MAY 11/GOLD ROSE BY $9.85 TO $1852,25//SILVER ADVANCED BY 8 CENTS TO $21.56//PLATINUM ROSE BY $26.80 TO $999.70//PALLADIUM FELL BY $47.05 TO $2029.90//COMEX GOLD STANDING FOR MAY ROSE BY A HUGE 153,500 OZ //NEW STANDING 13.900 TONNES//HOWEVER SILVER SAW ANOTHER 255,000 OZ EFP JUMP TO LONDON SO SILVER STANDING FOR MAY DROPS TO 27.845 MILLION OZ//VACCINE INJURY REPORT/VACCINE IMPACT//COVID RE SHANGHAI LOCKDOWNS//DR PAUL ALEXANDER REVIEWS VANDENBOCCHE’S HUGE PAPER ON ADE//USA CPI RED HOT//DIESEL FUEL PRICES SKYROCKET AGAIN//BAY FORMULA FOOD SHORTAGES//SWAMP STORIES FOR YOU TONIGHT//

harveyorgan · in Uncategorized · Leave a comment·Edit

GOLD;  $1852.25 UP $9.85

SILVER: $21.56 UP  $.08

ACCESS MARKET: GOLD $1852.00

SILVER: $21.54

Bitcoin morning price:  $31,614 UP 190

Bitcoin: afternoon price: $29,676 DOWN 1748

Platinum price: closing UP $26.80 to $999.70

Palladium price; closing DOWN $47.05  at $2029.90

END

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 EXCHANGE: COMEX

comex notices percentage of JPMorgan notices filed:  1591/2173 

EXCHANGE: COMEX
CONTRACT: MAY 2022 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,839.900000000 USD
INTENT DATE: 05/10/2022 DELIVERY DATE: 05/12/2022
FIRM ORG FIRM NAME ISSUED STOPPED


132 C SG AMERICAS 3
657 C MORGAN STANLEY 2
657 H MORGAN STANLEY 544
661 C JP MORGAN 1591
709 C BARCLAYS 26
732 C RBC CAP MARKETS 3
737 C ADVANTAGE 4
880 H CITIGROUP 2171
905 C ADM 2


TOTAL: 2,173 2,173
MONTH TO DATE: 4,085



NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT 2173  NOTICE(S) FOR 217,300 OZ  (0.0  TONNES)

total notices so far:  4085 contracts for 408,500. oz (12.706 tonnes)

SILVER NOTICES: 

875 NOTICE(S) FILED 4,375,000   OZ/

total number of notices filed so far this month  4737  :  for 23,685,000  oz



END

Russia is a major supplier of silver to London while Mexico supplies the COMEX

With the sanctions, London has no way to obtain silver other than compete with NY.

GLD

WITH GOLD UP $9.85

WITH RESPECT TO GLD WITHDRAWALS:  (OVER THE PAST FEW MONTHS):

GOLD IS “RETURNED” TO THE BANK OF ENGLAND WHEN CALLING IN THEIR LEASES: THE GOLD NEVER LEAVES THE BANK OF ENGLAND IN THE FIRST PLACE. THE BANK IS PROTECTING ITSELF IN CASE OF COMMERCIAL FAILURE

ALSO INVESTORS SWITCHING TO SPROTT PHYSICAL  (phys) INSTEAD OF THE FRAUDULENT GLD//

A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 7.25 TONNES FROM THE GLD

INVENTORY RESTS AT 1068.65 TONNES

Silver//SLV

WITH NO SILVER AROUND AND SILVER UP 8 CENTS

AT THE SLV// A BIG CHANGE IN SILVER INVENTORY AT THE SLV://A WITHDRAWAL OF 5.487 MILLION OZ INTO THE SLV/

INVESTORS ARE SWITCHING SLV TO SPROTT’S PSLV

CLOSING INVENTORY: 570.439 MILLION OZ

Let us have a look at the data for today

SILVER//OUTLINE


SILVER COMEX OI ROSE BY A STRONG SIZED  1005 CONTRACTS TO 142,752   AND CLOSER TO  THE NEW RECORD OF 244,710, SET FEB 25/2020 AND  THE GAIN IN OI WAS ACCOMPLISHED DESPITE OUR STRONG $0.40 LOSS  IN SILVER PRICING AT THE COMEX ON MONDAY.  OUR BANKERS WERE SUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT FELL BY $0.40) BUT WERE UNSUCCESSFUL IN KNOCKING OUT ANY SILVER LONGS  AS  WE HAD A HUMONGOUS GAIN OF 3153 CONTRACTS ON OUR TWO EXCHANGES.

WE  MUST HAVE HAD: 
I) HUGE BANKER SHORT COVERING AS THEY ARE VERY ANXIOUS TO GET OUT OF DODGE!!/. II)WE ALSO HAD  SOME  REDDIT RAPTOR BUYING//.   iii)  A STRONG ISSUANCE OF EXCHANGE FOR PHYSICALS iiii) A STRONG INITIAL SILVER STANDING FOR COMEX SILVER MEASURING AT 30.170 MILLION OZ FOLLOWED BY TODAY’S 255,000 OZ E.F.P JUMP TO LONDON //NEW STANDING 27.845 MILLION OZ/ //  V)    STRONG SIZED COMEX OI GAIN/

 I AM NOW RECORDING THE DIFFERENTIAL IN OI FROM PRELIMINARY TO FINAL: 


THE DIFFERENTIAL FROM PRELIMINARY OI TO FINAL OI SILVER TODAY: CONTRACTS  : 212

HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS  MAY. ACCUMULATION FOR EFP’S SILVER/JPMORGAN’S HOUSE OF BRIBES/STARTING FROM FIRST DAY/MONTH OF MAY: 

TOTAL CONTACTS for 7 days, total 10,704,  contracts:  53.520 million oz  OR 7.645 MILLION OZ PER DAY. (1529CONTRACTS PER DAY)

TOTAL EFP’S FOR THE MONTH SO FAR: 53.520 MILLION OZ

.

LAST 11 MONTHS TOTAL EFP CONTRACTS ISSUED  IN MILLIONS OF OZ:

MAY 137.83 MILLION

JUNE 149.91 MILLION OZ

JULY 129.445 MILLION OZ

AUGUST: MILLION OZ 140.120 

SEPT. 28.230 MILLION OZ//

OCT:  94.595 MILLION OZ

NOV: 131.925 MILLION OZ

DEC: 100.615 MILLION OZ 

JAN 2022//  90.460 MILLION OZ

FEB 2022:  72.39 MILLION OZ//

MARCH: 207.430  MILLION OZ//A NEW RECORD FOR EFP ISSUANCE AND WE ARE STILL GOING STRONG THIS MONTH.

APRIL: 114.52 MILLION OZ FINAL//LOW ISSUANCE

MAY: 53.520 MILLION OZ//INCREASING AGAIN

RESULT: WE HAD A VERY STRONG  SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1005 DESPITE OUR   $0.40 LOSS IN SILVER PRICING AT THE COMEX// TUESDAY.,.  THE CME NOTIFIED US THAT WE HAD A HUGE  SIZED EFP ISSUANCE  CONTRACTS: 1936 CONTRACTS ISSUED FOR MAY AND 0 CONTRACTS ISSUED FOR ALL OTHER MONTHS) WHICH  EXITED OUT OF THE SILVER COMEX  TO LONDON  AS FORWARDS    THE DOMINANT FEATURE TODAY: /HUGE BANKER SHORT COVERING AS THEY GET OUT OF DODGE//// WE HAVE A HUGE INITIAL SILVER OZ STANDING FOR MAY. OF 30.170 MILLION  OZ  FOLLOWED BY TODAY;S 255,000  OZ E.F.P JUMP TO LONDON//NEW STANDING 27.845 MILLION OZ//  .. WE HAD A HUMONGOUS SIZED GAIN OF 2941 OI CONTRACTS ON THE TWO EXCHANGES FOR 14.705 MILLION  OZ DESPITE THE STRONG LOSS IN PRICE. 

 WE HAD 875  NOTICE FILED TODAY FOR  4,375,000 OZ

THE SILVER COMEX IS NOW BEING ATTACKED FOR METAL BY LONDONERS ET AL.

GOLD//OUTLINE

IN GOLD, THE COMEX OPEN INTEREST ROSE BY A FAIRY TALE SIZED 18,316 CONTRACTS  TO 571,447 AND CLOSER TO NEW RECORD (SET JAN 24/2020) AT 799,541 AND  PREVIOUS TO THAT: (SET JAN 6/2020) AT 797,110.

THE DIFFERENTIAL FROM PRELIMINARY OI TO FINAL OI IN GOLD TODAY:  –3543 CONTRACTS.

THE BIS HAS ABANDONED THE GOLD COMEX TRADING!!!

.

THE  HUMONGOUS SIZED INCREASE IN COMEX OI CAME DESPITE OUR STRONG LOSS IN PRICE OF $16.90//COMEX GOLD TRADING/TUESDAY /.AS IN SILVER WE MUST  HAD  HUGE BANKER/ALGO SHORT COVERING ACCOMPANYING OUR FAIR SIZED EXCHANGE FOR PHYSICAL ISSUANCE. WE HAD ZERO LONG LIQUIDATION   

WE ALSO HAD A HUGE INITIAL STANDING IN GOLD TONNAGE FOR MAY AT 5.353 TONNES ON FIRST DAY NOTICE /FOLLOWED BY TODAY”S UNBELIEVABLE QUEUE JUMP OF 153,500 OZ//NEW STANDING 13.900 TONNES

YET ALL OF..THIS HAPPENED WITH OUR LOSS IN PRICE OF   $16.90 WITH RESPECT TO TUESDAY’S TRADING

WE HAD AN ATMOSPHERIC SIZED GAIN OF 27,726  OI CONTRACTS (95.89 PAPER TONNES) ON OUR TWO EXCHANGES..

E.F.P. ISSUANCE

THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A STRONG SIZED  8970 CONTRACTS:

The NEW COMEX OI FOR THE GOLD COMPLEX RESTS AT 571,447.

IN ESSENCE WE HAVE A  STRONG SIZED INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 27,286, WITH 18,316 CONTRACTS INCREASED AT THE COMEX AND 8970 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI GAIN ON THE TWO EXCHANGES OF 27,286 CONTRACTS OR 84.97 TONNES.

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES

WE HAD A STRONG SIZED ISSUANCE IN EXCHANGE FOR PHYSICALS (8970) ACCOMPANYING THE GIGANTIC SIZED GAIN IN COMEX OI (18,316,): TOTAL GAIN IN THE TWO EXCHANGES  27,286 CONTRACTS. WE NO DOUBT HAD 1) HUGE BANKER SHORT COVERING ,2.) STRONG INITIAL STANDING AT THE GOLD COMEX FOR MAY. AT 5.353 TONNES FOLLOWED BY TODAY’S GIGANTIC QUEUE JUMP OF 153,500 OZ//NEW STANDING 13.900 ///  3) ZERO LONG LIQUIDATION //.,4) ATMOSPHERIC SIZED COMEX  OI. GAIN 5) STRONG ISSUANCE OF EXCHANGE FOR PHYSICAL/

HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS IN 2022 INCLUDING TODAY

MAY

ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAY :

29,905 CONTRACTS OR 2,990,500 OR 93.01  TONNES 7 TRADING DAY(S) AND THUS AVERAGING: 4272 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE  SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 7 TRADING DAY(S) IN  TONNES: 93.01 TONNES

TOTAL ANNUAL GOLD PRODUCTION, 2021, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES

THUS EFP TRANSFERS REPRESENTS  93.01/3550 x 100% TONNES  2.62% OF GLOBAL ANNUAL PRODUCTION

ACCUMULATION OF GOLD EFP’S YEAR 2021 TO 2022 

JANUARY/2021: 265.26 TONNES (RAPIDLY INCREASING AGAIN)

 FEB  :  171.24 TONNES  ( DEFINITELY SLOWING DOWN AGAIN).. 

MARCH:.   276.50 TONNES (STRONG AGAIN/

APRIL:      189..44 TONNES  ( DRAMATICALLY SLOWING DOWN AGAIN//GOLD IN BACKWARDATION)

MAY:        250.15 TONNES  (NOW DRAMATICALLY INCREASING AGAIN)

JUNE:      247.54 TONNES (FINAL)

JULY:        188.73 TONNES FINAL

AUGUST:   217.89 TONNES FINAL ISSUANCE.

SEPT          142.12 TONNES FINAL ISSUANCE ( LOW ISSUANCE)_

OCT:           141.13 TONNES FINAL ISSUANCE (LOW ISSUANCE)

NOV:           312.46 TONNES FINAL ISSUANCE//NEW RECORD!! (INCREASING DRAMATICALLY)//SIGN OF REAL STRESS//SURPASSING THE MARCH 2021 RECORD OF 276.50 TONNES OF EFP

DEC.           175.62 TONNES//FINAL ISSUANCE// 

JAN:2022   247.25 TONNES //FINAL

FEB:           196.04 TONNES//FINAL

MARCH:  409.30 TONNES INITIAL( THIS IS NOW A RECORD EFP ISSUANCE FOR MARCH AND FOR ANY MONTH.

APRIL:  169.55 TONNES (FINAL VERY  LOW ISSUANCE MONTH)

MAY:  93.01 TONNES INITIAL// INCREASING AGAIN

SPREADING OPERATIONS

(/NOW SWITCHING TO GOLD) FOR NEWCOMERS, HERE ARE THE DETAILS

SPREADING LIQUIDATION HAS NOW COMMENCED   AS WE HEAD TOWARDS THE  NEW ACTIVE FRONT MONTH OF MAY.WE ARE NOW INTO THE SPREADING OPERATION OF SILVER

HERE IS A BRIEF SYNOPSIS OF HOW THE CROOKS FLEECE UNSUSPECTING LONGS IN THE SPREADING ENDEAVOUR ;MODUS OPERANDI OF THE CORRUPT BANKERS AS TO HOW THEY HANDLE THEIR SPREAD OPEN INTERESTS:HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NOW INTO THE  NON ACTIVE DELIVERY MONTH OF APRIL HEADING TOWARDS THE  ACTIVE DELIVERY MONTH OF MAY, FOR SILVER:

YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST  STARTS TO RISE BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN 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.”

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 HUGE SIZED 1005 CONTRACT OI TO 142,752 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  5 YEARS AGO.  

EFP ISSUANCE 1936 CONTRACTS

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

MAY 1936  ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 0 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 560 CONTRACTS AND ADD TO THE 1936 OI TRANSFERRED TO LONDON THROUGH EFP’S,

WE OBTAIN A HUMONGOUS SIZED GAIN OF 2941 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES. 

THUS IN OUNCES, THE  GAIN  ON THE TWO EXCHANGES 14.705 MILLION OZ

OCCURRED DESPITE OUR LOSS IN PRICE OF  $0.40 .

OUTLINE FOR TODAY’S COMMENTARY

1/COMEX GOLD AND SILVER REPORT

(report Harvey)

2 ) Gold/silver trading overnight Europe,

(Peter Schiff,

3. Egon von Greyerz///Matthew Piepenburg via GoldSwitzerland.com,

4. Chris Powell of GATA provides to us very important physical commentaries

end

5. Other gold commentaries

end

6. Commodity commentaries/cryptocurrencies

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING// TUESDAY  NIGHT

SHANGHAI CLOSED UP 22,86 PTS OR 0.75%   //Hang Sang CLOSED UP 190.88 PTS OR 0.97%    /The Nikkei closed UP 46.54 OR 0.18%          //Australia’s all ordinaires CLOSED UP 0.26%   /Chinese yuan (ONSHORE) closed up 6,7179    /Oil UP TO 103.92 dollars per barrel for WTI and down TO 106.85 for Brent. Stocks in Europe OPENED  ALL green       //  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.7179 OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7268: /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN  TRADING STRONGER AGAINST US DOLLAR/OFFSHORE STRONGER/

a)NORTH KOREA

outline

b) REPORT ON JAPAN/

OUTLINE

3 C CHINA

OUTLINE

4/EUROPEAN AFFAIRS

OUTLINE

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

OUTLINE

6.Global Issues

OUTLINE

7. OIL ISSUES

OUTLINE

8 EMERGING MARKET ISSUES

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

GOLD

LET US BEGIN:

THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY A DOUBLY ATMOSPHERIC SIZED 18,316 CONTRACTS OR 1,831,600 OZ  AND CLOSER TO 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  COMEX DECREASE OCCURRED DESPITE OUR  LOSS OF $16.90 IN GOLD PRICING TUESDAY’S COMEX TRADING. WE ALSO HAD A FAIR SIZED EFP (2187 CONTRACTS). . THEY WERE PAID HANDSOMELY  NOT TO TAKE DELIVERY AT THE COMEX AND SETTLE FOR CASH.

WE NORMALLY HAVE WITNESSED  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. IT SEEMS THAT ARE BANKERS FRIENDS ARE EXERCISING EFP’S FROM LONDON AND NOW THEY ARE LOATHE TO ISSUE NEW ONES.

EXCHANGE FOR PHYSICAL ISSUANCE

WE ARE NOW MOVING TO THE  ACTIVE DELIVERY MONTH OF MAY..  THE CME REPORTS THAT THE BANKERS ISSUED A  STRONG SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS.,

THAT IS 8970 EFP CONTRACTS WERE ISSUED:  ;: ,  . 0 JUNE :8970 & ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  8970 CONTRACTS 

WHEN WE HAVE BACKWARDATION,  EFP ISSUANCE IS VERY COSTLY BUT THE REAL PROBLEM IS THE SCARCITY OF METAL AND IT IS FAR BETTER FOR OUR BANKERS TO PAY OFF INDIVIDUALS THAN RISK INVESTORS ESPECIALLY FROM LONDON STANDING FOR DELIVERY. THE LOWER PRICES IN THE FUTURES MARKET IS A MAGNET FOR OUR LONDONERS SEEKING PHYSICAL METAL. BACKWARDATION ALWAYS EQUAL SCARCITY OF METAL!

ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: AN UNBELIEVABLY SIZED  TOTAL OF 27,286 CONTRACTS IN THAT 8970 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE HAD AN ATMOSPHERIC SIZED  COMEX OI GAIN OF 18,316  CONTRACTS..AND YET  THIS GAIN OCCURRED DESPITE  OUR LOSS IN PRICE OF GOLD $16.90

// WE HAVE A STRONG AMOUNT OF GOLD TONNAGE STANDING FOR MAY   (13.900),

 HERE ARE THE AMOUNTS THAT STOOD FOR DELIVERY IN THE PRECEDING 12 MONTHS OF 2021:

DEC 2021: 112.217 TONNES

NOV.  8.074 TONNES

OCT.    57.707 TONNES

SEPT: 11.9160 TONNES

AUGUST: 80.489 TONNES

JULY: 7.2814 TONNES

JUNE:  72.289 TONNES

MAY 5.77 TONNES

APRIL  95.331 TONNES

MARCH 30.205 TONNES

FEB ’21. 113.424 TONNES

JAN ’21: 6.500 TONNES.

TOTAL SO FAR THIS YEAR (JAN- DEC): 601.213 TONNES

YEAR 2022:

JANUARY 2022  17.79 TONNES

FEB 2022: 59.023 TONNES

MARCH: 36.678 TONNES

APRIL: 85.340 TONNES FINAL.

MAY: 13.900 TONNES

THE BANKERS WERE SUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT FELL $16.90) BUT  WERE  UNSUCCESSFUL IN FLEECING ANY LONGS// AS WE HAVE  REGISTERED AN UNBELIEVABLY SIZED GAIN  OF 95.89 TONNES ON TOTAL OI FROM OUR TWO EXCHANGES, ACCOMPANYING OUR HUGE GOLD TONNAGE STANDING FOR MAY (13.900 TONNES)

WE HAD 3543 CONTRACTS REMOVED FROM COMEX TRADES. THESE WERE REMOVED AFTER TRADING ENDED LAST NIGHT

NET GAIN ON THE TWO EXCHANGES 27,726 CONTRACTS OR 2,778,600  OZ OR 84.87 TONNES

Estimated gold volume today: 285,824/// good

Confirmed volume yesterday:361,945 contracts  good

INITIAL STANDINGS FOR MAY ’22 COMEX GOLD //MAY 11

GoldOunces
Withdrawals from Dealers Inventory in oznil oz
Withdrawals from Customer Inventory in oz76,020.400 oz
Manfra
Brinks
Delaware
JPMorgan includes10 kilobars
and 150 kilobars
Deposit to the Dealer Inventory in oznil OZ 
Deposits to the Customer Inventory, in oz63,885.223 oz HSBC
No of oz served (contracts) today2173  notice(s)
217,300 OZ
6.75 TONNES
No of oz to be served (notices)384 contracts
 38,400 oz
1.194 TONNES
Total monthly oz gold served (contracts) so far this month4085 notices
408,500 OZ
12.706 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this monthNIL oz
Total accumulative withdrawal of gold from the Customer inventory this monthxxx oz

For today:

dealer deposits  0

total dealer deposit  nil   oz//

No dealer withdrawals

1 customer deposits

i) Into HSBC:  63,885.233 oz

4 customer withdrawals:

i) Out of Brinks:  56,330.330 oz

ii) Out of Manfra 14,545.910 oz

iii) Out of jPMorgan: 4822.650 oz (150 kilobars)

iv) Out of Delaware  321.510 oz (10 kilobars_

total withdrawal: 76,020/5– oz

ADJUSTMENTS:   1  Brinks//dealer to customer 100.01 oz

CALCULATIONS FOR THE AMOUNT OF GOLD STANDING FOR MAY.

For the front month of MAY we have an  oi of 2557 contracts having GAINED 1535 contracts

We had 0 notices filed on Monday, so we gained 1535 contracts or  AN ADDITIONAL 153,500 oz will stand for delivery in this non active delivery month of May.

June saw a loss of 27,786 contracts down to 323,190  contracts 

July has a gain of 3 OI to stand at 154

August has a gain of 42,926 contracts up to 190,070 contracts

We had 2173 notice(s) filed today for  217,300 oz FOR THE MAY 2022 CONTRACT MONTH. 


Today, 0 notice(s) were issued from J.P.Morgan dealer account and  0 notices were issued from their client or customer account. The total of all issuance by all participants equate to 0 contract(s) of which 2173  notices were stopped (received) by j.P. Morgan dealer and  1591 notice(s) was (were) stopped/ Received) by J.P.Morgan//customer account and 0 notice(s) received (stopped) by the squid  (Goldman Sachs)

To calculate the INITIAL total number of gold ounces standing for the MAY /2021. contract month, 

we take the total number of notices filed so far for the month (4085) x 100 oz , to which we add the difference between the open interest for the front month of  (MAY 2557  CONTRACTS ) minus the number of notices served upon today  2173 x 100 oz per contract equals 446900 OZ  OR 13.900 TONNES the number of TONNES standing in this non  active month of MAY. 

thus the INITIAL standings for gold for the MAY contract month:

No of notices filed so far (4085) x 100 oz+   (2557)  OI for the front month minus the number of notices served upon today (2173} x 100 oz} which equals 446,900 oz standing OR 13.900 TONNES in this NON  active delivery month of MAY.

TOTAL COMEX GOLD STANDING:  13.900 TONNES  (A STRONG STANDING FOR A MAY ( NON ACTIVE) DELIVERY MONTH)

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

COMEX GOLD INVENTORIES/CLASSIFICATION

NEW PLEDGED GOLD:

241,794.285 oz NOW PLEDGED /HSBC  5.94 TONNES

204,937.290 PLEDGED  MANFRA 3.08 TONNES

83,657.582 PLEDGED JPMorgan no 1  1.690 tonnes

265,999.054, oz  JPM No 2 

1,152,376.639 oz pledged  Brinks/

Manfra:  33,758.550 oz

Delaware: 193.721 oz

International Delaware::  11,188.542 o

total pledged gold:  2,026,795.134 oz                             

TOTAL OF ALL GOLD ELIGIBLE AND REGISTERED:  36,025,758.780 OZ 

TOTAL ELIGIBLE GOLD: 18,195,107.026  OZ

TOTAL OF ALL REGISTERED GOLD: 17,830,651.712 OZ  

REGISTERED GOLD THAT CAN BE SERVED UPON: 15,803,856.0 OZ (REG GOLD- PLEDGED GOLD)  

END

MAY 2022 CONTRACT MONTH//SILVER//MAY 11

SilverOunces
Withdrawals from Dealers InventoryNIL oz
Withdrawals from Customer Inventory1,186,964.100  oz
Brinks
CNT
JPMorgan
Deposits to the Dealer InventorynilOZ
Deposits to the Customer Inventory1,170,303.526 oz
CNT
JPMorgan
No of oz served today (contracts)875CONTRACT(S)4,375,000  OZ)
No of oz to be served (notices)837 contracts (4,185,000 oz)
Total monthly oz silver served (contracts)4732 contracts 23,685,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this monthNIL oz
Total accumulative withdrawal of silver from the Customer inventory this month
 

And now for the wild silver comex results

we had 0 deposit into the dealer

total dealer deposits:  nil     oz

i) We had 0 dealer withdrawal

total dealer withdrawals: nil oz

We have 2 deposits into the customer account

i) Into CNT:  560,746.020 oz

ii) Into JPMorgan: 609,557.500 oz

total deposit:  1,170,303.526    oz

JPMorgan has a total silver weight: 177.201 million oz/336.966 million =52.56% of comex 

 Comex withdrawals: 3

i) Out of JPMorgan  581,487.080 oz

ii) Out of CNT::  1032.000 oz

iii) Out of Brinks 604,445.020  oz

total withdrawal 1,186,964.100    oz

1 adjustments: 

dealer to customer /JPMorgan 770,482.470 oz  

the silver comex is in stress!

TOTAL REGISTERED SILVER: 80.759 MILLION OZ

TOTAL REG + ELIG. 336.966 MILLION OZ

CALCULATION OF SILVER OZ STANDING FOR APRIL

silver open interest data:

FRONT MONTH OF MAY OI: 1712 HAVING LOST 293 CONTRACTS.  WE HAD 242 NOTICES FILED ON MONDAY

SO WE LOST 51  CONTRACTS OR AN EFP JUMP OF 255,000

JUNE HAD A GAIN OF 5 TO STAND AT 1496

JULY HAD A GAIN OF 544 CONTRACTS UP TO 115,553 CONTRACTS.

 .

TOTAL NUMBER OF NOTICES FILED FOR TODAY: 875 for 4,375,000 oz

Comex volumes: 76,415// est. volume today//   good

Comex volume: confirmed yesterday: 84,462 contracts (  good )

To calculate the number of silver ounces that will stand for delivery in MAY we take the total number of notices filed for the month so far at 4732 x 5,000 oz = 23,685,000 oz 

to which we add the difference between the open interest for the front month of MAY(xxx) and the number of notices served upon today 875  x (5000 oz) equals the number of ounces standing.

Thus the  standings for silver for the MAY./2021 contract month: 4732 (notices served so far) x 5000 oz + OI for front month of MAY (1712)  – number of notices served upon today (875) x 5000 oz of silver standing for the MAY contract month equates 27,845,000 oz. .

We LOST 51 contracts or AN ADDITIONAL 255,000 will NOT stand for delivery at the comex as they were EFP’d to London 

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

END

GLD AND SLV INVENTORY LEVELS:

MAY 11/WITH GOLD UP $9.85//BIG CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 7.25 TONNES FROM THE GLD/////INVENTORY RESTS AT 1068.65 TONNES

MAY 10//WITH GOLD DOWN $16.90: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A MASSIVE WITHDRAWAL OF 6.10 TONNES OF GOLD FROM THE GLD//INVENTORY RESTS AT 1075.90 TONNES

MAY 9/WITH GOLD DOWN $24.05: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.98 TONNES FROM THE GLD..//INVENTORY RESTS AT 1082.00 TONNES

MAY 6/WITH GOLD UP $7.95: A HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.06 TONNES FROM THE GLD////INVENTORY RESTS AT 1084.98 TONNES

MAY 5/WITH GOLD UP $6.60 TODAY:NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1089.04 TONNES

MAY 4//WITH GOLD UP 70 CENTS TODAY; A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.19 \TONNES FROM THE GLD//INVENTORY RESTS AT 1089.04 TONNES

MAY 3/WITH GOLD UP $6.05: A BIG CHANGE IN GOLD INVENTORY AT THE GLD/ A WITHDRAWL OF 2.32 TONNES//INVENTORY RESTS AT 1092.23

MAY 2/WITH GOLD DOWN $46.20: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.17 TONNES FROM THE GLD///INVENTORY RESTS AT 1094.55 TONNES

APRIL 29/WITH GOLD UP $20.05/NO CHANGES IN GOLD INVENTORY AT THE GLD/INVENTORY RESTS AT 1095,72 TONNES

APRIL 28/WITH GOLD UP $2.35: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 3.77 TONNES FROM THE GLD //INVENTORY RESTS AT 1095.72 TONNES

APRIL 27/WITH GOLD DOWN $15.30//A HUGE CHANGE IN GOLD INVENTORY AT THE GLD; A WITHDRAWAL OF 1.74 TONNES FROM THE GLD////INVENTORY RESTS AT 1099.49 TONNES

APRIL 26/WITH GOLD UP $7.60//HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 2.9 TONNES INTO THE GLD./INVENTORY RESTS AT 1101.23 TONNES

APRIL 25/WITH GOLD DOWN $36.80//NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1104.13 TONNES 

APRIL 22/WITH GOLD DOWN $13.50: A HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.61 TONNES FROM THE GLD.//INVENTORY RESTS AT 1104.13 TONNES

APRIL 21/WITH GOLD DOWN $6.80//NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1106.74 TONNES

APRIL 20/WITH GOLD DOWN $3.05: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT IF 6.36 TONNES INTO THE GLD..//INVENTORY RESTS AT 1106.74 TONNES

APRIL 19//WITH GOLD DOWN $26.90//A SMALL CHANGE IN GOLD INVENTORY AT THE GLD A DEPOSIT OF .87 TONNES INTO THE GLD//INVENTORY RESTS AT 1100.36 TONNES

APRIL 18/WITH GOLD UP $11.20: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.93 TONNES FROM THE GLD..//INVENTORY RESTS AT 1099.44 TONNES

APRIL 14/WITH GOLD DOWN $8.90: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A  DEPOSIT OF 11.32 TONNES INTO THE GLD..//INVENTORY RESTS AT 1104.42 TONNES

APRIL 13/WITH GOLD UP $8.80: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1093.10 TONNES

APRIL 12/WITH GOLD UP $26.95: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 2.61 TONNES INTO THE GLD///INVENTORY REST AT 1093.10 TONNES

APRIL 11/WITH GOLD UP $3.40 //A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 1.74 TONNES OF GOLD INTO THE GLD.//INVENTORY RESTS AT 1090.49 TONNES

APRIL 8/WITH GOLD UP $7.70: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A DEPOSIT OF 1.45 TONNES INTO THE GLD//INVENTORY RESTS AT 1088.75 TONNES

APRIL 7/WITH GOLD UP $13.40: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 1087.30 TONNES

APRIL 6/WITH GOLD DOWN $4.10: A HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.68 TONNES FROM THE GLD..//INVENTORY RESTS AT 1087.30 TONNES

APRIL 5/WITH GOLD DOWN $5.70: A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.75 TONNES FROM THE GLD//INVENTORY RESTS AT 1089.98 TONNES

GLD INVENTORY: 1068.65 TONNES

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

May 11/WITH SILVER UP 8 CENTS TODAY: BIG CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 5.487 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 570.439 MILLION OZ//

MAY 10.//WITH SILVER DOWN 40 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 575.977 MILLION OZ//

MAY 9/WITH SILVER DOWN 50 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 575.977 MILLION OZ

MAY 6/WITH SILVER DOWN 6 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 575.977 MILLION OZ//

MAY 5/WITH SILVER UP 6 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF .93 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 575.977 MILLION OZ//

MAY 4/WITH SILVER DOWN 27 CENTS TODAY: A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF .851 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 576.900 MILLION OZ

MAY 3/WITH SILVER UP 4 CENTS TODAY: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV//A DEPOSIT OF.877 MILLION OZ INTO THE SLV.

MAY 2/WITH SILVER DOWN 47 CENTS: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 554,000 OZ FROM THE SLV.//INVENTORY RESTS AT 575.171 MILLION OZ//

APRIL 29//WITH SILVER DOWN 12  CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 575.725 MILLION OZ/

APRIL 28/WITH SILVER DOWN 23 CENTS: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.308 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 575.725 MILLION OZ//

APRIL 27/WITH SILVER DOWN 4 CENTS: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.385 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 578.033 MILLION OZ

APRIL 26/WITH SILVER DOWN 13 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 579.418 MILLION OZ

APRIL 25/WITH SILVER DOWN 69 CENTS: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.031 MILLION OZ FROM THE SLV//INVENTORY RESTS AT 579.418 MILLION OZ//

APRIL 22/WITH SILVER DOWN 34 CENTS : STRANGE!! A HUGE CHANGE IN SILVER INVENTORY AT THE SLV: A WHOPPING DEPOSIT OF 3.508 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 581.449 MILLION OZ//

APRIL 21/WITH SILVER UP 57 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 577.941 MILLION OZ

APRIL 20/WITH SILVER DOWN 15 CENTS : A HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 2.955 MILLION OZ INTO THE SLV//INVENTORY RESTS AT 577.941 MILLION OZ///

APRIL 19/WITH SILVER DOWN 62 CENTS: A SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF .461 MILLION OZ FROM THE SLV INVENTORY…//INVENTORY RESTS AT 574.986 MILLION OZ

APRIL 18/WITH SILVER UP 38 CENTS: A HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 5.771 MILLION OZ INTO THE SLV./INVENTORY RESTS AT 575.447 MILLION OZ//

APRIL 14/WITH SILVER DOWN 25 CENTS : A MONSTROUS CHANGE IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 4.355 MILLION OZ INTO THE SLV.//INVENTORY RESTS AT 569.676 MILLION OZ//

APRIL 13/WITH SILVER UP 27 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 565.521 MILLION OZ

APRIL 12/WITH SILVER UP 66 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 565.521 MILLION OZ//

APRIL 11/WITH SILVER UP 13 CENTS: A SMALL CHANGE IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 831,000 OZ FORM THE SLV////INVENTORY RESTS AT 565.521 MILLION OZ

APRIL 8/WITH SILVER  UP 11 CENTS :NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 566.352 MILLION OZ//

APRIL 7/WITH SILVER UP 27 CENTS : NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 566.352 MILLION OZ//

APRIL 6/WITH SILVER DOWN 9 CENTS : NO CHANGES IN SILVER INVENTORY AT THE SLV/INVENTORY RESTS AT 566.352 MILLION OZ

APRIL 5/WITH SILVER DOWN 16 CENTS : A HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.386 MILLION OZ INTO THE SLV..//INVENTORY RESETS AT 566.352 MILLION OZ//

INVENTORY TONIGHT RESTS AT 570.439 MILLION OZ/

PHYSICAL GOLD/SILVER STORIES

1.PETER SCHIFF

2.LAWRIE WILLIAMS//,//Egon von Greyerz///Matthew Piepenburg via GoldSwitzerland.com, James  RICKARDS/

LAWRIE WILLIAMS: China’s April gold demand confirms sharp economic downturn

The latest figures from China’s Shanghai Gold Exchange (SGE) for the April month’s gold withdrawals would seem to confirm a sharp downturn in that country’s key economic activity. This amidst some draconic measures to try and control new coronavirus outbreaks in some key industrial centres. Indeed the April gold withdrawal total at 83.74 tonnes is the lowest since July 2020 which was in the heart of the original Covid-19 outbreak in that nation.

What this may suggest is that the current coronavirus outbreak in China is more serious, and widespread, than the country’s government is telling us. Or perhaps because this time it is having a greater impact because it seems to be affecting the major centres of Shanghai and Beijing, which were largely spared at the height of the initial outbreak. Whatever the reason for the downturn, it is indeed likely to have an adverse impact on worldwide gold demand given that China has been the world’s largest gold consuming nation for some years now.

Of course the other effect is on global supply chain disruptions given the importance of Chinese products in global markets. It seems that hardly anything one buys in the West has not been made in China these days – particularly in the electronics sector. Already supply chain disruptions are a major contributor to global inflation.

There are also some reports suggesting that India, the world’s second largest gold consumer, may also be seeing a resurgence of coronavirus infection spread as new more infectious variants begin to dominate. Infection figures seem to be rising again in the U.S. too where virus-related deaths have already surpassed 1 million people and new infection rates are now also at worrying levels in Germany and France in Europe, with something of a return to higher infection figures in Italy, while other countries where things had seemed to be well under control, like Japan, South Korea, Australia, New Zealand even among others are seeing worrying infection numbers. The world is probably learning to live with the coronavirus, but the pandemic seems far from over and will continue to have an impact for the foreseeable future, if not for ever.

But back to China. We equate Chinese SGE gold withdrawals with overall demand levels – particularly with respect to gold imports and we have already noted a huge fall-off in Swiss gold exports to both China/Hong Kong and India, which has to be worrying for the gold mining sector. China is itself the world’s largest gold producer from its mines and as a byproduct from its big smelting and refining industry, so can probably meet the reduced demand level almost entirely from its own output.

World No. 2 producer (by some estimates) Russia, too, will be keen to sell gold to the Chinese markets if Western outlets are blocked due to economic sanctions, but may find there is no market for its excess output there. No doubt there are some countries which are not party to sanctions on Moscow, which will still buy Russian gold, particularly if it is offered at a discount. Thus we do see some disruptions in the gold markets ahead. Gold may therefore be in for a difficult few months, particularly if the fall- off in demand from China and India persists.

-END-

-END-

3. Chris Powell of GATA provides to us very important physical commentaries

end

4.OTHER GOLD/SILVER COMMENTARIES

end

5.OTHER COMMODITIES //DIESEL

Widespread uSA diesel shortages.  This sends the crack spreads to skyhigh prices

(zerohedge)

Widespread US Diesel Shortages Send Crack Spreads To Mindblowing Highs

WEDNESDAY, MAY 11, 2022 – 06:30 AM

By John Kemp, senior market analyst

Global stocks of refined petroleum products have fallen to critically low levels as refineries prove unable to keep up with surging demand especially for the diesel-like fuels used in manufacturing and freight transportation. The result has been a surge in prices refiners receive for selling fuels compared with prices they pay for buying crude and other feedstocks, boosting their profitability significantly.

In the United States, refiners currently receive roughly an average of more than $150 per barrel from the sale of gasoline and diesel at wholesale prices, while paying only around $100 to purchase crude.

The indicative 3-2-1 margin of $50 per barrel is based on the assumption a refinery produces two barrels of gasoline and one barrel of diesel from refining three barrels of crude.

The margin is meant to be representative for an “average” refinery and is a gross figure out of which refiners have to pay for labor, electricity, gas, hydrogen, catalysts, pipeline transport and the cost of capital.

Net margins are narrower and refinery costs have been rising rapidly as result of widespread inflation ripping through the economy following the coronavirus pandemic. Nonetheless, even allowing for rising input costs, gross margins have more than doubled from $20 at the end of 2021, ensuring refiners have a strong financial incentive to maximize crude processing and fuel production.

DISTILLATE FOCUS

Gross margins are currently higher for making diesel (almost $60 per barrel) than for gasoline ($45 per barrel) reflecting the relative shortage of middle distillates.

U.S. distillate fuel oil stocks are 31 million barrels (23%) below the pre-pandemic five-year average compared with a deficit of only 6 million barrels (3%) in gasoline.

The squeeze on fuel inventories and refinery capacity is compounding already high prices for crude caused by sanctions on Russia and output restraint by OPEC+ and U.S. shale producers. The resumption of international passenger aviation as quarantine restrictions are lifted is tightening the fuel market even further because jet fuel is broadly similar to diesel and gas oil.

The effective wholesale price of diesel has climbed to over $160 per barrel while gasoline is trading at over $150, based on futures for delivery in New York Harbor.

Once distributors’ and retailers’ margins and taxes are included, the average price at the pump paid by motorists has climbed to $236 per barrel for diesel and $186 per barrel for gasoline.

The refining margins and fuel prices cited in this column are all for the United States but the same shortage of refining capacity and fuel inventories is boosting diesel prices in Europe, and dragging up gasoline prices with them.

SLOWDOWN AHEAD

There is scope for refiners to increase fuel production by postponing non-essential maintenance and running refineries flat out into the early autumn. And some room to adjust the output mix by switching from maximum gasoline to maximum diesel mode in downstream processing units.

But any increase in diesel production is unlikely to be able to reverse the depletion of inventories fully and return them to pre-pandemic levels. Prices will therefore have to continue rising until they begin to restrain consumption or the economy enters a cyclical downturn.

Consumers can reduce fuel use in the short term by consolidating freight loads (fewer voyages, flights and deliveries), reducing speeds (slower voyaging, flying and driving) and eliminating engine idling.

But the fuel savings are relatively modest and tend to degrade service levels, reduce capacity and increase capital costs.

By contrast, a slowdown in the business cycle delivers large simultaneous reductions in diesel use – absolutely or relative to trend – by freight firms, manufacturers, miners and construction firms. Business cycle slowdowns have therefore tended to be the main path by which the distillate market and other fuel markets have rebalanced in the past.

The adjustment process is probably underway in 2022. The cyclical slowdown and reduced fuel demand could occur in one, two or all three of the major consuming regions.

Parts of China’s economy appear to be in recession already as coronavirus lockdowns paralyse factories and transport systems and depress consumer spending.

Europe’s economy is on the verge of recession as Russia’s invasion of Ukraine, the sanctions imposed in response, soaring energy prices and rampant inflation disrupt manufacturing and depress household spending.

The only major economy with significant momentum is the United States, but there, too, the rate of expansion is slowing, which will likely result in slower growth in distillate consumption later in the year.

end

COMMODITIES IN GENERAL//DIESEL/OIL/INVENTORIES

Tumbling Inventories Send US Gasoline, Diesel Prices To Fresh Record High

WEDNESDAY, MAY 11, 2022 – 02:05 PM

By Tsvetana Paraskova of OilPrice.com

U.S. gasoline prices continued to rise, setting another all-time high on Wednesday at $4.404 per gallon average nationwide, data from AAA showed today. 

That’s the highest recorded average price for gasoline in the United States, ever.

Diesel prices also hit a new high on Wednesday, reaching $5.553 a gallon. This is the highest average price ever recorded, too.  

Average U.S. gasoline prices have reached new records every day this week, with Monday’s price at $4.328 per gallon. The gasoline price increased to $4.374 a gallon on Tuesday, to pass the $4.40 mark on Wednesday for the latest all-time high.

To compare, at this time last year, the national average U.S. gasoline price stood at $2.985 per gallon, per AAA data.

Infographic: Gas Prices Surpass $4 in Most U.S. States | Statista

You will find more infographics at Statista

High international crude oil prices, with markets rattled by the Russian invasion of Ukraine and a post-COVID recovery in travel demand, have been pushing U.S. gasoline prices higher this year.

According to forecasts by fuel-savings app GasBuddy, U.S. gasoline prices will see the highest monthly average for 2022 in May. GasBuddy sees prices averaging $4.25/gal in May, but they could rise as high as $4.51/gal nationally, Patrick De Haan, head of petroleum analysis for GasBuddy, tweeted on Tuesday. Gasoline prices could hit $4.62/gal on some days in August this year, GasBuddy’s forecasts show. The yearly average for 2022 is predicted at $3.99 per gallon. 

Meanwhile, the price of diesel has also soared to record highs amid very tight domestic inventories of middle distillates and a global shortage of supply. Diesel is used in every part of the industrial activity and supply chain, from goods transportation to manufacturing and agriculture; it fuels America’s economy. Diesel prices have soared to record highs in recent months, adding further upward pressure on U.S. inflation figures.

The exceptionally tight diesel market at home and abroad is unlikely to ease any time soon, considering the post-COVID demand from industry and for leisure and travel, as well as the reduced supply of diesel, other fuels, and crude oil from Russia following the invasion of Ukraine and the bans on Russian imports or self-sanctioning of buyers in the West to buy Russian energy goods.

On the East Coast, inventories are at their lowest ever, as the refinery capacity in the region has halved over the past decade to just 818,000 barrels per day now.

So, instead of focusing on boosting the production of gasoline in the summer driving season, this year U.S. refiners could be looking to raise diesel and jet fuel runs, as the global market of distillates is very tight following the Russian war in Ukraine and supports high refinery margins for those products. 

U.S. inventories are “very, very tight, especially tight for diesel,” Gary Simmons, Executive Vice President and Chief Commercial Officer at Valero Energy, said on the Q1 earnings call at the end of April.

Valero Energy saw its highest-ever March refining margins this year, led by diesel, Simmons added.

The global diesel crunch is expected to worsen if the EU reaches some kind of a compromise on banning Russian crude and oil product imports. This will keep diesel prices elevated, impacting every economic activity in the U.S. and elsewhere, and ultimately hitting consumers. 

Currently, diesel at New York harbor is trading at around $5 per gallon, which is well above $200 per barrel, Tom Kloza, head of global energy research at OPIS, told CNBC’s Pippa Stevens.

“These are numbers that are not just off the charts. They’re off the walls, out of the building, and maybe out of the solar system,” Kloza told CNBC.   

END

Major Trucking Firms Prepare For “Imminent Diesel Shortage In Eastern Half Of US”

BY TYLER DURDEN

WEDNESDAY, MAY 11, 2022 – 03:07 PM

Major trucking fleets across the eastern half of the US are preparing for an “imminent” diesel shortage, according to logistics firm FreightWaves

Founder and CEO of FreightWaves Craig Fuller said “3 very large fleets” are preparing for diesel pumps at fuel stations to run dry. Drivers of these fleets received notifications about fuel shortages that could materialize in the coming weeks across the Mid-Atlantic and Northeast regions.

https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=eyJ0ZndfZXhwZXJpbWVudHNfY29va2llX2V4cGlyYXRpb24iOnsiYnVja2V0IjoxMjA5NjAwLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X3NlbnNpdGl2ZV9tZWRpYV9pbnRlcnN0aXRpYWxfMTM5NjMiOnsiYnVja2V0IjoiaW50ZXJzdGl0aWFsIiwidmVyc2lvbiI6bnVsbH19&frame=false&hideCard=false&hideThread=false&id=1524389465371860993&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fcommodities%2Fmajor-trucking-firms-prepare-imminent-diesel-shortage-eastern-half-us-freightwaves-says&sessionId=62543adb74d2a94a976b4ffcf51a2c99d14aafc8&siteScreenName=zerohedge&theme=light&widgetsVersion=c8fe9736dd6fb%3A1649830956492&width=550px

Fuller tweeted several messages that drivers received from fleet operators. The notifications were alarming. 

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He also tweeted what appears to be an unnamed industry insider explaining the historic mess hitting Mid-Atlantic and Northeast markets is a combination of crude being diverted from the US to Europe and supply chains issues along the East Coast. 

Diesel supply is short worldwide due to the invasion of Ukraine disrupting energy markets and resulting Western sanctions. The writing has been on the wall for months about developing shortages, as we discussed in:

On Wednesday, DOE showed US diesel inventories are now 23% below the five-year average for this time of year, at their lowest since May 2005.

The situation isn’t improving as diesel prices at the pump soar to new highs. 

Retail gas prices are also legging higher. 

And who does President Biden blame this time for possible fuel shortages? Can’t keep blaming Putin for every problem. 

6.CRYPTOCURRENCIES

7. GOLD/ TRADING

Your early  currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:30 AM

ONSHORE YUAN: CLOSED UP 6.7179

OFFSHORE YUAN: 6.7263

HANG SANG CLOSED UP 190.88 PTS OR 0.97% 

2. Nikkei closed UP 46.54 OR 0.18%

3. Europe stocks  ALL CLOSED  ALL GREEN

USA dollar INDEX  UP TO  103.62/Euro RISES TO 1.0547

3b Japan 10 YR bond yield: RISES TO. +.247/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 129.95/JAPANESE FALLING APART WITH YEN FALTERING AS WELL AS LONG TERM YIELDS RISING BREAKING THE JAPANESE CENTRAL BANK.

3c Nikkei now  ABOVE 17,000

3d USA/Yen rate now well below the important 120 barrier this morning

3e Gold UP /JAPANESE Yen UP CHINESE YUAN:   DOWN -SHORE CLOSED  UP//  OFF- SHORE  UP

3f 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.

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

3h European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund FALLS TO +1.044%/Italian 10 Yr bond yield FALLS to 3.06% /SPAIN 10 YR BOND YIELD FALLS TO 2.19%…

3i Greek 10 year bond yield FALLS TO 3.41

3j Gold at $1852.40 silver at: 21.77  7 am est) SILVER NEXT RESISTANCE LEVEL AT $30.00

3k USA vs Russian rouble;// Russian rouble UP  1 3/8      roubles/dollar; ROUBLE AT 68.03

3m oil into the 103 dollar handle for WTI and  106 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 129.77 DESTROYING JAPANESE CITIZENS WITH HIGHER FOOD INFLATION

30 SNB (Swiss National Bank) still intervening again in the markets driving down the FRANC. It is not working: USA/SF this morning .9998– as the Swiss Franc is still rising against most currencies. Euro vs SF 1.0437well 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.

USA 10 YR BOND YIELD: 2.930 DOWN 6 BASIS PTS

USA 30 YR BOND YIELD: 3.085 DOWN 4 BASIS PTS

USA DOLLAR VS TURKISH LIRA: 15.34

Futures, Bonds Rise Ahead Of Critical CPI Print As Chinese Covid Fears Fade

WEDNESDAY, MAY 11, 2022 – 07:52 AM

US index futures and European stocks were set to extend their recovery from the longest streak of weekly declines since 2011 ahead of an inflation report that was expected to show prices cooled in April, while falling bond yields supported battered tech stocks; Asian equities also advanced, halting a seven-day slide, as new Covid cases tumbled in Shanghai with the local government saying there was basically no COVID community spread in 8 of 16 districts, and the Chinese covid scare appears set to fade.

S&P 500 futures were trading at session highs, up 1.2%, and Nasdaq 100 futures were up 1.4%, while Europe’s Stoxx 600 climbed for a second day. The dollar fell and Treasury yields slumped, with the 10Y trading a 2.91%, a 30 basis points slide in the past three days, providing further support for high duration tech names. US-listed Chinese stocks rallied in New York premarket trading after the Asian nation reported easing Covid cases. Tech stocks also climbed in Hong Kong and Europe on Wednesday.

In less than an hour, investors will be analyzing the latest US consumer price index reading, due out at 830am ET,  which is expected to show price gains moderated in April, for clues on the Federal Reserve’s pace of monetary tightening (full preview here).

“A soft inflation read will come as a relief that the Fed doesn’t need to get much more aggressive to bring inflation back towards its 2% policy target,” said Swissquote Bank’s Ipek Ozkardeskaya. “If however, inflation hasn’t pulled lower as expected — and worse, if we see a higher figure than last month print — we would see another big wave of selloff.”

The “bar is low” for a surprise from the US data amid ebbing consumer sentiment, according to Brent Schutte, chief investment strategist at Northwestern Mutual Life Insurance Co. “Things are going to be just a bit better at the margin,” he said. “The Fed overall is going to tighten less. That will lead to a market that begins to find its feet and move higher in coming quarters as inflation does come off the boil.”

Technology shares have been leading the selloff as higher interest rates mean a bigger discount for the present value of future profits, hurting frothy growth stocks that have been among the past years’ best performers. Even though the Nasdaq 100 rose yesterday, it was trading near its November 2020 low and is down 24% this year. 

In premarket trading, Coinbase shares plunged as much as 18% after posting revenue for the first quarter that fell short of estimates. Occidental Petroleum shares were up after adjusted earnings per share for the first quarter beat the average analyst estimate. US-listed Chinese stocks gained as declining Covid cases in Shanghai lifted hopes for a ease in lockdown measures, boosting risk appetite. Embark Technology shares jumped 31% in US premarket trading, after the self-driving truckmaker reported a smaller net loss per share for the first quarter, with KeyBanc saying the firm is seeing “steady progress.”

Here are the biggest premarket movers today:

  • Occidental (OXY US) shares rise 1.7% in US premarket after adjusted earnings per share for the 1Q beat the average analyst estimate. The company demonstrated its ability to deleverage its balance sheet, analysts said
  • Chinese stocks rose in premarket trading as declining Covid cases in Shanghai lift hopes for an ease in lockdown measures, boosting risk appetite. Alibaba (BABA US) was up 2.7%, JD.com (JD US) +2.5%, Pinduoduo (PDD US) +2.9% and Baidu (BIDU US) +3.6%.
  • Embark Technology (EMBK US) shares jump as much as 31% in premarket, after the company reported a smaller net loss per share for the 1Q, with KeyBanc saying the firm is seeing “steady progress”
  • Exicure (XCUR US) shares rise 48% in US premarket after the early-stage biotechnology company announced a $5m sale of common stock in a private placement at a premium to the last close
  • Peloton (PTON US) shares up 3.3% premarket after closing at its lowest level since going public in September 2019. Analysts slash price targets as they expect the turnaround process to take time, but they maintained their recommendations on the stock
  • Unity Software (U US) shares slump as much as 30% in U.S. premarket trading, after the 3D game-development company reported its 1Q results and gave a 2Q revenue forecast that was weaker than expected
  • View (VIEW US) shares tumble 54% in premarket trading after the company delayed its 10-Q filing and said it expects to disclose substantial doubt about its ability to continue as a going concern
  • Coinbase (COIN US) shares plunged as much as 18% in premarket after posting worse-than-expected revenue for the 1Q, with analysts pointing to drops in crypto prices impacting the firm’s earnings and outlook
  • Roblox (RBLX US) shares were down 1.6% in premarket as its user growth in North America was slightly negative for the second straight quarter, KeyBanc analyst Tyler Parker says, adding that he continues to see significant growth internationally

Despite the gains, sentiment remains fragile as investors seek evidence that price pressures are peaking in the global economy. US data later Wednesday may show inflation moderated in April but stayed above 8%. Traders will use this information to weigh whether the Fed can continue with its half-point hikes as expected or will need to opt for a three-quarter-point increase (or reverse hiking once the US slides into recession). In other words, there’s a lot riding on the inflation figure, Esty Dwek, CIO at Flowbank SA, said in an interview with Bloomberg TV. Still, “the Fed is going to need to see a number of months of lower inflation before they start to even consider taking their foot of the pedal.”

In Europe, the Stoxx 600 Index was 1.2% higher, with consumer products and mining stocks leading the gains. The CAC outperforms, rising as much as 2% back to Monday’s best levels. Health care stocks underperformed as Roche Holding slumped as its cancer medicine billed as a potential blockbuster failed in a study on patients with the most common form of lung cancer. Here are some of the biggest European movers today:

  • Compass shares gain as much as 12% after the catering company reported 1H results that beat estimates, increased its FY revenue forecast and announced a buyback.
  • European tobacco stocks rise after Philip Morris offered to buysmokeless tobacco company Swedish Match in a $16b transaction. Swedish Match +9%, Imperial Brands +1.3%, BAT +1%
  • European luxury stocks outperform as investors anticipate improving demand from easing virus cases in China.
  • Kering +3.4%, Hermes +2.8%, Swatch +5.1%
  • Pirelli gains as much as 3.6% in Milan trading after posting what Deutsche Bank called a “good” 1Q with a very strong price/mix.
  • HomeServe rises as much as 14% amid a Bloomberg report that Brookfield Asset Management is near a $5 billion deal for the emergency household repairs provider.
  • Roche falls as much as 7.2% on news that the Skyscraper-01 trial for the lung cancer drug tiragolumab missed co-primary endpoints.
  • Bayer slides as much as 7.6% after the Biden administration recommended the US Supreme Court reject a California Roundup appeal.
  • Alstom declines as much as 11% to erase gains made earlier in the session after full-year results.
  • K+S falls as much as 7% after the potash producer’s 1Q free cash flow was hit by cash out on CO2 certificates, and negative factoring effect, Baader says.

Earlier in the session, Asian equities advanced, halting a seven-day slide, as new Covid cases fell in Shanghai and global appetite for risk improved. The MSCI Asia Pacific Index rallied 0.4% as tech giants Tencent and Alibaba climbed alongside consumer discretionary shares. China’s CSI 300 Index led gains in the region after Shanghai reported fewer daily infections Tuesday and zero cases found in the community.  Shanghai Reports No Community Spread as Infections Halve Asia’s benchmark is set to end its longest losing streak since March 2020. The gauge has lost more than $2 trillion in value since a January peak, amid concerns over China’s Covid-Zero stance, inflation and U.S. interest rates. “Asia and EM equities are entering the late stages of a bear market that has traversed valuation, regulation, geopolitics and supply chain pressures,” Morgan Stanley strategists including Jonathan Garner wrote in a report. The firm prefers Japanese shares, due to their return ratios, and Southeast Asian stocks that benefit from higher inflation. Asia’s equity gauge reversed a 0.5% loss as investors awaited the release of U.S. consumer-price index data due later today. Benchmarks in the Philippines and Singapore were among the worst performers in the region.

India’s key equity gauges declined for a fourth day as quarterly earnings showed surging inflation eroding profit growth of top companies. The S&P BSE Sensex fell 0.5% to 54,088.39 in Mumbai to stretch its 4-day decline to 2.9%. The NSE Nifty 50 Index lost 0.5% on Wednesday. The key gauges have declined in all but one session this month. Fifteen of the 19 sector sub-indexes compiled by BSE Ltd. retreated, led by gauges of capital goods and information technology stocks. Of the 28 Nifty 50 companies that have announced results so far, 11 missed estimates and 17 matched. Cipla and Asian Paints were the latest to report profits below the consensus view after market hours on Tuesday.

“Lack of fresh positive cues is forcing investors to dump equities and switch to safer havens like gold,” according to Shrikant Chouhan, an analyst with Kotak Securities. He expects a sharp pullback in key indexes as they are already trading in oversold territory and sees 16,000 as a key support level for the Nifty 50 index.  Infosys contributed the most to Sensex’s decline, decreasing by 1.7%. Out of 30 shares in the Sensex index, nine rose and 21 fell.

In FX, the Bloomberg Dollar Spot Index fell after trading near a recent two-year high as the greenback weakened against all of its Group-of-10 peers. Risk-sensitive Scandinavian and Antipodean currencies led gains as traders positioned ahead of the US inflation data. Treasuries rallied, sending yields up to 7bps lower. The euro traded in a narrow range around $1.055 and European bonds rallied, with the periphery outperforming the core. Australian and New Zealand dollars were bought to reduce short positions against the greenback. Australia’s consumer confidence index fell 5.6% from a month ago to 90.4, the lowest since Aug. 2020, according to a report.

In rates, Treasuries rallied for a second day ahead of today’s CPI print and 10Y TSY auction. Yields were richer by as much as 6bp in belly of curve which bull-steepened, and tightened the 2s5s30s fly by 4bp on the day to lowest levels since late March; 10-year yields around 2.925%, outperforming bunds and gilts by 3.5bp and 3bp. The front-end lags with 2-year yields richer by ~3bp on the day, flattening 2s5s, 2s10s spreads by ~3bp. The US auction cycle resumes with $36b 10-year at 1pm ET, following well-bid 3-year Tuesday. WI 10- year yield ~2.92% is above auction stops since late 2018 and ~20bp cheaper than April’s, which tailed the WI by 3bp. In Europe, the fixed income rally also extended with 5y Germany richening ~6bps. Peripheral and semi-core spreads narrow with 10y Bund/BTP near 195bps. Gilts bull-flatten slightly with 2s10s narrowing back near 50bps.

In commodities, Crude futures advanced; WTI rose over 3% and back on to a $102-handle. Base metals are mixed; LME nickel falls 2% while LME copper gains 1.3%. Spot gold rises roughly $13 to trade near $1,851/oz. Bitcoin rises above $31,000.

Bitcoin has stabilised somewhat above the USD 30k mark after the recent bout of stablecoin induced pressure.

Looking to the day ahead now, and the main highlight will be the aforementioned US CPI reading for April. Otherwise, central bank speakers include ECB President Lagarde, as well as the ECB’s Nagel, Vasle, Makhlouf, Knot, Centeno, Muller and Schnabel, and the Fed’s Bostic. Finally, earnings releases include Disney.

Market Snapshot

  • S&P 500 futures up 1.2% to 4,047
  • STOXX Europe 600 up 0.9% to 423.91
  • MXAP up 0.2% to 160.15
  • MXAPJ up 0.4% to 525.66
  • Nikkei up 0.2% to 26,213.64
  • Topix down 0.6% to 1,851.15
  • Hang Seng Index up 1.0% to 19,824.57
  • Shanghai Composite up 0.8% to 3,058.70
  • Sensex down 0.7% to 54,011.37
  • Australia S&P/ASX 200 up 0.2% to 7,064.68
  • Kospi down 0.2% to 2,592.27
  • German 10Y yield little changed at 0.98%
  • Euro up 0.2% to $1.0555
  • Brent Futures up 2.8% to $105.34/bbl
  • Gold spot up 0.5% to $1,847.30
  • U.S. Dollar Index down 0.28% to 103.62

Top Overnight News from Bloomberg

  • ECB President Christine Lagarde said a first interest-rate increase in more than a decade may follow “weeks” after net bond-buying ends early next quarter, joining a growing crowd of policy makers signaling a move as soon as July
  • ECB Governing Council member Joachim Nagel says the exit from very accommodative monetary policy should be “swift enough to affect the price path and to prevent second-round effects and a de- anchoring of inflation expectations”
  • ECB Executive Board member Frank Elderson said policy makers can begin looking at raising interest rates from record lows in July, downplaying the risk of a euro-area recession as the war in Ukraine saps growth and fuels already record inflation
  • The UK escalated its threats over the post-Brexit deal for Northern Ireland, saying the European Union’s latest proposals on trading arrangements won’t work and signaling it’s prepared to take unilateral steps unless a new agreement can be negotiated
  • The EU’s executive arm is set to bolster renewables and energy savings goals as part of a 195 billion-euro ($205 billion) plan to end its dependency on Russian fossil fuels by 2027
  • For many of Sweden’s highly indebted consumers, the Riksbank’s sudden interest-rate increase at the end of April marks the start of a new squeeze that officials have long fretted about
  • Czech policy maker Ales Michl, a vocal opponent of the central bank’s aggressive campaign to increase interest rates, was appointed to take over as the bank’s governor as the country struggles to contain its worst inflation in almost three decades

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded mixed following the choppy performance on Wall Street. ASX 200 was subdued and briefly fell below the 7,000 level with sentiment dampened by weak Consumer Confidence data. Nikkei 225 swung between gains and losses with the biggest movers driven by recent earnings releases. Hang Seng and Shanghai Comp were both initially lacklustre as property developer Sunac faces its grace period deadline for a dollar bond interest payment and with participants digesting the latest firmer than expected CPI and PPI data from China, although Chinese markets then strengthened amid speculation of policy easing in Q2 and positive signs from the COVID situation in Shanghai.

Top Asian News

  • Why China Is Sticking With Its Covid Zero Strategy: QuickTake
  • Gray Market Hints at Tepid Trading Debut for Biggest India IPO
  • Malaysia Surprises With Rate Hike to Head Off Inflation
  • Defense Official Says Curfew May Be Lifted: Sri Lanka Latest

European bourses are firmer across the board, Euro Stoxx 50 +1.4%, with the exception of the SMI -0.2% given the performance of heavyweight Roche, -6.5%. Stateside, futures are bolstered though with gains marginally more contained going into today’s inflation data, ES +1.0%. China April vehicles sales -47.6% YY (-11.7% in March), according to the Industry Association; January-April -12.1% YY (prev. +51.8%). On Tuesday, CPCA says China sold 1.062mln passenger cars were sold in April which was -35.7% Y/Y. China’s Auto Industry Association says the industry’s development situation is gradually improving, firms are seeing May and June  as the window to make up for lost sales and production.

Top European News

  • Lagarde Joins ECB Officials Signaling July as Liftoff for Rates
  • Siemens Energy Slides Amid Mounting Losses at Wind-Turbine Unit
  • Ukraine, Russia Gas Clash Raises Threat to Europe’s Supply
  • Bayer Drops After Supreme Court Urged to Reject Roundup Appeal

FX

  • Greenback grounded in advance of US CPI as Treasury yields recede and curve re-flattens, DXY slips further below 104.00 and sub-103.50 vs fresh 2022 peak at 104.190 on Monday.
  • Aussie rebounds with iron ore and other commodities, shrugging off a drop in consumer confidence along the way; AUD/USD back on 0.7000 handle, albeit just and AUD/NZD around 1.1050 even though Kiwi relieved with full NZ reopening at the end of July and NZD/USD rebounds towards 0.6350 in response.
  • Franc and Yen appreciate the less bearish bond climate, Euro underpinned as ECB President Lagarde joins others in guiding towards July rate hike; USD/CHF sub-0.9000, USD/JPY under 130.00 and EUR/USD circa 1.0575 at best.
  • Loonie and Nokkie boosted by crude recovery, Swedish Crown supported by sharp rise in 1 year CPIF money market expectations; USD/CAD below 1.3000 and closer to hefty option expiry interest at 1.2950 (1.9bln vs 1.7bln at the round number).
  • Yuan on firmer footing after stronger than forecast Chinese inflation data, but Czech Koruna floored as President confirms appointment of a known dove to govern CNB; USD/CNH around 6.7400, EUR/CZK near 25.4000.

Fixed Income

  • Latest recovery leg in debt lifts Bunds, Gilts and 10 year T-note to new WTD peaks, at 153.61, 119.69 and 119-09+ respectively.
  • Solid covers at 10 year German and 7 year UK auctions given recent yield retreat, but some metrics show signs of investor reticence.
  • Min focus ahead, US CPI data, but also USD 36bln T-note leg of refunding.

Commodities

  • WTI and Brent are bolstered in excess of USD 3.00/bbl in a paring of recent losses alongside a positive turn in China’s COVID situation.
  • Currently, WTI Jun resides around USD 103/bbl (vs low USD 98.20/bbl) whilst Brent Jul trades around USD 105.50/bbl (vs low USD 101.30/bbl)
  • US Energy Inventory Data (bbls): Crude +1.6mln (exp. -0.5mln), Gasoline +0.8mln (exp. -1.6mln), Distillates +0.7mln (exp. -1.3mln), Cushing +0.1mln.
  • Libyan PM Bashagha announces the success of efforts to reopen the ports and oil fields in Libya, according to Sky News Arabia.
  • Brazilian truck drivers are considering a strike from May 21st to stop a 9% rise in diesel prices by Petrobras, according to Estadão.
  • Spot gold and silver are firmer and benefitting from the USD’s continuing pullback to fresh WTD lows, albeit, the yellow metal is steady around USD 1850/oz pre-inflation.

Central Banks

  • ECB’s Lagarde says we have not yet precisely defined the notion of “some time”, but I have been very clear that this could mean a period of only a few weeks. After the first rate hike, the normalisation process will be gradual. Judging by the incoming data, my expectation is that the (asset purchase programme) should be concluded early in the third quarter. Click here for analysis
  • ECB’s Muller says APP should end early July or a few weeks earlier; rate hike must not be far behind; appropriate for rates to be in positive territory by year-end, moves should be in 25bp increments. Rise in spreads is consistent with the changed ECB policy outlook; current policy is inappropriately easy, given high inflation.
  • ECB’s Elderson says they can start considering normalisation of the policy rate in July.
  • ECB’s Vasle says that inflation is becoming more broad-based and the policy response must follow the changed circumstances; supports further and faster action.
  • Czech President Zeman has appointed Central Bank member Michl as the new governor, as expected; Czech President Zeman says does not wish to see a large decrease in interest rates but does not see a reason for additional increases.
  • CBRT cuts its RRR for financing companies until May 13th, will be implemented at 0.00% until this point, according to the Official Gazette.

US Event Calendar

  • 07:00: May MBA Mortgage Applications, prior 2.5%
  • 08:30: April CPI YoY, est. 8.1%, prior 8.5%
    • April CPI MoM, est. 0.2%, prior 1.2%
    • April CPI Ex Food and Energy YoY, est. 6.0%, prior 6.5%
    • April CPI Ex Food and Energy MoM, est. 0.4%, prior 0.3%
    • April Real Avg Hourly Earning YoY, prior -2.7%, revised -2.6%
    • April Real Avg Weekly Earnings YoY, prior -3.6%, revised -3.5%
  • 14:00: April Monthly Budget Statement, est. $220b, prior – $225.6b

DB’s Jim Reid concludes the overnight wrap

Markets have begun to stabilise over the last 24 hours following Monday’s rout, but there’s no doubt that risk appetite is still very subdued as worries about a potential recession gather pace. The S&P 500 eventually managed to post its first gain in 4 sessions (+0.24%) but only after spending half the day in the red. Today we get the all important US CPI report for April. This will be a very important one for markets and the Fed, since although policymakers have strongly signalled that they’re inclined to continue hiking by 50bps at the next couple of meetings, there is still 25/50/75bps to play for after those meetings. Today’s report will help shape the early read into this and has an ability to move markets in a large manner if diverging from consensus too far.

On that theme, we heard from an array of Fed speakers yesterday. The main takeaway was that +50bp hikes for the next few meetings is the preferred path, while at the margins the door was opened to consider larger hikes after that. For instance, Cleveland Fed President Mester (a voter this year) said that 75bps increases couldn’t be ruled out forever, and that the Fed could have to speed up in H2 if inflation didn’t ease, which coincided with the move into the red for US equities. Discussing another tool to help speed up that fight, she also noted the Fed could start selling asset holdings instead of letting them mature on their own which is currently the base case. Elsewhere Atlanta Fed President Bostic left the door open, saying that “everything is on the table”, but reinforced +50bp hikes were his preference for the next two or three meetings. Separately, New York Fed President Williams openly discussed the prospect that unemployment could rise as part of the Fed’s “soft landing”, saying that he “would not define a soft landing as unemployment staying at 3.6%”. He also mirrored the tone from Fed Chair Powell last week, who referred to a “softish” landing, which is certainly implying it might not be quite as smooth as they’d like in an ideal world, and speaks to the growing risks on the horizon.

Elsewhere on inflation, President Biden gave a speech on this hot topic, saying his administration is weighing whether to cut tariffs which have been in place since the Trump Presidency in order to help fight rising prices, but no decisions have been made.

So against that backdrop, all attention will shift over to the US CPI report for April today. Back in March, the year-on-year measure rose to a 4-decade high of +8.5%, but our US economists write in their preview (link here) that’s likely to have been the peak in the year-on-year measure, with today’s reading marking the start of a gradual move lower over the coming months. They see the year-on-year measure coming in at +7.9% as base effects from last year’s surge in used car prices begin to roll off. Meanwhile they see the month-on-month measure at just +0.05% thanks to modest declines in gasoline prices after their near 20% run-up in March. It’ll be important to keep an eye on whether inflationary pressures remain broad-based, so the housing components like rent will be ones to watch.

As discussed at the top, US equities stabilised ahead of the print, with the S&P 500 gaining +0.24%, thus bringing its YTD decline to -16.05%. However, tech stocks outperformed thanks to a decline in yields, with the NASDAQ (+0.98%) and the FANG+ index (+1.42%) seeing bigger gains. And Europe also put in a stronger performance, with the STOXX 600 up +0.68% to end a run of 4 consecutive daily declines.

For sovereign bonds it was a different story for the most part, as the prospect of a recession brought down inflation expectations and led to a decline in yields across multiple countries. Yields on 10yr Treasuries were down -4.3bps on the day to 2.99%, whilst those on 10yr bunds (-9.5bps), OATs (-9.9bps) and BTPs (-15.0bps) all saw sizeable moves lower as well, in spite of Bundesbank President Nagel’s endorsement of a July rate hike from the ECB. The main exception were front-end Treasury yields, with the 2yr yield ticking up by +1.2bps in light of the renewed chatter around 75bp hikes this cycle and a slightly more risk on day. This shift was also reflected in Fed funds futures, where the rate priced in by the December meeting rose +3.5bps yesterday, paring back a small amount of the -15.5bps decline on Monday.

Overnight in Asia, major stock markets are mostly higher, with the Shanghai Composite (+1.63%) and the Hang Seng (+1.78%) racing ahead of the Nikkei (+0.44%) and the KOSPI (-0.05%). Chinese markets got a boost after Shanghai reported zero community cases and a halving of new infections. Optimism on covid powered stocks despite upside beats on both the CPI (2.1% vs 1.8% expected) and the PPI (8.0% vs 7.8% expected) overnight. Elsewhere, S&P 500 futures (+0.37%) are also in the green and the US 10y yield (-0.4bps) is edging lower.

Oil has been volatile over the last 24 hours. Brent crude came down a further -3.28% yesterday, which means that it had lost just under $10/bbl over the two days so far this week whilst WTI (-3.23%) slipped back beneath $100/bbl. However this morning the two contracts are back up +2.85% and +1.75% respectively. The EU are continuing to work on further sanctions, and French President Macron spoke about energy security yesterday with Hungarian PM Orban, whose government have been resistant to stronger energy sanctions on Russia.

Here in the UK, we had the State Opening of Parliament yesterday where the government outlined its legislative agenda. One potential area to watch out for is on the Brexit side, since there have been reports that legislation will be proposed that overrides parts of the Northern Ireland Protocol, which is the part of the Brexit deal that avoids a hard border between Northern Ireland and the Republic of Ireland, but instead puts an economic border in the Irish Sea between Great Britain and Northern Ireland. The government’s own explanatory notes to the Queen’s Speech yesterday said that “the Protocol needs to change”, but there was a distinctly lukewarm reaction from the EU to this prospect, with Commission Vice President Šefčovič saying in a statement that “Unilateral action by the UK would only make our work on possible solutions more difficult” and that “renegotiation is not an option”.

On the data side, Germany’s ZEW survey for May saw the expectations indicator unexpectedly rise to -34.3 (vs. -43.5 expected), up from its 2-year low in April. However, the current situation measure fell by more than expected to -36.5 (vs. -35.0 expected), reaching its lowest level in a year. Elsewhere, Italian industrial production was unchanged in March (vs. -1.5% expected).

To the day ahead now, and the main highlight will be the aforementioned US CPI reading for April. Otherwise, central bank speakers include ECB President Lagarde, as well as the ECB’s Nagel, Vasle, Makhlouf, Knot, Centeno, Muller and Schnabel, and the Fed’s Bostic. Finally, earnings releases include Disney.

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING// TUESDAY  NIGHT

SHANGHAI CLOSED UP 22,86 PTS OR 0.75%   //Hang Sang CLOSED UP 190.88 PTS OR 0.97%    /The Nikkei closed UP 46.54 OR 0.18%          //Australia’s all ordinaires CLOSED UP 0.26%   /Chinese yuan (ONSHORE) closed up 6,7179    /Oil UP TO 103.92 dollars per barrel for WTI and down TO 106.85 for Brent. Stocks in Europe OPENED  ALL green       //  ONSHORE YUAN CLOSED UP AGAINST THE DOLLAR AT 6.7179 OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.7268: /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN  TRADING STRONGER AGAINST US DOLLAR/OFFSHORE STRONGER//

3 a./NORTH KOREA/ SOUTH KOREA

///NORTH KOREA

END

3B  JAPAN

3c CHINA

COVID/SHANGHAI/LOCKDOWNS

Gordon Johnson: Tesla’s April Sales In China “Implode”, Fall 98% Sequentially, Despite Musk’s Comments To The Contrary

WEDNESDAY, MAY 11, 2022 – 11:50 AM

In Gordon Johnson’s latest note to clients, he reminds them that on Tesla’s April 21, 2022 conference call, Elon Musk said that Q2 production at Shanghai would be “roughly on par” with 1Q22, and “possible” to “be slightly higher”. 

“Given TSLA has said it’s capacity constrained and sold out, this was also implicit sales guidance,” Johnson wrote. 

In his note, Johnson takes exception with the media, who in his opinion seem to be making excuses for Tesla’s -98% sequential decline in April sales from China (versus a -41% decline in the overall BEV market for China).

However, the notion that these numbers were somehow “expected” stands at stark odds with what Elon Musk himself was saying leading into the end of April, Johnson says. 

Johnson also claims that another shut down means that Elon Musk’s guidance for the quarter is likely incorrect:

“In addition to the above, when considering, as we warned weeks ago (due to parts shortages), TSLA’s Shanghai plant was shut down again (YES, YOU HEARD THAT RIGHT) – link – it seems nearly certain production (and, by default, sales) at the Shanghai plant will NOT be flat-to-up QoQ as E. Musk guided less than a month ago.

“Along these lines, while many say TSLA has a temporary “COVID” problem, we disagree. That is, with virtually every auto company outselling TSLA domestically in the world’s largest EV market of China in April, and, more importantly, TSLA selling just 1,512 of the 10,757 cars it produced in China in April (i.e., 14.06%) – WHICH IS THE QUENTISSENTIAL definition of a company with a demand problem – it is our opinion that TSLA, indeed, has a demand problem in China,” Johnson wrote. 

He also continues to talk about Tesla losing market share, stating:

TSLA’s market share in China’s domestic EV market has been on a steady decline since peaking at 16.8% in 1Q20 (it came in at 10.2% in 1Q22, down -660bps from the peak). Stated differently, it is our opinion for TSLA to keep its sales growing in China, it will have to resort to aggressive price cuts, which will drive its “magical bean gross margins” lower (our opinion – we believe TSLA uses warranty “accounting shenanigans” to report margins that are higher than they should be [please contact our GLJ Research sales person for our detailed work on this topic]).

Johnson wraps up with his $67/share target price for Tesla by the end of 2023 and reiterates his “view that TSLA will go down as the greatest short (an over-hyped fantasy stock) in the history of financial markets.”

Recall, in Johnson’s last note from the end of April, we noted why he thought Tesla’s numbers, to him, looked similar to the growth fall off that Netflix just experienced.

At the time, he said he thought Elon Musk “likely lied” when he claimed on the conference call that “the most likely vehicle production in Q2 will be similar to Q1, maybe slightly lower, but it’s also possible we may pull a rabbit out of the hat and be slightly higher”.

Johnson wrote to clients in late April: “In short, we believe E. Musk saw the move in Netflix’s stock ex-growth in [last week’s] trading session, and wanted to paint a picture that, no matter what, TSLA will not go ex-growth, on a unit sales basis, in 2Q22 (we believe his forecast here will prove [very] wrong).”

END

Do not forget China

Inbox

Robert Hryniak5:36 PM (6 minutes ago)
to

If you think the Ukraine conflict creates ripples, the Taiwan caper is in its’ early stages of happening as China practices. Until the day it feels ready and then it will move and it will not ask for permission.

4/EUROPEAN AFFAIRS//UK AFFAIRS/EU

.

EU/LNG

Europe May Face LNG Crisis This Winter

WEDNESDAY, MAY 11, 2022 – 05:00 AM

Via Rystad Energy,

  • Rush to wean off Russian gas has made European consumers highly vulnerable to LNG price shocks.
  • Global LNG demand outstrips supply in 2022.
  • New LNG projects are unlikely to provide relief until 2024.

A liquified natural gas (LNG) crisis is brewing for European countries dealing with energy insecurity in the wake of Russia’s invasion of Ukraine, as demand will outstrip supply by the end of this year, Rystad Energy research shows. Although soaring demand has spurred the greatest rush of new LNG projects worldwide in more than a decade, construction timelines mean material relief is unlikely only after 2024. Global LNG demand is expected to hit 436 million tonnes in 2022, outpacing the available supply of just 410 million tonnes. A perfect winter storm may be forming for Europe as the continent seeks to limit Russian gas flows. The supply imbalance and high prices will set the scene for the most bullish environment for LNG projects in more than a decade, although supply from these projects will only arrive and provide relief from after 2024.

The European Union’s REPowerEU plan has set an ambitious target to reduce dependence on Russian gas by 66% within this year – an aim that will clash with the EU’s goal of replenishing gas storage to 80% of capacity by 1 November. By shunning Russian gas, Europe has destabilized the entire global LNG market that began the year with a precarious balance after a tumultuous 2021. The decision to sharply reduce reliance on Russian gas and LNG from current levels of between 30-40% will transform the global LNG market, resulting in a steep increase in energy-security based European LNG demand that current and under-development projects will not be able to supply.

Russia last year sent 155 billion cubic meters (Bcm) of gas to Europe, providing more than 31% of the region’s gas supply. Replacing a significant portion of this will be exceedingly difficult, with far-reaching consequences for Europe’s population, economy, and for the role of gas in the region’s energy transition. This will also likely create a boom for LNG producers elsewhere of a scale and duration not seen in over a decade.

“There simply is not enough LNG around to meet demand. In the short term this will make for a hard winter in Europe. For producers, it suggests the next LNG boom is here, but it will arrive too late to meet the sharp spike in demand. The stage is set for a sustained supply deficit, high prices, extreme volatility, bullish markets, and heightened LNG geopolitics,” says Kaushal Ramesh, senior analyst for Gas and LNG at Rystad Energy.

The expected reduction in Russian gas for Europe in 2022 is 37 Bcm, rising to more than 100 Bcm by 2030. As a result, Europe’s gas consumption likely peaked in 2019 and will now decline steadily through to 2030. Gas and LNG is therefore set to play a reduced role in Europe’s energy mix, providing further impetus for renewables and potentially a greater role for nuclear and coal. Europe was in fact on course to increase Russian imports of gas and LNG to over 40% of its supply by 2030, if the now stalled Nord Stream 2 pipeline had been approved. This will instead drop to around 20% by 2030 as current contracts are not renewed. To facilitate additional LNG imports, a slew of regasification terminals has been planned across Europe – some new and some reactivated from deep slumber.

If Russian flows were to stop tomorrow, the gas currently in storage (about 35% full) would likely run out before the end of the year, leaving Europe exposed to a brutal winter. Under this scenario, in the absence of joint buying arrangements and countries competing for limited molecules, the TTF gas price could climb to more than $100 per million British thermal units (MMBtu), resulting in industrial curtailments and widespread fuel switching in the power sector. We have already seen curtailments to fertilizer, steel and paper manufacturers in Europe, underscoring the economic pain that awaits. In an extreme scenario of a severely cold winter, not even the residential sector would be safe.

LNG markets go bullish with wave of new projects

More than LNG 20 projects with a combined capacity of over 180 million tonnes per annum (tpa) have reported some development progress recently. To be certain of LNG supply in 2030, the market will need more than 150 million tpa of production from the 186 million tpa planned, which means more than 80% of the project pipeline must be realized.

US projects are in pole position – some of which have been dormant waiting for demand to rise, and have now been given new life. Projects such as Energy Transfer’s Lake Charles and NextDecade’s Rio Grande that were previously on ice have reported 9.45 million tpa worth of deals after the invasion, including an about-face deal by French player Engie, which pulled out of negotiations with NextDecade in November 2020 but recently closed a 1.75 million tpa deal with the same project.

However, the project pipeline globally remains far from able to rescue the market. It includes the 15 million tpa Rovuma Area 4 LNG project, to be located adjacent to TotalEnergies’ Area 1 LNG in the currently at-risk Palma region of Mozambique. We expect little to no progress on this project until TotalEnergies resumes construction.

Mexico is also well-positioned for Asian exports due to geographical proximity and non-dependence on transit through the Panama Canal, and appears to be gaining momentum among Asian buyers.  At the same time, higher prices will slow Asian LNG demand growth in the medium term, which means the continent will remain dependent on fuel oil and coal. In some scenarios, Asian LNG demand may be permanently dented, and deployment of renewables accelerated.

end

European Sanctions Blown To Bits: Draghi Says “Most Gas Importers” Have Opened Ruble Accounts With Gazprom

WEDNESDAY, MAY 11, 2022 – 12:56 PM

Three weeks ago we reported that when faced with the actual, brutal consequences of its anti-Russian virtue signaling and harsh language, Europe’s fake united front promptly cracked crack as several European gas buyers quietly paid for supplies in rubles as Russia had demanded – in breach of Brussels sanctions – and we predicted that soon virtually everyone in Europe would follow in their footsteps and similarly bypass EU sanctions. Moments ago, one of the most powerful people in Europe – former Goldman partner and ECB head – Mario Draghi, confirmed just that.

Speaking during a press conference in Washington D.C. after his meeting with Joe Biden, Draghi said that European gas importers have already opened accounts in rubles with Gazprom.

The Italian PM was responding to a question asking if he is confident that Italy will be able to pay for gas without breaching sanctions and therefore gas flow to Italy won’t be affected.

“I’m actually quite confident, but for a silly reason. There is no official pronouncement of what it means to breach sanctions. Nobody ever said anything about whether rubles payments breach sanctions or not, how these payments are organized. So it’s such a gray zone here.”

Actually, it’s not a gray zone at all: on April 27, European Commission President Ursula von der Leyen specifically warned companies not to bend to Russia’s demands to pay for gas in rubles: “companies with such contracts should not accede to the Russian demands,” von der Leyen said. “This would be a breach of the sanctions so a high risk for the companies.”

In other words, Draghi is either completely unaware of the current realty over the hottest topic in the world today, or is blatantly lying, and in the process demonstrating that the entire “united European front” against Putin is one giant farcical facade.

Which led to the just as stunning conclusion from Draghi’: “As a matter of fact, most gas importers have already opened an account in rubles with Gazprom”, Draghi added in a stunning revelation that behind the scenes, Europe  continues to actively pay Russia billions every day, but is doing so on Putin’s terms and helping send the Ruble soaring!

Then again, it’s possible that Draghi is just senile, which would explain why he said that he has discussed with Joe Biden the creation of a global cartel of oil buyers.

We’ll repeat this because it bears repeating: Draghi and Biden sat down, both of them desperate for oil at any price, and contemplated creating an oil buyers’ cartel. We’ll just leave this here without further commentary because any attempts to understand this epic stupidity would lead to a scene right out of Scanners.

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

/UKRAINE/USA/RUSSIA

Russian Forces Unlikely To Stop After Capturing Donbas – Expect Prolonged War: Top US Intel Chief

TUESDAY, MAY 10, 2022 – 07:45 PM

At a moment that top US intelligence officials are holding intense discussions over what “victory” might look like for Russian President Vladimir Putin – or whether or not he’s contemplating an exit from the conflict in Ukraine and under what conditions – senior Pentagon officials assess there’s been little significant progress by Russian forces in the Donbas

During a Monday briefing one senior official told reporters this is due partly to low morale and “refusing to obey orders” – which is even impacting the officer corps. The officials described, “We still see anecdotal reports of poor morale of troops, indeed officers, refusing to obey orders and move and not really sound command and control from a leadership perspective.”

Further the officials said that “midgrade officers at various levels, even up to the battalion level” are either refusing to follow orders or are not obeying them with the same measure of alacrity that you would expect an officer to obey,” according to The Hill.

Given Putin’s more restrained than expected ‘Victory Day’ speech in Moscow on Monday, some Western observers have speculated that lack of any verbal assessment of how his forces are doing on the ground could be a sign of frustration. Prior to this, some thought the Russian leader aimed to declare full victory over the Donbas by the time of the May 9 commemoration events on Red Square.

Putin had given as one of the justifications for the Feb.24 invasion during the speech that the West was “preparing for the invasion of our land, including Crimea.” This following last month his commanders appearing to narrow the operation’s objectives to liberating Ukraine’s east in particular, also as heavy fighting is now taking place in the south, increasingly focused on the port city of Odesa, where Ukraine’s navy is headquartered.

On Tuesday Director of National Intelligence Avril Haines in testimony before lawmakers in the Senate said that a Russian military victory over the Donbas might not actually end the war.

“We assess President Putin is preparing for prolonged conflict in Ukraine during which he still intends to achieve goals beyond the Donbas,” she said. “Both Russia and Ukraine believe they can continue to make progress militarily,” Haines said, adding, “we do not see a viable negotiating path forward, at least in the short term.” Additionally she testified the US intel community’s assessment that…

  • U.S. DOES NOT SEE RUSSIA USING TACTICAL NUCLEAR WEAPONS AT THIS TIME -INTELLIGENCE CHIEFS
  • RUSSIA MAY STEP UP EFFORTS TO BLOCK WESTERN WEAPONS: HAINES
  • PUTIN WOULD USE NUCLEAR ARMS ONLY IN EXISTENTIAL THREAT: HAINES
  • RUSSIA’S PUTIN LIKELY COUNTING ON U.S., EU RESOLVE IN UKRAINE TO WEAKEN -HAINES

But one might argue that the Biden administration has from the beginning of the invasion shown little to no strategy of engaging diplomatically on any serious level to end the war. In fact, an opposite picture has emerged: while pumping billions in weapons and military aid into Ukraine, Defense Secretary Lloyd Austin said it’s America’s desire to see a “weakened” Russia due to its Ukraine offensive.

end

 /UKRAINE///RUSSIA

Kherson will soon to be asked to join Russia through a referendum similar to Crimea.

(zerohedge)

Russian-Captured Ukrainian Territories Will Soon Ask To ‘Join Russia’: State Media

WEDNESDAY, MAY 11, 2022 – 11:09 AM

Russia’s state-run RIA Novosti news agency is reporting for the first time Wednesday that the Russian military occupied southern Ukrainian city of Kherson will soon petition the Kremlin to become part of the Russian Federation.

It was in late April that a pro-Moscow “military-civilian administration” was installed after Kherson fell to the invading forces, complete with a local transition to the Russian ruble. While the news hasn’t been officially confirmed by the Kremlin, it’s significant that the report surfaced through RIA and not Ukrainian or opposition sources, suggesting such referendums or even simple declared annexations in captured regions could be imminent.

Kremlin spokesman Dmitry Peskov has in his latest statements invoked Crimea – which came under Russian control due to a Kremlin-backed ‘popular referendum’ in 2014 – as a model for what could happen regarding Kherson’s political future. He stressed it would be “up to local residents” and that the process would be “absolutely clear and legitimate”

Additionally, according to The Moscow Times, “Occupied Kherson, as well as the Pryazovske region on the Sea of Azov, reportedly began trading with Crimea shortly after Russian forces installed pro-Moscow administrations in the area.”

And Reuters writes of more signs of annexation of the city coming soon as follows: “TASS cited the Russian-controlled administration as saying that pension bodies and a banking system would be created from scratch for the region, and that branches of a Russian bank could be open there before the end of May,” according to its report.

However, some correspondents are saying there won’t be a referendum, or possibly just the appearance of one as a pretext…

Meanwhile, Ukraine’s defense ministry is vowing that the local population will “resist” such annexation attempts, despite eastern and southern areas of the country having large pockets of pro-Russian and Russian-speaking citizens.

Deputy Defense Minister of Ukraine Hanna Malya in fresh statements said this week that the fierceness of local Ukrainian resistance has prevented this scenario from taking effect thus far.

“Russians failed to capture the territories instantly as it was in 2014. They do not have such support from the local population. On the contrary, our citizens strongly resist, not only the citizens but also the state of Ukraine,” she described.

“But you have to understand that we cannot discuss in public the ways in which the state may act in the temporarily occupied territories. But the fact that the so-called referendums have not yet taken place and cannot take place shows that Ukraine is doing its job effectively,” Malyar emphasized.

END

6// GLOBAL COVID ISSUES/VACCINE MANDATE/

Dr Paul Alexander..

The OMICRON variant is infecting vaccinated persons, but it is NOT due to virus but due to the non-neutralizing Abs binding to the spike & not sterilizing/neutralize but enhancing/facilitate infection

You must look at what is happening now with the mRNA COVID injection taking the non-neutralizing Abs role in facilitating infection in the vaccinated person

Dr. Paul AlexanderMay 11

If we do not cut the chain of transmission with this vaccine, we cannot get to population level herd immunity; we will never ever get there and the pandemic will never end, 100 years it will continue and Fauci and Bourla know this; if we continue to exert immune pressure on the RBD of the spike and do not sterilize the virus, then there will be selection to overcome the sub-optimal pressure.

This now is about boosters forever; in time, we fear that the immune pressure from the non-neutralizing Abs will cause selection pressure that will select for the virus ability to transfect deep in the lungs and the lack of severity we see now due to omicron, we will end up having people getting very severely ill from Omicron…the variant will get around the non-neutralizing Abs, thus do not be fooled by the lack of severity at this time…it can get very deadly. The virus is trying to figure this out as we speak.

Geert VB explains it this way:

“We were putting immune pressure on essentially the RBD of the spike protein. When the neutralizing capacity of the vaccinal Abs diminishes, then the affinity of the non-neutralizing Abs become stronger and can more strongly bind to their epitope; how it typically works is that the neutralizing Abs bind to spike and there is a conformational change that prevents the non-neutralizing Abs from binding to their epitopes; but if the neutralizing Abs only weakly bind or dont bind to the spike, then there is no conformational change and the non-neutralizing Abs can bind and find their epitopes…researchers show the non-neutralizing Abs focuses on an antigenic site in the N-terminal domain (and not the RBD, a different part of the spike) that is conserved in all variants”

Reference here: Longitudinal study of a SARS-CoV-2 infection in an immunocompromised patient with X-linked agammaglobulinemia

para “Every time you get exposed and re-infected to omicron, the non-neutralizing Abs will get boosted and these non-neutralizing Abs are directed to the antigenic site in the N-terminal domain (epitopes) based on the above research and this is exactly what is preventing severe disease…we are putting this under tremendous pressure and not eliminating the virus and the virus will find a way to come around the immune pressure for if you cannot sterilize the virus as in a normal natural pandemic (after the wave begins, those with intact INNATE and natural acquired come into eliminate/sterilize the virus)…there is no way around this, to also induce resistance (overcomes the immune pressure and thus develops resistance) against the non-neutralizing Abs that target this conserved antigenic site within the N terminal domain…mutations can easily overcome this”.

Bottom line and trying to explain Geert, is that we are in trouble if we continue with this non-neutralizing injection, it is catastrophic as it is driving variants that can be deadly.

end

GLOBAL ISSUES

VACCINE INJURIES

FDA finally admits that covid vaccines cause blood clots – NaturalNews.com

Inbox

Robert Hryniak9:36 AM (1 minute ago)
to

They have a lot to answer for as all these vaccines are flawed and have been hoisted upon a faithful public who now is losing complete trust in government.
This is how change happens on a mass scale and it is a trade by that some people have to suffer the Pain and turmoil that these vaccines have and are causing.
Those folks who experience no visible consequences are fortunate.

https://www.naturalnews.com/2022-05-10-fda-admits-covid-vaccines-cause-blood-clots.html

END

A shocking 15 fully vaxxed tennis players withdraw from Miami Open due to serious health issues

Inbox

Robert Hryniak4:50 PM (3 minutes ago)
to Harvey

https://newstarget.com/2022-04-05-15-fully-vaxxed-tennis-players-withdraw-miami-open.htm

END

VACCINE IMPACT


44,348 Dead 4,279,200 Injured Following COVID-19 Vaccines in European Database of Adverse Reactions as More Pfizer Fraud Uncovered

May 10, 2022 5:22 pm

The European (EEA and non-EEA countries) database of suspected drug reaction reports is EudraVigilance, verified by the European Medicines Agency (EMA), and they are now reporting 44,348 fatalities, and 4,279,200 injuries following injections of five experimental COVID-19 shots. The latest Pfizer documents released by the FDA show evidence of more fraud during the COVID-19 vaccine trials. The number of people that were allegedly enrolled for the studies appeared very quickly, suggesting that fraud was committed. The Exposé has also just published an article about the Pfizer documents reporting that Pfizer knew during the trials that their COVID-19 vaccines “shed” and contaminated others who did not take the shot, and that a new study corroborates this. And Ed Dowd, an equity investment executive, reports that funeral homes and insurance companies continue to see increased deaths following COVID-19 vaccines.

Read More…

END

Michael Every//

Michael Every on the day’s most important topics

7. OIL ISSUES

end

8 EMERGING MARKET& AUSTRALIA ISSUES

Australia////  NEW ZEALAND/ SOUTH AFRICA/BRAZIL/ARGENTINA/INDIA

END

Your early  currency/gold and silver pricing/Asian and European bourse movements/ and interest rate settings WEDNESDAY morning 7:30 AM

Euro/USA 1.0547 UP .0018 /EUROPE BOURSES //ALL GREEN 

USA/ YEN 129.77   DOWN 0.4572 /NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…

GBP/USA 1.2353 UP   0.0046

 Last night Shanghai COMPOSITE CLOSED UP 22.86 POINTS UP 0.75%

 Hang Sang CLOSED  UP 190.88 PTS OR 0.97%

AUSTRALIA CLOSED UP  0.26%    // EUROPEAN BOURSES ALL GREEN 

Trading from Europe and ASIA

I) EUROPEAN BOURSES ALL GREEN  

2/ CHINESE BOURSES / :Hang SANG CLOSED UP 190.88 PTS OR 0.97%   

/SHANGHAI CLOSED UP 22.86 PTS UP 0.75% 

Australia BOURSE CLOSED UP 0.26% 

(Nikkei (Japan) CLOSED  UP46.54 OR 018%

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1852.40

silver:$21.77

USA dollar index early WEDNESDAY morning: 103.62  DOWN 32  CENT(S) from TUESDAY’s close.

THIS ENDS WEDNESDAY MORNING NUMBERS

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And now your closing WEDNESDAY NUMBERS 1: 00 PM

Portuguese 10 year bond yield: 2.09%  DOWN 7  in basis point(s) yield

JAPANESE BOND YIELD: +0.243% UP 0    AND 0   BASIS POINTS /JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 2.04%// DOWN 7   in basis points yield 

ITALIAN 10 YR BOND YIELD 2.91  DOWN 11   points in basis points yield ./

GERMAN 10 YR BOND YIELD: RISES TO +1.% DOWN 0 IN BASIS POINTS ON THE DAY//

END

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY  

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

Euro/USA 1.0545  up 0.0017    or 17 basis points

USA/Japan: 130.21 DOWN .153 OR YEN UP 15  basis points/

Great Britain/USA 1.2324 up 18  BASIS POINTS

Canadian dollar UP .0095 OR 95 BASIS pts up to 1.2939

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The USA/Yuan,  CNY: closed    ON SHORE  (CLOSED ..UP 6.7214  

THE USA/YUAN OFFSHORE:    (YUAN CLOSED (UP)..6.7427

TURKISH LIRA:  15.31  EXTREMELY DANGEROUS LEVEL/DEATH WISH/HYPERINFLATION TO BEGIN.

the 10 yr Japanese bond yield  at +0.243

Your closing 10 yr US bond yield DOWN 2  IN basis points from MONDAY at  2.973% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic

 USA 30 yr bond yield: 3.0685DOWN 4 in basis points 

Your closing USA dollar index, 103.68 down 26   CENT(S) ON THE DAY/1.00 PM/

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

London: CLOSED UP 103.63 PTS OR 1.43%

German Dax :  CLOSED UP 271.63  POINTS OR 2.01%

Paris CAC CLOSED UP 137.56 PTS OR 2,25% 

Spain IBEX CLOSED  UP 169.40 OR 2.08%

Italian MIB: CLOSED UP 600.71 PTS OR  2.60%

WTI Oil price 104.79   12: EST

Brent Oil:  107.14 12:00 EST

USA /RUSSIAN ///   RUBLE RISES TO:  67.00   UP 2 & 4/10       RUBLES/DOLLAR

GERMAN 10 YR BOND YIELD; +1.00

CLOSING NUMBERS: 4 PM

Euro vs USA: 1.0524 DOWN  .0005   OR DOWN 5 BASIS POINTS

British Pound: 1.2255 DOWN .0051  or  51 basis pts

USA dollar vs Japanese Yen: 129;90 DOWN ..471//YEN UP 47 BASIS PTS

USA dollar vs Canadian dollar: 1.2988 DOWN .0044 (CDN dollar UP 44 basis pts)

West Texas intermediate oil: 105.34

Brent OIL:  107.21

USA 10 yr bond yield: 2.927 DOWN 7 points

USA 30 yr bond yield: 3.044  DOWN 9  pts

USA DOLLAR VS TURKISH LIRA: 15.32

USA DOLLAR VS RUSSIA///USA/ ROUBLE:  67.70 DOWN  2 AND 1/5 ROUBLES (ROUBLE UP 2 AND 1/5  ROUBLES/USA

DOW JONES INDUSTRIAL AVERAGE: DOWN 326.37 PTS OR 1.01%

NASDAQ 100 DOWN 378,30 PTS OR 3.06%

VOLATILITY INDEX: 32.68 DOWN 0.31 PTS (0.94%)

GLD: 172.82 UP1.40 PTS OR 0.92%

SLV/ 19.88 UP .33 PTS OR 1.66%

end)

USA trading day in Graph Form

Bonds, Bullion, & Black Gold Bid As Bad-flation Batters Bitcoin & Big-Tech

WEDNESDAY, MAY 11, 2022 – 04:01 PM

The question dominating price action across all asset classes remains: can the Fed achieve a soft landing for the economy or will it inadvertently plunge the economy into recession/stagflation?

Bonds appear convinced of the ‘recession’ narrative as the short-end saw yields rise (Fed tightens) as the long-end collapsed (… and creates a recession that prompts easing). 30Y Yields fell 9bps today while 2Y yields rose 2bps…

Source: Bloomberg

Prompting a significant curve flattening (policy error risk)…

Source: Bloomberg

10Y Yields briefly spiked back above 3.00% on the CPI print and then dived lower, closing at their lowest yield close since 4/28…

Source: Bloomberg

STIRs are betting on a more aggressive Fed fighting inflation…

Source: Bloomberg

Stocks know only one thing – The Fed will keep tightening aggressively after today’s CPI print and probably trigger a recession. The days of bad news being good news are well and truly over as growthy, long-duration stocks were hit hardest (Nasdaq down over 3% today)…

NOTE the dip-buyers desperately bid stocks back up after CPI across the cash-open then it all went to hell after Europe closed.

This is the biggest 5 day drop for stocks since 3/20/20…

S&P 4,000 appears to be lost for now…

BofA suggests next support at 3824-3815…

Nasdaq is now down over 29% from its highs, Dow down over 17%, and the S&P almost 14%…

FANG stocks are down over $2 trillion in market cap

Source: Bloomberg

Crypto appears stuck between liquidity withdrawals driven an inflation-fighting Fed and ongoing stagflation. Bitcoin chopped around aggressively today, ending on the downside, back below $30k…

Source: Bloomberg

TerraUSD was chaos today…

And Luna crashed even worse…

Commodities were mixed but appear to have found support on the inflation bandwagon with oil and gold rallying today…

WTI soared back above $106…

And gold jumped back above $1850…

And retail gasoline prices hit a new record price…

Humpday Humor…

And Diesel is exploding higher…

Finally, Global Stagflation is no longer in doubt…

Source: Bloomberg

https://platform.twitter.com/embed/Tweet.html?dnt=false&embedId=twitter-widget-0&features=eyJ0ZndfZXhwZXJpbWVudHNfY29va2llX2V4cGlyYXRpb24iOnsiYnVja2V0IjoxMjA5NjAwLCJ2ZXJzaW9uIjpudWxsfSwidGZ3X3NlbnNpdGl2ZV9tZWRpYV9pbnRlcnN0aXRpYWxfMTM5NjMiOnsiYnVja2V0IjoiaW50ZXJzdGl0aWFsIiwidmVyc2lvbiI6bnVsbH19&frame=false&hideCard=false&hideThread=false&id=1524393133965934597&lang=en&origin=https%3A%2F%2Fwww.zerohedge.com%2Fmarkets%2Fbonds-bullion-black-gold-bid-bad-flation-batters-bitcoin-big-tech&sessionId=cef72753ec9799897c578b78e89e8002a338a0e3&siteScreenName=zerohedge&theme=light&widgetsVersion=c8fe9736dd6fb%3A1649830956492&width=550px

Brace!!!

END

I) /MORNING TRADING/

Pundits wrong: inflation red hot and we have not reached peak inflation

(zerohedge)

Stocks, Bonds, & Bitcoin Battered As ‘Hot’ CPI Sparks Surge In Rate-Hike Odds

WEDNESDAY, MAY 11, 2022 – 08:54 AM

Well that was unexpected… Core CPI rose more than every one of the 60-plus Bloomberg economists expected, putting The Fed back in uber-hawk mode.

Rate-hike expectations spiked…

Sending stocks reeling lower…

And bond yields higher, led by the short-end…

And cryptos puked with Bitcoin back below $30k……

As Matt Maley, chief market strategist for Miller Tabak + Co., says: “Very simply, this high inflation number has dimmed the hopes for many investors considerably that we’ve reached peak inflation. Therefore, the Fed will remain hawkish and it just might put a 75 basis point hike back on the table.”

But yesterday we were told it was all priced-in?

II)USA data

Exponential growth in consumer debt as it spirals northbound to $16 trillion dollars

(zerohedge)

US Consumer Debt Accelerates Towards $16 Trillion

TUESDAY, MAY 10, 2022 – 11:05 PM

According to the Federal Reserve (Fed), U.S. consumer debt is approaching a record-breaking $16 trillion. Critically, as Visual Capitalist’s Marcus Lu details below, the rate of increase in consumer debt for the fourth quarter of 2021 was also the highest seen since 2007.

This graphic provides context into the consumer debt situation using data from the end of 2021.

Housing Vs. Non-Housing Debt

The following table includes the data used in the above graphic. Housing debt covers mortgages, while non-housing debt covers auto loans, student loans, and credit card balances.

Trends in Housing Debt

Home prices have experienced upward pressure since the beginning of the COVID-19 pandemic. This is evidenced by the Case-Shiller U.S. National Home Price Index, which has increased by 34% since the start of the pandemic.

Driving this growth are various pandemic-related impacts. For example, the cost of materials such as lumber have seen enormous spikes. We’ve covered this story in a previous graphic, which showed how many homes could be built with $50,000 worth of lumber. In most cases, these higher costs are passed on to the consumer.

Another key factor here is mortgage rates, which fell to all-time lows in 2020. When rates are low, consumers are able to borrow in larger quantities. This increases the demand for homes, which in turn inflates prices.

Ultimately, higher home prices translate to more mortgage debt being incurred by families.

No Need to Worry, Though

Economists believe that today’s housing debt isn’t a cause for concern. This is because the quality of borrowers is much stronger than it was between 2003 and 2007, in the years leading up to the financial crisis and subsequent housing crash.

In the chart below, subprime borrowers (those with a credit score of 620 and below) are represented by the red-shaded bars:

We can see that subprime borrowers represent very little (2%) of today’s total originations compared to the period between 2003 to 2007 (12%). This suggests that American homeowners are, on average, less likely to default on their mortgage.

Economists have also noted a decline in the household debt service ratio, which measures the percentage of disposable income that goes towards a mortgage. This is shown in the table below, along with the average 30-year fixed mortgage rate.

While it’s true that Americans are less burdened by their mortgages, we must acknowledge the decrease in mortgage rates that took place over the same period.

With the Fed now increasing rates to calm inflation, Americans could see their mortgages begin to eat up a larger chunk of their paycheck. In fact, mortgage rates have already risen for seven consecutive weeks.

Trends in Non-Housing Consumer Debt

The key stories in non-housing consumer debt are student loans and auto loans.

The former category of debt has grown substantially over the past two decades, with growth tapering off during the pandemic. This can be attributed to COVID relief measures which have temporarily lowered the interest rate on direct federal student loans to 0%.

Additionally, these loans were placed into forbearance, meaning 37 million borrowers have not been required to make payments. As of April 2022, the value of these waived payments has reached $195 billion.

Over the course of the pandemic, very few direct federal borrowers have made voluntary payments to reduce their loan principal. When payments eventually resume, and the 0% interest rate is reverted, economists believe that delinquencies could rise significantly.

Auto loans, on the other hand, are following a similar trajectory as mortgages. Both new and used car prices have risen due to the global chip shortage, which is hampering production across the entire industry.

To put this in numbers, the average price of a new car has climbed from $35,600 in 2019, to over $47,000 today. Over a similar timeframe, the average price of a used car has grown from $19,800, to over $28,000.

end

CPI red hot

CPI Prints Hotter Than Expected In April, Real Wages Tumble For 13th Straight Month

WEDNESDAY, MAY 11, 2022 – 08:34 AM

After March’s surge in consumer prices, analysts’ consensus is that CPI has peaked and April was expected to show a big slowing from +8.5% YoY to +8.1% YoY, however, CPI printed hotter than expected at +8.3% YoY…

Source: Bloomberg

Bear in mind that headline CPI is still at its second highest since 1982.

Core CPI was expected to rise 6.0% YoY in April (down from +6.5% YoY in March) but rose a hotter than expected 6.2% YoY and the 0.6% MoM spike in core is bigger than all 67 estimates in BBG business survey.

Energy inflation eased as Services prices soared MoM…

Source: Bloomberg

Increases in the indexes for shelter, food, airline fares, and new vehicles were the largest contributors to the seasonally adjusted all items increase.  The indexes for medical care, recreation, and household furnishings and operations also increased in April.

Here are some of the stunning, record price increases, first on a Y/Y basis:

  • The food at home index rose 10.8 percent over the last 12 months, the largest 12-month increase since the period ending November 1980.
  • The index for meats, poultry, fish, and eggs increased 14.3 percent over the last year, the largest 12-month increase since the period ending May 1979
  • The index for airline fares continued to rise sharply, increasing 18.6 percent in April, the largest 1 month increase since the inception of the series in 1963.

And monthly:

  • The food index rose 0.9 percent over the month as the food at home index rose 1.0 percent. The energy index declined in April after rising in recent months. The index for gasoline fell 6.1 percent over the month, offsetting increases in the indexes for natural gas and electricity.
  • The index for new vehicles increased 1.1 percent in April after rising 0.2 percent in March. The medical care index increased 0.4 percent in April.
  • The index for hospital services rose 0.5 percent over the month, the index for physicians’ services rose 0.2 percent, and the index for prescription drugs was unchanged.
  • The index for household furnishings and operations continued to increase, rising 0.4 percent in April after increasing 1.0 percent the prior month.
  • The index for motor vehicle insurance increased 0.8 percent in April.
  • Also rising over the month were the indexes for personal care (+0.4 percent), education (+0.2 percent), alcoholic beverages (+0.4 percent), and tobacco (+0.4 percent).   

but, a few major component indexes declined in April.

  • The apparel index fell 0.8 percent over the month, ending a string of six consecutive increases.
  • The index for communication fell 0.4 percent in April, its third consecutive monthly decline.
  • The index for used cars and trucks also fell 0.4 percent over the month, its third straight decline after a long series of increases.

A full breakdown, YoY…

And M/M:

The cost of putting a roof over your head is soaring:

  • April Shelter inflation rose 5.14% Y/Y, up from 5.00% in March and the highest since March 1991
  • April Rent inflation rose 4.82%, up from 4.44% in March, and the highest since Feb 1991

Away from housing, it is also interesting to observe what’s going on with food away from home, i.e, restaurants. Inflation in the “full-service meals and snacks” category – meals you pay for after you eat – is surging. But the “limited-service” category, which captures meals you pay for before you eat, has been rolling over for several months now. As Bloomberg notes, usually these two move in tandem, so it will be interesting to see if this divergence can be maintained.

That said, and as Goldman warned, strong Services inflation will likely keep CPI elevated while last year’s spike in goods prices will increasingly drop out…

Source: Bloomberg

Finally, perhaps most worrying for the average Joe, ‘real’ wages fell for the 13th straight month…

Source: Bloomberg

Matt Maley, chief market strategist for Miller Tabak + Co., says:

“Very simply, this high inflation number has dimmed the hopes for many investors considerably that we’ve reached peak inflation. Therefore, the Fed will remain hawkish and it just might put a 75 basis point hike back on the table.”

Looking ahead there is good news and bad news, from Katherine Judge at CIBC:

“Looking beyond April, base effects will help annual inflation continue to decelerate in the near term, but that will be limited by gas prices, which are heading higher again, and supply disruptions resulting from lockdowns in China, in combination with the tightening in the labor market and higher shelter prices.”

And a scary prediction from ex-NY Fed president Bill Dudley speaking on BBG TV:

“I was 3% to 4% maybe six months ago. Now I’m 4% to 5%. It wouldn’t shock me if I’m 5% to 6% a few months from now.”

Get back to work Mr.Powell – and Mr.Biden, please stop whatever it is you are doing to ‘help’

end

Record Airfares And Soaring Food Prices: What’s Behind Today’s Surprise CPI Beat

WEDNESDAY, MAY 11, 2022 – 10:35 AM

Now that we’ve had the time to digest it, here is what we learned this morning.

The BLS reported that headline CPI prices eased down to a 0.3% (0.33% unrounded) M/M clip from a blowout 1.2% print last month, though this was higher than expectations for a 0.2% gain. Energy prices slid 2.7% M/M as a pullback in retail gasoline prices led to a 5.4% drop in energy commodities, which was partially offset by a 1.3% increase in energy services (look for energy prices to jump again in May, now that gasoline is back to all time highs). Looking at the other notable components, food stayed hot as food at home climbed 1.0% mom and food away from home rose 0.6% mom.

Coupled with negative base effects, Y/Y headline CPI slowed to 8.3% from 8.5% in March, with the latter month likely reflecting the peak in inflation even if the annual print was stronger than the 8.1% expected. Core CPI was an even stronger beat, rising 0.6% (0.57% unrounded) mom versus consensus at 0.4%. This led to the Y/Y rate dropping to 6.2% from 6.5%, reflecting the aforementioned unfavorable base effects.

A remarkable statistic from Brean Economics shows just how widespread the inflation was: “Of the 95 CPI components we can track back to 1998 (which cover 98% of the CPI) 63% show year-over-year price gains of 6% or more in April, which is the highest share on record.”

One of the main drivers of the upside surprise was a record 18.6% increase in airline fares, which added 13bp to core CPI alone and reflects a boost from reopening pressures. This contributed to a broader transportation services increase of 3.1% mom, with car truck rental and motor vehicle insurance prices also both rising 0.8% mom. Adding to the reopening theme, lodging gained 1.7% mom.

Even outside of the reopening-related categories, there were notable broad based gains across services amid tight labor markets and accelerating wages. OER rose 0.45% mom and rent of primary residence accelerated to 0.56% mom.

Medical care and other personal services both gained 0.5% mom, and recreation was up 0.4% mom. Water/sewer/trash and education/communication services both rebounded from negative readings in March to 0.3% mom and 0.2%, respectively. 

Core goods was more mixed. On one hand, new cars rose 1.1%—the new methodology discussed earlier likely contributing to a stronger reading this month — household furnishings/supplies and recreation goods both rose 0.5%, alcohol was up 0.4% mom, other goods rose 0.3% mom, and medical goods edged up 0.1% mom.

On the other hand, education/communication collapsed 2.6% mom, apparel slid 0.8% mom, and used cars fell 0.4% mom. There have been mixed signs of progress on supply chains in the US, which can help explain the more mixed readings across goods.

Looking ahead, Bank of America notes that the Russia/Ukraine conflict and China lockdowns remains risks to commodity prices and global supply chain conditions, which could lead to further choppiness.

Overall, expect strong – if declining – core goods inflation through this year, around 5% by year-end. Overall, this was a noisy report given the move in airline fares, so some of the strength should be faded. That said, underlying inflation pressures remain elevated—and BofA recommends keeping an eye out on trimmed-mean/median later this morning—which should leave the Fed comfortable maintaining their front-loaded rate hiking path. The risks of a 75bps rate hike are low given the noise, but this report adds to the debate on the margin.

Finally, here is the visual breakdown of CPI on a monthly basis…

… and Y/Y.

.end

IIB) USA COVID/VACCINE MANDATES

iiia) USA inflation// commodity//SHIPPING commentaries//LOG JAMS//”

Now huge baby formula shortages

Baby Formula shortages: (courtesy the Hill)

A national shortage of baby formula is the latest challenge facing President Biden.

The White House is already managing the highest inflation rate in decades, a war in Ukraine triggered by Russia’s invasion, a lingering pandemic and sky-high gas prices. There’s also the likelihood that the Supreme Court this summer will strike down the 1973 Roe v. Wade decision.

Now it can deal with panic over the baby formula shortage, which is causing consternation from coast to coast. The Food and Drug Administration is working to fix it.

“Like we didn’t have enough problems,” one Biden ally quipped in an interview on Tuesday. “Sure, throw in baby formula.”

Biden has had his hands full with short-term, medium-term and long-term problems, many of them related.

The baby formula shortage is being exacerbated by supply chain problems that also have caused inflation to rise. Biden in a White House speech on Tuesday identified inflation, which is making the midterm landscape for Democrats bleaker by the day, as his top issue.

Gas prices hit another peak on Tuesday, and they are being affected by the Ukraine war. Coronavirus cases are also ticking up again, a reminder that the pandemic hasn’t gone away. In China, lockdowns caused by the pandemic are contributing to economic malaise in the United States.

The baby formula shortage has led retailers including Amazon and Target to limit the amount of formula people can purchase online and in stores. 

White House press secretary Jen Psaki on Monday said the availability of the product is “a priority for the FDA and they’re working around the clock to address any possible shortage.”

 But Psaki stopped shy of saying the White House could take any additional steps.

“I don’t believe there’s a national stockpile of baby formula,” she said.

By Tuesday, the FDA had issued a lengthy outline of the steps it is taking to address the shortage, which include meeting with infant formula manufacturers, monitoring supply and taking steps to expedite production. 

“We are doing everything in our power to ensure there is adequate product available where and when they need it,” FDA Commissioner Robert Califf said in a statement.  

Republicans, salivating over a political atmosphere that seems like it could deliver the party House and Senate majorities in the fall, have ripped the administration over high gas prices and inflation. 

The GOP also has pounced on the baby formula issue, with the Republican National Committee highlighting accounts of mothers across the country who are worried about feeding their babies.

“Everything is more expensive in Biden’s America and now families are being devastated by a massive baby formula shortage,” said Emma Vaughn, a spokeswoman at the Republican National Committee. 

On Tuesday, Sens. Mitt Romney (R-Utah) and Tom Cotton (R-Ark.) sent letters to the Biden administration to voice concern about the shortage.

“I am deeply concerned about the apparent lack of an effective mitigation strategy and urge both agencies to move as fast as possible to safely resolve this situation,” Romney wrote, referring to the FDA and the Department of Agriculture.

A day earlier, Rep. Elise Stefanik (R-N.Y.), a new mother and member of the House GOP leadership, also took to Twitter to voice her disapproval.

“This is absolutely UNACCEPTABLE in America,” Stefanik wrote on Twitter. “Sadly, this has become the norm because of Joe Biden’s radical agenda.”

Democrats say Biden has become an easy target for all the problems — both large and small — that the nation has been facing.

“The easiest person to blame is the most visible public figure in America,” said Democratic strategist Joel Payne. “It doesn’t matter if it’s fair or logical. They might be doing everything you might imagine to address it but if it’s not being solved it’s at your feet.”

And the worst could still be yet to come, political observers caution.

“Don’t forget what is looking like a bear stock market and possible recession,” said Julian Zelizer, a professor of history and public affairs at Princeton University. “It’s not good for the administration however you paint it and whatever he says.”

“People will feel economic pain and fear directly so it’s hard to explain away,” he said.

The White House and Biden himself are starting to push back more aggressively against Republicans who have tried to use issues like inflation to attack the president and his policies.

“Republicans love to use inflation as a political talking point, but does anyone have a clue what their plan is to bring down prices?” a White House official asked on Monday ahead of Biden’s speech about his efforts to reduce prices.

On Tuesday, Biden assailed Sen. Rick Scott (R-Fla.) for a proposal he put forth that would raise income taxes on Americans who pay no taxes. The Scott plan also would sunset all legislation.

Republicans have sought to distance themselves from the Scott proposal, but the White House has cast it as representative of the entire GOP. Scott is the head of the Senate GOP’s campaign arm.

In an exchange with reporters following the speech, Biden acknowledged that voters fault him for inflation because Democrats are in power, but he noted the difficulty of getting his legislative agenda passed due to the narrow Senate majority.

“We’re in power,” Biden said. “You’re justifiably right that we control all three branches of government. Well, we don’t really. We have 50-50 in the Senate. You need 60 votes to get major things done. I’ve been pushing the things I’ve been proposing here and you’ve heard me speak to today since I got into office. And I need 60 votes to be able to even pass them.”

“All they’re focused on, understandably, is the problem they are facing,” Biden said of voters, adding that he needs to explain in “simple, straightforward language what is going on.”

end

IIIB) USA ECONOMIC STORIES

More laundered money flowing back to the Democrats

(Dave DeCamp/Antiwar.com)

House Passes Bill For $40 Billion In New Ukraine Aid

BY TYLER DURDEN

WEDNESDAY, MAY 11, 2022 – 07:26 AM

Authored by Dave DeCamp via AntiWar.com

On Tuesday night, the House passed a nearly $40 billion bill for new Ukraine aid as Washington continues to escalate its role in supporting Kyiv in its war against Moscow.

The measure passed in a vote of 368-57, with only Republicans voting against the bill. The legislation now moves to the Senate, which could hold a vote this week.

Senate Majority Leader Chuck Schumer (D-NY) has said the Senate will “move swiftly,” although some Republicans in the chamber have complained that the massive aid package is not large enough.

President Biden asked Congress for $33 billion for the new Ukraine aid package, but congressional Democrats ramped it up to $39.8 billion. The package includes $11 billion in presidential drawdown authority, which allows President Biden to send Ukraine military equipment from US stockpiles.

The aid also includes $6 billion in Ukraine Security Assistance Initiative funding, which enables the US government to buy weapons from arms makers and send them to Ukraine.

The Pentagon will receive $8.7 billion to replenish weapons stockpiles that have been to Ukraine, and $3.9 billion to pay for troop deployments in Eastern Europe.

In March, $13.6 billion for Ukraine aid was included in a spending bill signed by President Biden. The new $39.8 billion plan will bring total US aid for Ukraine in 2022 alone to over $53 billion.

To put the enormous figure into perspective, Russia’s entire military budget for 2021 was estimated to be about $65.9 billion.

end 

There Goes The Housing Market

WEDNESDAY, MAY 11, 2022 – 12:25 PM

Since the Fed is rushing to hike the US into a deep recession just so inflation will (supposedly) slide ahead of the November midterms, in line with Biden’s demands, the housing market is eager to comply with Powell’s and Biden’s handlers’ wishes, and is leading the charge into the economic abyss, as we discussed most recently here, and as the latest nationwide survey of new home builders confirms.

Last week, Zillow’s dismal outlook stoked fears that rising mortgage rates would result in the next downturn. On Monday night, Airbnb co-founder and CEO Brian Chesky warned: “this moment feels similar to late 2008 when we started” the online marketplace for lodging. 

It should: the surge in mortgage rates means that housing affordability has crashed to the lowest on record.

And nos there’s this: John Burns Real Estate Consulting provides a monthly snapshot of more than 300 builders across the nation. Here are a some comments from the builders, according to tweets from the firm’s director of research:

  1. Demand is slowing, namely entry-level due to payment shock.
  2. Investors are pulling back.
  3. Ripple effect of rising rates starting to hit move-up market. Market commentary to follow

The regional breakdown is shockingly uniform in just how quickly it got ugly across the entire nation:

  • Dallas builder: “Interest lists are shrinking or buyers are truly pausing.”
  • Houston builder: “Many first-time buyers simply no longer qualify with the increase in interest rates, as their debt-to-income ratio gets out of whack.”
  • San Antonio builder: “Traffic has been cut in half since the hike in rates.”
  • Raleigh builder: “Investor activity has slowed dramatically.”
  • Provo builder: “Investors are evaluating the investment more critically than in the past.”
  • Washington DC builder: “Traffic half what it was in March. Worried about first time buyers. Many fewer REAL buyers than number of people collected on interest list last 6 months. Certainly more attempts [from buyers] to negotiate.”
  • Seattle builder: “Pause by a large population of buyers. To achieve our desired [sales] pace, we had to make price adjustments. Rates starting to knock people out of qualification.”
  • Riverside San Bernardino builder: “Cancellations are starting to creep up due to loan declines and job losses. Waiting lists are certainly smaller. Saw an immediate change in buyer behavior when rates climbed over 5%.”
  • Los Angeles builder: “Buyers who are stretching to purchase have become more cautious.”
  • San Diego builder: “Buyers are definitely a bit more edgy.”
  • Denver builder: “Sales are slowing due to higher prices and rates. Backlog of buyers have remained but we are seeing new prospects priced out with interest rates and anticipated payments. Conforming loans quoting over 6%.”
  • Boise builder: “Rising interest rates may have pulled some buyers forward, and we expect to see a slowing of sales in the coming months as a result.”
  • Salt Lake City builder: “In our lower priced segments, buyers are compromising and reducing options.”
  • Bend builder: “Our market has slowed and prices are starting to drop.”
  • Atlanta builder: “Seen a decrease in the number of potential buyers who are participating in best and final offers on homes/homesites.”
  • Knoxville builder: “Detached 2,000-3,000 square foot product still selling, just not with 3 buyers for every home like a few months ago.”
  • Allentown builder: “Double hit of higher home prices and higher mortgage interest rates clearly has reduced the number of qualified buyers. Our waiting list is almost zero as of April 30th.”
  • Philadelphia builder: “Between higher interest rates and higher sales prices, along with high gas prices and a volatile stock market, we’re seeing a pullback in our sales.”
  • Tampa builder: “We’ve seen a significant shift in buyer behavior in the last 30 days. Florida was on fire and pricing has really come to a high point, and people are not willing to pay the prices anymore.”
  • Indianapolis builder: “Traffic has significantly declined and people have paused on moving forward with purchases.”
  • Kansas City builder: “Our lower end product has paused or slowed dramatically.”
  • Columbus builder: “Higher rates are definitely tempering buyer enthusiasm and traffic.”
  • Baltimore builder: “Buyers aren’t putting in as many options as they did last year.”
  • Reno builder: “Cancellation rate last month more than doubled from 6% to 16%. We attribute this to buyers that did not lock interest rates early in purchase process. Also seeing many buyers put buying decision on hold.”
  • Fresno builder: “Finding an increase in cancellations due to the rate increase. The majority of cancellations are resulting from fear vs non-qualification.”
  • Cleveland builder: “Once we reach home closings, about 5% of our current customers on the books will be forced to bust out as they originally qualified at a 3.25% rate and won’t be able to stretch beyond this.”
  • Sacramento builder: “Seeing trouble qualifying for entry-level buyers as they are priced out by rates.”
  • San Jose builder: “Quality traffic has significantly decreased.”

This means that still buoyant homebuilder confidence is about to catch down to abysmal homebuyer sentiment…

… which will immediately mutate into a recession, at which point the Fed will slam the breaks on the hiking cycle and quickly go into reverse. The only question is how long before the market grasps what is now patently obvious.

END

California To Hire “Water Cops” As Residents Ignore Newsom’s Conservation Plea Amid Megadrought

WEDNESDAY, MAY 11, 2022 – 04:40 PM

California plans to hire “water cops” to monitor people and businesses wasting water as statewide usage soared in March despite Gov. Gavin Newsom declaring a drought emergency last July and parts of Southern California under water restrictions, according to The Mercury News

The Santa Clara Valley Water District, south of the San Francisco Bay Area, encompassing 15 cities and more than 2 million residents, is considering “water cops” to police neighborhoods and business districts for water wasters. People who are wasting water could be fined up to $500. 

Water cops may slap citations for people watering their yards for long periods of time and washing cars in the driveway. 

Aaron Baker, the COO of Valley Water, told CBS News that water cops are “needed because of the unprecedented times we’re in, and because we aren’t making enough progress on our water savings.” 

The threat of water cops snooping on people comes as California’s total water usage in March was the most since 2015 despite calls for conservation amid a megadrought

California Water Resources Control Board said water usage jumped 19% compared to March 2020. 

On a regional basis, Bay Area was up 2.5% in March YoY. Soaring demand was primarily in Southern California: Los Angeles, Orange, and San Diego counties jumped 26.9%.

Californians aren’t listening to the state government, even with Newsom’s drought emergency deceleration last July. This could be problematic because a dry spring and lack of statewide mandatory conservation standards, with forecasts for a scorching summer, may suggest the water crisis could worsen. 

“We just came off the driest January, February and March in recorded history.

“It was a jaw-droppingly dry three months. People started turning on their sprinklers early. That’s where the water went. To their lawns. Pure and simple,” said Jeffrey Mount, a professor emeritus at UC Davis and senior fellow at the Public Policy Institute of California’s water center. 

The latest examples of an expanding water crisis are the Angeles Department of Water and Power and East Bay Municipal Utility restricting the amount customers can water their yards.  

“The lack of conservation is becoming a growing political embarrassment for Newsom, whose call for 15% conservation so far has been voluntary,” The Mercury News said. To be effective, this may suggest the state government might have to get tough on water wasters to meet conservation targets.

To do this: Unleash water cops

END.

iv)swamp stories

END

The King Report (including swamp stories)

ESMs then rallied steadily, peaking near the European open.  ESMs and stocks then traded sideways until they dipped when the US repo market open at 7 ET.  ESMs then commenced a rally that culminated in a 19-handle ESM spike at the NYSE open.  But that was it; ESMs and stocks then declined sharply until the European close.  At that point, ESMs were 3963.50, -102.00 from the daily high at 9:31 ET.
 
This contributed to the early US rally: David Tepper tells Cramer he’s covered his Nasdaq short, thinks selling could be ending 9:07 AM EDT https://t.co/j1mH4u24xR
     “I was talking to David Tepper who’s been short. He covered his short and feels that the selloff could be concluding” said Jim Cramer who added that “forced sellers equal bottom and it is a great time to be able to take a shot.” https://www.zerohedge.com/markets/futures-soar-after-report-david-tepper-covers-nasdaq-treasury-shor
 
Bonds soared early on Tuesday.  USMs hit +2 17/32 seven minutes after Europe closed.  It certainly looked like defensive asset allocators were in the arena.  Bonds lost over 1 point of the rally in the PM.
 
ESMs went inert ahead of and during The Big Guy’s risible and bumbling inflation address.  Joey Baby blamed inflation on Covid, ‘Putin’s War’ and Republicans, specifically Sen. Rick Scott.  Biden reiterated his lie that Scott and Republicans want to raise taxes on working families via the ‘ultra-Maga agenda’.
https://twitter.com/CBSNews/status/1524061414243147777   https://twitter.com/greg_price11/status/1524060505769398275
 
Biden to blast Republicans as having no plan on inflation (Does Joe know he is president & Dems control Congress?) He is not expected to announce new policy measures in the speech… But he is expected to sharpen his attacks on Republicans… http://reut.rs/3vZAMrT
 
GOP Sen. Rick Scott: The Most Effective Thing Joe Biden Can Do to Solve the Inflation Crisis He Created is Resign – Today, ahead of President Joe Biden’s speech bizarrely blaming Senator Rick Scott and other Republicans for Biden’s record-breaking inflation, Senator Scott released the following statement: It’s simple. The most effective thing Joe Biden can do to solve the inflation crisis he created is resignHe’s the problem. Getting him out of office is a quick and easy solution.
   “Let’s be honest here. Joe Biden is unwell. He’s unfit for office. He’s incoherent, incapacitated and confused. He doesn’t know where he is half the time. He’s incapable of leading and he’s incapable of carrying out his duties. Period. (Astounding comments from a Senator!  Perhaps rumors about Joe getting lost in the WH have merit.)  “Everyone knows it. No one is willing to say it. But we have to, for the sake of the country. Joe Biden can’t do the job.”…   https://www.rickscott.senate.gov/2022/5/sen-rick-scott-the-most-effective-thing-joe-biden-can-do-to-solve-the-inflation-crisis-he-created-is-resign
 
@RNCResearch: BIDEN: “You know, we have no plan. They have no plan to bring down energy prices today.”   https://twitter.com/RNCResearch/status/1524060285329420288
 
@townhallcom: BIDEN: “The number one threat is the strength, and that strength that we’ve built is inflation.  So, the Fed should do its job and it will do its job I’m convinced…”
https://twitter.com/townhallcom/status/1524058482319798273
 
@charliespiering: “Republicans would like to attack me as a big spender,” Biden says
 
Biden with his creepy whisper: “I know you got to be frustrated.  I know.  I can taste it.”
https://twitter.com/townhallcom/status/1524061934131322880
 
@townhallcom: REPORTER: “Do you take any responsibility for the inflation in this country?”  BIDEN: “I think our policies help, not hurt.”  https://twitter.com/townhallcom/status/1524063242045296640
 
Reporter asks The Big Guy if he bears any measure of responsibility for inflation.  Biden: “First is, we’re in power…We control all three branches of government…” (Dems control the judiciary?  Maybe!)
https://twitter.com/townhallcom/status/1524062634915545091
 
@PhilipWegmann: Biden: “I can’t believe that the majority of Republicans buy on to Scott’s plan, but that’s the plan in writing, and he’s in the leadership.”
 
Inflation Is So Bad Democrats Want Biden to ‘Do More’ for Midterms https://t.co/q31camrYtf
 
U.S. gas prices hit record high (Drive season is still weeks aways) https://t.co/lAaGICXnIB
 
Gasoline Prices Surge Anew in U.S. as Supply Concerns Deepen
Gasoline is rallying in the U.S. with pump prices rising to within a hair of an all-time record three weeks ahead of the peak driving season…  https://t.co/tmG3pE7oXG

The market dysfunction is increasing!  Moves that used to take a day or two now occur in minutes.  Moves that use to take a week or more now occur within a few hours.
 
Tuesday was another instance of stocks tumbling in early NYSE trading; and then a manipulation that rescues stocks occurred.
 
@YahooFinance: Cleveland Fed President Loretta Mester: “…We need to consider selling some of the MBS at some point during the process because one of our principles is to get our portfolio to be primary Treasuries… we don’t want to be influencing credit markets.” https://t.co/M1rCi1kRcI
 
Hawley Proposes Bill to Strip Disney of Copyright Protections
Senator Josh Hawley (R., MO.) is proposing new legislation… to end special copyright protections extended to the Walt Disney Company, and cap all federal copyright protections at 56 years, Fox News reported Tuesday… https://www.nationalreview.com/news/hawley-proposes-bill-to-strip-disney-of-copyright-protections/
 
@VivekGRamaswamy: The Big 3 U.S. asset managers control more capital than the total U.S. GDP, yet they impose a single monolithic view on corporate America…that most of *their own clients* disagree with. It’s arguably the biggest fiduciary breach of our century. And we’re going to fix it.
 
@SquawkCNBC: “When that much capital is concentrated in one set of hands, or in a few hands that are advocating for one ideology, we lack the true diversity of thought that the American economy depends on,” says @VivekGRamaswamy on the goal of his new firm @StriveFunds.
https://twitter.com/SquawkCNBC/status/1523991013894893569
 
Positive aspects of previous session
Early rally abetted by CNBC hype about Tepper’s short covering
Another midday/early afternoon upward manipulation to save stocks appeared
Fangs and Nasdaq rallied sharply on Tepper’s short covering
 
Negative aspects of previous session
Stocks and commodities tumbled early on recession fear, again
The equity market is increasingly dysfunctional and dangerous
 
Ambiguous aspects of previous session
Does the market see a looming recession?
 
First Hour/Last Hour Action [S&P 500 Index]: 1st Hour from NYSE open: Down; Last Hour: Down
 
Pivot Point for S&P 500 Index [above/below indicates daily trend to traders]: 4009.35
Previous session High/Low4068.82; 3958.17
 
Yellen says eliminating abortion rights would have ‘damaging effects’ on U.S. economy
Yellen’s comments drew a rebuke from Republican Senator Tim Scott of South Carolina… “I think people can disagree on the issue of being pro-life or pro-abortion. But in the end, I think framing it in the context of labor force participation, it just feels callous to me,” said Scott, adding that he was raised by a single mother in poverty… “So, there is a spillover into labor force participation, but it means the children will grow up in poverty and do worse themselves,” Yellen said. (Is abortion advocacy a Treasury Sec role?)
https://www.reuters.com/legal/litigation/yellen-says-eliminating-abortion-rights-would-have-damaging-effects-us-economy-2022-05-10/
 
Yellen Says Striking Down Abortion Rights Would Hurt US Economy
…Such a move would increase poverty levels and hurt the future earnings of children… “One aspect of a satisfying life is being able to feel like you have the financial resources to raise a child, that the children you bring into the world are wanted, and you have the ability to take care of them,” she said.
https://www.bloomberg.com/news/articles/2022-05-10/yellen-says-striking-down-abortion-rights-would-hurt-us-economy
 
@MaryMargOlohan: CHILLS. @SenatorTimScott delivers a stunning rebuke to Janet Yellen claiming black women need abortions to succeed: “I’ll just simply say that as a guy raised by a black woman in abject poverty, I am thankful to be here as a United States senator.”
https://twitter.com/MaryMargOlohan/status/1524122740256477185
 
Children born to needy women are disadvantaged in multiple ways.  However, the US economy befits from births.  Federal, state, and local entitlements to needy families and children ultimately flow into the economy and add trillions of dollars to US GDP. 
 
Once upon a time, economists used to assert that population growth was a major factor in economic growth.  You know, “demographics is destiny”.  Aunt Clara’s memory appears to be impaired, like her boss.  Dirt-poor immigrants spawned huge families in the 19th & 20th Centuries.  Blue-collar and needy families produced the “Baby Boomers” that generated enormous US economic growth after WWII.
Can you imagine the outrage if a GOP Treasury Secretary said what Aunt Clara did?
 
We do not want to belabor abortion politics because most people have entrenched positions.  However, Dems and their MSM propaganda wing are desperately brandishing the abortion card because they need a Hail Mary to avert electoral disaster in November.  Polls show this is a very misguided strategy.
 
Polls show abortion up to birth, which is in Schumer’s abortion bill that will be presented at the Senate today, is extremely unpopular.  Why would Dems take an extremist position ahead of Nov.?
 
A Feb. Marist Poll shows only 18% favor abortion up to birth.  A Pew Research poll in March shows only 19% of Americans favor abortion with no exceptions. 
https://www.pewresearch.org/religion/2022/05/06/americas-abortion-quandary/
 
Marist Poll (in mid-February): Big majorities of Democrats, young people reject late-term abortion
Equal numbers of Americans — 47 percent —identified themselves as pro-life and as those who support abortion.  The findings reflect a dramatic shift from a similar poll in early January that found respondents supporting abortion by 55 percent to 38 percent…
   71 percent to 25 percent — respondents said abortion generally should be illegal during the third trimester of pregnancy… 18 percent said abortion should be allowed any time until birth … 80 percent of respondents would like to see abortion limited to the first three months of pregnancy at most. The number represents a 5-percentage point increase since January
https://www.archbalt.org/poll-big-majorities-of-democrats-young-people-reject-late-term-abortion/
 
(Left leaning) FiveThirtyEight: Polls have found that a large majority of Americans support abortion in the first trimester (60%), but that support tends to drop (‘tends to drop’?  It collapses to 28%) in the second trimester(3rd semester support is even lower, which 5-30-8 ignores)
https://fivethirtyeight.com/features/where-americans-stand-on-abortion-in-5-charts/
 
Putin sparks more health speculation for covering legs with blanket at parade https://t.co/6jXneUsGKq
 
@Cernovich: That $40,000,000,000 headed to Ukraine won’t be audited on the block chain. Or audited at all. “10% for the big guy.” And there are lots of big guys with their hands out.
 
Mitch McConnell Claims ‘We All Agree the Most Important Thing Going on in the World Right Now Is the War in Ukraine’ (No Mitch, it’s overwhelmingly inflation.) http://dlvr.it/SQ6rfW
 
GOP @RepMTG Blasts America Last Ukraine Spending Bill: “Stop funding regime change & money laundering scams!  The American ppl do not support paying for constant U.S. involvement in foreign affairs while our own gov fails our own country!” https://twitter.com/ColumbiaBugle/status/1524162229502885889
 
@charliebilello: With 85% of companies reported, S&P 500 GAAP earnings are down 14% versus Q4 2021 and up only 1% year-over-year.  https://twitter.com/charliebilello/status/1523837759944904708
 
Today – Barring a very ugly number, there should be a relief rally after April CPI is released at 8:30 ET.  By the time the NYSE opens at 9:30 ET, there is no telling how many twists and turns ESMs will have.
 
The markets are thin and getting thinner because prudent investors and operators are exiting.  The US economy appears to be at an inflection point.  Most commodities peaked in April.  This is worrisome because GDP tends to recede before commodity prices peak.  When the GDP decline accelerates, commodities sink.  Commodities declining on reduced demand is a troubling dynamic.  But commodity prices falling on improved supply is generally a benefit.  The uncertainty over demand ebbing (recession) vs. increasing supply mandates that serious investors and traders take a wait and watch approach.
 

 
GDP y/y vs. CPI y/y
 
 

 
US GDP peaked at 12.2% in Q2 2021 (3.6% now, left template).  Perhaps, CPI peaked (8.5%) in March.
Last night, Atlanta Fed President Bostic forecasted US GDP at 2.6% for 2022.
 
ESMs are +6.50 at 20:30 ET.  Barring a big negative development, it feels like stocks want to rally.
 
Expected economic data: April CPI 0.2% m/m, 8.1% y/y, Core 0.4% m/m, 6% y/y; April Budget $220B; the ubiquitous Atlanta Fed Pres Bostic 12:00 ET
 
S&P 500 Index 50-day MA: 4354; 100-day MA: 4453; 150-day MA: 4500; 200-day MA: 4485
DJIA 50-day MA: 343,991; 100-day MA: 34,623; 150-day MA: 34,916; 200-day MA: 34,920
 
S&P 500 Index – Trender trading model and MACD for key time frames
MonthlyTrender and MACD are negative – a close above 5028.85 triggers a buy signal
HourlyTrender and MACD are negative – a close above 4547.45 triggers a buy signal
Daily: Trender and MACD are negative – a close above 4529.25 triggers a buy signal
Hourly: Trender is negative; MACD is positive – a close above 4071.97 triggers a buy signal
 
@SavBehrmannDC: Schumer says the “outrage directed at” the Supreme Court over the Roe draft is “deserved.”
 
@TPostMillennial: Psaki: “I know that there is an outrage … about protests that have been peaceful to date and we certainly continue to encourage that outside of judges’ homes.  And that’s the president’s position.” (Team Joe & Schumer encourage people to commit a felony!  Where is ‘Leader’ McConnell?)
https://twitter.com/TPostMillennial/status/1524103209073139718
 
Babylon Bee: FBI Sternly Warns Mob at Justice Kavanaugh’s Home to Stay Away from School Board Member’s House Next Door.
https://babylonbee.com/news/fbi-sternly-warns-mob-at-justice-alitos-home-to-stay-away-from-school-board-members-house-next-door
 
@mrddmia: The Obama Justice Department won a conviction, under 18 U.S.C. § 1507, against a man who protested the Supreme Court’s gay-marriage court proceeding. But the Biden Justice Department won’t prosecute abortion protesters threatening justices at their homes?
 
Texas Man Pleads Guilty to Federal Charge Stemming from Disturbance at U.S. Supreme Court
https://www.justice.gov/usao-dc/pr/texas-man-pleads-guilty-federal-charge-stemming-disturbance-us-supreme-court
 
DOJ notes show FBI panic after Trump tweet accusing Obama of spying on campaign
FBI leadership was seemingly alarmed after Trump tweeted that he knew Obama was wire tapping Trump Tower.  Notes during a 2017 meeting between Department of Justice officials and FBI leadership show the federal law enforcement agency seemingly panicked and went to great lengths to cover up its spying on then-candidate Donald Trump…   https://t.co/FlhzwReGa7
 
Biden and Pelosi are described as “devout” Catholics but are okay with inciting violence and then going silent on it. (Liberalism uber alles.)  https://t.co/sbyTs7NbWh
 
An estimated crowd of 50 to 100 protested, in violation of federal and Virginia law, at SCOTUS Justice Alito’s home on Monday night.  Authorities did nothing.  The protest ended when the crowd learned Alito was not home.  But Americans who took pictures in the Capitol or trespassed have spent months in jail!
 
Justice Department Threatens Oath Keepers with Life in Prison
“The United States takes the position that the most analogous offense to seditious conspiracy is ‘Treason,’” warns federal prosecutor Kathyrn Rakoczy…The Oath Keepers are not accused of carrying or using any weapons on January 6; none is charged with directly vandalizing government property. Two “stacks” of Oath Keepers entered the building after the joint session of Congress recessed that afternoon and walked through open doors with police nearby…No American ever has been convicted of seditious conspiracy…    https://amgreatness.com/2022/05/08/justice-department-threatens-oath-keepers-with-life-in-prison/
 
MSNBC political analyst: Supreme Court draft opinion threatens not just women, but ‘anyone with a uterus’ https://t.co/SJUbJ7uIA5
 
@Steigerworld: Imagine the media coverage if a movie like 2000 Mules had been produced by Michael Moore with similar evidence about Donald Trump’s win in 2016.
 
@DineshDSouza: “2000 Mules” is merely the most successful and most talked-about independently-released political documentary in more than a decade. Theaters are begging me to re-release it later this month. With “failure” like this, who needs success?
     Since the “fact checkers” say geotracking is imprecise and inaccurate, here’s Chief Justice Roberts in a 2018 opinion: “When the Government tracks the location of a cell phone, it achieves near perfect surveillance as if it had attached an ankle monitor to the phone’s user.”

 

Let us close today with this offering courtesy of Greg Hunter interviewing Peter Schiff

Fed Cannot Fight Inflation – Peter Schiff

By Greg Hunter On May 10, 2022 In Market AnalysisNo Comments

By Greg Hunter’s USAWatchdog.com 

Money manager and economist Peter Schiff says all the talk you are hearing from the Federal Reserve is simply the Fed “pretending to fight inflation.”  Schiff explains, “Everything I predicted with inflation breaking out and the way the Fed would react to it has come true.  The next thing is the Fed is now pretending it’s going to fight inflation.  I say they are pretending because they have no real intention of doing it because they can’t.  If the Fed could fight inflation, it would have started the fight a long time ago.  They would have acted preemptively when it was obvious it was a problem. . . . I have been warning about this for over a decade.  As the Fed was on this course of deliberately creating inflation, I always said this was going to come back and bite the Fed because they were going to let loose a monster that they were not going to be able to fight, like Frankenstein.  The Fed used to say we don’t care if we have too much inflation, we know how to solve it.  We have the tools, and I pointed out that they may have the tools, but they ain’t going to use them because it was like having a handgun as the tool for a headache.”

Schiff says there is record amount of debt in all sectors.  Schiff points out, “Now, the Fed says it’s going to take away all that free money?   The Fed is going to normalize interest rates?  Everything that was built on that foundation is going to implode.  We would have a financial crisis that would make 2008 look like a Sunday school picnic, and there will be no bailout if the Fed is fighting inflation.  It wouldn’t be another ‘Great Recession,’ it would be a ‘Greater Depression.’  This is why the Fed can’t do anything.  The Fed can’t do what Paul Volker did  . . . and raise interest rates to 20%.”

Schiff says the economy is going to tank no matter what the Fed does, and you will see this in the job market soon.  Schiff says, “I see massive layoffs coming.  It’s going to be like Covid except without Covid.  Instead of the government shutting down the economy, the economy is going to shut itself down.  Not because it’s been ordered to, but because the cheap money is gone. . . . Fed Head Powell is going to reverse course, and when he does, the bottom is going to drop out of the dollar.  Gold is going through the roof.  You better be fully positioned in your portfolio when that happens.  It’s probably going to happen while you are asleep because the dollar is going to collapse in Asia.  That’s where our biggest creditors are, and that’s where the mass exodus is going to start.”

Schiff advises to stock up on everything you think you are going to need.  Things such as toiletries, food, spare parts for your equipment and anything else you can store because everything is going up in price.  It will never be cheaper, and in the future, you might not be able to get it at any price.

There is much more in the 44-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with money manager and economic expert Peter Schiff, founder of Euro Pacific Capital and Schiff Gold.

(To Donate to USAWatchdog.com Click Here)

After the Interview:

There is much free information and articles at both of Peter Schiff’s websites:  EuroPac.com and SchiffGold.com.

You can also listen to Peter for free every week on The Peter Schiff Show.

See you on THURSDAY

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