobacco was heavily pressured due to a fall in profits and with the Co. planning job reductions. Hang Seng (+1.9%) and Shanghai Comp. (+1.4%) were positive following stronger than expected Chinese loans and aggregate financing data, but with the advances mainland initially limited after another PBoC liquidity drain in the last operation before the Lunar New Year holidays and following mixed Chinese inflation figures in which both CPI and PPI missed estimates although still showed the first increase to producer prices in 1 year. Finally, 10yr JGBs consolidated around the 151.50 level with prices attempting to plug the recent losses and avoid an extension to the current losing streak which matched the 2003 record of 10 consecutive declines yesterday. Nonetheless, JGBs lacked firm direction amid the indecisive risk tone in Tokyo and with stronger demand in the enhanced liquidity auction for longer-dated government bonds failing to spur prices.

Top Asian News

  • Up to a Million People Fleeing Hong Kong Might Suit China Fine
  • Hong Kong to Reopen Venues, Relax Distancing Rules as Cases Drop
  • Chinese Courier SF to Take Over Kerry Logistics for $2.3 Billion
  • Pimco Sees Risk in Premature Calls on Pandemic and Inflation

European equities trade mixed (Euro Stoxx 50 +0.1%) as the broader gains seen at the open somewhat tempered down amid a lack of fresh catalysts and as the region tackles with a myriad of large-cap earnings. US equity futures meanwhile see modest gains across the four contract – ES (+0.4%), NQ (+0.5%), YM (+0.4%) and RTY (+0.5%) ahead of US CPI and a busy central bank slate with Fed Chair Powell, ECB President Lagarde and BoE’s Bailey part of the line-up. Meanwhile, the overall narrative remains little changed as earnings take focus in the absence of fresh impetus. Sectors are also mixed in early trade with no real risk profile portrayed. Energy lags its peers despite elevated oil prices, likely on the back of Equinor (-0.2%) whose earnings included a surprise Q4 adj. net loss following net impairments of USD 1.30bln and a write down of USD 0.98bln related to the Tanzania LNG project. On the flipside, Materials top the charts as base metals continue to grind higher on reflationary hopes coupled with a softer Dollar – with the likes of Glenore (+3%) Anglo American (+2.3%), Rio Tinto (+2.2%), and BHP (+1.7%) all deriving impetus from copper prices to keep the FTSE 100 (+0.2%) afloat. Meanwhile, the banking sector is propped up after SocGen (+3.0%) topped net income estimates and announced the payment of a cash dividend and a potential Q4 share buyback programme in accordance with the ECB’s guidance. Interestingly, the group noted that “Fixed Income & Currency activities were hit by a slowdown in client activity, in rate activities and the compression of short-term financing spreads in financing activities” – highlighting somewhat of a dichotomy vs its US peers. ABN AMRO (-3%) bucks the banking trend post-earnings after the group proposed no dividend for 2020 and foresees the COVID-19 impact persisting into 2021. In terms of individual movers, Maersk (-6%) resides at the foot of the Stoxx 600 as FY20 EBITDA missed forecasts and the group sees the current surge in demand as temporary and likely to normalise over the course of the year. Other earnings-related movers include Heineken (-2.3%), Ubisoft (-6%), Smurfit Kappa (+2.7%). Finally, ThyssenKrupp (+6%) is firmer after upgrading its 2021/21 outlook amid improved demand for material and automotive components.

Top European News

  • EU Fights to Restore Faith in Leaders After Several Blunders
  • Draghi Keeps Italy Guessing on Which Super Mario Will Emerge
  • BioNTech Starts Production at New Covid Vaccine Plant in Germany
  • Merkel Proposes Gradual Easing If Covid Infections Fall Further

In FX, it was almost a perfect 10 for the Swedish Krona that had extended gains vs the Euro through 10.0500 into the Riksbank, but then slipped back as the repo rate, QE and guidance all remained unchanged with only minor or subtle tweaks to the language and distribution of asset purchases for Q2. However, the Board does not expect the Sek to extend on 2020 gains and assumes the dampening effect of its appreciation on inflation will diminish as a result, and the cross is now hovering around 10.0600. For more details of the official Riksbank statements, our analysis and market reaction see the Newsquawk headline feed at 8.30GMT. Conversely, the Norwegian Crown remains elevated between 10.2510-2070 parameters against the single currency following much firmer than forecast inflation data, and especially y/y headline CPI that surged to 2.5% from 1.4% and vs expectations of 1.7% to keep the Norges Bank on a path, albeit lengthy, towards a degree of policy normalisation.

  • USD – The Dollar has descended into another lower range in DXY terms, but paring declines within a 90.528-249 band thanks to a loss of bullish momentum in certain counterparts and a reversion to bear-steepening along the US Treasury curve in wake of a strong 3 year note auction and the remaining 2 longer-dated tranches of the Quarterly Refunding. Prior to all that, the Buck may derive some direction from CPI data and after today’s 10 year supply the stage will be clear for Fed chair Powell’s virtual appearance at the Economic Club of New York where he will get chance to assess developments since January’s FOMC.
  • NZD/JPY/AUD/CAD – Kiwi weakness and underperformance look more cross flow related than due to anything NZ specific as Aud/Nzd rebounds further from recent lows to 1.0700+ in wake of an improvement in Westpac consumer sentiment and firm midpoint fix for the CNY by the PBoC. Indeed, the Aussie appears more resilient above 0.7700 vs its US peer than its Antipodean neighbour on the 0.7200 handle, as Usd/CNH probes 6.4200 irrespective the aforementioned broader Greenback bounce. Meanwhile, the Yen has retreated from a brief pop over half round number resistance at 104.50 on the back of a dovish BoJ article in Jiji suggesting that March’s policy review may be used to clarify that there is more room delve deeper below par in rates, but the Loonie is holding around 1.2700 with assistance via a rebound in crude prices before BoC’s Lane orates.
  • GBP/CHF/EUR – All managing to resist the brunt of the mini Dollar revival, as the Pound retains firm grip of the 1.3800 level, Franc hovers closer to 0.8900 than 0.8935 and Euro maintains 1.2100+ status despite fading into 1.2150 and reversing in sympathy with the Yen following comments from ECB’s de Cos underlining a willingness to adjust all instruments as needed and echoing that amply monetary stimulus is still required. Expect more of the same from President Lagarde and GC member Panetta, plus BoE Governor Bailey on behalf of the MPC.

In commodities, WTI and Brent front month futures continue on their upward trajectory in early European trade as the complex tracks the softer Dollar and the overall sentiment across the market whilst remaining underpinned by vaccine hopes, reflation and OPEC support. Prices also see underlying support from another surprise draw in Private Inventories (-3.5mln bbl vs exp +1mln bbl), as markets look ahead to the DoE numbers after the US CPI figures, with headline crude expected to show a build of 0.985mln bbls. From a demand perspective, yesterday saw the EIA reduce its 2021 world demand growth forecast by 180k BPD, but raised the 2022 metric by 190k – ahead of the IEA and OPEC reports both released tomorrow. Elsewhere, analysts at ING suggests that this week has seen some weakness in the physical market, particularly in the North Sea. “A number of physical cargoes have been on offer in the North Sea market, which has weighed on differentials”, the bank says, “This is in contrast to the tightness that had been seen in this market just earlier this month.” WTI now meanders around USD 58.50/bbl (vs low 58.13/bbl) whilst its Brent counterpart gains further above USD 61/bbl (vs low USD 60.90/bbl) to a current high of USD 61.57/bbl. Turning to metals, spot gold and silver trade on the front foot on account of the softer USD in the run-up to US CPI, with the former around USD 1840/oz ahead of yesterday’s USD 1848/oz high, whilst spot silver retains is USD 27/oz-status. Platinum prices meanwhile rose some 2.5% as it extended its gains above USD 1200/oz to the highest since 2015 of tighter supply forecasts. In terms of base metals, LME copper prices hit levels last seen eight years ago while Shanghai copper notched a nine-year peak amid the broader sentiment and US stimulus hopes. Similarly, Dalian iron ore futures hit a three-week high with additional support from an improved demand in the base metal for after the Lunar New Year holiday.

US Event Calendar

  • 8:30am: Jan. CPI Ex Food and Energy YoY, est. 1.5%, prior 1.6%; MoM, est. 0.2%, prior 0.1%, revised 0%
  • 8:30am: Jan. CPI YoY, est. 1.5%, prior 1.4%; MoM, est. 0.3%, prior 0.4%, revised 0.2%
  • 10am: Dec. Wholesale Trade Sales MoM, prior 0.2%; Wholesale Inventories MoM, est. 0.1%, prior 0.1%
  • 2pm: Jan. Monthly Budget Statement, est. – $150b, prior -$32.6b

DB’s Jim Reid concludes the overnight wrap

Markets paused for breath yesterday following the major risk rally at the start of the week, as investors continued to focus on whether the proposed US stimulus package risked being too big, and questions were also being asked as to how long the pandemic restrictions would last for. By the close of trade, the S&P 500 had fallen -0.11%, snapping a run of 6 successive gains and bringing an end to the longest winning run since August. In terms of the sector moves, tech stocks saw a slight outperformance, with the NASDAQ eking out a +0.14% gain to reach a fresh all-time high. Energy stocks lagged even as the massive rally in oil prices over the last week continued. Brent Crude rose +0.88% to stretch out its winning streak to 8 sessions while WTI (+0.67%) rose for a 7th straight day itself. For context Crude and WTI are up +17.93% and +20.28% YTD.

Overnight in Asia markets are back to their winning ways though with the Hang Seng (+1.74%), Shanghai Comp (+1.03%), Kospi (+0.61%) and Asx (+0.52%) all up. Japanese markets are mixed for second day in a row with the Topix up +0.36% while the Nikkei is -0.01% as we type after erasing deeper losses at the open. Japanese markets are likely weighed down by the news that the government is planning to keep the state of emergency in the 10 prefectures despite earlier reports that it was considering lifting it in some areas on Friday. Futures on the S&P 500 are up +0.36%. In terms of earnings, Twitter rose +3.46% in extended trading after sales topped estimates. Cisco fell -5.4% post market as it reported a big decline in enterprise sales. In terms of overnight data releases, China’s January CPI came in at -0.3% yoy (vs 0% expected) while PPI printed in line with expectations at +0.3% yoy.

Also overnight we’ve heard more news on how effective vaccines are in the real world as Bloomberg reported that early findings from the UK’s immunisation drive shows that one dose of the Pfizer-BioNTech vaccine reduced the symptomatic infection risk among patients by 65% in younger adults and 64% in over-80s. In addition, The Sun Newspaper cited the same study to suggest that 2 doses of the Pfizer vaccine saw protection rise to between 79% and 84%, depending on age and added that the AstraZeneca vaccine offers similar protection. Good news but it should be noted that the effectiveness of Pfizer’s/ BioNTech vaccine on these results is a bit less than that in the clinical trials but nonetheless these results will make a huge impact if confirmed and sustained. These early findings from the UK immunisation program are likely to be released publically in next few days.

Back to markets and yields have been a bit more subdued over the last 24 hours than of late with 10yr US Treasuries falling -1.4bps to 1.157%, which brought a run of 8 successive moves higher to an end. This was the longest run since September 2019. There was also a noticeable flattening in the yield curve, with the 2s10s curve down -2.0bps in its largest decline in over two weeks. There was a similar pattern in Europe, where core yields fell as those on 10yr bunds (-0.1bps) and gilts (-1.2bps) dipped slightly. Meanwhile, OATs (+0.1bps), BTPs (+0.5bps) and Greek bonds (+1.1bps) all saw modest moves higher. That said, at one point in trading, yields on 10yr Italian debt fell beneath the 0.5% mark for the first time ever, which is a world away from the spike in Italian yields we saw when the pandemic first began.

Even with the breather in risk assets yesterday the dollar fell back for a 3rd day running, dropping -0.54% and is now negative on a month-to-date basis. The drop in the dollar came as Congressional Democrats continued efforts to quickly enact the Biden Administration’s stimulus package. In the clearest signal so far that Democrats are ready to vote on a party-line basis, the White House Press Secretary said yesterday “I don’t think the American people are particularly worried about how the direct relief gets into their hands….The most likely path at this point is through a reconciliation process.” The question still remains how quickly the various parts of the bill will get through the House and Senate. We got an indication of that yesterday though as the Democratic Chair of the Senate Finance committee vowed to complete the bill by early March, while Speaker Pelosi said the House is aiming to vote on the full bill during the week of February 22.

In terms of the latest on the coronavirus, DB’s Robin Winkler published an excellent piece yesterday that summarised the current state of play on the vaccine front (link here). The piece makes for a refreshingly optimistic read, since Robin thinks that the market is still underestimating how positive the outlook is, at least for the advanced economies, and is confident that those countries will have vaccinated the most vulnerable 20-25% by April, with run-rates ramping up in the coming weeks as manufacturing capacity expands and new vaccines are added to the pipeline. Furthermore on the plus side, there’s no indication yet that protection against severe illness is compromised by the new variants, and that’s the key indicator when it comes to fatalities and hospitalisations that have overwhelmed health service capacity. And there are positive indicators that the political and scientific consensus is shifting towards reopening the economy once those most at risk are protected, rather than waiting for herd immunity.

On the news developments, there were further signs that the UK lockdown was having its intended effect, with the number of daily cases reported yesterday (12,364) at its lowest level in more than 2 months. The vaccine rollout continues apace here, and the government’s target is that by this coming Monday, a first dose of the vaccine will have been offered to the most at-risk groups, including the over-70s and the clinically extremely vulnerable, who together make up 88% of the fatalities. In turn, the vaccination of those groups raises the prospect of an easing of restrictions as Robin’s piece outlined, since you can hopefully make a big impact on the death and hospitalisation statistics by focusing on those most at risk. The overnight news mentioned above hopefully shows the data going in the right direction. However we will see if the “eliminate covid” argument aggressively resurfaces as plans to reopen build from next week onwards in the U.K.. The news on mutations could heavily influence this.

Elsewhere, Bloomberg reported that in a meeting with state premiers today, Chancellor Merkel would propose that the current restrictions remain in place until early March, which includes school closures. Meanwhile in Israel, Prime Minister Netanyahu said that over 97% of the coronavirus deaths in the last 30 days hadn’t been vaccinated. In the US, New York City officials said the most populous city in the country has now surpassed 1 million vaccine doses administered and supply should be increasing soon. The US government informed state Governors that vaccine allocations should increase by 5% for the next three weeks, but that the significant boost in supply will come from the Johnson&Johnson vaccine, which is being produced now.

Looking at yesterday’s data, the number of job openings in the US rose to 6.646m in December (vs. 6.4m expected), which sent the ratio of the unemployed to job openings to its lowest level since the pandemic began. Furthermore, the quits rate, which is the share of those who voluntarily left their job, rose to 2.3%, which is back where it was in February 2020.

To the day ahead now, and highlights include the US CPI reading for January and the monthly budget statement, as well as French industrial production for December. Central bank speakers include Fed Chair Powell, Bank of England Governor Bailey, and the ECB’s Hernandez de Cos and Panetta. Meanwhile earnings releases include General Motors, Uber and Coca-Cola.

3A/ASIAN AFFAIRS

i)WEDNESDAY MORNING/ TUESDAY NIGHT: 

SHANGHAI CLOSED UP 51.60 PTS OR 1.43%   //Hang Sang CLOSED UP 562.53 PTS OR 1.91%    /The Nikkei closed UP 57.00 POINTS OR 0.19%//Australia’s all ordinaires CLOSED UP 0.45%

/Chinese yuan (ONSHORE) closed DOWN AT 6.4513  /Oil UP TO 58.74 dollars per barrel for WTI and 61.42 for Brent. Stocks in Europe OPENED ALL MOSTLY RED//  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.4513. OFFSHORE YUAN CLOSED DOWN ON THE DOLLAR AT 6.4286 TRADE TALKS STALL//YUAN LEVELS //TRUMP INITIATES A NEW 25% TARIFFS FRIDAY/MAY 10/MAJOR PROBLEMS AT HUAWEI /CFO ARRESTED//CORONAVIRUS/PANDEMIC/TRUMP TESTS POSITIVE FOR COVID 19  : /ONSHORE YUAN TRADING BELOW 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/USA

This will get China deeply annoyed;  Two USA carriers are holding exercises in the South China Sea.  It is hard to imagine that Biden gave the go ahead for them to be held

(zerohedge)

Two US Carriers Hold Exercises In South China Sea As Beijing Blasts ‘Blow To Peace & Stability’

 
TUESDAY, FEB 09, 2021 – 19:05

China is condemning what it’s deemed a blow to “regional peace and stability” after no less than two US aircraft carrier strike groups have initiated coordinated military exercises and maneuvers in the South China Sea on Tuesday. It comes further after China blasted the latest provocative sail by of the USS John S. McCain destroyer near the China-claimed Paracel Islands last week, as well as repeat incursions of Taiwan air space by PLA bombers and jets.

The USS Theodore Roosevelt and the USS Nimitz carriers “conducted a multitude of exercises aimed at increasing interoperability between assets as well as command and control capabilities,” a US Navy statement indicated.

Image of the last time the US had dual carriers in the South China Sea, in July. Via Reuters

It marks the first such dual carrier operation in the South China Sea since the last one in July 2020, and represents the most serious posture of defense readiness signaled to Beijing since Biden took office.

“Biden is taking a strong stance to oppose China’s territorial claims in the disputed waters,” underscores Bloomberg in its reporting.

Early this month we noted that in a reflection of the new administration’s intent to generally shift its foreign policy priorities from the Middle East to South East Asia and China in particular, the USS Nimitz was called “home” and away from its Indian Ocean-Mideast region of responsibility, but not before stopping or “pausing” provocatively in “China’s backyard” (as Beijing sees it):

Pentagon press secretary John Kirby had initially announced at the start of this month that “USS Nimitz has left Arabian Sea and 5th Fleet after being deployed for over 270 days amid tensions with Iran,” while indicating it was  “currently in the Indo-Pacific.” So now we know why.

Chinese Foreign Ministry spokesman Wang Wenbin was quick to condemn the dual carrier “show of force” on Tuesday:

China will continue to take necessary measures to firmly safeguard national sovereignty and security and work with countries in the region to firmly safeguard peace and stability in the South China Sea,” according to the statement.

Initially the Nimitz had remained out at sea past its scheduled date to return home to its US West Coast base.

It had been in the gulf region and Indian Ocean at the tail-end of the Trump presidency amid ratcheting tensions with Iran, and as the former president reportedly mulled military action to prevent Iran from taking steps to achieve nuclear weapons.

With the Biden administration apparently looking for rapid de-escalation with Iran, perhaps considering that particular geopolitical hotspot to be much more manageable, it appears Beijing now fully occupies the attention of Washington and the Pentagon.

END

China’s economy is not doing too good:

(zerohedge)

China Economy Rolling Over Hard Ahead Of Lunar New Year

 
TUESDAY, FEB 09, 2021 – 19:45

First the good news: after a recent spike in “domestic” new Covid cases across China (as opposed to the laughable “imported” cases), Beijing’s measures of targeted lockdown and massive testing and tracing appear to be effective in containing the recent Covid outbreak in Northern China. The seven-day average of domestic cases fell to 27 as of 5 Feb from the peak of 111 on 18 Jan.

Shijiazhuang city of Hebei Province, one of the hotspots, lifted the lockdown on 29 Jan and started to resume work/production on 3 Feb. Meanwhile, on 30 Jan, the central government urged local governments not to ratchet up unnecessary travel barriers and social distancing measures in low-risk areas.

Naturally, it was Beijing’s prerogative to halt any local outbreak ahead of the Lunar New Year week which begins this Friday, and which would have made any containment during the peak travel period impossible. On the other hand, tightened travel controls will adversely affect nationwide economic activities around the LNY time.

And so, whether it is due to partial covid-linked lockdowns, due to China’s ongoing attempts to contain and deleverage the country’s massive debt load, or simply as a byproduct of China’s credit impulse which as we discussed last December, is now rapidly shrinking, but most real-time indicators of China are showing a sharp slowdown across the economy which appears to be rolling over in everything from traffic and mass transit, to manufacturing even as prices of many goods (especially food) rose sharply, in what some may call a pre-stagflationary outcome

First, a look at traffic volumes, subway and migration which have clearly slowed down.

Industrial production has seen a more modest hit, mostly in just the past few weeks, even as copper and rebar prices have soared.

On the services side, the picture has remained more robust with both property and auto transactions solid although the recent surge in food prices has sparked some concerns about stagflation.

Perhaps the most interesting chart is one tracking the recent liquidity squeeze which sent overnight and 7-day repo rates soaring in late January, only to ease substantially after the PBOC resumed net OMO injections, which have been in line with recent years. Meanwhile, both government and corporate bond issuance have picked up in the days ahead of the LNY.

Putting the above data together, Nomura’s China economist Ting Lu writes that “the latest Covid-19 wave should be brought under control in coming months, but at the cost of a slower services sector recovery and a pause in policy normalization.” The bank lowered its 2021 real GDP growth forecast to 8.8% (from 9%), trimming Q1, but raising Q2 on the resurgence of Covid-19 and government countermeasures, while also trimming forecasts for activity, inflation and credit indicators. This is why:

  • Activity: To fight the worst wave of Covid-19 since the initial outbreak, central and local governments have tightened social distancing measures, reimposed some lockdown measures and travel bans, and encouraged migrant workers to stay in their workplace cities for the Lunar New Year (LNY) holiday. We believe these measures will impair the recovery in the services sector, but may provide a small boost to industrial production and construction in South China, as workers would remain at their workplaces. To reflect this, we recently cut our Q1 real GDP growth forecast to 18.0% y-o-y from 19.0%, but raised our Q2 forecast to 8.1% from 7.9%, as we expect some pent-up demand to be released once these restrictions are eased. Our Q3 and Q4 growth forecasts remain  nchanged. As a result, we lowered our 2021 annual growth forecast to 8.8% from 9.0% earlier.
  • Policy: Due to the resurgence of Covid-19 and the related growth slowdown, we believe Beijing will maintain its pledge to avoid any sharp shift in policies and its pace of normalisation will thus be highly contingent on the Covid-19 situation. We expect the PBoC to maintain its “wait-and-see” approach in the near term before resuming its gradual policy normalisation. We believe the recent surge in interbank rates was partly due to some special factors linked to RMB appreciation and cross-border RMB settlement, and expect the PBoC to ramp up short-term liquidity injections to keep interbank rates largely stable around the LNY holidays, though it may not inject as much liquidity as in previous years as the new Covid-19 wave also reduces liquidity demand.

end

China seems desperate to kick start its economy: China injects a record amount of loans in January.

China Injects Record Amount Of Loans In January

 
TUESDAY, FEB 09, 2021 – 23:29

On one hand China is desperate to tell the world that this time it is taking deleveraging of the world’s largest and most indebted financial system seriously. On the other hand, it is doing this:

The chart shows that in January, China created a staggering, record 3.58 trillion in new yuan loans, a number which easily surpassed the previous record of 3.340 trillion set last January just as the Chinese economy shut down as a result of covid, when only gargantuan credit injections prevented a total economic collapse in the world’s 2nd largest economy. It’s almost as if only ever greater credit injections are keeping China alive.

Because it wasn’t just new loans: the broadest Chinese credit aggregate, Total Social Financing which includes new loans as well as shadow debt creation and bond issuance, also exploded to a monstrous 5.170 trillion yuan, which at today’s exchange rate is roughly $800 billion.

That’s right: in one month China injected roughly 6 months of QE into the economy. And to think of all the praise Stanley Druckenmiller heaped just a few days ago on China for its “fiscal sanity”.

Here are the details:

  • New CNY loans: RMB 3580Bn in January vs. consensus: RMB 3500bn. Outstanding CNY loan growth: 12.7% yoy in January; December: 12.8% yoy (12.1% SA ann mom).
  • Total social financing: RMB 5170bn in January, vs. consensus: RMB 4600bn.
  • TSF stock growth (after adding all government bonds) was 13.2% yoy in January, lower than 13.4% in December. The implied month-on-month growth of TSF stock accelerated to 12.0% (seasonally adjusted annual rate) from 7.8% in December.
  • M2: 9.4% yoy in January (1.0% SA ann mom) vs. GSe: 10.0% yoy, Bloomberg consensus: 10.1% yoy. December: 10.1% yoy (2.6% SA ann mom estimated by GS).

So yes, anyone who only looks at the M2 – like Druck – would be left with the impression that China is barely adding to the Chinese debt. That would be dead wrong as nothing could be further from the truth.

As Goldman summarizes, the sequential growth of total social financing soared in January from a significant slowdown in December, mainly on decent loans growth, less drag from shadow lending (especially a rebound in banks’ undiscounted acceptance bills), and recovery in corporate bond issuance. How to read this conflicting signal amid China’s overall posture of urgent deleveraging? Well, if one listens to how Goldman justified it, this is just a Golidlocks scenario – the garguantuan amount of debt could have been even more Gargantuan:

Overall, as suggested by the Q4 monetary policy report and December’s Central Economic Working Conference, the PBOC will avoid sharp tightening to jeopardize growth recovery, but will also likely avoid too dovish a policy to prevent risks (e.g., financial leverage).

Goldman’s main points:

  1. The sequential growth of TSF picked up to 12.0% mom annualized sa in January, from 7.8% in December, mainly on decent loans growthless drag from shadow lending (especially a rebound in banks’ undiscounted acceptance bills), and recovery in corporate bond issuance, despite a decline in net government bond issuance. In year-on-year terms, TSF stock growth moderated to 13.2% yoy in January. M2 growth decelerated to 9.4% yoy in January from 10.1% in December, in part due to larger-than-seasonality increase in fiscal deposits.
  2. Among major TSF components, new Rmb loans was decent in January, reflecting robust activity growth in manufacturing and construction suggested by January PMI data, and the government’s continued support for SMEs. Net increase in mid-to-long term loans to corporates was higher in January, and mid-to-long term loans to households also gained pace, although some news reports mentioned banks slowed the lending pace for mortgage loans. Banks’ undiscounted acceptance bills rebounded significantly in January (even after seasonal adjustment), partially due to lower interbank interest rates (though rates up in late January). Contraction in trust and entrusted loans also narrowed, in part due to smaller maturities. Corporate bond issuance recovered roughly to the average levels before the shock from bond defaults in November, while net government bonds issuance in January slowed notably. The government has delayed pre-allocation of part of local government special bond quota this year, and news reports seemed to suggest there remains a chance the government will pre-allocate part of quota to local governments.

There is another reason why China injected such a massive amount of debt in the economy: the real reason. Recall that interbank interest rates in late January soared leading to concerns that PBOC may tighten monetary policyWell, it was up to Beijing to ease nerves and to demonstrate that while rates won’t be cut, China can easily inject trillions into its economy, if needed.

It was needed, because the PBOC scrambled to inject enough liquidity to unfreeze the repo market (even as it still pretended that it was tightening conditions as part of its deleveraging) and as Goldman elaborates “in a monetary policy framework with policy rates increasingly emphasized as an anchor for market rates (DR007 in particular), this is more like a normalization of market rates to the average levels (fluctuating around OMO rates) prior to the shock from bond defaults in November, and accordingly narrow the deviation of market rates from the policy rate (OMO rate).”

And while a decent liquidity injection from PBOC and significant decline in interbank interest rates in December and early January helped corporate bond issuance recovery, it had also led to significant rise in leveraging in bond market. So to make sure the credit markets were well greased, China had no option but to flood even more new loans.

Goldman’s conclusion is that “as suggested by the Q4 monetary policy report and December’s Central Economic Working Conference, the PBOC will avoid sharp tightening to jeopardize growth recovery, but will also likely avoid too dovish a policy to prevent risks (e.g., financial leverage).”

Yawn. What the credit data really means is that Beijing continues to engage in a giant magic trick with the rest of the world, one where it pretends to shrink its debt even as it injects record amount of debt at the same time.

And yes, massive credit injections are all that really matter because on Wednesday, Chinese bank stocks outperformed in Hong Kong “after financial institutions offered a record amount of new loans last month” Bloomberg reported adding that half of the 12 biggest gainers Wednesday morning in Hang Seng Index are lenders, led by Bank of Communications rising as much as 4.3% while major banks also rally in mainland trading.

In other words, such an amount of debt was not expected, and should not have been expected if indeed China was doing as well as Beijing has been claiming.

In short: Beijing continues to lie about everything.

end

Demographically in China: a disaster! A collapse of newborn population plummeted 15% in 2020

(ZEROHEDGE)

“Collapse Of Newborn Population Is Really Here”: Births In China Plummeted 15% In 2020

 
TUESDAY, FEB 09, 2021 – 23:05

Preliminary numbers assessing China’s births in 2020 released by the country’s household registration system are setting off alarm bells for Beijing, suggesting a continued severe population decline, given the new numbers for last year show a whopping 15% decline in births from the year before.

“Concerns over the outlook for China’s population have grown after the number of newborns recorded in the country’s household registration system declined 15 per cent during a coronavirus-hit 2020,” South China Morning Post observes of the new numbers. “Last year, a total 10.035 million of newborns were recorded in the household registration system, known as hukou in China, down from 11.79 million in 2019, according to figures released by the Ministry of Public Security on Monday.”

 

AFP via Getty Images

While the hukou system only reveals preliminary information on total births across the population, it’s official demographic stats for COVID-impacted 2020 is expected to come out soon via China’s National Bureau of Statistics based on a once in ten year national census it recently conducted. As SCMP underscores it’s predicted that when total official stats do come out, expectations are for a further decline after previously 2019 saw “the lowest level since 1961” and down from 2018 as well.

China is the world’s most populous country with the number of people commonly estimated at just over 1.4 billion. When the current working-age population hits retirement, there are fears the decline in births trend will severely impact the world’s second largest economy.

This also given the latest official figures out of the National Bureau of Statistics show that some 18% of the population is already over 60, with this ageing demographic to grow to one-third of the entire population by 2050.

The SCMP report cited one prominent research economics professor to say the writing is on the wall. “The collapse of the newborn population is really here,” he warned, writing that:

“Although we cannot deduce the decline in the birth population in these regions as the annual decline in the country, we consider that idea of having two children is weak and the number of women of childbearing age has decreased, so we need not anticipate further that the birth population in 2020 will drop significantly compared with 2019. The collapse of the newborn population is really here,” said James Liang, a research professor of applied economics at the Guanghua School of Management, Peking University, in a blog post last week.

The obvious irony is of course that China is responsible for its own undoing on this front, given it’s now feeling the full impact of its draconian and dystopian/totalitarian “one child policy” which was enforced harshly and in effect from 1975 through 2015.

Statistic: Population distribution in China in 2019, by broad age group | Statista
Find more statistics at Statista

In 2016 and after couples were allowed to have two children, which the government began vocally encouraging, though it increasingly appears too little, too late.

Sensing the coming population and birth rate woes, the Communist-run People’s Daily in 2018 put out a rare full page editorial urging the following: “Giving birth is a family matter and a national issue too,” and warned that “the impact of low birth rates on the economy and society has begun to show.”

Thus seemingly overnight the central planners in Beijing went from punishing those who dared to have more children to then claiming bigger families were ‘patriotic’ as part of a national duty. Based on the latest preliminary numbers, it naturally doesn’t appear the population got the message in time.

end

4/EUROPEAN AFFAIRS

UK

UK Government is blocking genocide amendment passed by the House of Lords.

(Zhou/Epoch Times)

“UK Government Accused Of Playing “Parliamentary Skullduggery” To Block Genocide Amendment

 
WEDNESDAY, FEB 10, 2021 – 2:00

Authored by Lily Zhou via The Epoch Times,

The UK government has bundled the highly anticipated genocide amendment with a different amendment ahead of the Parliamentary vote on Tuesday afternoon, a move that’s been blasted as “shameful” and “parliamentary skullduggery.”

Former Conservative leader Sir Iain Duncan Smith has called the move a “sad tragedy.”

“The sad tragedy is that the Government has so engineered it that tomorrow the democratically elected [House of Commons] will not be able to vote on Lord Alton’s #GenocideAmendment which passed in the [House of Lords] with a majority of 171,” Duncan Smith wrote on Twitter on Monday.

“The Government has run out of arguments and is now using arcane procedural games which demean our democracy and the [House of Commons],” he wrote in another tweet on Tuesday.

The so-called “genocide amendment” to the UK’s post-Brexit trade bill (pdf) aims to stop and prevent the UK from doing bilateral trade with genocidal countries.

If passed, it gives UK courts the power to preliminarily determine whether a current or potential trade partner of the UK has committed genocide.

A previous version of the amendment—proposed by Lord Alton—had been defeated in the House of Commons by only 11 votes after 33 Tory MPs rebelled to support it.

The modified amendment won a two-thirds majority last week in the House of Lords, and there had been “significant and growing support in both houses,” according to Imran Ahmad Khan, chair of the All-Party Parliamentary Group for Foreign Affairs.

The version MPs will be voting on, however, is an alternative proposal backed by the government, which replaces Lord Alton’s amendment, bundled together with another Lords’ amendment. This amendment gives the power of reporting evidence of genocide to a “responsible committee.”

Duncan Smith has inserted an amendment to the replacement amendment, bringing the determination of genocide back to UK courts, but this means those who support the genocide amendment would also have to vote for the proposals backed by the government.

A number of supporters of the genocide amendment lashed out against the government’s move.

Conservative MP Nusrat Ghani said she was “bitterly disappointed” and “appalled.”

“Bitterly disappointed that Government in controlling the [House of Commons] agenda is denying MPs their ability to vote for the Genocide Amendment tomorrow!” she wrote in a tweet.

“Appalled at the Parliamentary games played over an issue as grave as Genocide.”

“We are sickened to find out that the Government has moved to prevent Parliament voting on the #GenocideAmendment tomorrow,” Rahima Mahmut, UK director of the World Uyghur Congress (WUC), wrote on Twitter.

The debates around the genocide amendment have been largely focused on the Chinese regime’s treatment to Uyghur Muslims in Xinjiang. The WUC on Monday obtained the first formal legal opinion on the Chinese regime’s treatment of Uyghurs, concluding that there’s a “very credible case” that the Chinese regime has committed genocide against the Uyghur people in Xinjiang.

“Make the argument for & against #GenocideAmendment, then put it to a fair vote. That would be the decent, right thing to do,” Benedict Rogers, co-chair of the Conservative Party Human Rights Commission, wrote on Twitter.

“Instead government changes the argument daily, lies, bullies & threatens supporters of amendment, then plays parliamentary skullduggery. Truly shameful!” he added.

The genocide amendment is designed to circumvent the international route for recognising genocide, which has been paralysed by China and Russia’s veto powers in the United Nations, and to cater for successive UK governments’ long-stated position that genocide has to be determined by a court.

In a statement emailed to The Epoch Times, a government spokesperson said that “the Government shares the grave concerns about human rights abuses in Xinjiang behind Lord Alton’s amendment, and understands the strength of feeling on this issue.

“However, these proposals could embroil the courts in the formulation of trade policy and international relations, and risked undermining the separation of powers.

“The Government has listened to members across the House and is backing the amendment put forward by the Chair of the Justice Select Committee, which has the support of a number of Select Committee chairs and backbenchers.

“It addresses the concerns raised on human rights issues and trade agreements and empowers Parliamentarians to take a stand on credible reports of genocide by a prospective trade partner, while placing a specific duty on Government to act.”

Duncan Smith on Monday posted a video on Twitter showing a montage of government officials saying a determination of genocide is a judicial matter.

END

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

IRAN/USA

Seems that Biden does not want to let up in pressure against Iran

South Front

Trump’s Maximum Pressure Campaign Lives On Under Biden’s Command

 
TUESDAY, FEB 09, 2021 – 22:05

Submitted by Southfront,

The Islamic Revolutionary Guard Corps received 340 new speedboats during a ceremony at the southern Iranian port city of Bandar Abbas.

The delivered speedboats are co-produced by the IRGC Navy and the Defense Ministry and are capable of carrying various types of missiles to attack enemy targets. The delivery took place alongside the celebration of the 42nd anniversary of the Islamic Revolution. These boats are to be actively used in the Persian Gulf, Sea of Oman, and the Caspian Sea.

The IRGC Navy is focused on smaller vessels, aimed at swarming a potential adversary. The newly-delivered speedboats were described as agile, maneuverable and equipped with radar-evading stealth technology.

Tehran is continuing to reinforce its positions and pursue its interests. This is prompted by the fact that US President Joe Biden’s vow to rejoin the Nuclear Deal turned out to be entirely hollow. Iran demanded that the sanctions imposed by the Trump Administration be removed, otherwise rejoining the deal meant nothing.

On February 8th, Biden confirmed that sanctions on Iran wouldn’t be lifted, with White House Press Secretary Jen Psaki saying that such a “big policy change” wasn’t planned.

To show some “reduction in pressure”, the USS Nimitz carrier strike group was pulled out of the region, in a signal that an escalation with Iran isn’t planned. That happened as Tehran, Moscow and Beijing announced they would hold joint naval drills.

In response, US Central Command’s Gen Kenneth McKenzie said that Iran was the “Main Driver of Instability”, in his first public address since Biden became president. McKenzie repeated a usual a US accusation against Tehran, claiming that for more than forty years it “has funded and aggressively supported terrorism and terrorist organizations.” The “maximum pressure” campaign is simply “on hold”, but is not canceled.

Iranian allies in the Middle East continue actively operating, hammering US interests and those of their allies.

US convoys continue suffering regular attacks in Iraq, with two being subject to attacks on February 7th. In Lebanon, Hezbollah said that it would continue targeting and downing Israeli drones and more. Israel’s lack of activity in the previous days is quite notable.

The most significant success is being achieved in Yemen, by the Houthis. The Ansar Allah movement is pushing the Saudi-led coalition back, as it destroyed ammunition depots and weapons in Marib. Riyadh also intercepted a swarm of suicide drones attributed to the Houthis, but there was no confirmation.

Saudi Arabia is also remaining active in airstrikes, and violating the al-Hudaydah ceasefire, but with few results to show.

US and allied interests are being pressured all around the Middle East, as the Biden administration refuses to turn its back on any of Trump’s “maximum pressure” policies. The withdrawal of the USS Nimitz CSG is a likely a welcome sign, but the sanction regime remaining, surely, spoils the party.

END

Iran

Iran has produced uranium metal (enriched) which is the core material for a nuclear reactor. This is amajor escalation and no doubt that Israel is getting ready to bomb this facility out of existence.

Zerohedge)

Iran Has Produced Uranium Metal In Major Escalation Of Nuclear Program: IAEA

BY TYLER DURDEN
WEDNESDAY, FEB 10, 2021 – 14:37

Western diplomats are deeply alarmed after a classified briefing given at the UN by the International Atomic Energy Agency (IAEA) on Wednesday, The Wall Street Journal reports, after some of the contents of IAEA findings which said the Iranians were intent on pursuing a major step toward nuclear weapons production had been leaked earlier last month. The new IAEA findings say Iran has now acted on its prior “threat” to produce uranium metal.

“In contravention of the 2015 nuclear accords, Iran has started producing uranium metal, a material that can be used to form the core of nuclear weapons, the United Nations atomic agency told members in a confidential report Wednesday evening,” WSJ reports.

The IAEA is alleging the small amount of uranium metal was produced by the first time on February 8 at the Isfahan nuclear facility.

The breaking WSJ report notes further:

The Iranian threat to produce uranium metal had alarmed Western diplomats because the material crosses over from uranium enrichment, which can be used for civilian purposes, and is a core component of nuclear weapons.

As we reported last month, Iran’s ambassador to the IAEA Kazem Gharib Abadi essentially admitted Iran is planning to take this significant step, however, he insisted at the time that the activities “related to the design of an improved type of fuel for the Tehran Research Reactor,” which is used for peaceful energy purposes.

IAEA said in the latest findings: “The Agency on 8 February verified 3.6 gram of uranium metal at Iran’s Fuel Plate Fabrication Plant (FPFP) in Esfahan.”

Here’s the Iranian IAEA official positively announcing intent to pursue uranium metal production last month:

The manufacture of uranium metal is prohibited under the terms of the 2015 Joint Comprehensive Plan of Action (JCPOA) nuclear deal, which Biden on the campaign trail had vowed to return to, but which has since been stalled as Washington is demanding Iran “return” to the deal’s stipulations first.

That Iran appears to have now accomplished uranium metal production appears a dramatic move aimed fundamentally at increasing leverage with Biden administration as each side demands the other comes back into conformity with the JCPOA first.

Tehran has since slammed White House ‘hypocrisy’ given it was the US side which clearly tore up the deal under Trump.

Iranian leaders have also of late gone so far as to say they’ll pursue a nuke “if backed into a corner”. It now seems Tehran now sees itself in that proverbial “corner”.

6.Global Issues

There is no way citizens will take a Covid vaccine every year. Ivermectin used prophylactally will suffice.

If one does get hit with the virus, no doubt the new Israel discovery of exosomes will stop the deadly effects of the virus.

(zerohedge)

J&J CEO Says Annual Covid Vaccine Needed “For Years” As MSM Warns Virus Will “Circulate For Decades”

 
TUESDAY, FEB 09, 2021 – 17:05

In recent days there has been a flood in good news on the covid front. Consider that a recent report from Bank of America, which notes that “COVID-19 hospitalizations continue to plunge” we read the following encouraging data points:

The number of people hospitalized with COVID-19 in the US has declined dramatically to 81,439, or 51,035 (down 39%) from the peak which occurred on January 5th – a rapid turn in the crisis. The decrease is broad-based (50 states + DC, except for AK, which saw a minimal 2-person increase over the past week).

The weekly percentage change in US COVID-19 hospitalized is consistent with the largest declines seen during the coronavirus crisis. Moreover the 7-day test positivity rate has declined to 7.2% from the 13.6% peak on January 8th. Since hospitalizations are lagged relative to time of infection,US coronavirus outbreaks peaked back in the second half of December.

Finally, the vaccine rollout in the US accelerated to more than 2 million doses per day over the weekend and a cumulative 41.2mn doses had been administered through February7th.

The recent widespread improvements prompted Goldman to get this close to declaring the all clear: in a Monday note from chief economist Jan Hatzius, he writes that “the global virus situation has improved significantly, with both new confirmed cases and the positivity rate down meaningfully since December.  It is still too early for a significant impact from vaccinations, so we would attribute the improvement to other factors such as new restrictions, greater caution in individual behavior, and perhaps partial herd immunity in some places.”

More notably, Hatzius notes that “the renewed improvement in the UK is particularly noteworthy because of the concerns about new variants, in this caseB117, which surfaced first there…. the UK’s response to its B117-heavy infection surge in December was similar to France’s response to its surge in October. The fact that both countries saw their infections decline in similar ways after the ELI increase suggests that B117 has not been a game changer, at least so far.”

So much for worries that mutant strains would render both the response strategy and vaccines moot.

And yet despite this impressive improvement in the pandemic, some are hinting that covid may be here to stay for a long, long time. Take the CEO of Johnson & Johnson, Alex Gorsky, who told CNBC that people may need to get vaccinated annually for Covid-19, Gorsky told CNBC the virus can mutate as it spreads causing it to have different responses to therapeutics and vaccines.

“Unfortunately, as [the virus] spreads it can also mutate,” he told CNBC’s Meg Tirrell during a Healthy Returns Spotlight event. “Every time it mutates, it’s almost like another click of the dial so to speak where we can see another variant, another mutation that can have an impact on its ability to fend off antibodies or to have a different kind of response not only to a therapeutic but also to a vaccine.”

“We’ll be getting a Covid-19 shot just like we would a flu shot. What that shot is going to be comprised of, I don’t think we know today. But I think we could all imagine a future where we’re living with this. But where we can keep the science at pace with the virus, so that we can keep on living our lives” Gorsky said.

Of course, the CEO of J&J – a company which stands to make billions from selling the covid vaccine year after year – has a clear conflict of interest and would like nothing more than to sell vaccines indefinitely… and to see Covid circulate within the population forever. After all, that would not only pump up JNJ’s stock price but the CEO’s compensation as well.

What is more troubling is that the narrative that covid will never actually go away is one that the mainstream media is starting to trumpet as well. As the WSJ reported earlier this week, while “vaccination drives hold out the promise of curbing Covid-19, but governments and businesses are increasingly accepting what epidemiologists have long warned: The pathogen will circulate for years, or even decades, leaving society to coexist with Covid-19 much as it does with other endemic diseases like flu, measles, and HIV.”

“Going through the five phases of grief, we need to come to the acceptance phase that our lives are not going to be the same,” said Thomas Frieden, former director of the U.S. Centers for Disease Control and Prevention. “I don’t think the world has really absorbed the fact that these are long-term changes.”

So does that mean masks and social distancing forever? Perhaps:

Endemic Covid-19 doesn’t necessarily mean continuing coronavirus restrictions, infectious-disease experts said, largely because vaccines are so effective at preventing severe disease and slashing hospitalizations and deaths. Hospitalizations have already fallen 30% in Israel after it vaccinated a third of its population. Deaths there are expected to plummet in weeks ahead.

But some organizations are planning for a long-term future in which prevention methods such as masking, good ventilation and testing continue in some form. Meanwhile, a new and potentially lucrative Covid-19 industry is emerging quickly, as businesses invest in goods and services such as air-quality monitoring, filters, diagnostic kits and new treatments.

Of course, it also means that while some zombie companies will exist only thanks to billons in periodic PPP bailouts, other companies will make unprecedented profits as they directly benefit from a perpetual pandemic.

More importantly, it will means constant media propaganda, because any time the administration needs to pass a multi-trillion stimulus – say when ratings sag – it can just crank up the panic dial to max and greenlight itself another multi-trillion fiscal boost which makes the economy ever more artificial and unable to survive on its own two feet absent constant government handouts.

Most importantly it means that tens of millions of people will become perpetual financial wards of the state, cementing any political system that promises constant handouts to all those who no longer have a chance of coping, or survival in a world where universal basic income – which is gradually becoming the norm – is pulled away.

end
 
Israel is getting close to herd immunity
Promising data re the variant
 
Lubell/Rabinovitch/Reuters/Jerusalem
(special thanks to Chris Powell for sending this to me)’

Vaccine vs variant: Promising data in Israel’s race to defeat pandemic

JERUSALEM (Reuters) – Israel’s swift vaccination rollout has made it the largest real-world study of Pfizer Inc’s COVID-19 vaccine. Results are trickling in, and they are promising.

 
 
Medical workers, some seen through a window of an observation room, wear personal protective equipment (PPE) as they work inside an underground ward treating patients with the coronavirus disease (COVID-19) at the Critical Care Coronavirus Unit at Sheba Medical Center in Ramat Gan, Israel February 8, 2021. REUTERS/Ronen Zvulun

More than half of eligible Israelis – about 3.5 million people – have now been fully or partially vaccinated. Older and at-risk groups, the first to be inoculated, are seeing a dramatic drop in illnesses.

Among the first fully-vaccinated group there was a 53% reduction in new cases, a 39% decline in hospitalizations and a 31% drop in severe illnesses from mid-January until Feb. 6, said Eran Segal, data scientist at the Weizmann Institute of Science in Rehovot, Israel.

(Graphic: Trends in COVID-19 infections and hospitalisations in Israel following vaccination – )

Reuters Graphic

In the same period, among people under age 60 who became eligible for shots later, new cases dropped 20% but hospitalizations and severe illness rose 15% and 29%, respectively.

Reuters interviewed leading scientists in Israel and abroad, Israeli health officials, hospital heads and two of the country’s largest healthcare providers about what new data shows from the world’s most efficient vaccine rollout.

The vaccine drive has provided a database offering insights into how effective the vaccines are outside of controlled clinical trials, and at what point countries might attain sought-after but elusive herd immunity.

More will be known in two weeks, as teams analyse vaccine effectiveness in younger groups of Israelis, as well as targeted populations such as people with diabetes, cancer and pregnant women, among a patient base at least 10 times larger than those in clinical studies.

“We need to have enough variety of people in that subgroup and enough follow-up time so you can make the right conclusions, and we are getting to that point,” said Ran Balicer, chief innovation officer of HMO Clalit, which covers more than half the Israeli population.

 

Pfizer is monitoring the Israeli rollout on a weekly basis for insights that can be used around the world.

As a small country with universal healthcare, advanced data capabilities and the promise of a swift rollout, Israel provided Pfizer with a unique opportunity to study the real-world impact of the vaccine developed with Germany’s BioNTech

But the company said it remained “difficult to forecast the precise time when herd protection may start to manifest” because of many variables at play, including social distancing measures and the number of new infections generated by each case, known as the reproduction rate.

Even Israel, in the vanguard of the global vaccine drive, has lowered expectations of emerging quickly from the pandemic because of soaring cases.

A third national lockdown has struggled to contain transmission, attributed to the fast-spreading UK variant of the virus. On a positive note, the Pfizer/BioNTech shot appears to be effective against it.

“We’ve so far identified the same 90% to 95% efficacy against the British strain,” said Hezi Levi, director-general of the Israeli Health Ministry.

“It is still early though, because we have only now finished the first week after the second dose,” he said, adding: “It’s too early to say anything about the South African variant.”

WHICH ARM?

Israel began its vaccination programme Dec. 19 – the day after Hanukkah – after paying a premium for supplies of the Pfizer/BioNTech vaccine.

 

Slideshow ( 4 images )

Four days later, the more contagious UK variant was detected in four people. While the vaccine is preventing illness in older people, the variant now makes up about 80% of new cases.

Finding themselves in a race between the vaccine and the new variant, Israel began giving shots to those over 60 and gradually opened the programme to the rest of the population.

Every detail was digitally tracked, down to in which arm the patient was jabbed and what vial it came from.

One week after receiving the second Pfizer dose – the point at which full protection is expected to kick in – 254 out of 416,900 people were infected, according to Maccabi, a leading Israeli healthcare provider.

(Graphic: COVID-19 infections among vaccinated people – )

Reuters Graphic

Comparing this against an unvaccinated group revealed a vaccine efficacy of 91%, Maccabi said.

By 22 days after full vaccination, no infections were recorded.

Israeli experts are confident the vaccines rather than lockdown measures brought the numbers down, based on studying different cities, age groups and pre-vaccine lockdowns.

 

The comparisons were “convincing in telling us this is the effect of the vaccination,” said Weizmann Institute’s Segal.

With 80% of senior citizens partially or fully vaccinated, a more complete picture will begin to emerge as soon as this week.

“And we do expect further decline in the overall cases and in the cases of severe morbidity,” said Balicer, of HMO Clalit.

VACCINES AND TRANSMISSION

There may be early signs that vaccinations are tamping down virus transmission in addition to illness

At Israel’s biggest COVID-19 testing centre, run by MyHeritage, researchers have tracked a significant decrease in the amount of virus infected people carry, known as cT value, among the most-vaccinated age groups.

This suggests that even if vaccinated people get infected, they are less likely to infect others, said MyHeritage Chief Science Officer Yaniv Erlich.

“The data so far is probably most clear from Israel. I do believe that these vaccines will reduce onward transmission,” said Stefan Baral, from Johns Hopkins School of Public Health in Maryland.

 

DIMINISHING RETURNS

It is unclear whether Israel will be able to keep up its world-leading vaccination pace.

“When you vaccinate fast and a lot, you eventually get to the hardcore – those who are less willing or harder to reach,” said Boaz Lev, head of the Health Ministry’s advisory panel.

The vaccination pace is seen even more crucial with the British variant’s rapid transmission.

“In the race between the UK variant spreading and the vaccinations, the end result is that we are seeing a kind of plateau in terms of the severely ill,” said Segal.

The big question is whether vaccines can eradicate the pandemic.

Michal Linial, a professor of molecular biology and bioinformatics at Jerusalem’s Hebrew University, said data from past decades suggests viruses become endemic and seasonal.

She predicted this coronavirus would become far less aggressive, perhaps requiring a booster shot within three years.

“The virus is not going anywhere,” she concluded.

END

ISRAEL//ANOTHER COVID BREAKTHROUGH

This drug, Allocetra threats the cytokine storm. They hare having good success.  They have completed second phase trials and now the big third phase.

(Rothwell/Yahoo News/Tel Aviv)

and a special thank you to Chris Powell who sent this to us

Israeli drug that substantially alleviates serious Covid symptoms completes second phase trials

 
 
James Rothwell

 

 
 
Israeli medical team of Sheba Medical Center at Tel HaShomer wave national flags as the Israeli Air Force - JACK GUEZ/AFP
Israeli medical team of Sheba Medical Center at Tel HaShomer wave national flags as the Israeli Air Force – JACK GUEZ/AFP

A new Israeli drug that can substantially alleviate serious Covid symptoms in as little as two hours has successfully completed its second phase of trials.

The drug, Allocetra, treats the extreme overreaction of the body’s immune system seen in some severe coronavirus patients, which can sometimes lead to organ failure and death. The phenomenon is known as a “cytokine” storm.

According to Israel’s Channel 13, 90 per cent of a sample of 20 patients who were seriously ill recovered after they were treated with the drug during the trials. The drug is now commencing its third trial phase.

 

Yair Tayeb, one of the recovered patients, told the Times of Israel that he felt much better only two hours after receiving the drug.

“I couldn’t breathe, I could barely speak. [I was in] very, very serious condition,” he said. “I went through an experience you can’t put into words.”

“They gave me the drug. Suddenly after two hours I started feeling something strange in my body. I stopped coughing, my breathing started to come back, I was feeling better. I stopped sweating. I couldn’t believe it. I was afraid to tell people I was okay, I was so excited.”

He added: “Two days ago I couldn’t stand on my legs… look at me now, going home.”

It is one of two drugs being developed in Israel which scientists hope will be a game changer in tackling serious Covid cases.

The other drug, EXO-CD24, was tested on 30 patients with moderate to severe Covid symptoms who all recovered, with 29 of them feeling better within five days.

It was developed at the Ichilov Medical Centre in Tel Aviv and was initially designed to treat ovarian cancer.

“Even if the vaccines do their job, and even if there aren’t any new mutations, one way or another, the coronavirus will be staying with us,” said Professor Nadir Arber, who designed the drug.

END

7. OIL ISSUES

end

8 EMERGING MARKET ISSUES

 

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

Euro/USA 1.2125 UP .0009 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/TRUMP POSITIVE WITH VIRUS /AND NOW ECB TAPERING BOND PURCHASES/JAPAN TAPERING BOND PURCHASES /USA RISING INTEREST RATES /FLOODING/EUROPE BOURSES / MOSTLY RED EXCEPT ITALY

USA/JAPAN YEN 104.75 UP 0.164 (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 1.3838   UP   0.0023  (Brexit March 29/ 2019/ARTICLE 50 SIGNED/BREXIT FEES WILL BE CAPPED/

USA/CAN 1.2695 DOWN .0003 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  FRIDAY morning in Europe, the Euro ROSE BY 9 basis points, trading now ABOVE the important 1.08 level RISING to 1.2125 Last night Shanghai COMPOSITE UP 51.50PTS OR 1.43% 

//Hang Sang CLOSED UP 562.53 PTS OR 1.91 PTS 

/AUSTRALIA CLOSED UP 0,45%// EUROPEAN BOURSES ALL MOSTLY RED EXCEPT ITALY

Trading from Europe and Asia

EUROPEAN BOURSES ALL MOSTLY RED EXCEPT ITALY

2/ CHINESE BOURSES / :Hang Sang CLOSED UP 562.53 PTS OR 1.91% 

/SHANGHAI CLOSED UP 51.60 PTS 1.43% 

Australia BOURSE CLOSED UP 0.45% 

Nikkei (Japan) CLOSED UP 57.00  POINTS OR 0.19%

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1844.20

silver:$27.26-

Early WEDNESDAY morning USA 10 year bond yield: 1.175% !!! UP 2 IN POINTS from TUESDAY’S night in basis points and it is trading WELL BELOW resistance at 2.27-2.32%.

The 30 yr bond yield 1.966 UP 2  IN BASIS POINTS from TUESSDAY night.

USA dollar index early WEDNESDAY morning: 90.44 DOWN 0 CENT(S) from  TUESDAY’s close.

This ends early morning numbers WEDNESDAY MORNING

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx6

And now your closing  WEDNESDAY NUMBERS \1: 00 PM

Portuguese 10 year bond yield: 0.08% DOWN 0 in basis point(s) yield from YESTERDAY/

JAPANESE BOND YIELD: +.08.%  UP 1   BASIS POINTS from YESTERDAY/JAPAN losing control of its yield curve/56

SPANISH 10 YR BOND YIELD: 0.14%//UP 1 in basis point yield from yesterday.

ITALIAN 10 YR BOND YIELD:0.50 DOWN 1 points in basis points yield from yesterday./

the Italian 10 yr bond yield is trading 38 points higher than Spain.

GERMAN 10 YR BOND YIELD: FALLS TO –.44% IN BASIS POINTS ON THE DAY//

THE IMPORTANT SPREAD BETWEEN ITALIAN 10 YR BOND AND GERMAN 10 YEAR BOND IS 0.95% 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 WEDNESDAY

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

Euro/USA 1.2131  UP     .0015 or 15 basis points

USA/Japan: 104.55 UP .0.082 OR YEN DOWN 8  basis points/

Great Britain/USA 1.3843 UP .0028 POUND UP 28  BASIS POINTS)

Canadian dollar UP 15 basis points to 1.2684

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

The USA/Yuan,  CNY: closed DOWN AT 6.4582    ON SHORE  (DOWN)..

THE USA/YUAN OFFSHORE:  6.4286  (YUAN DWON)..

TURKISH LIRA:  7.05  EXTREMELY DANGEROUS LEVEL/DEATH WISH.

the 10 yr Japanese bond yield  at +0.08%

Your closing 10 yr US bond yield DOWN 2 IN basis points from TUESDAY at 1.141 % //trading well ABOVE the resistance level of 2.27-2.32%) very problematic USA 30 yr bond yield: 1.932 DOWN 2 in basis points on the day

Your closing USA dollar index: 90.35 down 9 basis points

XXXXXXXXXX

CLOSING EUROPEAN BOURSES:

GREAT BRITAIN:  CLOSED DOWN 9.24 PTS OR .25%

 

German Dax :  CLOSED DOWN 81.04 POINTS OR .58%

Paris Cac CLOSED DOWN 22.74 POINTS 0.40%

Spain IBEX CLOSED DOWN 35.90 POINTS or 0.44%

Italian MIB: CLOSED DOWN 51.36 POINTS OR 0221%

WTI Oil price; 58.70 12:00  PM  EST

Brent Oil: 61.52 12:00 EST

USA /RUSSIAN /   RUBLE RISES:    73.82  THE CROSS LOWER BY 0.09 RUBLES/DOLLAR (RUBLE HIGHER BY 9 BASIS PTS)

TODAY THE GERMAN YIELD FALLS  TO –.44 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 f0r Oil, 4:00 pm/and 10 year USA interest rate:

WTI CRUDE OILPRICE 4:30 PM :  58.50//

BRENT :  61.15

USA 10 YR BOND YIELD: … 1.132..down 3 basis points…

USA 30 YR BOND YIELD: 1.918 down 3 basis points..

EURO/USA 1.2119 ( UP 3   BASIS POINTS)

USA/JAPANESE YEN:104.63 UP .043 (YEN DOWN 4 BASIS POINTS/..

USA DOLLAR INDEX: 90.42 DOWN 2 cent(s)/

The British pound at 4 pm   Britain Pound/USA 1.3833 UP 18  POINTS

the Turkish lira close: 7.05

the Russian rouble 73.93   DOWN 0.01 Roubles against the uSA dollar. (DOWN 1 BASIS POINTS)

Canadian dollar:  1.2703 DOWN 4 BASIS pts

German 10 yr bond yield at 5 pm: ,-0.44%

The Dow closed UP 61.97 POINTS OR 0.20%

NASDAQ closed DOWN 31.92 POINTS OR 0.23%


VOLATILITY INDEX:  22.11 CLOSED UP .48

LIBOR 3 MONTH DURATION: 0.202%//libor dropping like a stone

USA trading today in Graph Form

Stoner Stocks Soar, Tesla Tumbles, Dollar Dumps, & Gold Jumps

 
WEDNESDAY, FEB 10, 2021 – 16:00

Get higher baby…

Pot stocks caught the eye of Redditors and soared…

Source: Bloomberg

Led by an explosion higher in heavily-shorted TLRY (up around 50% today)…

Source: Bloomberg

Some of the original WSB trades performed well today with GME up over 3% (but they’re all still down dramatically from the peak of the debacle)…

Source: Bloomberg

But GME’s early ramp faded fast late on…

Source: Bloomberg

But one momo darling got clubbed like a baby seal (for once) as TSLA was trounced, worst day in a month (and dragged the market lower) on the heels of a massive OTM Put option buy and the reverse-gamma created…

Source: Bloomberg

TSLA found support at $800…

Source: Bloomberg

Bear in mind that TSLA’s drop today took 45 points off the S&P 500 (and AMZN took 30 off with its drop). BKNG, TYL, and NVDA added over 100pts between them to offset.

We couldn’t help think of Leeroy Jenkins spoiling the game for everyone else…

When TSLA got whacked, the machines hit the market with a decent sell program hitting everything…

Source: Bloomberg

Small Caps broke their win-streak today, underperforming the rest of the majors along with Nasdaq 100. The Dow managed to outperform, barely holding on to green on the day…

Source: Bloomberg

Heavily-shorted Biotechs seem to have lost favor with the Reddit crowd…

Source: Bloomberg

And short-watch-penny-stocks also slipped lower…

Source: Bloomberg

Energy stocks – once again – dominated the gains with Consumer Discretionary the laggard…

Source: Bloomberg

Treasury yields were lower across the curve (with the long-end outperforming, 30Y -3bps, 3Y -1bps)…10Y dived quickly today on the weaker than expected core CPI print…

Source: Bloomberg

The Dollar fell for the 4th straight day, almost back to unchanged on the year…

Source: Bloomberg

Cryptos rolled over today with Bitcoin back below $44k briefly…

Source: Bloomberg

Ethereum also slipped lower, finding support at $1700…

Source: Bloomberg

Gold managed to hold on to gains after briefly spiking higher, ironically on disappointing inflation…

Source: Bloomberg

A weak dollar and bigger than expected crude draw sent WTI higher once again…

Source: Bloomberg

Finally, Bitcoin may seem like a risky proposition, but there’s another way to approach it.

In combination with gold, the cryptocurrency is less risky than the broader U.S. equity market, Bloomberg Intelligence’s Mike McGlone writes.

Source: Bloomberg

The 260-day realized volatility on BI’s Gold-Bitcoin 75/25 Index currently sits near its lowest level ever versus the market, “around 20% less than the same risk measure on the S&P 500 and appearing in early recovery days akin to the start of 2016.”

a)Market trading/LAST NIGHT/USA

 
 

b)MARKET TRADING/USA//Non farm payrolls

 
 

ii)Market data/USA

CPI
 
They doctor these numbers big time. CPI rises .3% M/M but their stupid core inflation falls as rent inflation is at a 10 yr low.  This is enough for the Fed to continue on with its bubbles.
 
 
(zerohedge)

Dollar & Bond Yields Tumble As Core CPI Disappoints, Rent Inflation At 10-Year Lows

 
 
WEDNESDAY, FEB 10, 2021 – 8:36

US Consumer Prices were expected to rise for the 8th straight month in January and it did rising 0.3% MoM as expected, leaving year-over-year prices rising at 1.4%…

Source: Bloomberg

However Core CPI missed expectations, unchanged in January compared to an expected 0.2% MoM rise.

Source: Bloomberg

Used Car prices and Food-at-home saw MoM declines as Energy costs and Apparel saw the biggest rises…

Used car price acceleration appears to have peaked…

Source: Bloomberg

And on the bright side for many, shelter/rent inflation continues to slow (despite record high prices?)

  • Rent inflation Y/Y dropped from 1.84% in Dec to 1.62% in Jan, lowest since August 2011
  • Shelter inflation Y/Y dropped from 2.28% in Dec to 2.05% in Jan, also lowest since August 2011

So the NY rental collapse is why the Fed will keep inflating the biggest asset bubble for years?

Notably Goods inflation is soaring, at its highest since April 2012, with Service inflation at its lowest since Nov 2010…

Source: Bloomberg

The reaction in bonds was instant, with 10Y Yields dropping 2bps…

Source: Bloomberg

And the dollar is taking a dive…

Source: Bloomberg

However, we note that inflation indices are one to two months away from a dramatic rise due to basing effects from the pandemic lockdowns…

Source: Bloomberg

Will The Fed shrug them off as transitory?

end

U.S. budget deficit jumps to $163 billion in January as Washington pumps more stimulus into the economy

Feb. 10, 2021 at 2:04 p.m. ET

MarketWatch

Historically high budget deficits not going away

The numbers: The U.S. budget deficit increased sharply in January to $163 billion as Washington funneled more financial aid to families and unemployed workers to cushion the latest blow from the coronavirus pandemic.

The deficit increased last month from a $33 billion budget gap in the same month of 2020, the Treasury Department said Wednesday.

The budget gap in the first four months of the current fiscal year was 89% higher compared to a year earlier — $736 billion vs. $347 billion.

What happened: The federal government approved almost $1 trillion in additional stimulus payments at the end of December. Many families got $600 checks or money for rental assistance while benefits for the unemployed were increased.

Federal outlays, or spending, leaped by 23% to $547 billion from a year earlier. By contrast, the government spent $405 billion in the same month in January 2020.

Tax revenues rose 1% in January to $385 billion from $372 billion a year earlier. Tax receipts have mostly recovered from the pandemic, reflecting a resilient U.S. economy and the ability of private-sector companies to adjust.

Yet tax receipts rose year-on-year by almost 10% in January 2020, showing the economy still has a way to go to return to pre crisis growth levels.

The government operates on an annual budget that runs from Oct 1. to Sept. 30 instead of using the calendar year. The deficit topped $3 trillion in the fiscal 2020, reflecting the largest shortfall as a percentage of gross domestic product since 1945.

Big picture: Historically large budget deficits aren’t going away anytime soon.

Adding to $900 billion in fresh federal aid approved in the waning days of the Trump administration, President Biden is working on a package of almost $2 trillion in additional stimulus. Democrats appear to have enough votes to pass the measure.

The size of the deficit in fiscal 2021 will depend on the amount of aid that gets approved and how much is spent before the fiscal year runs out on Sept. 30.

The enormous gusher of federal spending, especially with the economy well on the way to recovery, is raising concerns among some Wall Street DJIA, 0.05% investors and economists about a sharp increase in inflation later this year or next. But so far there’s little sign of it.

-END-

iii) Important USA Economic Stories

We knew that this was coming:  Biden new stimulus to shower state and local governments with $350 billion in aid as well as changes to Medicaid.

The dollar will collapse with all of this spending

(zerohedge)

Biden Stimulus To Shower State And Local Govts With $350 Billion In Aid, Make Changes To Medicaid

 
WEDNESDAY, FEB 10, 2021 – 11:15

State and local governments are set to receive $350 billion in funding as part of the next stimulus bill, according to draft stimulus legislation released Tuesday night by House Democrats.

The funding – which took a backseat during the Trump administration amid GOP criticism that it was nothing more than a bailout for poorly run Democratic strongholds – is slated for committee action on Friday in the House Oversight and Reform Committee after Chair Carolyn Maloney (D-NY) introduced it. The bill would bypass the traditional appropriations process which is not eligible for budget reconciliation, according to Bloomberg.

States would receive $195 billion and that money would partly be distributed based on a the share of unemployed workers. The District of Columbia would get the same share as states, unlike in last year’s relief bill. Local governments would receive $130 billion, partly based on population, with a carve-out for smaller communities. Territories would receive $4.5 billion and tribes $20 billion.

The bill also would spend $570 million to pay for 600 hours of paid leave for federal and postal workers to use for Covid quarantine or to care for infected loved ones. -Bloomberg

“Democrats’ plan to bail out locked-down, poorly managed liberal states is unfair to American taxpayers and is ripe for waste, fraud, and abuse,” said the committee’s top Republican, James Comer of Kentucky.

Meanwhile, the House Energy and Commerce Committee has drafted a proposal which would make big changes to Medicaid – offering states more money to expand public health insurance options for the poor, as well as granting them the ability to claw back funds for prices increases on certain drugs.

Released late Tuesday night, the plan would end Medicaid drug rebate caps for certain medications, currently set at 100% of a drug’s average manufacturer price. After the cap is reached, drug makers can reach their prices. By eliminating the caps, drugmakers could be prompted to leave the Medicaid program or curtail research, according to a 2019 warning by a congressional advisory committee.

What’s more, states would be allowed to restart Medicaid benefits for people in prison up to 30 days prior to their release – a provision intended to support those who need addiction treatments and other services.

The plan has $14.2 billion for vaccines-related activities. Community health centers also would receive $7.5 billion and $6 billion goes to tribal health centers. The legislation has $7.5 billion for the expansion of internet access. Chairman Frank Pallone’s draft would also provide $46 billion for Covid-19 testing, tracing, monitoring and mitigation. The committee has planned a Thursday vote on the provisions. -Bloomberg

Earlier this week, President Joe Biden supported a proposal to more quickly phase out planned $1,400 stimulus checks as House and Senate Democrats clash over what extended unemployment should look like.

Expect more stimulus details to emerge over the coming weeks, as over a dozen different House committees are working on various components of Biden’s plan, and will be releasing them as they go along.

More (as we noted yesterday):

On Monday afternoon, House Dems released a draft of their fiscal package. Amid the top highlights is that Biden is going for the full $1.9T and is not succumbing to pressure to reduce the size of the bill to accommodate the GOP nor centrist lawmakers who may be at-risk in 2022 elections. Further, the timing appears to be Feb 22 to get a bill completed and sent for a floor vote with the goal of putting the bill into law by early/mid-March.

Following criticism that Joe Biden’s $1.9 trillion stimulus package would benefit the rich, House Democrats agreed that individuals earning more than $100,000 and couples with income above $200,000 will not be eligible for direct payments. Draft legislation released Monday by the House Ways and Means Committee (full summary below) called for $1,400 payments for single people earning $75,000 or married couples earning $150,000. The checks will now completely phase out for individuals making $100,000 or joint taxpayers making $200,000.

The payments will scale down more quickly than previous rounds, where the top levels were determined by the size of the payment and the number of children in the household. The first round of checks, approved in the Cares Act last March, started at $1,200 before they began phasing out.

According to Bloomberg, House Democratic leaders rejected a push by some moderate Democrats to lower the threshold at which payments begin phasing out at $50,000 for an individual and $100,000 per couple. One such proponent was the man who may be the most important Senator for the next two years – Joe Manchin, a West Virginia Democrat – who is critical to the Democrats’ 1-person majority in the Senate, and who has been pushing for lower income caps to qualify for the payments. Manchin told reporters on Monday that he wants to make sure that there is a “hard stop” so people making $250,000 or $300,000 don’t get payments and that the money is directed to people who are “truly in need.”

On the other end, progressives and socialists such a Senators Bernie Sanders have pushed for more inclusive thresholds. Last week, the Senate voted on a measure that would seek to bar “upper-income” people from qualifying for stimulus checks, but didn’t define the term.

Previously, a group of 10 Senate Republicans had proposed to send $1,000 payments to individuals earning as much as $40,000 or married couples earning twice that. Those checks would phase out completely once a single earner makes $50,000 or joint filers earn $100,000.

So what else is in the House Dems version of the fiscal package (via JPM).

EDUCATION AND LABOR PANEL

  • $130 billion for kindergarten through 12th grade school reopening
  • $40 billion for higher-education institutions
  • $39 billion for childcare businesses
  • $5 billion for extended pandemic food benefits
  • $4 billion for expanded home-heating assistance
  • $1.4 billion for senior-care services
  • Provisions to tighten workplace safety standards for Covid-19
  • Funding to subsidize health insurance for the newly unemployed, and to address a rise in domestic violence and child abuse

FINANCIAL SERVICES COMMITTEE

  • $10 billion to use the Defense Production Act to produce masks and other Covid-19 equipment,
  • $25 billion for rental assistance, largely run through the Treasury Department
  • $5 billion in assistance for the homeless.
  • $10 billion for direct assistance to homeowners for mortgage payments, property taxes and utility costs
  • $14 billion in payroll assistance to airlines, with $1 billion for their contractors

TRANSPORTATION COMMITTEE

  • $50 billion for the Federal Emergency Management Agency to deal with the Covid-19 disaster
  • $30 billion for transit
  • $8 billion for airports
  • $1.5 billion for Amtrak

CHILD TAX CREDIT

  • Boosts the annual child credit to $3,600 a year for children five and younger and $3,000 for those six and up.
  • The money would come in monthly instalments from July through December. The maximum child tax credit is currently $2,000 and is disbursed annually
  • Single-parent households earning up to $75,000 or couples making $150,000 will get the full credit amounts, which will phase out for incomes above those levels
  • The credits will be based on a family’s 2020 income.

For now, Democrats are pressing forward with the $15/hour minimum wage which the CBO said would help eliminate poverty while costing up to 1.4mm jobs (Goldman made a similar analysis of the minimum wage impact on the economy). That said, it is unlikely that the minimum wage hike will survive the Reconciliation process’s Byrd Rule which prevents any policies from being included in the budget reconciliation process unless they have a direct budgetary effect. Ironically, according to JPM, the CBO’s finding that the minimum wage increase would add $54 billion over 10 years to the budget deficit could improve the odds that the minimum wage stays in a final bill.

More importantly, expectations for the size of the final package are increasing as there does not appear to significant pushback from  moderate Dems to the size and composition of the bill. That said, keep an eye on comments from Senators Manchin and Sinema, as Dems in traditionally GOP states they are more likely to oppose overly Progressive measures.

In response, Goldman revised its stimulus amount forecast and now thinks this amount is likely to be as high as $1.5 trillion (6.8% of GDP), up from the bank’s previous forecast of $1.1 trillion (5% of GDP). This is turn prompted the bank to also hike its GDP forecast for 2021 and 2022 up by about 0.2% each year, to 6.8% and 4.5%respectively, and to move forward its estimate of the first Fed rate hike from late 2024 to early 2024.

The tentative timeline is Feb 22 to get the bill to a floor vote, which target a final passage by early/mid-March.

According to Goldman, congressional leaders are aiming for passage ahead of the March 13 expiration of jobless benefits, but it might take until late March if things do not go smoothly. The relevant congressional committees appear to be aiming to pass their legislation late in the week of February 8 though in some cases this could slip to the following week. The House might be able to pass the combined package by late in the week of Feb. 22 but this might take until the week of March 1.

From there, the timing will depend mainly on how long it takes to get the bill through the Senate. Senate debate on a reconciliation bill is limited to 20 legislative hours but can take longer if there are many amendments. In practice, Senate consideration is likely to take a full week. From there, the time to enactment will depend mainly on whether there are any differences between the House and Senate versions, which would lead to additional negotiations and another round of votes in the House and Senate.

If congressional Democrats in the House and Senate are unanimous in their support for a single pre-negotiated package, Congress should be able to get the bill to the President in early March. In the more likely event that political disagreements arise that must be worked out, enactment in mid- to late March looks likely. Even with those delays, this would be on the quicker side of prior reconciliation bills. As shown in Exhibit 1, it took Congress only four weeks after passing the budget resolution to enact reconciliation legislation in 2001, but in 2003 and 2017 the process took longer.

Finally, from a market standpoint, JPM notes that “the larger the fiscal package, the stronger the support for multiple investment themes, including: Reflation, Cyclical Rally, Reopening, and Value Rally.

Equity sectors to play within these themes include: Banks; Emerging Markets; Energy and Semis.

As JPM concludes, “the completion of earnings season combined with a fiscal package becoming law may create the next leg higher in Equities, adding fuel to the reflation/cyclical trade.”

This is going to be a major problem for Robinhood: an inadequate customer support as well as not knowing their client

(zerohedge)

Ex-Robinhood Employees Detail Inadequate Customer Support In Suicide Lawsuit

 
TUESDAY, FEB 09, 2021 – 20:25

Former employees of Robinhood have detailed a pattern of inadequate customer support, including unqualified customer service agents offering financial advice, licensed brokers “too busy” to help on urgent matters, and unanswered pleas from customers, according to CBS News.

The stock trading app company – a major player in last month’s short-squeeze insanity – is now the subject of a Monday lawsuit brought by the family of 20-year-old college student Alex Kearns, who committed suicide last June after mistakenly thinking he was on the hook for hundreds of thousands of dollars in stock market losses over options held in his Robinhood account.

The ex-employee accounts are included in the suit which claims wrongful death, negligent infliction of emotional distress and unfair business practices. Kearns’ parents told CBS News they believe their son would still be alive if Robinhood had answered any of his three urgent customer support inquiries before he killed himself.

“He just needed a little help,” said his father, Dan Kearns.

According to documents obtained by CBS News through a Freedom of Information Act request, other customers have also taken issue with Robinhood’s customer service, with many raising concerns about the company’s response time. In 2020, the Federal Trade Commission received more than 650 complaints from customers about Robinhood Financial LLC and its subsidiaries, more than twice as many as its competitors Etrade, Schwab, Fidelity and TD Ameritrade. A common theme among the complaints filed against Robinhood: getting “no response” from the company. -CBS News

“I am unable to withdraw my money or invest in stock from my account,” wrote one user, who noted that Robinhood hadn’t responded to his last email in over a week. “In need of money in these difficult times as i lost my job yesterday.”

Another disgruntled user was upset at the company’s automated responses, writing “I do not have a clue what is happening to my claim or if it’s even open anymore,” adding “They have no way to contact by phone so i can’t even communicate with anyone.”

Robinhood used to have a telephone hotline for customers, however according to one former call center employee, Katy LaPlante (who worked as an independent contractor for Robinhood in 2016 and 2017), customers with serious financial issues were not receiving the help the needed.

The people who called the hotline were losing money, she said, but she was unable to help. “But when we’re talking about, like, ‘Why couldn’t I sell my stock?'” she said, “What service could I give you? I couldn’t give you a service. I had to basically put you off.”

Five other former customer service workers — including one who left the company last fall — all told CBS News Robinhood’s brokers were rarely available to help users who needed financial advice.

LaPlante said she pushed to get people the help they needed. “If it was really egregious, I would pitch a huge fit. And I mean, a fit. Like, put down my phone, put you on hold, start really getting aggressive with my supervisors But how many times in a day can you do that?” -CBS News

The company eventually got rid of the customer support phone linebecause they could not keep up with the volume of calls.

“I feel sick,” said LaPlante following the news of Kearns’ death. “because [customer service] was an issue then. It’s an issue now. Why didn’t you fix it?”

Dan and Dorothy Kearns say Robinhood never should have allowed such an inexperienced person access to the types of trading he was engaged in.

I’m angry that they can put a number like that in front of someone, whether it’s a 20-year-old kid or a 60-year-old experienced trader,” said Dorothy Kearns.

“I think he was in just pure terror about his situation,” added Dan.

Before his death, Alex wrote to the company three times seeking clarification. “I was incorrectly assigned more money than I should have,” he wrote, explaining that he’d structured his options trade in a way that should have protected him from losing this much money. “Could someone please look into this?”

The company sent Alex an automated reply that assigned a case number and told him the company’s response time may be delayed.

“Alex had written them asking for help,” said Dan Kearns. “And unfortunately, that’s the only way that Robinhood communicates, is through email. And their response was a canned reply, basically, ‘We’ll get back to you later.'” -CBS News

After Alex’s suicide, Robinhood sent him an automated email suggesting that he didn’t owe any money at all.

According to attorneys for the family, had anyone at Robinhood “bothered to respond,” Alex Kearns “would have been alive and well today.”

END

The sale of Tik Tok to USA interests temporarily shelves by Biden

(zerohedge)

TikTok Sale Shelved “Indefinitely” As Biden Admin Reviews Security

 
WEDNESDAY, FEB 10, 2021 – 7:19

A plan to force the sale of TikTok’s US operations to a group which includes Walmart and Oracle has been indefinitely shelved, as the Biden administration conducts a broad review of the previous administration’s efforts to address national security risks posed by Chinese tech companies, according to the Wall Street Journal.

The deal had been in limbo since last fall after several successful legal challenges to the Trump administration by TikTok’s Chinese owner, ByteDance Ltd.

According to ‘people familiar with the situation,’ discussions between ByteDance and US national security officials have been ongoing, and have centered around data security and ways to prevent the Chinese government from accessing data collected on American users.

No “imminent decision” has been made on how to resolve these issues as the Biden administration reassesses the US stance on potential security risks.

“We plan to develop a comprehensive approach to securing U.S. data that addresses the full range of threats we face,” said National Security Council spokeswoman, Emily Horne. “This includes the risk posed by Chinese apps and other software that operate in the U.S. In the coming months, we expect to review specific cases in light of a comprehensive understanding of the risks we face.

Last year, former President Trump ordered a ban on TikTok, forcing its sale to the majority US ownership group which included Oracle and Walmart. Days later, the Committee on Foreign Investments in the US (CFIUS), which must approve all such cross-border business deals which may pose national security risks, formerly ordered ByteDance to divest of US operations.

In November, TikTok asked a federal appeals court in Washington to vacate the CFIUS order, calling it ‘arbitrary and capricious,’ while the company said it was prepared to address the government’s security concerns in other ways.

Separately, several federal court rulings have de-fanged the Trump admin order to shut down TikTok, with the most recent (Dec. 7) concluding that Trump likely overstepped his authority under the International Emergency Powers Act with an executive order.

Talks between the Committee on Foreign Investment in the U.S. and TikTok to resolve the situation have continued, according to the people familiar with the matter, one of whom said possible solutions include use of a trusted third party to manage TikTok’s data, which wouldn’t require an outright sale.

Any deal would likely be different from the one discussed last September, the people said, in part because TikTok no longer faces the threat of an imminent shutdown.

Any sale would also need the approval of Chinese regulators. Beijing last year adopted new restrictions on exporting certain types of social-media algorithms that TikTok uses, further complicating deal talks. –Wall Street Journal

ByteDance, whose backers include General Atlantic and Sequoia Capital, was valued at $180 billion in December, according to PitchBook. Founder Zhang Yiming recently encouraged employees to continue working and ‘wait for the geopolitical storm’ to pass, according to staffers interviewed by The Journal.

Meanwhile, the Walmart and Oracle could still participate in a potential deal, according to officials familiar with the situation, however much of that depends on where the Biden administration comes down on the situation – which could start coming into focus next week, when a formal government response to TikTok’s court challenge against Trump’s executive order is due.

Next week, another Trump executive order will go into effect banning US transactions with eight China-linked apps, including Alipay mobile, owned by Chinese billionaire Jack Ma’s Ant Group, and WeChat mobile payment app, owned by China’s Tencent Holdings.

The Biden administration can choose to enforce Trump’s order, or it could extend the deadline, supersede it with a new EO, or simply rescind it.

Trump administration officials had contended that Chinese tech companies such as ByteDance, Huawei Technologies Co. and others pose a national security threat because they can be forced to share their data on Americans with China’s authoritarian government.

The companies have said they would never do so, but Mr. Trump’s concerns have been shared by both Democrats and Republicans in Congress.

The Biden administration’s review is being led by officials who have sometimes been critical of Mr. Trump’s targeting of Chinese tech companies, although they have expressed a range of views on how to respond to the complex challenge. –Wall Street Journal

Biden national security adviser Jake Sullivan and White House China coordinator Kurt Campbell have been publicly critical of Trump’s crackdown on Chinese tech companies – with the pair writing in a 2019 article in Foreign Affairs that while protecting US technological advances will require enhanced restrictions on China, “These efforts should be pursued selectively rather than wholesale, imposing curbs on technologies that are critical to national security and human rights and allowing regular trade and investment to continue for those that are not”

Another Biden admin officials who’s weighed in on the TikTok issue is Peter Harrell, who currently serves as the senior director at the National Security Council for international economics and competitiveness, who tweeted last Summer: “Strongly agree that the best way for US to address TikTok is for TikTok to become a leader in transparency and data privacy, rather than banning it.”

“I take the threat of Chinese surveillance seriously, but it is welcome news that the courts may be beginning to push back on unbounded executive power,” he said in another tweet.

END

Bubbles everywhere:  These are the  major places where the Fed’s money printing machine is ending up

A good read..

John Rubino/DollarCollapse

Is This The Biggest Financial Bubble Ever? Rubino: “Hell Yes It Is!”

 
WEDNESDAY, FEB 10, 2021 – 5:00

Authored by John Rubino via DollarCollapse.com,

If you’re over 40 you’ve lived through at least three epic financial bubbles: junk bonds in the 1980s, tech stocks in the 1990s, and housing in the 2000s. Each was spectacular in its own way, and each threatened to take down the whole financial system when it burst.

But they pale next to what’s happening today. Where those past bubbles were sector-specific, which is to say the mania and resulting carnage occurred mostly within one asset class, today’s bubble is spread across, well, pretty much everything – hence the term “everything bubble.”

When this one pops there won’t be a lot of hiding places.

Way too much money

Most bubbles start when an influx of outside cash sends the price of something up dramatically. This captures the imagination of the broader investing public and the process takes on a life of its own, culminating in an orgy of bad decisions and eventually a wipe-out of the easy fortunes made on the way up.

So to understand the everything bubble, let’s start at the beginning with that influx of outside money. This time it’s coming from the Federal Reserve in what can only be described as the mother of all print runs. M2, a medium-broad measure of the US money supply, has more than tripled so far in this century, and lately the arc has gone vertical, rising by nearly a third in just the past year.

All this extra money has to go somewhere, so no surprise that it’s flowing in lots of different directions. Among the recipients:

Fixed income

The bond and money markets, made up of instruments that pay interest, are in the aggregate far bigger than the world’s stock markets. And they’ve been booming, with interest rates falling steadily for four straight decades. Since bond prices are the reciprocal of bond yields, the next chart can be read as an epic bull market in bonds, one which has gained steam in the past year as massive currency creation has forced fixed income investors (who have to invest new cash somehow) to buy bonds regardless of what they yield.

To further illustrate how uniquely dysfunctional the world’s bond markets have become, here’s a chart going back to the 1300s showing that today’s rates aren’t just low by modern standards, but are the lowest in human history. Which is another way of saying today’s bond bubble dwarfs anything anywhere ever.

The hopeless position in which pension funds and retirees find themselves is summed up in the following headline: Junk buyers desperate for debt are pressing companies to borrow.

Stocks, of course

The most obvious bubbles happen in stocks, because “the market” gets top billing in both the financial media and the psyches of investors. And after a long, slow slog out of the depths of the Great Recession, US stocks have in the past couple of years blown through all previous valuation records. That’s right, this market is now a bigger bubble than those of 1929 and 1999, and it’s still going strong.

Pretty much any popular stock valuation indicator backs up this assertion, but the most dramatic is probably the “Buffet Indicator,” so named because legendary investor Warren Buffet uses it to decide how to allocate his billions. It’s also easy to understand: chart the aggregate market capitalization of all US stocks against GDP and there you are. When stocks are low versus GDP, they’re underappreciated and undervalued; when high compared to GDP they’re overvalued. Today they’re higher than ever before, including just before the last two major bear markets.

Want some other bubbliscious indicators? Here you go: Right now, more stocks are trading at over 10 times sales than in 1999 at the height of the dot-com bubble. And the number of “zombie” companies, i.e., those that have to borrow to cover their existing debt service and will collapse if cut off from new credit, has never been higher.

Housing

This one is a surprise because it was the epicenter of the last bubble, and very seldom does an asset class reinflate so quickly. But hey, all that money has to go somewhere, and houses are the American dream yadda yadda. In the past couple of years, home prices in many places have blown through their 2006 bubble highs, and are now accelerating. Note the hockey stick inflection at the far right of the following chart.

Today, you can google “home prices” and get dozens of headlines like these:

CoreLogic: December home prices rise at fastest rate since 2014

Are we trapped in another housing bubble? A rapid rise in home prices has some experts worried

In metro Denver housing market, double-digit price gains carry over in 2021

As the hedge fund guy in The Big Short says after visiting Florida, “Yep, it’s a bubble.”

Cryptocurrencies – this generation’s dot-coms?

Cryptos weren’t around for any previous bubbles so their role in what’s coming isn’t yet knowable. What is clear is that they’re behaving like dot-com stocks in the 1990s, with bitcoin (think Amazon.com) soaring parabolically if erratically…

… and hundreds of lesser coins with a wide variety of future prospects (think eBay, AOL, Pets.com) also soaring on a torrent of fiat currency rocket fuel. Here’s the second most valuable crypto:

The conclusion: Even if cryptos end up dominating some future monetary system, their parabolic arcs in the here and now scream “bubble!”

As for moral hazard …

A true bubble is more than just soaring prices. It also features people behaving in ways that with hindsight will seem totally incomprehensible. Think previous bubbles’ daytraders and home flippers making fortunes doing things that experts normally find difficult. And recall the huge amounts of money that once poured into things that in normal times would have little appeal to rational investors. Collateralized Debt Obligations (bonds that were somehow comprised of subprime mortgages and AAA-rated) and mutual funds holding dot-com stocks with no earnings — and no realistic prospect thereof — are prominent examples from the recent past.

Today’s world offers some even better examples of moral hazard, including:

SPACs

These are companies that go public without assets or earnings or any of the other impedimenta typical of IPOs. You give them your money and they’ll figure out how to put it to work. Why? Because they’re geniuses who claim to have made fortunes in the past few years, and you apparently have way too much cash and no productive uses for it. There are even SPAC ETFs that offer exposure to the whole “sector.”

Rock star money managers

In typical bubbles, a handful of money managers roll the dice on the bubble asset and win big. Bigger than big. They make ridiculous amounts of money and are hailed as geniuses and courted by reporters and politicians hoping to bask in their reflected glory. Then of course the bubble pops and the geniuses crash and burn along with their favorite speculations.

The everything bubble’s supernova is the ARK Innovation ETF, run by hitherto obscure (and now household name) Cathie Wood. Her “innovation”? She loaded up on Tesla stock right before it embarked on an epic (and inexplicable) 1000% run that made it more valuable than the ten biggest carmakers on the planet combined.

Wood is still long and strong Tesla in addition to many other prominent bubble assets, and will apparently use the torrent of money now pouring into her fund to roll the dice on an even bigger scale.

High-tech daytraders

This list wouldn’t be complete without the Reddit/Robinhood traders who are having a ball chasing a wide variety of stocks straight up while tormenting hedge funds on the other side of those trades. See When Predator Becomes Prey.

Mutually-exclusive solutions

So here we are, with all the typical bubble pathologies on full display, but for multiple bubbles rather than just one. And a government determined to levitate all those bubbles simultaneously, even at the expense of rising inflation. See Jim Rickard’s latest, Hyperinflation Can Happen Much Faster Than You Think. 

What happens when one of these bubbles bursts? The others burst too, in short order. You can’t have an epic, systemically dangerous bust in one big sector and placid good times in all the others. Markets – now more interconnected than ever – simply don’t work that way.

Meanwhile, the actions necessary to fix some of these bubbles are mutually exclusive. A stock market or housing bust requires much lower interest rates and bigger government deficits, while a currency crisis brought on by rising inflation requires higher interest rates and government spending cuts. Let everything blow up at once and there will be literally no fixing it. And the “everything bubble” will become the “everything bust.”

end
Michael Every also comments on the everything bubble markets
(Michael Every)
 

Rabobank: The Everything Bubble Has Become More Everything And More Bubble

 
WEDNESDAY, FEB 10, 2021 – 9:46

By Michael Every of Rabobank

Oh-No-Bi-Wan Kenobi

For those who haven’t seen it –and I accept there are now probably many readers who haven’t– there is a classic scene in the first Star Wars film (Episode IV) in which Jedi Master Obi-Wan Kenobi tells his villainous duelling opponent, his former apprentice, Darth Vader: “You can’t win, Darth. If you strike me down, I will become more powerful than you can possible imagine.” Darth being Darth of course strikes him down: and Kenobi disappears entirely, leaving only his outer garment (but no shoes or underpants, etc.). So it looks like Darth has won the fight. Except Kenobi goes on to become an immortal ‘Force ghost’, who like a happier Banquo, helps guide Darth’s son to blow up the mega battle-station he has until then been prowling up and down menacingly.

We are less than a month into the Biden administration, and despite a slight down-day for stocks on Tuesday, it is quite clear, according to a slew of commentators, that the Everything Bubble has become more Everything and more Bubble. The Federal Reserve and other global central banks are still pouring their fully operational firepower into the economy, fully aware that little of this flows to productive assets or wages, and most of it to speculation: but when financial/asset speculation IS most of the ‘economy’, that looks like victory to them. Indeed, doesn’t it feel like victory to those who speak Bloombergian? There is more money than ever; a major global airline has decided you don’t have to wear masks in business or first class on long-haul flights; and the luxury Maldives is seeing record hotel occupancy!

Then add in the prospect of USD1.9 trillion in fiscal stimulus on top, a portion of which might even be heading for productive use given reports of a five-year UDS100bn boost on US national science spending – which is defense related at heart (and must surely be accompanied by matching national security actions if so?). China is also doing its quasi-fiscal part, with aggregate financing up CNY5,170bn in January, or USD800bn in one month. That makes concerns over the China Credit Impulse turning down look misplaced – and US fiscal stimulus look moderate. (Somehow this is not negative for CNY in the way it is for USD: thank the huge trade surplus, which new US spending on science is aimed at replicating long term.)

Yes, there are those pesky rising long bond yields that could, like an overlooked reactor vent, be the fatal flaw in the blueprints that blow everything up. Even the ‘widow-maker” trade of shorting JGBs in Japan appears to be fruitful. But let’s overlook that systemic risk, like Darth. After all, central banks can always adopt yield curve control if needed and take away that market function – striking it down and seeing it disappear without shoes or underpants left as reminders.

Of course, if they do that then the Everything Bubble is complete. Price discovery will be a ghost. Markets will still exist,…but to make rich people richer and allow central bankers to strut up and down in black making scuba noises into their hand. Both history and the world’s multiple traditions of philosophy show us that such efforts will not end well.

There is also a dilemma here for President Biden, the opposite of his predecessor in not tweeting about the Dow, but hence not mentioning the Everything Bubble either. If there is action taken, then the market collapse would be huge: and how does the US get back to ‘full employment’ if the rich are getting poorer? Yet the longer we wait to see such action, the bigger the Everything Bubble grows, and the bigger the bang when it pops. Can it last four years? If not, the downside will be on his watch, or coincide with the next US election cycle.  

Meanwhile, of course, the Everything Bubble makes the political task of fiscal stimulus all the more difficult, not easier. It was already going to be hard to raise US employment and wages significantly. Full employment is going to need payrolls of 500K a month for two years, for example. And higher minimum wages could be at the cost of lower private-sector employment near term – potentially up to 1.4 million fewer jobs, lobby those opposed to it. Indeed, yesterday’s NFIB small business survey also fretted over higher minimum wages, and the sub-index expecting better business conditions ahead was down to the lowest since November 2013.

Yet wage increases will now have to keep track with soaring commodity and asset prices. Where will energy prices be in a few months compared to a few months ago? And food prices? (We get Chinese and US CPI today as a latest snapshot.) And house prices? And mortgage rates – unless we strike down the bond market? In short, even as the Maldives is full of people who flew in on a fully-flat bed without a mask (or a big black helmet), the key ingredients are there for more populism.

On which, the IMF is now warning about not just a lost year, or a lost decade, but a “lost generation” in many emerging markets. Perhaps the big market winners might want to plan their mask-free, fully-flat bed trips abroad accordingly.

Meanwhile, the US Senate has voted, with the help of 6 Republicans, that the trial of former President Trump is constitutional. This matters in that: (1) it means much of the week is going to be taken up with that polarising political action; and (2) because it is far short of the two-thirds majority needed to convict. In other words, bitter recrimination will probably not strike Trump down and take his shoes and underpants with him. He will remain on the political scene, complaining of double standards and conspiracies against him; and despite the Financial Times saying “Mitt Romney is the model for a new Republican Party”, polls show Trump will most likely control the bulk of Republican voters as we head into 2022, which could see Congress swing back to Trumpian Republicans. That is the uncomfortable reality, and it is not one that can be papered over with asset bubbles – indeed, asset bubbles only make it worse.

“I have a bad feeling about this.”

end

iv) Swamp commentaries

 
 

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

 

Well that is all for today

I will see you THURSDAY night.

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