MAY 18//GOLD DOWN $2.55 TO $1817.75//SILVER UP 4 CENTS TO $21.55//PLATINUM DOWN $17.65 TO $938.90//PALLADIUM DOWN $39.00 TO $2007.60//GOLD STANDING FOR MAY ROSE BY 10,900 OZ: NEW STANDING 18.289 TONNES//SILVER HAS ANOTHER EFP JUMP TO LONDON OF 125,000 OZ AS NEW STANDING DROPS TO 27.910 MILLION OZ//COVID UPDATES FROM SHANGHAI//NORTH KOREA HAS A MASSIVE INCREASE OF COVID CASES//COVID SHUTDOWNS FROM CHINA CAUSES MAJOR PROBLEM SHORTAGES FOR ITEMS SUCH AS MEDICAL IMAGING INGREDIENTS//RUSSIA VS USA AS THE USA WILL BLOCK DEBT PAYMENTS OWED BY RUSSIA: THIS WILL ONLY HURT THE WEST//COVID UPDATES FROM THE WEST//VACCINE INJURIES//VACCINE MANDATES//BIG PROBLEMS FOR SRI LANKA//USA COMMODITY PROBLEMS: DIESEL GAS, BABY FORMULA//TARGET SHARES CRASHES ON MARGIN PROBLEMS//SWAMP STORIES FOR YOU TONIGHT//

May 18, 2022 · by harveyorgan · in Uncategorized · Leave a comment·Edit

harveyorgan · in Uncategorized · Leave a comment·Edit

GOLD;  $1817.75 DOWN $2.55

SILVER: $21.55 UP  $.04

ACCESS MARKET: GOLD $1816.60

SILVER: $21.40

Bitcoin morning price:  $29753 DOWN 476

Bitcoin: afternoon price: $29,174 DOWN 1055

Platinum price: closing DOWN $17.65 to $938.90

Palladium price; closing DOWN $39.00  at $2007.60

END

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 EXCHANGE: COMEX

comex notices percentage of JPMorgan notices filed:  244/285

EXCHANGE: COMEX
CONTRACT: MAY 2022 COMEX 100 GOLD FUTURES
SETTLEMENT: 1,818.200000000 USD
INTENT DATE: 05/17/2022 DELIVERY DATE: 05/19/2022
FIRM ORG FIRM NAME ISSUED STOPPED


118 C MACQUARIE FUT 285
657 C MORGAN STANLEY 2
657 H MORGAN STANLEY 33
661 C JP MORGAN 244
737 C ADVANTAGE 6


TOTAL: 285 285
MONTH TO DATE: 5,672


NUMBER OF NOTICES FILED TODAY FOR  MAY CONTRACT 285  NOTICE(S) FOR 28,500 OZ  (0.8864  TONNES)

total notices so far:  5672 contracts for 567,200. oz (17.642 tonnes)

SILVER NOTICES: 

97 NOTICE(S) FILED 485,000   OZ/

total number of notices filed so far this month  5022  :  for 25,110,000  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 DOWN $2.55

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 4.07 TONNES FROM THE GLD

INVENTORY RESTS AT 1049.21 TONNES

Silver//SLV

WITH NO SILVER AROUND AND SILVER UP 4 CENTS

AT THE SLV// A BIG CHANGE IN SILVER INVENTORY AT THE SLV://A HUGE CHANGE IN SILVER INVENTORY

AT THE SLV.: A WITHDRAWAL OF 1.892 MILLION OZ FROM THE SLV/

INVESTORS ARE SWITCHING SLV TO SPROTT’S PSLV

CLOSING INVENTORY: 563.193 MILLION OZ

Let us have a look at the data for today

SILVER//OUTLINE


SILVER COMEX OI ROSE BY A VERY STRONG SIZED  1691 CONTRACTS TO 144,534   AND CLOSER TO  THE NEW RECORD OF 244,710, SET FEB 25/2020 AND  THE SMALL GAIN IN OI WAS ACCOMPLISHED DESPITE OUR STRONG  $0.22 GAIN  IN SILVER PRICING AT THE COMEX ON MONDAY.  OUR BANKERS WERE UNSUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT ROSE BY $0.22) AND WE ALSO UNSUCCESSFUL IN KNOCKING OFF ANY SILVER LONGS AS THEY REMAIN FIRM IN THEIR BELIEF OF A SILVER FAILURE.

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 TINY ISSUANCE OF EXCHANGE FOR PHYSICALS iiii) A STRONG INITIAL SILVER STANDING FOR COMEX SILVER MEASURING AT 30.170 MILLION OZ FOLLOWED BY TODAY’S 125,000 OZ E.F.P. JUMP   //NEW STANDING 27,910,000 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  : -81

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 12 days, total 16,215,  contracts:  81.075 million oz  OR 6.75 MILLION OZ PER DAY. (1351CONTRACTS PER DAY)

TOTAL EFP’S FOR THE MONTH SO FAR: 81.075 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: 81.075 MILLION OZ//INCREASING AGAIN

RESULT: WE HAD A VERY STRONG SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 1619 WITH OUR  $0.31 GAIN IN SILVER PRICING AT THE COMEX// MONDAY.,.  THE CME NOTIFIED US THAT WE HAD A TINY  SIZED EFP ISSUANCE  CONTRACTS: 41 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 125,000  OZ QUEUE. JUMP //NEW STANDING 27.910 MILLION OZ//  .. WE HAD A STRONG SIZED GAIN OF 1741 OI CONTRACTS ON THE TWO EXCHANGES FOR 8.700 MILLION  OZ WITH THE GAIN IN PRICE. 

 WE HAD 97  NOTICE FILED TODAY FOR  485,000 OZ

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

GOLD//OUTLINE

IN GOLD, THE COMEX OPEN INTEREST FELL  BY A FAIR SIZED 1547 CONTRACTS  TO 555,756 AND FURTHER FROM 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:  –203 CONTRACTS.

THE BIS HAS ABANDONED THE GOLD COMEX TRADING!!!

.

THE  FAIR SIZED LOSS IN COMEX OI CAME DESPITE OUR  GAIN IN PRICE OF $5.40//COMEX GOLD TRADING/MONDAY / WE MUST HAVE  HAD  SOME SPECULATOR SHORT COVERING ACCOMPANYING OUR SMALL SIZED EXCHANGE FOR PHYSICAL ISSUANCE. WE HAD ZERO LONG LIQUIDATION   //JUST SPECULATOR SHORT COVERING FROM OUR STUPID SPECULATORS.

WE ALSO HAD A HUGE INITIAL STANDING IN GOLD TONNAGE FOR MAY AT 5.353 TONNES ON FIRST DAY NOTICE /FOLLOWED BY TODAY”S QUEUE JUMP OF 10,900 OZ//NEW STANDING 18.289 TONNES

YET ALL OF..THIS HAPPENED WITH OUR GAIN IN PRICE OF   $5.40 WITH RESPECT TO MONDAY’S TRADING

WE HAD A SMALL SIZED LOSS OF 669  OI CONTRACTS (2.0808 PAPER TONNES) ON OUR TWO EXCHANGES..

E.F.P. ISSUANCE

THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A SMALL SIZED  878 CONTRACTS:

The NEW COMEX OI FOR THE GOLD COMPLEX RESTS AT 555,756.

IN ESSENCE WE HAVE A  SMALL SIZED DECREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 669, WITH 1547 CONTRACTS DECREASED AT THE COMEX AND 878 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS  TOTAL OI LOSS ON THE TWO EXCHANGES OF 669 CONTRACTS OR 2.0809 TONNES.

CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES

WE HAD A SMALL SIZED ISSUANCE IN EXCHANGE FOR PHYSICALS (878) ACCOMPANYING THE FAIR SIZED LOSS IN COMEX OI (1547,): TOTAL LOSS IN THE TWO EXCHANGES  669 CONTRACTS. WE NO DOUBT HAD 1) SOME SPECULATOR SHORT COVERING ,2.) STRONG INITIAL STANDING AT THE GOLD COMEX FOR MAY. AT 5.353 TONNES FOLLOWED BY TODAY’S STRONG QUEUE JUMP OF 10,900 OZ//NEW STANDING 18.289 ///  3) ZERO LONG LIQUIDATION//SOME SPECULATOR SHORT COVERING //.,4) FAIR SIZED COMEX  OI. LOSS 5) SMALL 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 :

47,880 CONTRACTS OR 4,788,000 OR 148.92  TONNES 12 TRADING DAY(S) AND THUS AVERAGING: 3990 EFP CONTRACTS PER TRADING DAY

TO GIVE YOU AN IDEA AS TO THE  SIZE OF THESE EFP TRANSFERS :  THIS MONTH IN 12 TRADING DAY(S) IN  TONNES: 148.92 TONNES

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

THUS EFP TRANSFERS REPRESENTS  148.92/3550 x 100% TONNES  4.19% 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:  148.92 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 STRONG SIZED 1619 CONTRACT OI TO 144,534 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 41 CONTRACTS

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

MAY 41  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  1700 CONTRACTS AND ADD TO THE 41 OI TRANSFERRED TO LONDON THROUGH EFP’S,

WE OBTAIN A STRONG SIZED GAIN OF1660 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES. 

THUS IN OUNCES, THE  GAIN  ON THE TWO EXCHANGES 8.300 MILLION OZ

OCCURRED DESPITE OUR GAIN IN PRICE OF  $0.22 .

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 DOWN 7.72 PTS OR 0.25%   //Hang Sang CLOSED UP 41.36 PTS OR 0.20%    /The Nikkei closed UP 251.45 OR 0.94%          //Australia’s all ordinaires CLOSED UP 1.03%   /Chinese yuan (ONSHORE) closed DOWN 6,7442    /Oil UP TO 114.454dollars per barrel for WTI and UP TO 113.50 for Brent. Stocks in Europe OPENED  ALL MOSTLY RED       //  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.7442 OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.74544: /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN  TRADING WEAKER AGAINST US DOLLAR/OFFSHORE WEAKER/

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 FELL BY A FAIR SIZED 1547 CONTRACTS TO 555,756 AND FURTHER FROM THE RECORD THAT WAS SET IN JANUARY/2020: {799,541  OI(SET JAN 16/2020)} AND  PREVIOUS TO THAT: 797,110 (SET JAN 7/2020). AND THIS FAIR  COMEX DECREASE OCCURRED DESPITE OUR  GAIN OF $5.40 IN GOLD PRICING MONDAY’S COMEX TRADING. WE ALSO HAD A SMALL SIZED EFP (878 CONTRACTS). . THEY WERE PAID HANDSOMELY  NOT TO TAKE DELIVERY AT THE COMEX AND SETTLE FOR CASH. IT NOW SEEMS THAT THE COMMERCIALS HAVE GOADED THE SPECS TO GO SHORT BIG TIME AND THEY ARE CAUGHT. THE COMMERCIALS WILL SLAUGHTER WHEN THEY THINK THE TIME IS RIGHT

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  SMALL SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS.,

THAT IS 878 EFP CONTRACTS WERE ISSUED:  ;: ,  . 0 JUNE :878 & ZERO FOR ALL OTHER MONTHS:

TOTAL EFP ISSUANCE:  878 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 LOST THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A  GOOD SIZED  TOTAL OF 669 CONTRACTS IN THAT 878 LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE HAD A FAIR SIZED  COMEX OI LOSS OF 1547  CONTRACTS..AND YET  THIS LOSS OCCURRED WITH  OUR GAIN IN PRICE OF GOLD $5.40.   

// WE HAVE A STRONG AMOUNT OF GOLD TONNAGE STANDING FOR MAY   (18.289),

 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: 18.289 TONNES

THE BANKERS WERE UNSUCCESSFUL IN LOWERING GOLD’S PRICE  //// (IT ROSE $5.40) BUT  IT SEEMS WERE QUITE SUCCESSFUL IN KNOCKING OFF SOME SPECULATOR SHORTS//  WE HAVE  REGISTERED A SMALL SIZED LOSS  OF 2.089 TONNES ON TOTAL OI FROM OUR TWO EXCHANGES, ACCOMPANYING OUR HUGE GOLD TONNAGE STANDING FOR MAY (18.289 TONNES)

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

NET LOSS ON THE TWO EXCHANGES 669 CONTRACTS OR 66,900  OZ OR 2.0808

 TONNES

Estimated gold volume today: 162,967/// poor

Confirmed volume yesterday:167,076 contracts  poor

INITIAL STANDINGS FOR MAY ’22 COMEX GOLD //MAY 18

GoldOunces
Withdrawals from Dealers Inventory in oznil oz
Withdrawals from Customer Inventory in oz197,513.650 oz
Brinks
Int. Delaware
JPMorgan
Manfra includes: 2000 kilobars and 15 kilobars
Deposit to the Dealer Inventory in oznil OZ 
Deposits to the Customer Inventory, in oz3574.26 oz Brinks
No of oz served (contracts) today285  notice(s)
28,500 OZ
0.8864 TONNES
No of oz to be served (notices)208 contracts 20,800 oz
0.6469 TONNES
Total monthly oz gold served (contracts) so far this month5672 notices
567,200 OZ
17.642 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 deposit

i)Into Brinks:  3574.26 oz

total deposits: 3574.26 oz

4 customer withdrawals:

i) Out of Brinks:  160,755.000   oz 5000 kilobars

ii) Out of Int. Delaware: 482.265 oz (15 kilobars)

iii) Out of JPMorgan:  32,702.125 oz

iv) Out of Manfra: 3574.260 oz

total withdrawal: 197,513.650 oz

ADJUSTMENTS:   

a) JPM:  64,334.151 oz// customer to dealer

CALCULATIONS FOR THE AMOUNT OF GOLD STANDING FOR MAY.

For the front month of MAY we have an  oi of 493 contracts having GAINED 103 contracts

We had 6 notices filed on MONDAY, so we gained 109 contracts or  AN ADDITIONAL 10,900 oz will stand for delivery in this non active delivery month of May.

June saw a loss of 11,328 contracts down to 239,194 contracts 

July has a GAIN OF 10 OI to stand at 327

August has a gain of 9453 contracts up to 257,678 contracts

We had 285 notice(s) filed today for  28500 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 285 contract(s) of which 0  notices were stopped (received) by j.P. Morgan dealer and  244 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 (5672) x 100 oz , to which we add the difference between the open interest for the front month of  (MAY 493  CONTRACTS ) minus the number of notices served upon today  285 x 100 oz per contract equals 577100 OZ  OR 17.9502 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 (5672) x 100 oz+   (493)  OI for the front month minus the number of notices served upon today (285} x 100 oz} which equals 588,000 oz standing OR 18.289 TONNES in this NON  active delivery month of MAY.

TOTAL COMEX GOLD STANDING:  18.289 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:  35,793,598.694 OZ 

TOTAL ELIGIBLE GOLD: 17,812,062.336  OZ

TOTAL OF ALL REGISTERED GOLD: 17,961,536.365 OZ  

REGISTERED GOLD THAT CAN BE SERVED UPON: 15,948,662.0 OZ (REG GOLD- PLEDGED GOLD)  

END

MAY 2022 CONTRACT MONTH//SILVER//MAY 18

SilverOunces
Withdrawals from Dealers InventoryNIL oz
Withdrawals from Customer Inventory177,513.650  oz
Delaware
CNT
JPMorgan
Deposits to the Dealer Inventorynil OZ
Deposits to the Customer Inventory1150,905.812 oz
CNT
Delaware
No of oz served today (contracts)97CONTRACT(S)
485,000  OZ)
No of oz to be served (notices)463 contracts (2,315,000 oz)
Total monthly oz silver served (contracts)5119 contracts 25,595,000 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

i) zero dealer deposits

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 Delaware:  547,017.150 oz

ii) Into CNT  603,858.662 oz

total deposit:  1,150,905.812    oz

JPMorgan has a total silver weight: 176.729 million oz/339.387 million =52.12% of comex 

 Comex withdrawals: 3

i) Out of CNT  60,373.580 oz

ii) Out of Delaware 926.100 oz

iii) Out of JPMorgan: 116,071.370 oz oz

total withdrawal 177,371.030     oz

2 adjustments:  customer to dealer  HSBC  5045.85 oz

and Manfra: dealer to customer:  429,842.143 oz

the silver comex is in stress!

TOTAL REGISTERED SILVER: 80.674 MILLION OZ

TOTAL REG + ELIG. 339.387 MILLION OZ

CALCULATION OF SILVER OZ STANDING FOR APRIL

silver open interest data:

FRONT MONTH OF MAY OI: 560 HAVING LOST 188 CONTRACTS.  WE HAD 163 NOTICES FILED ON MONDAY

SO WE LOST 25   CONTRACTS OR AN E.F.P JUMP TO LONDON OF 125,000 OZ

JUNE HAD A GAIN OF 22 TO STAND AT 1543

JULY HAD A GAIN OF 381 CONTRACTS UP TO 113,425 CONTRACTS.

 .

TOTAL NUMBER OF NOTICES FILED FOR TODAY: 97 for 485,000 oz

Comex volumes: 34,067// est. volume today//   poor

Comex volume: confirmed yesterday: 43,461 contracts ( fair )

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 5119 x 5,000 oz = 25,595,000 oz 

to which we add the difference between the open interest for the front month of MAY(560) and the number of notices served upon today 97  x (5000 oz) equals the number of ounces standing.

Thus the  standings for silver for the MAY./2022 contract month: 5119 (notices served so far) x 5000 oz + OI for front month of MAY (560)  – number of notices served upon today (97) x 5000 oz of silver standing for the MAY contract month equates 27,910,000 oz. .

We LOST 25 contracts or AN ADDITIONAL 125,000 OZ will NOT  stand for delivery at the comex

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 18/WITH GOLD DOWN $2.55//A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.07 TONNES FROM THE GLD///INVENTORY RESTS AT 1049.21 TONNES

MAY 17/WITH GOLD UP $5.40:HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.61 TONNES FROM THE GLD////INVENTORY RESTS AT 1053.28 TONNES

MAY 16/WITH GOLD UP $5.40: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 4.93 TONNES FROM THE GLD///INVENTORY RESTS AT 1055.89 TONNES

MAY 13/ WITH GOLD DOWN $16.25//A HUGE CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 5.8 TONNES FROM THE GLD.//INVENTORY RESTS AT 1060.82 TONNES

MAY 12/WITH GOLD DOWN $26.50: A BIG CHANGE IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.99 TONNES FROM THE GLD////INVENTORY RESTS AT 1066.62 TONNES

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

GLD INVENTORY: 1049.21 TONNES

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

MAY 18/WITH SILVER UP $0.04 TODAY: A HUGE CHANGE IN SILVER INVENTORY AT THE SLV// A WITHDRAWAL O 1.892 MILLION OZ FROM THE SLV//FINVENTORY RESTS AT 565.085 MILLION OZ//

MAY 17/WITH SILVER UP $.22 TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 3.508 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 565.085 MILLION OZ//

MAY 16/WITH SILVER UP $.52 TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.546 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 568.593 MILLION OZ//

MAY 13/WITH SILVER UP 31 CENTS TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 570.439 MILLION OZ/

MAY 12/WITH SILVER DOWN 88 CENTS TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 570.439 MILLION OZ//

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

INVENTORY TONIGHT RESTS AT 563.193 MILLION OZ/

PHYSICAL GOLD/SILVER STORIES

1.PETER SCHIFF

Peter Schiff: Don’t Listen To What The Fed Says; Look At What The Fed Is Doing

WEDNESDAY, MAY 18, 2022 – 06:30 AM

Via SchiffGold.com,

The Fed continues to talk tough about fighting inflation.  And the markets seem to be listening. But in his podcast, Peter Schiff said you need to look at what the Fed is actually doing. And it’s not doing much.

Despite a big rally in the stocks on Friday, the stock market finished its sixth consecutive week in the red. It’s the longest streak of consecutive losses since June of 2011.

Peter said despite Friday’s bounce, he still sees a lot of downside in the markets, calling Friday a day of “panic buying.”

Sometimes in bear markets, investors panic to buy. They don’t panic to sell until the end of the bear market. And despite the carnage, I have not really seen any indications of panic selling. I’ve seen more indications of panic buying, which in my mind indicates that there’s still a lot of downside to go.”

Meanwhile, gold continues to languish. During the stock rally Friday, gold dropped again, despite more bad inflation numbers.

The markets are clearly concerned, but Peter said they are concerned about the wrong thing.

What the markets still don’t get is Fed is not really going to fight inflation. It’s pretending it’s going to fight inflation. And that is the problem. Because all the people who were surprised by inflation they didn’t expect now expect the Fed to get rid of it. And the reason they are dumping gold and silver, and in particular gold and silver mining stocks — it’s not because they fear the inflation. They think the inflation is in the past. What they fear is this future inflation fight.”

Why do people think the Fed is going to go through with this fight? Because it says so.

The central bankers have said that they will do what it takes to tame the inflation dragon and bring the CPI back down to 2%, Doing what it takes means a very tight monetary policy with rising interest rates. That’s why the markets are so bearish on gold.

The tighter they perceive future monetary policy is going to get, the more problematic everybody believes that’s going to be for gold and silver, and they’re selling these gold and silver stocks.”

But Peter said even if the Fed does what it claims it will do in terms of raising interest rates and shrinking its balance sheet, it still won’t be enough to bring inflation back down to 2%.

In fact, it’s barely going to reduce the upward trajectory, let alone bring it all the way back down to 2%. And if the Fed actually tried to get inflation back down to 2%, it would not only send the economy into recession, but it would create a financial crisis worse than 2008. The markets still don’t get that. I don’t know why they can’t think that far ahead. All they can see is the Fed is claiming it’s going to fight inflation and it’s going to jack up interest rates. And so, for some reason, they believe that this is going to succeed.”

There is also this myth that the US economy is strong enough to handle the bitter medicine the Fed will have to deliver in order to get inflation under control, despite all the signs that the economy isn’t as strong as everybody imagines.

When the underlying weakness of the US economy is finally laid bare, then all this tough talk about fighting inflation is going to go away because then the Fed is going to concentrate on its other mandate, which is the economy. … Once people start losing their jobs in the recession, then the Fed is going to forget about inflation and start focusing on employment. For some reason, the markets aren’t there yet.”

This is why every time the markets get surprised by hotter than expected inflation, they just assume the Fed is going to have to fight harder.

It never occurs to them that it means the Fed has already lost the fight and it’s going to surrender.”

Peter reiterated that if the Fed’s actions don’t indicate it’s serious about fighting inflation.

I’ve said this many times. It wouldn’t just be talking about fighting inflation. It would be fighting it right now.”

But according to the latest data, the Fed balance sheet expanded by another 2%. In effect, this is more gasoline on the inflationary fire.

If the Fed has acknowledged that the balance sheet is already too big and it needs to be reduced, why are they still making it bigger?”

Why wait until June to begin quantitative tightening? Why are interest rates still below 1%? If we really have an inflation emergency, why so much talk and so little action from the Fed?

The fact of the matter is you’ve got to look at what the Fed is doing, not what the Fed is saying. They have to talk tough. … It’s the opposite of the Teddy Roosevelt strategy. They don’t have a stick. They can’t really fight inflation. So, they have to talk tough as if they’re going to fight it, because they’re hoping their tough talk will do the fighting for them, and they won’t have to reveal the fact that they don’t really have a stick.”

In this podcast, Peter also talks about Jerome Powell’s reappointment as Fed chair, consumers borrowing to make ends meet, and oil positioning for another big move up.

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

-END-

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

Craig Hemke at Sprott Money: Comex trade-at-settlement games continue

USED IDENTICALLY AND SAME MECHANISM OF SPREADERS LIQUIDATION

(Craig Hemke)

Submitted by admin on Tue, 2022-05-17 21:54Section: Daily Dispatches

9:54p ET Tuesday, May 17, 2022

Dear Friend of GATA and Gold:

The “trade at settlement” mechanism of controlling gold futures prices by massive legging into and out of the market is operating at full bore again, the TF Metals Report’s Craig Hemke writes tonight at Sprott Money.

Hemke concludes: “There continue to be malevolent forces that manage and manipulate the Comex gold price, primarily for their own profit. This monthly trade-at-settlement abuse is simply the latest weapon they have put in their arsenal.”

Hemke’s analysis is headlined “Comex TAS Games” and it’s posted at Sprott Money here:

https://www.sprottmoney.com/blog/COMEX-TAS-Games-Craig-Hemke-May-17-2022

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

end 

4.OTHER GOLD/SILVER COMMENTARIES

end

5.OTHER COMMODITIES //DIAMONDS

END

COMMODITIES IN GENERAL/

END

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 DOWN 6.7442

OFFSHORE YUAN: 6.7544

HANG SANG CLOSED  UP 42.76 PTS OR 0.20% 

2. Nikkei closed UP 251.45 OR 0.94%

3. Europe stocks  ALL CLOSED  MOSTYL RED

USA dollar INDEX  UP TO  103.63/Euro FALLS TO 1.0509

3b Japan 10 YR bond yield: FALLS TO. +.238/ !!!!(Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 129.10/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 DOWN /JAPANESE Yen UP CHINESE YUAN:   UP -SHORE CLOSED  DOWN//  OFF- SHORE  DOWN

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 +0.859%/Italian 10 Yr bond yield FALLS to 2.75% /SPAIN 10 YR BOND YIELD FALLS TO 1.90%…

3i Greek 10 year bond yield RISES TO 3.58

3j Gold at $1809.40 silver at: 21.60  7 am est) SILVER NEXT RESISTANCE LEVEL AT $30.00

3k USA vs Russian rouble;// Russian rouble UP  1/3      roubles/dollar; ROUBLE AT 63.27

3m oil into the 113 dollar handle for WTI and  114 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 129.10 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 0.9972– as the Swiss Franc is still rising against most currencies. Euro vs SF 1.0482well 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: 3.000 UP 3  BASIS PTS

USA 30 YR BOND YIELD: 3.191 UP 3 BASIS PTS

USA DOLLAR VS TURKISH LIRA: 15.94

Futures Slide After Dismal Target Earnings, Plunging Mortgage Apps

WEDNESDAY, MAY 18, 2022 – 07:51 AM

The brief bear market rally in US stocks was set to end with a whimper following Tuesday’s strong dead cat bounce, after Fed Chair Jerome Powell gave his most hawkish remarks to date. Hope that China lockdowns would soon end turned to skepticism, as the yuan slumped after its biggest gain since October, while dismal guidance from Target – which warned that inflation was crushing margins – confirmed what Walmart said yesterday, namely that the US consumer is running on fumes. An 11% plunge in the latest weekly mortgage applications only reaffirmed that a hard-landing is inevitable and just a matter of time. Nasdaq 100 futures dropped 1%, while S&P 500 futures slipped 0.7% after US stocks surged on Tuesday. Treasury yields hit session highs, rising back to 3.0%, and the dollar snapped a three-day losing streak. Bitcoin got hammered again, sliding back under $30k.

Among the biggest premarket movers, Target crashed 22% with Vital Knowledge calling its margin shortfall “more dramatic” than what Walmart posted on Tuesday, citing industry-wide macro problems. The retailer reduced its full-year forecast on operating income margin to about 6% of sales this year. It also reported first-quarter adjusted earnings per share that came in below expectations. Food and gas inflation is drawing money away from discretionary and general merchandise spending, forcing “aggressive” discounting to clear out product in the latter category, Vital’s Adam Crisafulli said in a note.

Elsewhere in US premarket trading, Tesla slipped 1% after its price target was cut at Piper Sandler. Meanwhile, Twitter Inc. also traded slightly lower even as the social media platform’s board said it plans to enforce its $44 billion agreement to be bought by Elon Musk. Here are some other notable premarket movers:

  • US tech hardware stocks may be in focus as Jefferies Group LLC strategists have turned bullish on the likes of IBM (IBM US), Cisco Systems (CSCO US) and Microchip Technology (MCHP US) after this year’s steep declines for US information technology shares
  • National CineMedia (NCMI US) shares jump as much as 33% in US premarket trading after AMC Entertainment (AMC US) reported a 6.8% stake in the cinema advertising company. AMC shares gain 1.2% in premarket trading.
  • DLocal Ltd. (DLO US) shares gain as much as 15% in US premarket trading after the Uruguay-based payment platform posted 1Q revenue that doubled from the year-earlier period and topped expectations.
  • Doximity (DOCS US) shares fall as much as 19% in US premarket trading, after the online healthcare platform provider’s forecast for 1Q revenue missed the average analyst estimate, prompting analysts to slash their price targets on the stock.
  • Penn National (PENN US) may be active on Wednesday as Jefferies raised the recommendation to buy from hold. The company’s shares rose 4% in premarket trading.

On Tuesday, Powell said the Fed will keep raising interest rates until there is “clear and convincing” evidence that inflation is in retreat, which initially pushed stocks lower but then was faded as risk closed near session highs as nothing Powell said was actually new. The S&P 500 is emerging from the longest weekly slump since 2011 as investors have been gripped by fears of hawkish monetary policy and surging inflation driving the economy into a recession. As also discussed yesterday, Bank of America’s survey published yesterday showed that fund managers are the most underweight equities since May 2020 and are piling into cash.

“This is one of the most challenging markets I have been in in my career,” Henry Peabody, fixed income portfolio manager at MFS Investment Management, said on Bloomberg Television. “I suspect at a certain point of time we’re going to have the liquidity of the markets challenged. They really haven’t been thus far.”

As the Fed embarks on interest-rate hikes, frothy growth shares, including the tech sector, have suffered in particular as higher rates mean a bigger discount for the present value of future profits. This marks a major shift in investor outlook after tech stocks had been some of the market’s best performers for years.

“Investor sentiment and confidence remain shaky, and as a result, we are likely to see volatile and choppy markets until we get further clarity on the 3Rs — rates, recession, and risk,” Mark Haefele, chief investment officer at UBS Global Wealth Management, wrote in a note.

Rebounds in risk sentiment are proving fragile amid tightening monetary settings, Russia’s war in Ukraine and China’s Covid lockdowns. In what’s seen as his most hawkish remarks to date, Powell said that the US central bank will raise interest rates until there is “clear and convincing” evidence that inflation is in retreat.

“We’ll have this kind of volatility as people jump in and look at opportunities to buy as markets decline,” Shana Sissel, director of investments at Cope Corrales, said on Bloomberg Television, referring to the Wall Street bounce. The Fed is going to struggle to achieve a soft economic landing, she added.

In Europe, the Stoxx 600 Index was little changed, with energy stocks outperforming. Spain’s IBEX outperformed, adding 0.5%. ABN Amro slumped almost 10% after the Dutch lender reported first-quarter results burdened by rising costs.  The Stoxx Europe 600 Basic Resources sub-index drops, underperforming other sectors in the broader regional benchmark on Wednesday as base metals ended a three-day rebound and as iron ore declined. Base metals paused a recovery from this year’s lows, with copper and aluminum stalling after hawkish remarks from Federal Reserve Chair Jerome Powell. Iron ore futures declined as investors weighed China’s faltering economy and the prospect of support measures amid a mixed outlook for steel demand. Basic resources index -0.6%, halting three days of gains; broader benchmark little changed. Siemens Gamesa jumped as much as 15% as Siemens Energy weighs a bid for the shares of the troubled Spanish wind-turbine maker it doesn’t already own. Here are the most notable movers:

  • European oil and gas stocks rise amid higher crude prices and broker upgrades, while renewables rallied after Siemens Energy confirmed it was considering a buyout offer for Siemens Gamesa. Shell gains as much as 1.8%, BP +1.8%, Equinor +3.4%, Gamesa +15%, Vestas +7.7%
  • Air France-KLM shares rise as much as 7.5% in Paris on news that container line CMA CGM intends to take a stake of up to 9% in the French carrier following the signing of a long-term strategic partnership in the air cargo market.
  • Rockwool shares gain as much as 8.3%, most since Feb. 15, as the company boosts its sales in local currencies forecast for the full year.
  • British Land shares rise as much as 4.2%, as the company’s results show a strong recovery and a good performance in the UK landlord’s portfolio, analysts say.
  • Vistry shares climb as much as 8% with analysts saying the UK homebuilder’s trading update looks positive, particularly the robust momentum in its sales rate.
  • The Stoxx Europe 600 Basic Resources sub-index drops, underperforming other sectors in the broader regional benchmark on Wednesday as base metals ended a three-day rebound and as iron ore declined. Rio Tinto slips as much as 1.5%, Antofagasta -2.7%, Anglo American -1.5%
  • Prosus shares fall as much as 4.2% and Naspers sinks as much as 6.7% after Tencent reported first- quarter revenue and net income that both missed analyst expectations.
  • TUI shares drop as much as 13% in London after the firm announced an equity raise in order to repay a chunk of government aid that helped see it through the coronavirus crisis.
  • ABN Amro shares declined as much as 11% after the lender reported 1Q earnings that showed higher costs related to money laundering.
  • Experian shares fall as much as 5.1% after the consumer-credit reporting company reported full-year results, with Citi saying organic growth missed consensus.

Meanwhile, UK inflation rose to its highest level since Margaret Thatcher was prime minister 40 years ago, adding to pressure for action from the government and central bank. The pound weakened and gilt yields fell as traders speculated that the Bank of England will struggle to rein in inflation and avoid a recession.

Elsewhere, the Biden administration is poised to fully block Russia’s ability to pay US bondholders after a deadline expires next week, a move that could bring Moscow closer to a default. Sri Lanka, meantime, is on the brink of reneging on $12.6 billion of overseas bonds, a warning sign to investors in other developing nations that surging inflation is set to take a painful toll.

Earlier in the session, Asian stocks advanced for a fourth session as strong US economic data allayed worries about the global growth outlook, while Chinese equities slipped. The MSCI Asia-Pacific Index rose as much as 1%, extending its rebound from an almost two-year low reached last Thursday. Materials shares led the gains, with Australia’s BHP Group climbing 3.2%. Benchmarks in most markets were in the black, with Indonesia, Taiwan and Singapore chalking up gains of at least 1%.  Upbeat retail sales and industrial production data from the US underpinned sentiment, so much so that investors barely reacted to hawkish comments from Federal Reserve Chair Jerome Powell. He indicated that policy makers won’t hesitate to raise interest rates beyond neutral levels to contain inflation.

Equities in China bucked the trend. Property shares paced the drop after data showed the decline in China’s new home prices accelerated in April, while tech shares also lost steam ahead of Tencent’s earnings which missed expectations and slumped. Local investors may be underwhelmed by a lack of details from Chinese Vice Premier Liu He’s fresh vow to support tech firms. Liu said the government will support the development of digital economy companies and their public listings, in remarks reported by state media after a symposium with the heads of some the nation’s largest private firms.

Lee Chiwoong, chief economist at Mitsubishi UFJ Morgan Stanley Securities, said Liu’s comments point to an easing of the crackdown on internet firms. “The Chinese government is stepping up measures to support the economy following the slowdown,” Lee said.  “As bottlenecks stemming from lockdowns in Shanghai ease, that impact will gradually show up in the economy,” Lee added. “We should be able to clearly see an economic recovery in the second half of this year.”

Japanese equities gained as investors assessed strong US economic data and comments by Federal Reserve Chair Jerome Powell on the outlook for interest rate hikes.  The Topix Index rose 1% to close at 1,884.69. Tokyo time, while the Nikkei advanced 0.9% to 26,911.20. Sony Group Corp. contributed the most to the Topix gain, increasing 2.9%. Out of 2,172 shares in the index, 1,345 rose and 749 fell, while 78 were unchanged. Chinese stocks erased losses intraday after earlier disappointment over a much-anticipated meeting between Vice Premier Liu He and some of the nation’s tech giants. Overnight, data showed US retail sales grew at a solid pace in April, while factory production rose at a solid pace for a third month.

Australia’s stocks also gained, with the S&P/ASX 200 index rising 1% to close at 7,182.70, extending its winning streak to a fourth day. Miners contributed the most to its advance. All sectors gained, except for consumer staples and financials. Eagers slumped after saying that its 1H profit will be lower than it was a year ago and flagged reduced new vehicle deliveries. Wage data was also in focus. Australian wages advanced at less than half the pace of consumer-price gains in the first three months of the year, reinforcing the RBA’s signal that it will stick to quarter-point hikes.  In New Zealand, the S&P/NZX 50 index rose 1.1% to 11,258.28

India’s benchmark equities index fell, snapping two sessions of gains, weighed by declines in engineering company Larsen & Toubro Ltd.    The S&P BSE Sensex dropped 0.2% to close at 54,208.53 in Mumbai, after rising as much as 0.9% earlier in the session. The NSE Nifty 50 Index fell 0.1% to 16,240.30.  Larsen & Toubro slipped 2% and was the biggest drag on the Sensex, which saw 17 of its 30 member stocks decline. Sixteen of 19 sectoral sub-indexes compiled by BSE Ltd. dropped, led by a gauge of realty shares.   State-run Life Insurance Corporation, which debuted Tuesday, rose 0.1% to 876 rupees, still below the issue price of 949 rupees. In earnings, of the 34 Nifty 50 firms that have announced results so far, 20 have either met or exceeded analyst estimates, while 14 have missed. Consumer goods company ITC Ltd. is scheduled to announce results on Wednesday.

In FX, the Bloomberg Dollar Spot Index reversed an early loss and the greenback advanced versus all of its Group-of-10 peers apart from the yen. The pound was the worst G-10 performer, tracking Gilt yields lower and paring the previous day’s gains. A widely expected jump in UK inflation prompted investors to pare back bets on BOE rate hikes. Money markets are pricing around 120bps of BOE rate hikes by December, down from 130bps from the previous day. UK inflation rose to its highest level since Margaret Thatcher was prime minister 40 years ago, adding to pressure for action from the government and central bank. Consumer prices surged 9% in the year through April. The euro fell for the first day in four and weakened beyond $1.05. The Bund curve has twist flattened as traders bet on a faster pace of ECB tightening after Bank of Finland Governor Olli Rehn said there’s broad agreement among members of the Governing Council that policy rates should exit sub-zero terrain “relatively quickly.” That’s to prevent inflation expectations from becoming de- anchored, he said. The Aussie swung between gains and losses while Australia’s bonds trimmed earlier declines after a report showed wage growth last quarter was less than economists forecast. The wage price index climbed an annual 2.4% last quarter, trailing economists’ expectations and coming in well below headline inflation of 5.1%. The yen rose as US yields declined amid fragile risk sentiment. Japanese government bonds were mixed, with a decent five-year auction lending support while an overnight rise in global yields weighed on super-long maturities.

In rates, Treasuries were under pressure, though most benchmark yields remained within 1bp of Tuesday’s closing levels. 10-year yields rose just shy of 3.00%, higher by less than 1bp with comparable bund yield +3.3bp and UK 10-year flat. TSY futures erased gains amid a series of block trades in 5- and 10-year note contracts starting at 5:20am ET, apparently selling flow. According to Bloomberg, six 5-year block trades and two 10-year block trades — all 5,000 lots — have printed since 5:20am, apparently seller-initiated as cash yields concurrently rebounded from near session lows. Wednesday’s $17b 20-year new-issue auction at 1pm ET may also weigh on the market. 20-year bond auction is this week’s only nominal coupon sale; WI yield ~3.37% exceeds all 20-year auction stops since then tenor was reintroduced in 2020, is ~27.5bp cheaper than last month’s result. Elsewhere, the UK yield curve bull-steepened with the short end richening ~5bps, while pound falls after inflation surged to a four-decade high. Money markets pare BOE rate-hike wagers. Bund curve bear-flattens while money markets bet on a faster pace of ECB tightening after ECB’s Rehn said the central bank needs to move quickly from negative rates.

In commodities, WTI trades within Tuesday’s range, adding 1.6% to around $114. Most base metals are in the red; LME tin falls 1.5%, underperforming peers, LME aluminum outperforms, adding 1%. Spot gold is little changed at $1,815/oz.

Looking to the day ahead now, and data releases include the UK and Canadian CPI readings for April, along with US data on housing starts and building permits for the same month. Central bank speakers include the Fed’s Harker and the ECB’s Muller. Earnings releases include Cisco, Lowe’s, Target and TJX. Finally, G7 finance ministers and central bank governors will be meeting in Germany.

Market Snapshot

  • S&P 500 futures down 0.5% to 4,065.50
  • STOXX Europe 600 down 0.2% to 438.11
  • MXAP up 0.8% to 164.43
  • MXAPJ up 0.7% to 539.81
  • Nikkei up 0.9% to 26,911.20
  • Topix up 1.0% to 1,884.69
  • Hang Seng Index up 0.2% to 20,644.28
  • Shanghai Composite down 0.2% to 3,085.98
  • Sensex up 0.3% to 54,469.39
  • Australia S&P/ASX 200 up 1.0% to 7,182.66
  • Kospi up 0.2% to 2,625.98
  • German 10Y yield little changed at 1.03%
  • Euro down 0.4% to $1.0505
  • Brent Futures up 1.5% to $113.66/bbl
  • Gold spot down 0.0% to $1,815.04
  • U.S. Dollar Index up 0.33% to 103.70

Top Overnight News from Bloomberg

  • Sweden’s biggest pension company has begun buying government bonds amid a “paradigm shift” in the market that pushed yields to their highest level since 2018. The CIO views Treasuries as “quite attractive” after a prolonged period of razor-thin yields that forced the company into alternative and riskier asset classes to preserve returns across its $117 billion portfolio
  • While outright China bulls may be hard to find, shifts in positioning at least point to improving sentiment. Bearish bets on stocks are being abandoned in Hong Kong, expectations for yuan volatility are falling, domestic equity traders have stopped unwinding leverage and foreigners have slowed their once-record exit from government bonds
  • The EU is set to unveil a raft of measures ranging from boosting renewables and LNG imports to lowering energy demand in its quest to cut dependence on Russian supplies. The 195 billion-euro ($205 billion) plan due Wednesday will center on cutting red tape for wind and solar farms, paving the way for renewables to make up an increased target of 45% of its energy needs by 2030, according to draft documents seen by Bloomberg that are still subject to change

A more detailed look at global markets courtesy of Newsquawk

Asia-Pac stocks traded mixed as the regional bourses only partially sustained the momentum from global peers. ASX 200 was led higher by outperformance in the mining and materials related sectors, while softer than expected wage price data reduced the prospects of a more aggressive RBA rate hike next month. Nikkei 225 briefly reclaimed the 27,000 level but retreated off its highs as participants digested GDP data which printed in negative territory, albeit at a narrower than feared contraction. Hang Seng and Shanghai Comp were subdued with large-cap tech stocks pressured in Hong Kong including JD.com despite beating earnings expectations and with Tencent bracing for the expected slowest revenue growth since its listing, while the mainland was hampered by the mixed COVID-19 situation as Shanghai registered a 4th consecutive day of zero transmissions outside of quarantine, although Beijing was said to lockdown some areas in its Fengtai district for 7 days.

Top Asian News

  • Shanghai authorities issued a new white list containing 864 financial institutions permitted to resume work, according to sources cited by Reuters.
  • China, on May 20th, is to remove some COVID test requirements on travellers to China from the US, according to embassy.
  • China’s Foreign Ministry says the BRICS foreign ministers are to meet on May 19th.
  • Goldman Sachs downgrades its 2022 China GDP growth forecast to 4.0% from 4.5%.

European bourses are rangebound and relatively directionless, Euro Stoxx 50 U/C, taking impetus from a mixed APAC session which failed to sustain US upside. Stateside, futures are modestly softer and a firmer Wall St. close; ES -0.2%. Limited Fed speak due and near-term focus on retail earnings. Tencent (0700 HK) Q1 2022 (CNY): adj. net profit 25.5bln (exp. 26.4bln), Revenue 135.5bln (exp. 141bln). Lowe’s Companies Inc (LOW) Q1 2023 (USD): EPS 3.61 (exp. 3.22/3.23 GAAP), Revenue 23.70bln (exp. 23.76bln). SSS: Lowe’s Companies: -4.0% (exp. -2.5%); Lowe’s Companies (US): -3.8% (exp. -3.7%). -0.2% in the pre-market

Top European News

  • UK Chancellor Sunak is reportedly mulling bringing forward the 1p income tax cut to the basic rate by one year, according to iNews citing Treasury insiders. Other reports suggest that Sunak is putting plans together to raise the warm home discount by hundreds of GBP in July ahead of lowering taxes in autumn to assist with the cost of living crisis, according to The Times.
  • EU is to offer the UK new concessions on the Northern Ireland protocol but has threatened a trade war if UK PM Johnson refuses to agree to a compromise, according to The Telegraph.

In FX

  • Sterling slides to the bottom of the major ranks as fractionally sub-forecast UK CPI dampens BoE rate hike expectations; Cable reverses from just over 1.2500 to sub-1.2400, EUR/GBP nearer 0.8500 after dip below 0.8400 only yesterday.
  • Hawkish Fed chair Powell helps Buck bounce ahead of US housing data, DXY towards the upper end of 103.770-180 range.
  • Aussie hampered by softer than expected wage metrics that might convince the RBA to refrain from 40bp hike in June, AUD/USD heavy on the 0.7000 handle.
  • Yen relatively resilient in wake of Japanese GDP showing less contraction in Q1 than feared, USD/JPY closer to 129.00 than 129.50.
  • Euro loses momentum irrespective of comments from ECB’s Rehn echoing Summer rate hike guidance as final Eurozone HICP is tweaked down, EUR/USD fades from 1.0550+ to test support around 1.0500.
  • Loonie treads cautiously before Canadian inflation metrics as oil prices come off the boil, USD/CAD back above 1.2800 within 1.2795-1.2852 range.

In Fixed Income

  • Gilts sharply outperform as UK CPI falls just shy pf consensus and dampens BoE tightening expectations.
  • 10 year UK bond rebounds towards 119.50 from sub-119.00 lows, while Bunds lag below 152.50 and T-note under 119-00.
  • Record high cover for 2052 German auction and low retention sets high bar for upcoming 20 year US offering.

Central Banks

  • ECB’s Rehn says June forecasts are seen near the adverse scenario from March, first rate increase will likely take place in the summer. Many colleagues back stance for quick moves.
  • ECB’s de Cos says the end of APP should be finalised early in Q3, first hike shortly afterwards. Further rises could be made in subsequent quarters of medium-term outlook remains around target; the build-up of price pressures in EZ in recent months raises the likelihood of second-round effects, which have not strongly materialised.

In commodities

  • WTI and Brent are modestly supported after yesterday’s lower settlement; currently, firmer by just over USD 1.00/bbl.
  • Focus has been on the narrowing WTI/Brent spread, particularly going into US driving season; see link below for ING’s views.
  • US Energy Inventory Data (bbls): Crude -2.4mln (exp. +1.4mln), Cushing -3.1mln, Gasoline -5.1mln (exp. -1.3mln), Distillates +1.1mln (exp. unchanged).
  • Spot gold and silver are modestly firmer but capped by a firmer USD, yellow metal just shy of USD 1820/oz.

US Event Calendar

  • 07:00: May MBA Mortgage Applications, prior 2.0%
  • 08:30: April Building Permits MoM, est. -3.0%, prior 0.4%, revised 0.3%
  • 08:30: April Housing Starts MoM, est. -2.1%, prior 0.3%
  • 08:30: April Building Permits, est. 1.81m, prior 1.87m, revised 1.87m
  • 08:30: April Housing Starts, est. 1.76m, prior 1.79m

DB’s Jim Reid concludes the overnight wrap

Another reminder of my webinar replay from last week discussing our recession call for 2023 and an update on credit spreads. In it I said that while we have high conviction that HY spreads would be +850bp in H2 2023, the outlook over the next few weeks and months may actually be positive from this starting point. I would say I am nervous of that view but I still don’t think that the real economic pain comes until deeper into 2023 when the lagged impact of an aggressive Fed starts to bite. Click here to view the webinar and to download the presentation.

Good luck to Glasgow Rangers and Eintracht Frankfurt in tonight’s Europa League final. These are not teams that any would have expected to reach this final and I will watch with stress free divided loyalties. My father’s family were all from the former and supported Rangers while the latter play at the fabulously named Deutsche Bank Park. So good luck to both. I suspect I’ll be less stress free in 11 days’ time when Liverpool are out for revenge against Real Madrid in the Champions League Final. At the moment I’m feeling nervously optimistic.

Talking of which, investor optimism has returned to markets over the last 24 hours as more positive data releases raised hopes that the US economy might be more resilient in the near-term than many have feared. The economic concerns won’t go away, but stronger-than-expected numbers on retail sales and industrial production helped the S&P 500 (+2.02%) close at its highest level in over a week. Remember monetary policy acts with a lag and it would be very unusual historically if the data rolled over imminently. By this time next year it will likely be a very different story.

The higher yield momentum was reinforced by a Powell speech after Europe went home but there was a steady march of slightly hawkish central bank speakers through the day. Before we review things keep an eye out for UK CPI just after this goes to press. The headline rate is expected to be a huge 9.1%. Expect a lot of headlines reporting of 40 year highs.

With regards to Powell, most in focus was his claim that policy rates would rise above neutral if that was required to tame inflation. While the sentiment was not necessarily new, his explicit comment that neutral rates are “not a stopping point” garnered focus, noting that the Fed was looking for “clear and convincing evidence” that inflation was subsiding. The rates market have already priced terminal policy rates above the Fed’s estimate of neutral, but a combination of the risk on, and stronger data meant that equities could go up alongside yields.

Earlier in the day we got a smattering of communications from Fed regional Presidents, none of which registered as materially but it reinforced the direction of travel after a month to date where markets have repriced the Fed lower. Indeed, even resident hawk, St Louis Fed President Bullard, reiterated Powell’s message in that the Fed was on course for 50bp hikes at the upcoming meetings and said that “I think we have a good plan for now”.

Sovereign bonds had already sold off significantly ahead of all that Fedspeak, aided by the broader risk-on tone yesterday, but continued drifting higher through the US session. Yields on 10yr Treasuries closed +10.4bps to a one-week high of 2.99%, driven by a +7.9bps rise in real yields to 0.24%. The moves were more pronounced at the front-end however, and the 2yr yield rose by a larger +13.1bps as investors priced in a more aggressive path of hikes over the next 12 months after data showed the economy was performing stronger than the consensus had anticipated. In terms of the headlines, retail sales were up by +0.9% in April (vs. +1.0% expected), but the growth in March was revised up to +1.4% (vs. +0.5% previously). Retail sales excluding autos and gas were up by +1.0% as well (vs. +0.7% expected), whilst the industrial production number was another that came in above expectations at +1.1% (vs. +0.5% expected).

Europe also had a large move in yields, which followed comments by Dutch central bank Governor Knot who became the first member of the Governing Council to openly float the idea of a 50bp hike. Although he said that “my preference would be to raise our policy rate by a quarter of a percentage point”, he said that “bigger increases must not be excluded” if data were to show inflation “broadening further or accumulating”. So even though he’s one of the more hawkish members of the council, that’s still a significant milestone in that larger moves are being openly discussed, and echoes what we saw with the Fed at the turn of the year when the policy trajectory became increasingly aggressive.

Market pricing reflected that shift yesterday, and for the first time overnight index swaps were pricing in that the ECB would hike by more than 100bps by their December meeting and thus catching up with the DB House View. That growing belief behind additional hikes led to a fresh selloff in sovereign bonds, with those on 10yr bunds (+10.9bps), OATs (+10.5bps) and BTPs (+11.7bps) all moving higher. The biggest moves were seen from gilts (+15.0bps) however, which followed data that pointed to an increasingly tight labour market in the UK, and overnight index swaps nearly doubled the probability of a 50bp rate hike from the BoE in June, with the odds moving from 17% on Monday to 33% yesterday.

Over in equities, stronger risk appetite led to a significant rebound yesterday, with the S&P 500 (+2.02%) hitting a one-week high, whilst the NASDAQ (+2.76%) saw an even larger rebound in spite of the simultaneous rise in yields. Walmart (-11.38%) was by far the worst performer in the S&P, which came as it cut its earnings per share forecast, which it now expected to decrease by 1%, relative to previous guidance that expected it to rise by the mid single-digits. But that was the exception, and every sector except consumer staples moved higher on the day, with the more cyclical areas leading the advance. Over in Europe the STOXX 600 (+1.22%) posted a strong performance of its own, bringing its advance to more than +5% since its recent closing low just over a week ago.

Overnight in Asia, performance in regional stock indices is diverging partly on the back of economic data. Japan’s Q1 GDP (-1.0%) contracted less than expected (-1.8%), lifting the Nikkei (+0.50%) this morning. In China, though, rising covid cases and waning optimism about government’s support of tech companies weighed on the Shanghai composite (-0.37%) and the Hang Seng (-0.66%). New home prices (-0.30%) in the country also slid for an eighth month in a row. This slight souring of sentiment has extended to S&P 500 futures (-0.23%) with the US 10y yield edging back lower by -2.2bps.

Elsewhere, tensions over Brexit ratcheted up again yesterday after UK Foreign Secretary Truss announced plans to introduce legislation that would override parts of the Northern Ireland Protocol. Truss said that the UK’s preference “remains a negotiated solution with the EU” and that the bill would contain an “explicit power to give effect to a new, revised Protocol if we can reach an accommodation”, but that “the urgency of the situation means we can’t afford to delay any longer.” Unsurprisingly the EU did not react happily, and Commission Vice President Šefčovič said in a statement that if the UK moved ahead with the bill, then “the EU will need to respond with all measures at its disposal.”

Staying on the UK, the latest employment data out yesterday pointed to an increasingly tight labour market, with the unemployment rate falling to 3.7% in the three months to March (vs. 3.8% expected), which is the lowest it’s been since 1974. Furthermore, the number of vacancies was larger than the total number of unemployed for the first time, and the more up-to-date estimate of payrolled employees in April saw an increase of +121k (vs. +51k expected). Elsewhere in Europe, the latest estimate of Euro Area GDP growth in Q1 showed a bigger than expected expansion of +0.3% (vs. +0.2% previously).

Elsewhere the chances of a Russian sovereign debt default increased, following the Treasury department confirming a temporary waiver that allowed Russia to pay US creditors would expire on May 25. Meanwhile, the US is reportedly considering a tariff on Russian oil in conjunction with European allies, as the saga about banning imports to Europe drags on.

To the day ahead now, and data releases include the UK and Canadian CPI readings for April, along with US data on housing starts and building permits for the same month. Central bank speakers include the Fed’s Harker and the ECB’s Muller. Earnings releases include Cisco, Lowe’s, Target and TJX. Finally, G7 finance ministers and central bank governors will be meeting in Germany.

3. ASIAN AFFAIRS

i)WEDNESDAY MORNING// TUESDAY  NIGHT

SHANGHAI CLOSED DOWN 7.72 PTS OR 0.25%   //Hang Sang CLOSED UP 41.36 PTS OR 0.20%    /The Nikkei closed UP 251.45 OR 0.94%          //Australia’s all ordinaires CLOSED UP 1.03%   /Chinese yuan (ONSHORE) closed DOWN 6,7442    /Oil UP TO 114.454dollars per barrel for WTI and UP TO 113.50 for Brent. Stocks in Europe OPENED  ALL MOSTLY RED       //  ONSHORE YUAN CLOSED DOWN AGAINST THE DOLLAR AT 6.7442 OFFSHORE YUAN CLOSED UP ON THE DOLLAR AT 6.74544: /ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN  TRADING WEAKER AGAINST US DOLLAR/OFFSHORE WEAKER/

3 a./NORTH KOREA/ SOUTH KOREA

///NORTH KOREA//COVID

With no vaccinations in North Korea, this country can reach full immunity from COVID. However, Kim’s cure is not good and their citizens are in poor health with less immunity to fight COVID

(zerohedge)

Kim Mobilizes Military To Tackle “Explosive” North Korean COVID Outbreak, Infected Told To ‘Gargle Saltwater’

TUESDAY, MAY 17, 2022 – 11:25 PM

North Korea first acknowledged an “explosive” outbreak of COVID-19 last week, with health officials instructing residents to ‘gargle’ saltwater to treat the virus as medical supplies remain limited and a non-existent vaccine program, Reuters reports. 

Leader Kim Jong Un blasted health officials over the slow response to counter the virus and the lack of medication for not reaching people quickly. Kim had to mobilize the army’s medical corps to “stabilize the supply of medicines in Pyongyang City,” according to the state news agency KCNA. 

On Monday, North Korean health authorities reported more than 1.2 million have been fever-stricken, with 50 deaths.

With very few COVID treatments, state media have instructed people to use antibiotics, painkillers, and other remedies, such as gargling saltwater and drinking willow leaf tea.

Kim has placed himself in the spotlight of the country’s infectious disease response team, overseeing daily meetings on the outbreak, which he already said has caused “great upheaval.” 

North Korea has rejected international help and vaccines for the last 2.5 years. Without immediate help, fatality and infection rates could soar in a country with one of the world’s worst hospital systems. 

Most people in the country remain unvaccinated and don’t have strong immune systems because of poor appetite and depressed living standards. 

Kim has taken a page out of China’s book and issued a nationwide lockdown to stop the spread

Some suspect North Korea is significantly underestimating infections and fatalities. 

“When people die, North Korean authorities will say they’ve died of overwork or from natural deaths, not because of COVID-19,” Nam Sung-wook, a professor at Korea University in South Korea, told ABC News. He said Kim is likely understating the outbreak to protect his “dignity.” 

South Korea’s unification ministry has offered to send masks, test kits, and vaccines, but the North hasn’t acknowledged its neighbor to the south. 

Considering the lack of medical treatment, malnourishment and chronic poverty of the vast majority of the population, and lack of a credible hospital system, North Korea could be entering COVID hell. 

end

3B  JAPAN

3c CHINA

COVID//LOCKDOWNS/SHANGHAI

Yuan initially surges on speculation that Shanghai COVID lockdowns will end soon. It did not last as the yuan closed down.

(zerohedge)

Yuan Surges On Speculation China’s Covid Lockdowns Will End Soon

TUESDAY, MAY 17, 2022 – 07:25 PM

Three weeks ago, when looking at the pattern in China’s covid data, we said that China’s covid panic is almost over…

… a view we repeated a week ago when we warned all those who were short oil – on the “thesis” that China’s lockdowns would last indefinitely – to cover.

Fast forward to today when after more than a month of growing lockdown (and mangled supply chain) fears, there was finally a glimmer of hope at the end of China’s covid tunnel and possibly for Chinese markets.

As Bloomberg notes, Chinese lockdown conditions have improved over May 1-11, versus the April average, with the Goldman Effective Lockdown Index declining to 33.1 points for data so far in May, versus an average of 37.3 over April 1-25. The index is on a declining trend, and bits and pieces of news are mildly encouraging.

Most recently, Shanghai reported no new Covid-19 infections in the broader community for a third consecutive day, a long-awaited milestone which authorities have said will allow them to start unwinding the lockdown (even though most residents will have to put up with confinement for a while longer before resuming more normal life).

The commercial hub of 25 million set out on Monday its clearest timetable yet for exiting a lockdown now in its seventh week, but the plan was met with scepticism by many residents who have seen isolation extended time and again. “Normality is very far away,” said one Shanghai resident still stuck at home.

Still, Shanghai plans to resume outdoor activities in stages, with some shops reopening this week, but with most restrictions on movement remaining in place until May 21, after which public transport and other services will resume gradually.

By June, the lockdown should be lifted, but residents will still be asked to get tested frequently. More people were allowed out of their homes this week, with some joggers and dog walkers spotted. One man was seen fishing in a Shanghai creek. But tall fences remained around many residential compounds and there were almost no private cars on the streets, with most people still confined to their homes.

For other cities in China that have been under lockdown, three days with no new cases in the community usually means “zero COVID” status and the beginning of the lifting of restrictions. This suggests that activity will improve in May, albeit at a depressed level.  The correlation in levels terms between the official PMIs and the lockdown index since 2021 have been -67% and -95% for manufacturing and non-manufacturing respectively. In changes terms, correlations are -47% and -93%.

Beijing’s latest daily case count was 52, with authorities discovering a few dozen new infections on an almost daily basis despite gradually tightening restrictions over the past three weeks or so. Dine-in services are banned in the capital, some malls and other businesses are shut, public transport is curtailed and many residents have been advised to work from home. Residents in some COVID-affected parts of Beijing’s Fengtai district were ordered not to leave their neighbourhoods, state television reported on Tuesday. In Beijing’s largest district, Chaoyang, some compounds have closed side exits while main gates are manned by volunteers checking health credentials on the mobile app authorities use to track COVID.

Security personnel patrolled the banks of the Liangma canal, which has become a picnic spot in recent weeks for residents not allowed to go elsewhere. Signs had been put up asking people to “avoid crowds, gatherings and eating together”.

* * *

China’s uncompromising “zero-COVID” policy has placed hundreds of millions of consumers and workers under various restrictions at a time when the rest of the world is lifting them to “live with the virus” even as infections spread. Data this week showed the havoc wreaked on the economy by Shanghai’s lockdown and the curbs in dozens of other major cities, with retail sales and industrial output plunging at their fastest pace in more than two years in April.

The capital Beijing saw a 16% plunge in retail sales in April, the beginning of its current outbreak, according to Reuters calculations based on January-April data released on Tuesday. Property sales dropped 26%.  The American Chamber of Commerce warned that COVID controls would hamper foreign investment in China for years to come as travel curbs disrupt due diligence on projects. Big firms are also exploring alternatives for supply chains, it said.

News that China “finally” appeared to be getting over its second covid crisis sent the onshore yuan sharply higher, with the USDCNY falling as much as 0.7% to 6.7377, its biggest decline since October.

It followed the 9th consecutive stronger-than-expected yuan fixing by the PBOC, at 6.7854 per dollar, stronger than the 6.7872 average estimate in a Bloomberg survey where forecasts ranged from 6.7830 to 6.7911.

Market sentiment was also boosted by optimism that a meeting Tuesday between the Chinese regulators and tech giants would result in Beijing dialing back its yearlong clampdown of the industry.

“The easing restrictions is a driver for yuan gains, but just as important is the general USD retreat,” says Alvin Tan, head of Asia currency strategy at RBC Capital Markets

In light of the bullish reversal in sentiment, it is not surprising why Bloomberg’s Simon Flint echoed what we have been saying for much of the past few weeks: “to the extent that markets should be focused on the second derivative of activity, there is some hope that the worst is over.”

end

Chinese lockdowns have caused critical shortages in the west such as chemicals used for medical imaging

Li (EpochTimes)

China’s Protracted Lockdowns Cause Critical Shortages In West

TUESDAY, MAY 17, 2022 – 11:05 PM

Authored by Dorothy Li via The Epoch Times (emphasis ours),

Hospitals in the United States are on high alert, with some doctors prioritizing patients in critical condition as the prolonged lockdown in China’s Shanghai has caused a global shortage of chemicals used in medical imaging.

Some of the largest U.S. hospitals said earlier this month they were facing significant shortages of iodinated contrast media products, which are dyes given to patients so that their internal organs and vessels can be picked up by CT scans, X-rays, and radiography.

The dwindling supply was due to the temporary closure of the production facility of General Electric’s health care unit in Shanghai, a trade hub that has been locked down for nearly two months. Though the factory has been allowed to resume operation gradually, the Greater New York Hospital Association warned that an 80 percent reduction in supply might last through the end of June, according to a May 5 statement.

Some hospitals have started to conserve use of the medical dye. For example, the University of Alabama at Birmingham Health System said they activated a response to aggressively ration the supply of intravenous contrast to address the shortage, according to a May 7 statement. The efforts mean doctors are prioritizing urgent scans and postponing elective tests.

U.S. health care facilities are not alone in feeling the economic consequences. From Apple, Microsoft, and Tesla, to Adidas, Estée Lauder, and Starbucks, global companies have warned of the spillover effects of China’s protracted COVID-19 lockdowns.

As the fast-moving Omicron variant spread across the country, Chinese cities, from large to small, have imposed various degrees of restrictions under the regime’s “zero-COVID” playbook. The biggest lockdown in Shanghai led to many of the city’s 25 million residents enduring a food shortage. Officials on May 15 signaled that the city started reopening, but residents said they still could not step out of their homes.

As of May 10, some 41 cities across the country are under partial or full lockdown, according to estimates by Japanese bank Nomura, accounting for almost 30 percent of China’s economic output.

Production Disrupted

With factory workers and consumers stuck at home and many businesses forced to suspend operations, China’s export growth last month was at a 2-year low. Exports in dollar terms decelerated to 3.9 percent in April from a year earlier, tumbling from the 14.7 percent growth in March, China’s customs reported on May 9.

The sluggish figures from the trade sector, which accounts for about a third of gross domestic product (GDP), added to a string of signs that the world’s second-largest economy is slowing down. Factory activity had already contracted at a sharper pace in April, industry surveys showed.

Chinese authorities promised to allow some businesses to resume operations within a so-called “closed loop” system where workers live where they work. But only 19 percent of 460 German companies have permits to operate under such conditions, according to a survey by the German Chamber of Commerce in China published on May 12. Of those allowed to produce under lockdown, facilities are running at less than half of their capacity on average.

Closed loop productions are inacceptable as a long-term solution for German companies to operate in China,” said Maximilian Butek, the executive director of the chamber, in a statement.

The flash survey, echoing the results of recent findings by the U.S. and European business groups in China, underscored signs that foreign employees are increasingly planning to leave the country due to the regime’s strict COVID-19 strategy.

Wary Investors

Strict COVID-19 curbs and the resulting supply chain chaos have rattled foreign business confidence, according to several surveys by foreign lobby groups.

A recent survey by the American Chamber of Commerce in China found that over half of its 121 members have already delayed or reduced investments as a result of the lockdown. Some 51 percent have already decreased their revenue projections for the year, according to the poll conducted from late April to early May.

“Revenue forecasts for this year are down, but, more worryingly, members don’t see any light at the end of the tunnel,” said AmCham China Chairman Colm Rafferty in the statement.

A gloomier picture was painted by European businesses in the country. The number of companies weighing a shift of investments out of China reached its highest proportion in a decade, according to a survey by the European Chamber of Commerce in China published on May 5.

The survey, conducted in late April, found nearly a quarter of the 372 respondents were considering moving current or planned investments out of China, more than double the number at the beginning of the year. About 60 percent of businesses have cut their business revenue projections this year, while 92 percent stated that they had been affected by recent port closures, a decline in road freight, and rising sea freight costs.

China’s zero-COVID policy is the last straw for foreign investors, who have already been dealing with headwinds like trade conflicts and a deteriorating business environment, said Frank Tian Xie, an associate professor of marketing at the University of South Carolina Aiken.

Stronger Reverberations

At a May 5 meeting of the Chinese Communist Party’s most powerful body, the Politburo Standing Committee, Chinese leader Xi Jinping issued warnings against anyone who criticized, questioned, or distorted the regime’s zero-COVID policy.

“We have won the battle to defend Wuhan,” Xi said, according to the official news outlet Xinhua. “We can certainly win the battle to defend greater Shanghai.”

Economists have repeatedly warned of the consequences of the strict COVID-10 curbs. A top Chinese economist Xu Jianguo warned at a May 8 webinar that the economic impact of the latest outbreak is ten times more severe than in early 2020, when the regime initially locked down Wuhan, South China Morning Post reported. He estimated the curbs, including lockdown and travel restrictions, have cost the country $2.68 trillion this year, said the report.

end

4/EUROPEAN AFFAIRS//UK AFFAIRS/EU

FINLAND/SWEDEN/NATO

Both Finland and Sweden formally apply to join NATO

Probably Russia will not do anything until nukes are put onto their shores

(Pearsen/EpochTimes)

Finland And Sweden Formally Apply To Join NATO

WEDNESDAY, MAY 18, 2022 – 07:37 AM

Authored by Caden Pearsen via The Epoch Times,

Finland and Sweden formally applied to join NATO on Wednesday in Brussels, driven by the Russia–Ukraine conflict to step out of their neutrality maintained during and since the Cold War.

NATO Secretary-General Jens Stoltenberg said it was a “historic moment” and that he warmly welcomed the two nations into the world’s biggest military alliance, a move considered to be one of the most significant adjustments to Europe’s security architecture in decades.

“You are our closest partners, and your membership in NATO will increase our shared security,” Stoltenberg said at a short ceremony in which the Swedish and Finnish ambassadors handed over their application letters in white folders embossed with their national flags.

NATO considers Finland’s and Sweden’s membership as beefing up its strength in the Baltic region.

Turkish President Recep Tayyip Erdogan is not convinced about the Finnish and Swedish membership, but Stoltenberg said on Wednesday that they were “determined to work through all issues and reach rapid conclusions.”

He noted their membership had strong support from all other allies.

The 30 member countries will now fast-track their application in a process expected to take around 30 days, ABC reported. Final approval could take a matter of months, with the Russia–Ukraine conflict speeding up the usual 12-month process.

Canada is expected to ratify it in the coming days.

Finland and Sweden have long remain unaligned militarily with NATO despite being strong partners. However, public opinion in the Nordic countries has tilted strongly since Russia invaded Ukraine.

Finland shares an 810-mile-long border with Russia. The New York Times reported that Finnish President Sauli Niinisto said the Russia–Ukraine conflict “changed everything” for the nation that previously believed “that nonalignment would give us stability.”

He said Finland could no longer afford to sit on the sidelines.

Russian President Vladimir Putin was unusually calm on Monday when he responded to the imminent membership, saying that he has “no problem with these states” joining NATO, provided there is no military threat to his nation, Reuters reported.

However, he told the leaders of the Collective Security Treaty Organization (CSTO), a Russia-dominated military alliance of former Soviet states, that any “expansion of military infrastructure into this territory would certainly provoke our response … What that [response] will be—we will see what threats are created for us.”

CSTO includes nations like Armenia, Belarus, Tajikistan, Kazakhstan, and Kyrgyzstan.

Putin’s most recent response is in stark contrast to his previous comments against the expansion of the alliance. In fact, he has cited NATO’s eastward expansion as one of the main reasons for Russia’s invasion of Ukraine.

END

TURKEY

As expected Turkey blocks NATO accession talks with Sweden and Finland as they issue a list of demands.

Will they kick out Turkey?  With the large NATO basein Incirlik?

(zerohedge)

Turkey Blocks NATO Accession Talks With Sweden & Finland – Issues List Of Demands

WEDNESDAY, MAY 18, 2022 – 08:45 AM

Turkey has issued its “list” of demands that must happen before it would accede to granting formal NATO membership to Scandinavian countries Finland and Sweden. This coming on the same day both countries handed in their formal applications. In a photo op with the Finnish and Swedish ambassadors, NATO Secretary-General Jens Stoltenberg hailed the “historic moment”.

But given that for days Turkey has voiced vehement denunciation of the move, calling the countries ‘terror safe-havens’ over their alleged support for the outlawed Kurdish PKK (also as Sweden is home to one of the largest Kurdish communities in Europe), Brussels is in for a long-haul of gridlock as there must be consensus among the 30-member states for new entry. Within hours after an application submission ceremony, FT is reporting Turkey has already blocked the planned initial accession talks with Sweden and Finland essential to processing the requests:

Turkey has blocked Nato’s initial decision to process requests by Finland and Sweden to join the military alliance, throwing into doubt the hopes for a quick accession of the two Nordic countries. Nato ambassadors met on Wednesday with the aim of opening accession talks on the same day that Finland and Sweden submitted their applications but Ankara’s opposition stopped any vote, according to a person with direct knowledge of the matter.   

The FT report continues: “The postponement raises doubt that Nato will be able to approve the first stage of Finland’s and Sweden’s applications within one or two weeks, as secretary-general Jens Stoltenberg indicated. It also sets the stage for several days of intense diplomacy between the US, Turkey, Finland and Sweden over the issue.”

Meanwhile, three “senior Turkish officials” have issued to Bloomberg key actions that Finland and Sweden must implement if they hope to gain Ankara’s approval. Despite their expressing that Turkey isn’t seeking to negotiate beyond the scope of Finnish, Swedish issues – other elements looming in the background are coming into play, like the blocked F-35 deal which grabbed headlines over past years.

Turkey’s foreign minister Mevlut Cavusoglu recently told a meeting of NATO diplomats that majority of Turkish citizens – which is the country that also happens to form NATO’s second largest military – are adamantly opposed to Sweden and Finland’s membership, given they host and give aid to PKK “terrorists”.

Below is the list as summarized based on information in the Wednesday Bloomberg report…

1) Denounce the Kurdistan Workers’ Party (PKK) and crack down on their activities in host countries

The senor officials told Bloomberg that not only must Helsinki and Stockholm take a public stance of denouncing the PKK as a ‘terrorist organization’ – but both governments must crackdown on PKK activities and those of its sympathizers domestically.

Likely also with the Syrian Kurdish YPG in mind, which enjoys support from Washington, Finland and Sweden must also denounce the PKK’s “affiliates before being allowed to join the bloc,” the senior officials said. 

This has also included breaking reports of a demand for the countries to extradite identified ‘terrorists’ to Turkey

2) Immediately lift arms export restrictions imposed in 2019 

A number of EU countries, including Sweden and Finland, imposed arms export restrictions on Turkey due to its cross border military campaign against Syrian Kurdish militias – most especially the YPG, which Turkey’s leaders see as but an extension of the PKK. However, the YPG has enjoyed the longtime backing of the West, with US troops having for years at this point trained them on the ground in northeast Syria, enraging Turkish leaders.

“Turkey also wants Sweden and Finland to put an end to arms-export restrictions they imposed on Turkey, along with several other European Union members, after its 2019 incursion into Syria to push the YPG back from the frontier,” the officials were quoted in Bloomberg as saying.

3) Washington should restore Turkey’s participation in F-35 program

Though not directly a demand of Finland and Sweden, the issue of Washington previously halting the F-35 program for Turkey still looms large. 

“Turkey wants to be re-included in the F-35 advanced aircraft program, from which it was barred after it bought S-400 missile-defense systems from Russia,” Bloomberg writes based on its Turkish government sources. “It also has an outstanding request to the US to purchase dozens of F-16s warplanes and upgrade kits for its existing fleet.”

4) Lift sanctions related to Turkey’s possession of Russian S-400s

As part of the Turkish wish-list, Bloomberg notes, “Moreover, Turkey wants the US to lift sanctions over its possession of the S-400 missiles.”

This was closely related to the saga of the blocked F-35 deal, widely viewed as a humiliation for the Erdogan government, and which took US-Turkey relations to a low point under the Trump administration, despite the two leaders at the time being viewed as on very friendly terms.

Meanwhile, the issue of Turkey for many years having unsuccessfully so far sought EU membership while at the same time more recently having to stand by as talk emerges of ‘fast-tracking’ others (such as Ukraine) has without doubt added insult to injury…

 

5. RUSSIAN AND MIDDLE EASTERN AFFAIRS

RUSSIA/UKRAINE/

Stupidly the USA is set to block Russian debt payments so they could default even though they have the money to pay.  It will only hurt western investors

(zerohedge)

US Set To Block Russian Debt Payments, Pushing Moscow Closer To Historic Default

TUESDAY, MAY 17, 2022 – 05:25 PM

The latest attempt at inflicting maximum punishment and pressure on Russia amid its grinding war in Ukraine has many scratching their heads, as the US is now set to block Moscow’s ability to pay its sovereign debt – though ironically which Russia appears ready and willing to pay, if it weren’t for the far reaching US-led sanctions imposed on its central financial institutions in the first place. 

A key US Treasury waiver which provided an exemption for transactions involving Russia’s finance ministry, central bank and national wealth fund in instances where US bondholders are paid is set to expire according to schedule on May 25, and the Biden administration is reportedly strongly mulling not renewing it.

A senior administration official said that while “It’s under consideration” a final decision has yet to be reached. “We are looking at all options to increase pressure on (Russian President Vladimir) Putin.”

Bloomberg reported Tuesday, however, that the US Treasury is going to let the waiver expire, citing people familiar with administration deliberations. That waiver previously issued by the Treasury Department’s Office of Foreign Assets Control made exceptions for transacting with sanctioned Russian entities for the purposes of “the receipt of interest, dividend, or maturity payments in connection with debt or equity.”

“The waiver, issued shortly after the US levied sanctions on Russia over its invasion of Ukraine in February, has given Moscow room to keep paying investors, helping it avert default on its government debt,” Bloomberg points out.

And yet there’s reportedly significant internal dissent against such a drastic plan as letting the waiver expire on fears that such a policy would only prove counterproductive to Washington interests. “Some Treasury officials had privately argued that allowing Russia to pay its debt would further drain its coffers and redirect resources that would otherwise be spent on weapons and military operations in Ukraine,” the report says. “But the administration has decided against extending the waiver as a way to maintain financial pressure on Moscow, the people said.”

The perhaps bizarre and unprecedented aspect to the US plan is that Russia appears perfectly willing to pay its foreign investors, but has argued that it of course can’t do that in dollars because of the very sanctions in place led by Western creditors, in a circular catch-22. Or put another obvious way: can it really be “default” if your creditor refuses to take your money?

Upon the waiver’s May 25th expiration, it is estimated that Russia will still have about $2 billion in external sovereign bond payments it must meet by close of the year.

Moscow’s reaction of late has been to sharpen its tone in its financial wrestling with the West. Instead of pushing for a default in response to the barrage of western sanctions, Russia’s view is the opposite and even though Moscow has said it won’t be accessing the international bond market this year due to exorbitant debt prices, the country has not actually been seeking to default. On the contrary, a month ago Finance Minister Anton Siluanov told the pro-Kremlin Izvestia newspaper that Russia will take legal action if the West tries to force it to default on its sovereign debt.

END

Russian Ukraine peace talks not happening as stances harden

(DeCamp/Antiwar.com)

Russia-Ukraine Peace Talks Not Happening in ‘Any Form’ As Stances Harden

WEDNESDAY, MAY 18, 2022 – 08:05 AM

Authored by Dave DeCamp via AntiWar.com,

Almost three months into Russia’s war in Ukraine, there appears to be no hope that a negotiated solution will be reached anytime soon. On Tuesday, Russian Deputy Foreign Minister Andrey Rudenko said that the warring sides are not currently holding peace talks “in any form.”

“No, negotiations are not going on. Ukraine has practically withdrawn from the negotiation process,” Rudenko said, according to Interfax.

The New York Times reported on Tuesday that Vladimir Medinsky, who headed the Russian delegation in earlier negotiations with Ukraine, said Kyiv hasn’t responded to a draft peace deal Russia put forward on April 15. A Ukrainian negotiator responded to Medkinsky’s comments by saying Russia was operating with “fakes and lies.”

The Times report says that the impasse stems from Russia’s desire to control “vast swathes” of Ukrainian territory, although the contents of the April 15 peace proposal are not clear. Russia had earlier asked for Ukraine to drop its claim to Crimea, which Russia has controlled since 2014, and recognize the independence of the breakaway Donbas republics.

While Ukraine has been slowly losing territory to Russia in the east, Kyiv has hardened its stance at the negotiating table thanks to massive military support from the US and other Western nations. “Now that we feel more confident in the fight, our position in the negotiations is also getting tougher,” Ukrainian Foreign Minister Dmytro Kuleba said last week.

On Sunday, NATO pledged to give Ukraine military support for as long as it needed, and the US is preparing a massive $40 billion aid package for Ukraine. Once it is signed into law by President Biden, the new aid package would bring total US aid for Ukraine in 2022 alone to over $53 billion.

Leaders of NATO countries have been actively discouraging Ukraine from holding peace talks with Russia. British Prime Minister Boris Johnson has said that he “urged” Ukraine not to negotiate with the Russians. He reportedly told Ukrainian President Volodymyr Zelensky in an April 9 visit to Kyiv that even if Ukraine was ready to sign a deal with Russia, the West was not.

The US and many of its NATO allies have also made clear that one of their main goals in Ukraine is to hurt Russia. According to the Times, Estonian Prime Minister Kaja Kallas has said the West needs to push for a military defeat of Russia rather than “a peace that allows aggression to pay off.”

In recent weeks, the leaders of France, Germany, and Italy have all come out in favor of a negotiated solution to end the war, but Washington does not appear to be on board with the idea. When asked about the US’s position on negotiations, Biden administration officials have said they feel the best way they could help Ukraine is by supporting them militarily.

Medinsky said that Ukrainian negotiators had agreed to much of the draft deal Russia proposed but said other factions of the Ukrainian government were likely against the agreement. “But they probably represent that part of the Ukrainian elite that is most interested in reaching a peace agreement,” he said. “There is probably another part of the elite that doesn’t want peace, and that draws direct financial and political benefit from a continuation of the war.”

While a peace deal seems unlikely in the near future, Russian and Ukrainian officials have been holding talks at a lower level, but they have focused on issues like prisoner exchanges. Medinsky insists that Russia still wants to reach a deal with Ukraine and is seeking an “Austria” model, a country that is not part of NATO but is a member of the EU.

end

One thousand Azovstal fighters haver surrendered but top commanders still remain according to the Kremlin

(zerohedge)

1,000 Azovstal Fighters Have Surrendered Since Monday, But Top Commanders Remain: Kremlin

WEDNESDAY, MAY 18, 2022 – 10:45 AM

According to fresh statements from Russia’s defense ministry Wednesday nearly 700 more Ukrainian fighters have surrendered at Mariupol’s Azovstal steelworks plant since the initial Tuesday reports that 300 had laid down their arms, with the wounded transferred to a Russian-controlled hospital.

This would bring the total number to almost 1,000 fighters surrendered, according to the Russian statements. The Russian MoD counted “694 Ukrainian fighters who had been holed up in Mariupol’s Azovstal steelworks have surrendered over the past 24 hours, according to a report by the country’s RIA news agency.”

Regional media has reported, however, that the Ukrainian Azov battalion’s top commanders have yet to come out of the large Azovstal plant. Pro-Russian separatist leader Denis Pushilin was cited as saying of the top leadership, “They have not left [the plant].”

This despite Ukrainian defense officials claiming on Tuesday that there was an intentional decision to wind down “combat operations”. The Ukrainians were taken into Russian detention after laying down their arms, in what the Kremlin asserted was an obvious “surrender”.

Additionally Ukraine’s President Volodymyr Zelensky dubbed it an “evacuation”:

“The operation to rescue the defenders of Mariupol was initiated by our military and our intelligence officers with the goal to return them home. The work continues and this work requires tact and time,” he said.

As we reported previously, multiple major Western media outlets also refused to use the term “surrender” in their headlines.

“Hundreds of Ukrainian fighters were taken by bus to Russian controlled territory,” a NY Times report said. “Ukraine’s president said the combat mission in the city was over, capping some of the longest, fiercest resistance.”

At this point, the Russian military’s official number of those fighters now in its custody from the Azovstal seige stands at 959 Ukrainian troops.

end

Kyiv’s Guerillas “Kill Top Russian Officers” l 7 Killed In Donetsk l Putin’s “Economic Suicide” Jibe – YouTube

Inbox

Robert Hryniak11:12 AM (4 minutes ago)
to



This Ukrainian drama is winding down as of being of real interest as there is a growing focus on China, and that will be the next pivot of attention shortly. A new proxy candidate, perhaps the Aussies will come forth to confront China over some minute Island chain of distant relevance to see a naval confrontation take place. So do expect soon a major shift in the MSM to take place. And the daily noise drums will be beat loudly while supply chains falter further causing further scarcity and rising prices. Reliance of all things Chinese will be a curse with a price to be paid soon. And that will affect everything from iPhones to prescription drugs.

 And yes, the conflict in Ukraine will be protracted as it has evolved into a predictable hybrid conflict or war on a multi level with NATO becoming the new proxy behind the Ukraine to be deployed at a future date. All sides will arm and train and plan for this.

The meat grinder of Ukrainian forces will continue unabated. The Ukrainians are losing between 700-1000 troops a day, dead and MIA with another 200+ wounded. Whatever forces are still in the Donbas, they will be eliminated as a military force or surrender over the next month or so. And the drama of Mariupol is done to fade away in the fog of disinformation.

From a Russian perspective they are letting events play out and are responding to a changing battlefield beyond the Ukraine for which they will take their time. Just like all or most of Europe seems willing to arm itself to a future land war with Russia across a broad front. How a unsettled public reacts to all of this remains a mystery as economic upheavals reach across the consumer spectrum.

I think that with time Kiev will fall or be allowed to exist in a reduced landlocked Ukraine and what will be left, will be pretty poor. Much poorer than it has been, with all the problems such poverty brings. Whether hunger haunts in the future of Ukraine remains to be seen as it will rely on the goodwill of Russia and a new Ukrainian attitude that the likes of Zelensky cannot bring forth, controlled by his handlers. The real resource strength has always been in the eastern part. Perhaps this is why the idea of neutral Ukraine part of the EU is repulsive as it will be a further drain on EU coffers which are pretty barren as it is. And it will require meddling hands stay off and away and that simply maybe too much to ask.

And as for Finland, yes, they are naive to think that Russia will not fortify the border with stand off missile systems. Such weapon systems while having offensive capability are really defensive weapons, and their number deployed will grow rapidly in coming months. This is a natural response and should not come as a surprise to anyone. The care as not to wage real war on the Ukraine will not be bestowed on other parties in the future. And as new skirmishes occur likely in early 2024 and later in 2028 new stark realities will seen. War solves nothing and only resets conflict without resolution.

And on the subject of oil and gas, Russian energy producers have been directed to divert supply and plans are being made to do so. Thus, new markets will be found or wells will be shut in, especially in oil. At some point it is more likely Russia will curtail availed supply and this will be seen as scarcity of supply becomes evident in the future. Russia is turning inwards and away from the West looking for mutual benefit trade partners having concluded the West is no longer dependable as a trade partner. Over the next several years the impact of this will bring stark realization of meaning of scarcity of many natural resources. And yes, for a time some but not all will be available, perhaps in Rubles until new parties replace availed supply. It is much like a business deciding that a supplier or customer is not reliable and deciding to replace that party. This is what is happening to the West. This displacement will cause and is causing much of upheavals we see now and will experience in the future. Back in 2014 Poland experienced the shock of no apple sales to Russia while apples were sourced elsewhere and still has not found adequate replacement of demand. The same thing happened with yogurt and today Russia is self sufficient in dairy supplies as domestic supply was built. The same thing has also happened in wheat production and will occur in other areas. Whether the West understands or cares is not relevant as this is reality that has impact. Here too lies a huge problem of leadership, where even in a country like America leadership is by a teleprompter. The lack of real leadership will only heap more harm on a situation not addressed, as opposed to resolving in.

Sadly, the days of statesmanship are gone not to return anytime soon and the authority of stand-off weapons will rule for a time. And the western world and Russia both will pay the price. Even oligarchs who plundered Russia’s wealth in the past are no longer needed in the changing conditions within Russia. Those who left have little, if any means of removing further wealth or technology and are are left to their own demise with assets abroad fair game for the taking. There is not sympathy for these folks within Russia who as a majority see them as traitors to Russia. Yes, vilification of such parties is very ingrained in the public mind. The bulk of them are split between Israel and Dubai. And even in Dubai they are learning they can spend but have no influence. The are simply wealthy refugees enjoying their plunder looking to the next feast, wanted or desired by few, and tolerated for what their money buys.

Cheers
Robert

6// GLOBAL COVID ISSUES/VACCINE MANDATE/

Investigation Launched After ‘Mystery’ Surge In Deaths Of Newborn Babies

WEDNESDAY, MAY 18, 2022 – 05:00 AM

Authored by Paul Joseph Watson via Summit News,

Health authorities in Scotland have launched an investigation after a mystery surge in deaths of newborn babies, the second time the phenomenon has been recorded in the space of six months.

A report by the Herald newspaper highlights the “very unusual” spike in deaths of babies, with the alarm being raised after 18 infants died within four weeks of birth in March.

That same control limit was also breached in September last year, when 21 neonatal deaths were reported, the first time this had occurred since records began.

“The neonatal mortality rate was 5.1 per 1,000 live births in September and 4.6 per 1,000 in March, against an average of 1.49 per 1000 in 2019,” reports the newspaper.

Public Health Scotland (PHS) said the deaths could not have been down to chance, while the cause behind the previous spike in September also “remained a mystery.”

The report notes that vaccination uptake has increased in expectant mothers and that COVID infections during pregnancy are associated with a higher chance of premature birth, but found no “direct link” between COVID surges and the deaths.

PHS Scotland says COVID infections “did not appear to have played a role” in the September spate of deaths.

Edinburgh University’s Dr. Sarah Stock said, “The numbers are really troubling,” but admitted she didn’t know the cause of the deaths.

end

Fwd: Flight Crew Vaccine Harm – Global Coalition Statement

Inbox

Milan Sabioncello7:29 AM (20 minutes ago)
to me

———- Forwarded message ———
From: Free To Fly Canada<info@freetofly.ca>
Date: Tue, May 17, 2022 at 10:39 PM
Subject: Flight Crew Vaccine Harm – Global Coalition Statement
To: Milan Sabioncello <sabioncello@gmail.com>

View online
    The link below will lead you to an important statement Free to Fly helped broker, and signed. This group of aviation and medical professionals express serious concerns about compromises in aviation safety due to increasing reports of vaccine injuries among flight crew.
The signatories represent over 30 global airlines, thousands of pilots, and over 17,000 physicians and medical scientists.    GLOBAL COALITION STATEMENT

end

Triple vaccinated individuals account for majority of COVID-19 cases, hospitalizations and deaths in Canada this year – NaturalNews.com

Inbox

Robert HryniakTue, May 17, 11:12 PM (8 hours ago)
to

No surprise as immune system weakens with each shot 



https://www.naturalnews.com/2022-05-16-triple-vaccinated-canada-covid-cases-hospitalizations-deaths.html

Triple vaccinated individuals account for majority of COVID-19 cases, hospitalizations and deaths in Canada this year

Arsenio Toledo

Image: Triple vaccinated individuals account for majority of COVID-19 cases, hospitalizations and deaths in Canada this year

(Natural News) Since the beginning of the year, Canadians who are fully vaccinated and boosted against the Wuhan coronavirus (COVID-19) have accounted for the majority of cases, hospitalizations and deaths in the country.

Canada has one of the highest vaccination rates in the world. As of press time, 83 percent of the population is fully vaccinated and 55 percent is fully vaccinated and boosted.

Despite these exceptionally high national full vaccination and booster vaccination rates, Canada has not been spared from its largest COVID-19 wave since the beginning of the pandemic. (Related: Infections, hospitalizations, deaths increase in Canada for the doubly and triply vaccinated as antibody-dependent enhancement takes hold.)

Official data from the government of Canada shows that between Feb. 21 and April 17, the country’s vaccinated population has accounted for four out of every five COVID-19 cases, hospitalizations and deaths.

Furthermore, the data shows that the rate of COVID-19 infection, hospitalization and death per 100,000 people is the highest among the fully vaccinated and boosted.

The rate of infection, hospitalization and death among the triple-vaccinated is so high that Canadians in this category are, four times more likely to be infected with COVID-19, two times more likely to be hospitalized and three times more likely to die of COVID-19 than the unvaccinated population.

All the data proving this was published by the Canadian government itself.

Nearly 100 percent of COVID-19 deaths between April 10 and 17 were among the vaccinated

On April 10, the total number of unvaccinated Canadians who succumbed to COVID-19 was 9,511. In the next weekly release of data on April 17, that total only increased by one to 9,512.

Conversely, the total number of fully vaccinated Canadians who died of COVID-19 was 2,770 on April 10. That total jumped by 62 following the next weekly release of data to 2,832. Within the same week 160 triple vaccinated people died, leading to a new count of 1,995 from the previous count of 1,835.

Meaning, 222 out of the 223 or 99.6 percent of deaths related to COVID-19 between April 10 and 17 were among the fully vaccinated and boosted population.

Furthermore, over three-fourths of the deaths were among the fully vaccinated who had received booster doses of the experimental and deadly COVID-19 vaccine.

Another four individuals from the partially vaccinated category died of COVID-19 during that same week. One other person who fell under the “cases not yet protected” category also died. This covers individuals who are either too young to receive a vaccine or have an underlying condition that makes them ineligible to be vaccinated. This brought the total number of deaths in Canada due to COVID-19 up from 15,775 to 16,002.

“Of course, a much greater percentage of individuals in Canada have been vaccinated than not,” wrote Thomas Lambert for the Counter Signal. “But even when accounting for the differences in population size, the vaccinated population is still more likely to die from COVID.”

Learn more about COVID-19 vaccine deaths around the world at VaccineDeaths.com.

Watch this video from the New American as journalist Veronika Kyrylenko interviews mRNA inventor Dr. Robert Malone about resisting COVID tyranny.

This video is from the channel The New American on Brighteon.com.

GLOBAL ISSUES//FOOD

end

VACCINE IMPACT

“Apocalyptic” Warnings on Food Shortages and Financial Upheaval as Riots Break Out in Sri Lanka and Iran
May 17, 2022 7:19 pm
I think I have read the word “apocalyptic” used to describe the immediate future more than I have ever seen before, suggesting that the world is now on the brink of chaos. Here are two headlines that were in my newsfeed today, on May 17, 2022: “Bank of England Governor Warns of ‘Apocalyptic’ Food Shortages” “Mood On Wall Street Has Never Been More Apocalyptic” One of the countries that has been especially hard hit with massive riots where soldiers were ordered to shoot protesters, is Sri Lanka. Mahinda Rajapaksa, the brother of sitting President Gotabaya Rajapaksa, resigned last week after violent protests, and the country is on the brink of total disaster. Protests have also happened in Iran due to rising costs of food, and the government responded by actually shutting down the Internet so people could not communicate with each other. Are you ready for the “apocalyptic” future?
Read More.


END

Michael Every//

Michael Every on the day’s most important topics

Rabobank: If The US Is Going To Win This War, It Needs Higher Rates, A Stronger Dollar, And Lower Commodity Prices

WEDNESDAY, MAY 18, 2022 – 11:05 AM

By Michael Every of Rabobank

Everything Old is New Again

Using the matrix of both bond yields AND commodity prices I suggested yesterday as a judge of what the market is thinking vs. what the Fed then needs to be doing seems to have held water. Amid the usual “why bother paying attention to facts when one can buy dips” equity action, US 10-year yields surged 8bp back to 2.99% and 2-year yields 12bps to 2.69%, AND oil and wheat moved higher, the former to over $115 before dipping back to around $113, the latter starting lower but closing at a new record high. Bonds sold off after we got a hawkish Powell interview that showed he was looking at the continued rise in commodities, not any falls in demand.

Specifically, Powell stated ”There’s an overwhelming need to get inflation under control”; that “this is not a time for tremendously nuanced readings of inflation: we need to bring it down in a convincing way. We do not see that right now. Some signs are promising, others are not”; and that the Fed “will push ahead with rate increases until we get as far as we need to get – we’ll keep going.” Indeed, Powell stressed, “Neutral is not necessarily a stopping point. If we have to go beyond neutral, we will not hesitate.” He also underlined “We will tighten until we are at a place where financial conditions are appropriate, and inflation is coming down.” In other words, bond yields cannot truly come down before key commodities do. Whocouldanooed?

For those rightly thinking that rate hikes don’t help inflation driven by the supply side, which is seeing real incomes fall sharply for those outside Wall Street, there was no succour. Powell added the Ukraine war could last longer than expected, as could Chinese lockdowns, and that “there is a real possibility that globalisation does into reverse to some extent.” Indeed, while inflation is partly driven by supply bottlenecks, the Fed is not seeing much evidence of it “healing,” and, crucially, “is not setting policy based on the view we get relief from the supply side.” As such, “we clearly have a job to do on the demand side.”

But what of the Fed’s 2020 shift to focus on the lowest possible unemployment rate for all Americans in order to bridge socio-economic chasms? Well, now Powell sees the natural rate of unemployment as likely higher than 3.6%, where it sits, and implied he expects joblessness to rise ahead, adding he wants to see only “healthy” nominal wage inflation consistent with 2% CPI, which it currently exceeding in many places. (Australia just saw a 2.4% y-o-y print for Q1, which was below consensus, and may take some heat out of Aussie markets.)

Overall, Powell said there would be “pain involved” in doing what was necessary, and a “soft-ish” landing was only now “plausible”. So, yes, the implication is the recession Mr Market is talking of – just not the rates easing-of-financial-conditions Fed response he was already starting to price for.

That was followed up by Evans arguing the Fed should raise rates to a 2.25%-2.5% neutral range “expeditiously”, and favours “front-Loaded” hikes to transition to a more measured pace, which would give them time to monitor supply chains –which are being noticed and have no resolution– in order to evaluate tighter policy.

In short, everything old is new again: hawkishness; wanting higher unemployment and lower nominal (and real) wage growth; and a Fed that is prepared to talk the talk – although walking the walk, or walking and chewing gum at the same time, is yet to be seen.

Meanwhile, we got more central bank news from Europe, where Reuters says, ‘Exclusive-ECB’s Lagarde gives national central bank chiefs louder voice on policy’. The details are that ECB President Lagarde “has given national central bank chiefs a bigger say in policy meetings, asking her own board to speak less and set aside more time for debate,” according to sources. Chief economist Lane and fellow board member Schnabel have been told to limit their presentations and leave more space for the central banks of the euro’s 19 countries to air their views. This is implied as being introduced because “a few voices typically dominate,” and “criticism has grown since last summer as Lane and his staff repeatedly underestimated the size and duration of inflationary pressures. The surge in prices, which some ECB policymakers warned were persistent, eventually prompted the central bank to change tack and open the door to higher interest rates.” So, this is not so much about democracy as the fact that the loudest voices on inflation have been completely wrong (by not seeing everything everywhere all at once, as noted yesterday).

Regardless, it takes us back to an older era when a wider variety of speakers had a say. On which, wouldn’t it be nice if we also got business, trade/logistics, and union voices heard around the central bank table too today, rather than just the financial sector and academic economists like Lane? Their input would certainly be relevant, it appears.

And why not national security figures too? The first modern central bank, the BOE, was set up to finance a major war, as were its European counterparts. (As the EU and UK are daggers drawn again over Northern Ireland, with trade war in the wind.) Today they cannot even do a good job of fighting inflation, let alone defending Western interests. Yet everything old may be new again there too due to the Ukraine metacrisis.

US Treasury Secretary Yellen is now talking of a new Marshall Plan, which takes us back to the 1950s. Inconveniently, that involves winning the war first, which means US Lease-Lease, which is already in place, taking us back to the 1940s, and integrating military, economic, and financial components: after all, the measurement of ‘GDP’ originated in the US in WW2 as a tool to win it, not to set up the quarterly ‘guess the weight of the cake and make billions’ competition it has since become.

If the US is going to win this war, it needs to address the economic component – which implies higher rates, a stronger dollar, and lower commodity prices to tame its inflation and reduce Russian income. Others might want similar FX movement, as the EIA notes today: “A strong US dollar means that countries that use currencies other than the US dollar pay more as crude oil prices increase. Since June 1, 2021, the Brent crude oil price has increased by 59% in US dollars and by 86% in euros.” Now imagine your currency collapses because you try to do ‘new normal’ QE while running commodity-driven trade deficits – and you don’t get Fed swap lines,… as Turkey’s TRY stumbles further over geopolitics, and China stops reporting foreign investor bond trades as capital outflows accelerate, and new home prices just dropped 0.3% m-o-m.

Yet the US will also need to address the financial component. Being *very* charitable, that might explain why there are rumors flying around that the White House is considering de facto forcing Russia to default on its foreign debt by not extending a soon-to-lapse rule allowing Moscow to make such dollar payments. It will also involve joined-up actions such as offering India $500m in US military aid, approaching the levels offered to Egypt and Israel, to persuade it to switch from Russian to US weapons, as part of a broader geopolitical realignment. (Which was already underway via The Quad: this is also to help tip the balance as India decides between French and US planes.)

Yet at the same time, this links back to supply chains. There are reports that Ukraine has already depleted a quarter and a third of the total US stock of Javelin and Stinger missiles, and current US production is in no way capable of replacing them: they are being fired far faster than they can roll off of production lines. Imagine what happens if the war drags on beyond the end of the year. Imagine if a new war begins somewhere else. Imagine the global military hegemon without the weaponry it needs to fight. And that dilemma brings us back to integrating military, economic, and financial components.

Relatedly, we recently got another ‘old is new’ shift from the IMF, who are now officially more supportive of capital controls, pre-emptively in some cases. Those who follow a Godley approach to balance sheets would point out that there are many good reasons for introducing capital controls like the ones we had under Bretton Woods, which takes us back to 1945-1971. If you don’t have destabilizing global capital flows, you don’t have destabilizing global trade deficits, because the former drives the latter.

Meanwhile, those who follow a geopolitical-realist approach to markets will extend the argument to say it is the US which is most likely to ultimately introduce capital controls (and more tariffs) against some countries which it runs large bilateral trade deficits with, i.e., no US capital outflows to China, and no capital inflows to the US from China, which would effectively decouple the two. And when one says ‘ultimately’, one is not looking too far into the future at the rate things are shifting and given the train of thought from the US Trade Representative. One is not only looking at China in this regard. Germany could be in the cross-hairs too if the country fails to follow through on its promise to rearm before the 2024 US presidential election, and instead goes for more appeasing ‘trundle durch bumble’.

Imagine the rates impact of this kind of US policy shift towards trade only within an Anglosphere, or a Network of Liberty, or ‘Freedom Trade’ not free trade. Yet is not out of the question based on the current political and geopolitical trends and the iron logic of war. Far from it. Rather, everything old is new again.

”Don’t throw the past away; You might need it some rainy day; Dreams can come true again; When everything old is new again

Get out your white suit, your tap shoes and tails; Put it on backwards when forward fails; Better leave Greta Garbo alone; Be a movie star on your own”

end

7. OIL ISSUES//ELECTRICITY ISSUES/USA

WTI Rebounds After Big Surprise Crude & Gasoline Draws

TUESDAY, MAY 17, 2022 – 04:36 PM

Oil prices slipped lower today after the Biden admin announced it plans to allow Chevron  to negotiate its oil license with Venezuela’s national producer and legged down further on growth scares as Fed Chair Powell said he won’t hesitate to raise rates above neutral if needed.

The proposed changes to alleviate some sanctions against Venezuela “should be seen as positive development, but not be mistaken as providing immediate relief to the tight market we are experiencing in real time,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.

API

  • Crude -2.445mm (+1.553mm exp)
  • Cushing -3.071mm – biggest draw since Oct 2021
  • Gasoline -5.102mm – biggest draw since Oct 2021
  • Distillates +1.075mm

Large draws for Crude and Gasoline stocks

Source: Bloomberg

“We are getting into uncharted territory of crude inventories,” said Peter McNally, global sector lead at Third Bridge.

“It’s tricky to implement these bans at a time when demand normally picks up and inventories are low.”

WTI hovered around $112 ahead of the API data and rallied on the surprise draws…

Finally we note that WTI settled above Brent (front-month) for the first time since May 2020…

Also, US average retail gasoline prices topped $4.50 a gallon for the first time, according to auto club AAA, just a couple of weeks ahead of the summer driving season…

And judging by where crude and wholesale gasoline prices are, we could see $5 within days.

And all this as the SPR hits its lowest level since 1987…

Dear Mr. Biden, it’s not working.

END

OPEC ministers warn no increase in supply coming

(zerohedge)

OPEC Ministers Warn No Increase In Supply Is Coming Online

TUESDAY, MAY 17, 2022 – 08:05 PM

According to OPEC, the oil markets are so askew at the moment that adding capacity would fail to materially stave off high prices.

Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, has said there are “physical impediments that no producer can solve” at work right now in the oil market, according to the Financial Post/Bloomberg.

The move shows OPEC posturing up at a time when U.S. lawmakers have been rushing to try and solve the problem of exploding gas prices. Bin Salman’s comments come at a time when exports out of Russia, a major player on the global oil and gas stage, have been disrupted. 

“There is no refining capacity commensurate with the current demand and the expectation of the demand in the summer,” Bin Salman said this week.

His thoughts were echoed by Bahrain’s Oil Minister Sheikh Mohammed Bin Khalifa Bin Ahmed, the report said.

As a result, OPEC is expected to continue to raise output by 432,000 barrels a month. 

Bahrain’s oil minister commented this week: “There’s no new capacity coming. Even if you produce more crude, there isn’t demand for it, there aren’t any more refineries.”

And OPEC seems to be happy with the job they are doing – which means Sleepy Joe is going to have to turn to another page in his “big book of micromanaging the oil market to try and manipulate prices”.

Iraqi Oil Minister Ihsan Abdul Jabbar even commented that OPEC was putting in its “best performance in maybe more than 50 years” in achieving balance in the oil market.

end

8 EMERGING MARKET& AUSTRALIA ISSUES

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

COSTA RICA

My goodness Costa Rica in trouble with ransomware gang

(zerohedge0

Ransomware Gang Threatens To “Overthrow” Costa Rica’s Government As Attack Deepens

TUESDAY, MAY 17, 2022 – 10:45 PM

Last week, Costa Rica declared a state of emergency after a Conti Group ransomware attack infected government computer networks. Now, the ransomware gang responsible for the attack said its objective is to overthrow the government, according to AP News

On Monday, newly elected President Rodrigo Chaves told reporters that the Russian-speaking cyber gang had increased ransom payment to $20 million. He said the ransomware had impacted 27 government institutions, including federal agencies, state-run utilities, and municipalities. 

We are at war, and that’s not an exaggeration,” Chaves said, adding officials believe they’re dealing with a national terrorist group with collaborators inside Costa Rica. 

Also, on Monday, Conti said: “We have our insiders in your government … are also working on gaining access to your other systems, you have no other options but to pay us. We know that you have hired a data recovery specialist, don’t try to find workarounds.”

The ransomware attack was first discovered in April, infecting the Finance Ministry, including customs and tax collection networks. AP notes other government networks have been infected and have not worked properly in a month. 

Conti has also said: “We are determined to overthrow the government by means of a cyber attack, we have already shown you all the strength and power, you have introduced an emergency.”

If the ransomware is not paid promptly, the cyber gang said they would delete the decryption keys, effectively paralyzing critical networks that run certain government agencies. 

Brett Callow, a ransomware analyst at Emsisoft, said, “the threat to overthrow the government is simply them making noise and not to be taken too seriously.” 

However, Callow did say, “We haven’t seen anything even close to this before, and it’s quite a unique situation.” 

Could this be the first instance a cyber gang attempts to overthrow a government with ransomware? 

SRI LANKA

Crisis-Hit Sri Lanka Defaults On Debt As It Runs Out Of Fuel

WEDNESDAY, MAY 18, 2022 – 01:10 PM

There’s no money to buy petrol, the crisis-hit Sri Lankan government said Wednesday as it urged citizens to “not to wait in line” for fuel, and following violent protests in the streets, which started in early April in the capital of Colombo and quickly spread across the country due to soaring prices amid food and other essential resource shortages like medicine.

On Tuesday the new prime minister, Ranil Wickremesinghe, declared in a television address that Sri Lanka was down to it’s “last day of petrol” amid the most severe crisis in over seven decades. He said the country would need an immediate bail-out of at least $75 million of foreign currency just to cover the next few days of essential imports.

He additionally signaled the central bank would be forced to print money if it hoped to pay government wages. Parliament has further been informed that the government has missed its April 18 deadline to pay $78 million in global bonds payments, as well as another $105 million owed to Chinese banks, according to Bloomberg. Wednesday marked the end of a 30-day grace period.

Following the development, Reuters wrote “Sri Lanka is expected to be placed into default by rating agencies on Wednesday after the non-payment of coupons on two of its sovereign bonds.”

It’s predicted to be just the beginning of a historic default on a total $12.6 billion of overseas bonds  the first such since the small country’s independence from Britain in 1948, amid a continued spiral of runaway inflation and foreign exchange squeeze fueled by lack of dollars. 

Power and Energy Minister Kanchana Wijesekera told parliament Wednesday, “There aren’t enough dollars available to open letters of credit.” He explained, “We are working to find funds but petrol will not be available at least until the weekend. The very small reserve stock of petrol is being released for essential services like ambulances,” he said.

PM Wickremesinghe followed by saying that an emergency bridge loan of $160 million has been secured from the World Bank – though it wasn’t specified if the funds would be used for fuel imports.

He further said in a somewhat ambiguous statement suggesting there’s little hope of the government digging the country out of the debt and energy crisis in the near future: “The statistics have gone haywire,” and added“But the reality is we don’t even have $1 million.”

Political and moneyed elites have been subject of increasingly brazen mob attacks in the last weeks…

Making matters worse, and increasing the likelihood that riots and deadly street protests will continue, central authorities early this week announced the public can expect 15 hours of power cuts a day amid the energy crisis.

Last week protests turned deadly, with reportedly at least nine killed, including a ruling party member of parliament – which resulted in Prime Minister Mahinda Rajapaksa being forced to resign. Thousands of protesters had also breached his residence and office.

* * *

More from Rabobank on the crisis…

Sri Lanka is officially down to its last day of petrol. It was already going hungry – now it will be immobile. Angry people were already burning down politicians’ houses. Now they seem to be attacking anyone looking wealthy. ‘Oh, that’s just Sri Lanka,’ some say. True. But Iran is seeing food protests; so is Tajikistan. Significantly lower bond yields, when oil and food prices are rising and demand is largely inelastic, and “demand destruction” means hunger, is not something that ‘just happens’ like it could when commodity prices were low. Especially not when it also implies a collapse in the stock market and in housing and soaring unemployment to boot. Yes, such a global risk-off phase may be bullish for core bond yields like the US and Germany – but in many places it is a potential disaster. If Wall Street continues to say commodities don’t matter and inflation has peaked, the likelihood is that we will see dozens more African, Middle Eastern, and Asian countries experiencing exactly the same socio-political destabilisation

END

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

Euro/USA 1.0509 DOWN 0.0938 /EUROPE BOURSES //MOSTLY RED (EXCEPT SPAIN) 

USA/ YEN 129.04   DOWN 0.318 /NOW TARGETS INTEREST RATE AT .11% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…

GBP/USA 1.2415 DOWN   0.0072

 Last night Shanghai COMPOSITE CLOSED DOWN 7.72 POINTS UP 0.25%

 Hang Sang CLOSED  UP 41.76 PTS OR 0.20%

AUSTRALIA CLOSED UP  1.03%    // EUROPEAN BOURSES MOSTLY RED 

Trading from Europe and ASIA

I) EUROPEAN BOURSES ALL MOSTLY RED 

2/ CHINESE BOURSES / :Hang SANG CLOSED UP 41.36 PTS OR 0.20%   

/SHANGHAI CLOSED DOWN 7.72 PTS UP 0.25% 

Australia BOURSE CLOSED UP  1.03% 

(Nikkei (Japan) CLOSED  UP 251,45 OR 0.94%

INDIA’S SENSEX  IN THE RED

Gold very early morning trading: 1809.75

silver:$21.60

USA dollar index early WEDNESDAY morning: 103.63  UP 23  CENT(S) from TUESDAY’s close.

THIS ENDS WEDNESDAY MORNING NUMBERS

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And now your closing WEDNESDAY NUMBERS 1: 00 PM

Portuguese 10 year bond yield: 2.14%  DOWN 2  in basis point(s) yield

JAPANESE BOND YIELD: +0.241% UP 0    AND 0/10   BASIS POINTS /JAPAN losing control of its yield curve/

SPANISH 10 YR BOND YIELD: 2.08%// DOWN 3   in basis points yield 

ITALIAN 10 YR BOND YIELD 2.94  DOWN 3   points in basis points yield ./

GERMAN 10 YR BOND YIELD: RISES TO +1.01.%

END

IMPORTANT CURRENCY CLOSES FOR WEDNESDAY  

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

Euro/USA 1.0497  DOWN 0.0052    or 52 basis points

USA/Japan: 128.21 DOWN 1.211  OR YEN UP  121  basis points/

Great Britain/USA 1.2402 DOWN 0.0085 OR 185  BASIS POINTS

Canadian dollar DOWN .0047 OR 47 BASIS pts  to 1.2821

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

The USA/Yuan,  CNY: closed    ON SHORE  (CLOSED ..DOWN 6.7540  

THE USA/YUAN OFFSHORE:    (YUAN CLOSED (DOWN)..6.7699

TURKISH LIRA:  15.95  EXTREMELY DANGEROUS LEVEL/DEATH WISH/HYPERINFLATION TO BEGIN.

the 10 yr Japanese bond yield  at +0.241

Your closing 10 yr US bond yield DOWN 6  IN basis points from TUESDAY at  2.915% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic

 USA 30 yr bond yield   3.11 DOWN 5 in basis points 

Your closing USA dollar index, 103.64 DOWN 23   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 DOWN 68.57 PTS OR 0.91%

German Dax :  CLOSED DOWN 179.13  POINTS OR 1.26%

Paris CAC CLOSED DOWN 87.52 PTS OR 1.36% 

Spain IBEX CLOSED  DOWN 16.00 OR 0.19%

Italian MIB: CLOSED DOWN 236.76 PTS OR  0.97%

WTI Oil price 110.30   12: EST

Brent Oil:  109.71   12:00 EST

USA /RUSSIAN ///   RUBLE RISES TO:  63.46   DOWN 13/100       RUBLES/DOLLAR

GERMAN 10 YR BOND YIELD; +1.01

CLOSING NUMBERS: 4 PM

Euro vs USA: 1.0471 DOWN   .0077   OR UP 77 BASIS POINTS

British Pound: 1.2347 DOWN .01395  or  140 basis pts

USA dollar vs Japanese Yen: 128.21 DOWN 1.22//YEN UP 1.22 BASIS PTS

USA dollar vs Canadian dollar: 1.2879 UP .0079 (CDN dollar DOWN 79 basis pts)

West Texas intermediate oil: 108.83

Brent OIL:  109.40

USA 10 yr bond yield: 2.897 DOWN 7 points

USA 30 yr bond yield: 3.074  DOWN 9  pts

USA DOLLAR VS TURKISH LIRA: 15.943

USA DOLLAR VS RUSSIA///USA/ ROUBLE:  63.44 DOWN  0 AND 15/100 ROUBLES (ROUBLE UP 15/100 ROUBLES/USA

DOW JONES INDUSTRIAL AVERAGE: DOWN 1164.52 PTS OR 3.57%

NASDAQ 100 UP 566.37 PTS OR 4.72%

VOLATILITY INDEX: 30.90 UP 4.8 PTS (18.39%)

GLD: 169.42 DOWN 0.09 PTS OR 0.05%

SLV/ 19.73 DOWN 19 PTS OR 0.95%

end)

USA trading day in Graph Form

Stocks & Bond Yields Crater As The ‘American Consumer Is Strong’ Narrative Implodes

Tyler Durden's Photo

BY TYLER DURDEN

WEDNESDAY, MAY 18, 2022 – 04:00 PM

Yep, we went there and unleashed the ‘deer in headlights’ image…

While most blinkered investors ignored last week’s record surge in revolving consumer credit (i.e. credit card spending), this week’s Walmart and Target earnings brought it home to the rest of the country that the “American consumer is strong” or “consumer has best balance sheet ever” narrative imploded, crashing on the shores of a gigantically lopsided and divided national aggregate that hides the reality that most of America is unable to pay the ‘cost of living’ under Bidenomics 40-year-high inflation without resorting to the plastic. Additionally, we are hearing more investors coming around to the idea that Powell’s comments were anything but ‘less hawkish’ – he unequivocally put 75bps back on the table with his ‘if things do not go as planned, we will do more’ comments… it just seems like nobody wanted to hear that yesterday!?

TGT and WMT are a bloodbath this week (-29% and -17% respectively in the last two days – worst drops since 1987)…and to pile on the ‘recession’ trade, Disney’s CFO warned that “growth in per capita parks spending will slow”..

Source: Bloomberg

NOTE – these are not widely held hedge fund names – they are, however, extremely widely-held ETF and passive investor names… when do the passive hand-sitters, reach for the mouse and end the pain?

That ugly realization appeared to finally hit home today as Housing data confirmed the signals from the retailers, sending stocks and bond yields plunging lower (and the yield curve dramatically flatter) as stagflationary themes are becoming base case for many.

Nasdaq was the biggest loser today but chatting with some more ‘seasoned’ traders, almost everyone said a similar thing – this is the calmest major selloff they have ever seen, no panic puke, just slow and steady derisking (again perhaps signaling a VWAP seller and more passive investor unwinds)

Stocks have almost unwound all of the dead-cat bounce from last week (remember that bounce was triggered when the S&P 500 hit a drawdown of 19.99% – just shy of the bear market trigger)…

The S&P lost its 4,000 pin once again…

Stocks still not ‘pricing in’ The Fed…

Source: Bloomberg

Staples & Discretionary were (unusually both) monkeyhammered today…

Source: Bloomberg

Trucking stocks were clubbed like a baby seal (to their lowest since Feb 2021) after the Target comments on Transportation costs…

Source: Bloomberg

Equity markets caught down to credit’s ongoing weakness today…

Source: Bloomberg

VIX rose modestly today but equity risk remains massively under-priced relative to credit risk…

Source: Bloomberg

As stocks puked, bond yields crashed with the long-end outperforming (30Y -11bps, 2Y -3bps)…

Source: Bloomberg

…signaling “growth scare” fears are rising (and thus stagflation… globally)

Source: Bloomberg

10Y tested 3.00% again and plunged…

Source: Bloomberg

And the yield curve flattened dramatically…

Source: Bloomberg

TINA is dead… there is an alternative…

Source: Bloomberg

The dollar managed a small rebound today after 3 down days…

Source: Bloomberg

Bitcoin broke back below $30k again today – remaining in the $29-$31k range…

Source: Bloomberg

Despite a sizable crude and gasoline inventory draw, oil prices tumbled along with the rest of the risk assets…

Gold managed gains today, holding above $1800…

Finally, as we noted earlier, don’t be fooled by (nominal) retail sales spending data…

After adjusting for inflation, the US consumer has hit the wall.

Still, things could get a lot worse yet…

Source: Bloomberg

Will Powell allow that? Will Biden allow Powell to allow that?

END

I) / EARLY MORNING TRADING/

US Stocks Extend Losses On China Smartphone News

WEDNESDAY, MAY 18, 2022 – 11:35 AM

US equity markets were already in puke mode following catastrophic earnings from WMT, TGT, and a bunch of other retailers confirming the US consumer is about to implode, but headlines from Nikkei that China’s leading smartphone makers have told suppliers to scale back orders for the coming quarters by around 20% following COVID lockdowns that have severely disrupted supply chains.”

According to NikkeiChina’s top smartphone makers – Xiaomi, Vivo, and Oppo – have told suppliers to scale back orders for the upcoming quarters by about 20% due to supply chain disruptions from the country’s Covid-19 lockdowns (i.e., demand has cratered).

Xiaomi, China’s biggest smartphone maker and No. 3 globally, has told suppliers that it will lower its full-year forecast to around 160 million to 180 million units from its previous target of 200 million. Xiaomi shipped 191 million smartphones last year and is aiming to become the world’s leading smartphone maker. The company could adjust its orders again as it continues to monitor the supply chain situation and consumer demand in its home market.

Meanwhile, Vivo and Oppo are also seeking to reduce excessive inventories. Vivo told suppliers it will not update specifications for key components to reduce costs.

The news sent futures into an (even faster) freefall, led by a 3.5% plunge in Nasdaq…

With AAPL down hard…

As stocks plunge, bonds are bid wioth yields tumbling 6-8bps across the curve, with 10Y once again unable to hold above 3.00%…

How much more pain is Powell willing to take?

II)USA data

US Housing Starts, Permits Plunge In April As Mortgage Rates Soar

WEDNESDAY, MAY 18, 2022 – 08:37 AM

Following March’s modest rise in Housing Starts and Permits, analysts expected reality to catch up with the homebuilder market in April (just as we saw in the NAHB sentiment survey slumping to 2 year lows). Housing Starts and Building Permits both dropped in April but the picture was mixed with Starts falling just 0.2% MoM (against -2.1% MoM exp), but that was due to a huge downward revision in March Starts from +0.3% to -2.8% MoM?!

Building Permits tumbled 3.2% MoM (more than the expedcted 3.0% MoM drop) with only minimal revisions to March.

Source: Bloomberg

Overall Start and Permits appear to be rolling over…

Source: Bloomberg

On the Starts side of the equation, multi-family Starts soared in April (+16.8% MoM to 612K from 524K, and the second highest on record, only Jan 2020 higher) as single-family starts plunged (-7.3%MoM to 1.100MM, lowest since Sept 2021)…

On the more forward-looking side of the housing market , a 4.6% MoM plunge in Single-family permits (to the lowest since Oct 2021) dominated the Permits slide (with multi-family permits down just 0.6% MoM)…

The average for a 30-year loan rose to 5.3% last week, up from 2.94% a year prior and the highest since 2009, Freddie Mac data show.

“The housing market is facing growing challenges,” Robert Dietz, chief economist at the NAHB, said in a statement.

“Building material costs are up 19% from a year ago, in less than three months mortgage rates have surged to a 12-year high and based on current affordability conditions, less than 50% of new and existing home sales are affordable for a typical family. Entry-level and first-time home buyers are especially bearing the brunt of this rapid rise in mortgage rates.”

Finally, given the collapse in mortgage applications (purchases now crashing, following refi apps crash), we suspect the collapse in the new home construction business is just beginning (judging by the spread to forward-looking building permits)…

Source: Bloomberg

And Powell will only make things worse… “Soft landing” my arse!

end

Goldman Economist Warns US Consumers Maxing Out Credit Cards Will Lead To Late 2022 Spending Collapse

WEDNESDAY, MAY 18, 2022 – 03:45 PM

A little over a week ago, when looking at the latest consumer credit data from the Federal Reserve, we were shocked to learn that in March, credit card debt soared by a record $52.4 billion, the biggest monthly increase on record and more than double the expected change.

Summarizing our views on this historic surge in credit-fueled purchases, we said that “while this unprecedented rush to buy everything on credit at a time when there were no notable Hallmark holidays should not come as much of a surprise, after all we have repeatedly shown that for the middle class any “excess savings” are now gone, long gone

… the fact is that most economists – such as those at Goldman Sachs – had previously anticipated that continued spending of savings by consumers (who they fail to realize are now tapped out) is what will keep the US economy levitating in 2022. Unfortunately, as today’s consumer credit numbers clearly demonstrate, any savings that US middle class households may have stored away courtesy of stimmies, are long gone.”

Hilariously, yesterday it was none other than the person who in late 2021 predicted – incorrectly – that “pent up savings” would provide a major boost to the US economy in Q1 and Q2 of 2022, much to our amusement and criticism (of which we dispensed generously here)…

… and who admitted that US consumers, drowning in inflation, are “already relying on leverage to some extent to fund their spending.” 

We are talking, of course, about Goldman chief economist Jan Hatzius, who no longer sees any “pent-up savings” offsetting either the fiscal or the hyperinflationary drag (unlike what he said in October) and instead speaking on Bloomberg TV, said that “borrowing is going to be a short-term driver of spending, and I think has been to some degree already.”  Did the explosive growth in credit card borrowing tip him off?

Sarcasm aside, Hatzius was at least was correct in saying that “consumer spending is going to be relatively slow. Income is going to be quite weak in 2022” which is also why the bank slashed its GDP forecast over the weekend and now see only a 1.25% gain in gross domestic product in the fourth quarter of 2022 compared with the same period of 2021.

Echoing verbatim what we have said since late 2021, Hatzius also said that not only is consumer credit on the rise, but there has been a pickup in mortgage-equity withdrawal where homeowners take out a loan against the appreciated equity in their property, and concluded that both dynamics are supporting spending. Well of course. The question is what happens when those credit cards are maxed out.

The Goldmanite’s remarks contrast with the view of some (idiot) economists who see bloated stockpiles of savings, thanks especially to government transfers during the pandemic, as a major pillar of support for consumer demand. Newsflash: as we have said since the summer of 2021, those “excess savings” are gone… all gone.  In other words, take the whole “consumer is strong” narrative and shove it.

Which is a problem since Goldman (for now) is sticking with its call that the Federal Reserve will raise its benchmark rate to a 3%-to-3.25% range. “The risk case is that they have to do more and that then also raises the risk of a hard landing,” Hatzius said. Meantime, consumers’ reliance on leverage “supports spending in the short term but ultimately is not going to be a sustainable source of big increases in spending,” Hatzius said. “So it builds in a slowdown, sort of down the road.”

You mean, precisely what Zero Hedge said in October in counter to the cheerful optimistic econotakes by… Jan Hatzius last October. Yes, why yes indeed.

And yes, for those wondering, Goldman did actually publish a note a few days ago (available to professional subs), explaining why the surge in consumer credit is quite concerning…

… concluding that “once credit levels have normalized and households can no longer grow credit at a higher than normal pace, we see potential for binding credit constraints to subtract up to 2% from the level of PCE.”

In conclusion, Hatzius said that the timing of a downturn in housing will determine the turning point, he said. While that’s not yet evident in the data, it’s bound to come given the surge in mortgage rates.

The implications, as we correctly said two weeks ago, are profound: any model that projected that US spending will be fueled by “savings” can now be trashed. And since this is most of them, the consequences are dire as they confirm – once again – that the Fed is tapering, QTing and hiking right into a consumer-driven recession which was not visible until new precisely because of all the credit-card fueled spending, which according to Deutsche Bank will begin in late 2023 and which according to Morgan Stanley can start in as little as 5 months. Today’s data suggests that Morgan Stanley is right.

More in the full Goldman report available to pro subs.

IIB) USA COVID/VACCINE MANDATES

END.

iii)a.  USA economic stories

This should tell the story facing most retailers;  operating income slashed due to higher energy and other costs.

(zerohedge)

Target Shares Crash After Full-Year Operating Income Slashed Due To “Unexpectedly High Costs”

WEDNESDAY, MAY 18, 2022 – 07:44 AM

Target shares plunged to a 14-month low in premarket trading after reporting first-quarter earnings that missed Wall Street’s expectations. 

The discount retailer’s first-quarter profit fell short of expectations, even as sales increased above forecasts, though the company was burdened with expensive freight costs, higher markdowns, and lower-than-expected sales of discretionary items (a similar story to Walmart’s).

Market research firm Vital Knowledge said Target’s margin shortfall is “more dramatic” than what Walmart reported Tuesday, due mainly to inflationary problems. 

The retailer lowered its full-year forecast on operating income margin to 6% of sales this year. Target had previously forecasted at least 8%. During the quarter, adjusted earnings tumbled to $2.19 a share. 

Here’s what Target reported for Q1:

  • Adjusted EPS $2.19 vs. $3.69 y/y, estimate $3.06 (Bloomberg Consensus)
  • Sales $24.83 billion, +4% y/y, estimate $24.34 billion
  • Comparable sales +3.3%, estimate +1.17%
  • Operating margin 5.3%, estimate 8.13%

Commenting on the dismal results, Chief Executive Officer Brian Cornell said, “We were less profitable than we expected to be, or intend to be over time … it’s clear that many of these cost pressures will persist in the near term.” 

Cornell said: “Throughout the quarter, we faced unexpectedly high costs, driven by a number of factors, resulting in profitability that came in well below our expectations, and well below where we expect to operate over time.”

The shares fell a staggering 21% on the news. 

On consumers, Target said strong demand for food staples, beauty products, and household essentials went along with “lower-than-expected sales in discretionary categories.” Consumers are beginning to pull back on discretionary items as they struggle to buy essential items amid the worst inflation in four decades. Cornell said consumers are shifting towards more generic brands, a move to save money. He said consumers who bought large ticket items, such as television and home appliances last year, are buying lower ticket items. 

And it appears to be the same story between Target and Walmart, both missed profit expectations as inflation costs created pressure on margins

-END

Target’s Plunge Exposes Inflation’s Risk To Margins

WEDNESDAY, MAY 18, 2022 – 09:45 AM

By Justin Zacks, Bloomberg Markets Live commentator and analyst

While share prices of retailers have been all over the map in 2022, this week’s post-earnings plunges in Target and Walmart are highlighting the damage inflation can do to profit margins. Still, the exact influence of inflation on retailers depends on what they sell, who they are selling to and the methods they are using to do so. This influence will change as consumer demand and supply chains adapt.

[ZH: Top-down, producers have still not passed along prices to consumers, with huge aggregate pressures building]

Among chain stores in the S&P 500, only Dollar Tree (+15%) and Walmart (+2.4%) had positive returns year-to-date before Tuesday. The two worst-performing retailers were ecommerce sites Amazon.com (-34%) and Etsy (-60%).

This rotation by investors generally was based on two themes, the switch from online to bricks-and-mortar retailers due to the continued economic reopening following the waning of Covid-19 cases and the expectation that consumers would shift to lower-priced goods due to high inflation.

New York City raising its Covid-19 alert level to high on Tuesday is a warning that the pandemic (along with online retailing) might not be over yet, while Tuesday’s disparate results from the two largest brick-and-mortar retailers in the US, Walmart and Home Depot, are examples of how the effects of inflation are not the same across the board.

Walmart fell 11% Tuesday, the most in 35 years, after it sliced its 2022 outlook due to inflationary pressures. Its first-quarter gross profit rate was 38 basis points lower than the previous year as customers shifted to buying lower-margin groceries.

Target plunged 22% in premarket trading on Wednesday after lowering its operating margin outlook for the full year. Similar to Walmart, the big-box department-store chain saw strong demand for groceries and household essentials at the expense of discretionary categories in the first quarter.

“The Fed is very concerned about your lower and middle income persons who are struggling with higher inflation,” Dana Peterson, chief economist at the Conference Board, said in a Bloomberg TV interview Tuesday.

She noted that “in the present situation, people are still pretty optimistic,” but are “concerned about the economy in the future as they see higher interest rates and inflation affecting consumption” which “may bleed over into their labor market prospects.”

The large retailers themselves are already seeing overstaffing issues, according to Business Insider.

On Tuesday, Federal Reserve Chair Jerome Powell said the Fed will continue to raise rates until there is “clear and convincing” evidence that inflation has abated. Just how severe the effects of inflation have been on lower-income consumers will be further tested next week as Dollar General and Burlington Stores report earnings.

Meanwhile, Home Depot closed higher by 1.7% on Thursday after reporting first-quarter comparable sales that exceeded the average analyst estimate. While customer transactions were down 8.2% year-on-year, the home-improvement retailer more than made up for that with an 11.4% increase in the average ticket.

Price is less of an issue for Home Depot’s customers than for Walmart’s, which tend to skew toward the lower end of the income distribution. But while the home-improvement retailer’s outlook is strong, its sales growth did not outpace inflation.

Competitor Lowe’s, which is positioned slightly down the income spectrum and which doesn’t have as big of a professional-contractor business as Home Depot, is trading lower in the premarket after reporting worse-than-expected first-quarter comparable store sales.

“Its about what strata of consumer you are talking about,” Bloomberg Intelligence analyst Jennifer Bartashus said in a Bloomberg TV interview Tuesday. Consumers that have the discretionary income to spend are still spending,” she said.

“When I look at the consumer landscape, I just see a bifurcation happening that is probably set to continue over the short term,” noted Bartashus.

Consumers with incomes on the high end of the spectrum are less sensitive to inflation and are ready to spend after being cooped up at home during the various waves of the coronavirus pandemic over the past two years.

“We are expecting a big summer season of vacation,” Telsey Advisory Group CEO Dana Telsey said in a Bloomberg TV interview Tuesday. And after Covid-19 delays, there will be 2.6 million weddings with the average attendee spending $430 in 2022, she noted.

Telsey expects “the luxury good universe will do very well,” as Asian travelers return to the US once Covid-19 restrictions are lifted.

Two of the largest US luxury-goods manufacturers, Estee Lauder and PVH Corp., are both down about 35% year-to-date due to the lack of a rebound in international tourism.

April US retail sales were better than expected, but overall those sales have failed to keep up with inflation, perhaps one of the reasons the VanEck Retail ETF is down 16.5% year-to-date. Stagflation concerns and negative sentiment led Goldman Sachs strategists to lower their short-term outlook for global equities Tuesday.

END

My goodness:  Target is projecting that incremental freight costs to the company will be $1 billion .

(zerohedge)

Trucking Stocks Massacred After Target Warns Of $1 Billion In Incremental Freight Costs

WEDNESDAY, MAY 18, 2022 – 02:45 PM

Remember when freight, trucking and logistics data provider Freightwaves warned at the last day of April that a freight recession was imminent and was set to cripple the trucking sector and broader economy (prompted Jim Cramer to declare that “Mr Freightwaves” knows nothing). Well, as always, Cramer was wrong and Freightwaves was right, and today we are seeing nothing short of bloodbath in the trucking and logistics space, where stocks have plunged the most in over six weeks amid weak outlook from several retailers, including Target, which just like Walmart plunged the most since 1987 as inflation crippled its profit margins, and as it warned that fuel and freight costs soared in the first quarter.

How bad is it looking? On the Target earnings call, the COO said the company is now expecting $1 billion in incremental freight costs this year.

The Russell 3000 Index Trucking Subsector (RGUSPTK) dropped over 10% versus a 3.3%  drop in the S&P 500 Index, although both are still sliding.

Big decliners on the trucking index include Saia, JB Hunt, ArcBest, Knight-Swift, Werner, Schneider and Old Dominion

The bottom line is that, just as Freightwaves warned two months ago, prices are now so high that demand destruction is crushing margins, with a recession now just a matter of months.

Slow growth is forcing many companies to lay off. Netflix reduces employee count by 150 mostly in the uSA

(zerohedge)

Here Come More Lay Offs: Netflix Reduces Employee Count By 150, Mostly In U.S.

WEDNESDAY, MAY 18, 2022 – 09:25 AM

A couple of days ago we wrote an article highlighting a lot of the layoffs being made as the U.S. heads face first into a recession and quantitative tightening. 

In addition to the names mentioned, Netflix is giving 150 employees – mostly in the U.S. – their walking papers. The lay offs are slightly less than 2% of the company’s total staff. 

The company explained to CNBC this week“As we explained on earnings, our slowing revenue growth means we are also having to slow our cost growth as a company.” 

It continued: “So sadly, we are letting around 150 employees go today, mostly US-based. These changes are primarily driven by business needs rather than individual performance, which makes them especially tough as none of us want to say goodbye to such great colleagues. We’re working hard to support them through this very difficult transition”.

The lay offs are less than one month after Netflix’s horrific earnings report that showed its first subscriber loss in a decade and helped shares fall more than 70% since January. 

Netflix is working on lower-priced ad-based tiers to help expand its reach, the company said last month. It’s also going to be cutting back on password sharing, a feature being used by more than 100 million households. 

We noted days ago that companies like Better, Noom, Canopy Growth and Robinhood were also all making layoffs. 

iii b USA//inflation stories/log jams etc

High Gasoline And Diesel Prices Are Here To Stay

WEDNESDAY, MAY 18, 2022 – 09:05 AM

Authored by Tsvetana Paraskova via OilPrice.com,

  • U.S. gasoline and diesel prices are at record highs and show no sign of falling or of denting demand.
  • Refining capacity has shrunk dramatically since 2020 due to the covid pandemic, driving fears of a supply crisis.
  • It is looking increasingly likely that the only cure for these high prices would be a recession, a cure that could be as bad as the disease.

U.S. gasoline and diesel prices are soaring to record highs nearly every day these days, as crude oil prices hold above $110 a barrel, the Russian invasion of Ukraine upends global crude and refined product trade flows, and refinery capacity globally is now lower than before the pandemic after some refineries—including in the United States—closed permanently after COVID crippled fuel demand in early 2020. There isn’t a quick fix for all-time high fuel prices in America— or elsewhere — analysts say. The quickest fix is actually not one American consumers would want — a recession that would lead to job losses.

Despite the Biden Administration’s months-long efforts to lower gasoline prices — including massive releases of crude from the Strategic Petroleum Reserve (SPR) and blaming oil companies for price gouging — U.S. refineries cannot catch up with demand. 

Not that demand has soared so much. It’s the capacity for supply, globally and in the U.S, that is now a few million barrels per day lower than it was before the pandemic. 

U.S. Refinery Capacity Lowest Since 2015 

Some 1 million barrels per day (bpd) of refinery capacity in America has been shut permanently since the start of the pandemic, as refiners have opted to either close losing facilities or convert some of them into biofuel production sites. Globally, refinery capacity is also stretched thin, especially after Western buyers — including in the U.S. — are no longer importing Russian vacuum gas oil (VGO) and other intermediate products necessary for refining crude into gasoline, diesel, and jet fuel. 

The fuel market is extremely tight in Europe, too, considering that many refiners refuse to stock Russian crude and suppliers shun Russian diesel, even if the EU is still struggling to reach a common stance on an embargo on Russian oil imports. 

In the U.S., refinery operable capacity was at just over 18 million bpd in 2021, the lowest since 2015, per EIA data.  

“As you well know, 1 million barrels of distillation capacity has exited the system since pre-pandemic,” Mike Jennings, CEO at refiner HF Sinclair and Holly Energy Partners, said on the Q1 earnings call last week. 

Distillate refining margins are sky high due to a shortage of refined product, he added. 

“How long that persists? I don’t see any signs of it ending soon or well,” Jennings said. 

Rising demand since economies reopened and people returned to travel, combined with lower refining capacity and very tight distillate markets have drawn down U.S. product inventories to below seasonal averages and at multi-year lows, with record-low inventories reported on the East Coast. 

Distillate fuel inventories fell by 900,000 barrels in the week ending May 6 and are about 23% below the five-year average for this time of year, the EIA said in its latest weekly inventory report. At 104 million barrels, distillate inventories — which include diesel — are at their lowest since 2008. On the East Coast, they are at their lowest ever, as the refinery capacity in the region has halved over the past decade to just 818,000 bpd now.

“We’re Ripe for a Potential Supply Crisis”

Globally, around 3 million bpd of refining capacity has been shut down since early 2020, according to estimates from Wood Mackenzie

“For companies with aging refineries that required significant investment to remain viable, it has been difficult to justify the spending in the face of a weak demand outlook, particularly for gasoline as a result of increased fuel efficiency and the rise of electric vehicles,” Ed Crooks, Vice-Chair, Americas, at WoodMac wrote last week. 

At the same time, new refining capacity in the Middle East and Asia is only now entering the market after being delayed, in part because of the pandemic and weak refining margins, Crooks notes. 

“We’re ripe for a potential supply crisis,” John Auers, executive vice president at energy consultancy Turner, Mason & Co told Bloomberg last week.

As the summer driving season approaches, U.S. gasoline prices are at an all-time high but haven’t dented demand yet. 

Moreover, the paper market signals high prices for gasoline throughout the summer as gasoline futures in New York hit on Monday $4.00 a gallon for the first time ever. 

“The continuous inventory withdrawal over the past few weeks has pushed US gasoline stocks to levels significantly below the five-year average at this point in the season and reflects acute supply tightness,” ING strategists Warren Patterson and Wenyu Yao said on Monday, commenting on the record gasoline future prices. 

The situation on the diesel market is even worse. Distillate stocks are 23% below the seasonal average and prices are at record highs, too.  

“I wouldn’t be surprised to see diesel being rationed on the East Coast this summer,” John Catsimatidis, CEO at United Refining, told Bloomberg in an interview last week. 

No Short-Term Fix 

Prices are not expected to drop significantly from record highs any time soon, analysts and industry professionals say, as they note there isn’t any quick fix for the fundamental tightness in the fuel product markets globally.  

“I think that we can expect, assuming the economies stay reasonably strong, that commodity prices and, particularly prices of our products, are going to be relatively high,” HF Sinclair’s CEO Jennings said on the Q1 call last week. 

Record-high diesel and gasoline prices are threatening economic growth, adding further upward pressure on U.S. inflation figures. As diesel prices impact every part of the economy, the fight against inflation becomes more complicated for the Fed, as steeper interest rate hikes could lead to the deterioration of economic activity and household spending and, ultimately, recession.

“When we look at the tight market, the natural conclusion is to say that a recession sorts this,” Mark Williams, Wood Mackenzie’s research director for short-term refining and oil product markets, said, commenting on the diesel market imbalance. 

Right now, a recession may be the only short-term “fix” for the very tight fuel markets, but it’s surely the least welcome cure for high gasoline and diesel prices. 

END

BABY FORMULA

How US Trade Policy Is Making The Baby Formula Shortage Worse

WEDNESDAY, MAY 18, 2022 – 11:30 AM

By Eric Kulisch of FreightWaves

Policy analysts say U.S. trade restrictions, including ones engineered under the Trump administration, along with lean manufacturing practices help explain why stores can’t easily replenish stocks of baby formula. The taxes and extra regulatory hoops make it expensive and difficult to import the specialized baby food.

The U.S. produces 98% of the infant formula it consumes, but that self-sufficiency is being tested by limited availability of ingredients because of supply chain disruptions, labor shortages and the February shutdown of Abbott Laboratories’ (NYSE: ABT) Sturgis, Michigan, plant over contamination concerns.

The nationwide out-of-stock average for baby formula reached 43% for the week ending May 8, according to retail technology firm Datasembly. The Biden administration points to other industry data showing an 80% in-stock rate, but with less variety of products than normal.

The Food and Drug Administration late Monday advised international businesses of new flexibilities allowed in the import process in an effort to increase the availability of infant formula across the country. 

Under the relaxed rules, the FDA will not object to the importation of certain infant formula products intended for a foreign market or distribution in the U.S. of products manufactured here for export to foreign countries. It also said it may provide room for domestic companies that manufacture infant formula for export to shift more production for sale in the U.S. market.

Tariff barriers

High tariffs and policies to protect the U.S. dairy industry from Canadian competitors have kept a lid on infant formula imports and made it difficult, notwithstanding the FDA’s emergency action, for distributors to substitute formula from overseas sources, according to trade experts.

“We’ve reached the point where producers are no longer able to maintain supply and there aren’t other close-at-hand markets that you can turn to,” said Eric Miller, president of Rideau Potomac Strategy Group, an international trade advisory firm based in Washington, in an interview. “The U.S. has basically said our priority is keeping subsidized imports and products made with subsidized inputs out of the U.S. market. So there’s no excess production that’s available and we keep prices high for consumers in the U.S.”

Infant formula is subject to a 17.5% tariff, and imports from some countries can be hit with additional duties above a certain volume threshold. 

Canadian dairy products have mostly been kept out of the U.S. market for decades because the U.S. considers them subsidized. The Canadian dairy sector operates under a supply management system that limits production, sets prices and restricts imports.

Additionally, the Trump administration, under pressure from the U.S. Export Dairy Council, then headed by current Agriculture Secretary Tom Vilsack, included provisions in the United States‐​Mexico‐​Canada Agreement to restrict exports of formula from Canada. 

The USMCA’s agriculture annex limits Canadian exports of infant formula anywhere in the world, not just to the U.S., largely to minimize sales to China after China’s largest formula maker, Feihe International, invested $175 million to build a baby formula plant in Ontario. 

Canada is considered a safe, clean source of infant formula by Chinese parents after a 2008 scandal in which tainted, domestically produced baby formula resulted in the deaths of six infants and led to deep distrust of locally made formula.

Trump officials reasoned that if China was purchasing more infant formula from Canada, then it wasn’t buying from U.S. companies.

Under the USMCA rules, Canada is required to apply an export charge of CA$4.25 per kilogram to global exports of infant formula in excess of 13,333 metric tons for the remainder of the dairy year. The quota increased to 40,000 metric tons in year two of the trade agreement and by only 1.2% annually after that.

The charges are designed to offset the amount of subsidies that producers get on the input side, said Miller, a former policy adviser for the Business Council of Canada and the Canadian Embassy in Washington. 

The export limits were actually below the production capacity of the Feihe plant, which does business as Canada Royal Milk, according to the Canadian Broadcasting Corp.

The U.S. imported no baby formula from Canada in 2021 because of the confusing USMCA regulations and expensive tariff-quotas, writes Gabriella Beaumont‐​Smith, a trade policy analyst at the Cato Institute, a libertarian think tank in Washington.

“Over time what it means is that the Canadian dairy infrastructure has built up to serve the Canadian market, with some cases set up to serve non-U.S. markets,” Miller said.

U.S. government and IBISWorld figures show Mexico is the largest overseas source of infant formula in the U.S., but formula accounts for a tiny fraction of the total imports from Mexico. Other primary exporters of formula are Ireland, Chile and the Netherlands.

Red tape

Nontariff barriers, such as a 90-day waiting period for new entrants to distribute infant formula, also act to limit imports, experts say.

The FDA has rigorous regimes for marketing certifications and ensuring that specialty products are properly labeled and authorized for sale in the U.S. market. Obtaining certifications for foreign dairy facilities is extremely intensive as well. 

“Businesses also have little incentive to go through the onerous regulatory process to sell to American retailers, given the aforementioned tariffs and the relatively short duration of the current crisis,” said Beaumont-Smith.

It is illegal, for example, to import baby formula from the European Union for commercial purposes because it doesn’t comply with FDA labeling requirements, although parents can import it for personal use. Last summer, Able Groupe recalled German-made infant formulas distributed in the U.S. via mail service because the labels didn’t include notification that iron levels were below U.S. standards (1 milligram of iron per 100 calories) and weren’t in English.  

Beaumont-Smith said many medical experts believe the differences between American and European formulas are minor and that the regulatory burden for meeting U.S. standards doesn’t noticeably increase safety. 

U.S. Customs and Border Protection took credit in April 2021 for seizing 588 cases of infant formula in Philadelphia because they lacked appropriate nutritional labeling. The formula from major brands HiPP and Holle was imported by a freight forwarding company in 17 separate shipments from Germany and the Netherlands, where the companies are based. 

The Food, Drug & Cosmetic Act (FDCA) prohibits interstate and import shipments of foods that have been misbranded. The FDA’s import safety alert said the cases of formula didn’t list the ingredients associated with formula for infants under the age of 1. The manufacturers also failed to comply with FDA regulatory requirements to sell their infant formula in the United States, CBP said in a news release.

Miller said formula makers such as Nestle typically use the same recipes in other markets but would have to go through an “excruciating” process to get them certified and labeled for sale in the U.S.

“The great absurdity of this is that less than a hundred miles from the U.S. border you have this plant in Canada that is exporting to China. It’s all about the perversions of trade policy and who’s market is being protected,” said Miller, who is also a fellow at the Woodrow Wilson International Center.

FDA supply efforts

Since February the FDA has taken a series of steps to increase domestic formula supply, including expediting certificates to allow already permitted products from abroad more flexibility moving into the U.S. and streamlining the import entry review process for certain products coming from foreign facilities with favorable inspection records. 

The FDA says loosening import rules, in conjunction with the Department of Agriculture and U.K. and European authorities, has enabled a 300% increase in imports of infant formula year-to-date from last year. Much of the increase is likely connected to an ongoing airlift of infant formula from Abbott Labs’ facility in Ireland.

Companies interested in taking advantage of the latest flexibilities should submit information for the FDA to quickly evaluate whether the product can be used safely and whether it provides adequate nutrition. The FDA said it will look for proper labeling, information on nutritional adequacy and safety testing, and information about facility inspection history. The agency intends to prioritize submissions that can demonstrate the safety and nutritional adequacy of their products, and have the largest volume available and/or can get shipments on U.S. store shelves the quickest. 

The FDA is already in discussions with some manufacturers and suppliers regarding additional supply. 

Today’s action paves the way for companies who don’t normally distribute their infant formula products in the U.S. to do so efficiently and safely. We are hopeful this call to the global market will be answered and that international businesses will rise to the occasion to assist in bolstering the supply of products that serve as the sole source of nutrition for many infants,” said FDA Commissioner Robert Califf. “With these flexibilities in place, we anticipate that those products that can quickly meet safety and nutrition standards could hit U.S. stores in a matter of weeks.”

Manufacturing constraints

In a commentary for The Hill newspaper, Willy Shih, professor of management practice at the Harvard Business School, blamed the shortage on a lack of spare capacity, low inventory strategies, market concentration in four main producers and elongated supply chains all aimed at meeting consumer expectations for low prices instead of building resilience.

Meanwhile, Abbott on Monday agreed with the FDA to take corrective action necessary to resume production at the facility and maintain quality controls. The Department of Justice filed a complaint alleging that Abbott managers failed to comply with quality and safety practices for producing infant formula, including protecting against the risk of contamination from bacteria. To resolve the complaint, Abbott agreed to enter into a consent decree requiring it retain an independent expert to help bring the Sturgis facility into compliance with the FDCA and safe food manufacturing standards. The consultants must periodically evaluate Abbott’s regulatory compliance. 

The proposed safety plan, which is subject to court approval, includes requirements  for testing products, as well as ceasing production, and promptly notifying the FDA should contamination be detected. The proposed consent decree also requires Abbott to implement a sanitation plan, environmental monitoring plan and employee training programs. 

Once the FDA confirms all conditions have been met, Abbott said it could restart the site within two weeks. The company would begin production of EleCare, Alimentum and metabolic formulas first and then begin production of Similac and other formulas. After the reopening, it will take six to eight weeks before products are available on shelves. 

iv)swamp stories

The King Report (including swamp stories)

The King Report May 18, 2022 Issue 6762Independent View of the News
US April Retail Sales increased 0.9% m/m; +1.0% was expected.  Retail Sales ex-Autos: 0.6%, 0.4% expected; Sales ex-Autos & Gas 1.0%, 0.7% consensus.  However, March Retail Sales were revised to 1.4% m/m from 0.5%; ex-Autos sales were revised to 2.1% from 1.1%; and ex-Autos & Gas sales were revised to 1.2% from 0.2%.  Sales are NOT adjusted for inflation.
 
Auto dealerships +2.2%; Gasoline stations -2.7%; Ex-gasoline retail sales +1.3%; Bars and restaurants +2.0%; Clothing store +0.8%; Online store sales +2.1%; Electronics and appliance +1.0%: Furniture stores +0.7%; Building material, garden equipment and supplies stores -0.1%; Sporting goods, hobby, musical instrument and book stores -0.5%.
 
Americans are using debt and credit cards to maintain spending during the record inflation.
 
According to the Bank of America, aggregate credit and debit card spending increased 13% year-on-year in April. The bank noted that while inflation was leading to higher spending, it was “clear consumer strength goes beyond this.” Consumer price inflation increased 8.3% year-on-year in April
https://www.reuters.com/markets/us/us-retail-sales-increase-strongly-april-2022-05-17/
 
Goldman’s Hatzius Says Consumers Using Leverage for Spending
    Chief economist sees soft outlook for US consumption
    Consumers are tapping credit and mortgage equity, he says
“Borrowing is going to be a short-term driver of spending, and I think has been to some degree” already, Hatzius said on Bloomberg Television Tuesday. “Consumer spending is going to be relatively slow. Income is going to be quite weak in 2022.”  He said consumer credit is on the rise, and there has been a pickup in mortgage-equity withdrawal, where homeowners take out a loan against the appreciated equity in their property. Hatzius observed that both dynamics are supporting spending…
https://finance.yahoo.com/news/hatzius-says-consumers-using-leverage-151054818.html
 
Walmart Slides After Cutting Profit Forecast on Rising Costs
The retail giant now sees earnings per share falling by about 1% this year, compared with a prior view of mid-single-digit gains… Adjusted profit fell to $1.30 a share during the first quarter ended in late April. That trailed the $1.48 average of analyst estimates… “US inflation levels, particularly in food and fuel, created more pressure on margin mix and operating costs than we expected,” Walmart Chief Executive Officer Doug McMillon said in the statement… The shares sank 8.5% in early trading at 9:31 a.m. New York time, their biggest drop since March 2020…
https://finance.yahoo.com/news/walmart-slides-cutting-profit-forecast-133713541.html
Powell Comment Highlights per BloombergFocused on getting inflation down to 2%Financial conditions have tightened quite a bitGood to see markets react to Fed communications (AKA verbal intervention)Need to see growth moving down from high levels in 2021Need growth to slow so supply can catch upUncertainty about economy limits guidanceEconomy well positioned to withstand tighter policyNeed to see clear evidence inflation is abating – WSJWon’t hesitate to raise rates above neutral if neededFed is raising rates expeditiously, unsure where neutral rate isIn hindsight, probably should have raised rates earlierInflation data really changed beginning in October (well before Ukraine invasion in Feb)War in Ukraine looks longer lasting than first expectedFed clearly has a job to do on cooling demandFed not setting policy on expectation of supply chain reliefChina lockdowns are preventing healing of supply chainPrice stability is the bedrock of the economyThere are plausible paths to a soft landing for the economyNow is not the time for nuanced reading of inflationFed will “keep pushing” forward with rate increases until inflation comes downSlower-growth labor market may keep wage pressure upNAIRU (non-accelerating inflation rate of unemployment) probably well above 3.6%There is a real possibility that globalization will reverse 
ESMs and stocks initially spiked higher when Powell began speaking.  ESMs tumbled from 4079.00 at 14:08 ET to 4039.00 at 14:22 ET.  After a spike to 4058.25 at 14:27 ET, ESMs rolled over and traded within a range until they broke higher 4 minutes before Powell finished speaking at 14:40 ET.
 
At 14:45 ET, SPY May 400 put volume was 59,189.  SPY May 410 call volume was 57,7345.  SPY was 406.26.  ESMs and stocks plodded higher for the expected last-hour upward manipulation.  ESMs hit a new daily high when the final hour arrived.  ESMs hit a peak (4089.75) at 15:06 ET.  ESMs and stocks then vacillated in a tight range until they sagged at 15:45 ET.  ESMs rallied during the final 10 minutes.
 
Either the urge to manipulate stocks higher for expiration trumped the fear of Powell’s hawkish comments or the market does not believe that the Fed will act as hawkish as it speaks.  Maybe both!
 
Once again, we had another occasion of an early decline in the US and thereafter a rally.
 
US April Industrial Production: 1.1% m/m, 0.5% expected; Manufacturing Production: 0.8%, 0.4% exp.
Half of Joe Biden’s Twitter Followers Are Fake, Audit Reveals
https://www.newsweek.com/half-joe-biden-twitter-followers-are-fake-audit-elon-musk-1707244
 
‘Twitter does not believe in free speech’: Undercover Project Veritas recording reveals Twitter engineer saying platform censors the right but NOT the left…
https://www.dailymail.co.uk/news/article-10823295/Twitter-does-not-believe-free-speech-Twitter-engineer-recorded-saying-censor-right.html
 
Breakthrough deaths comprise increasing proportion of those who died from COVID-19
In August of 2021, about 18.9% of COVID-19 deaths occurred among the vaccinatedin February 2022, that proportional percent of deaths had increased to more than 40% (How effective are vaccines?)
https://abcnews.go.com/Health/breakthrough-deaths-comprise-increasing-proportion-died-covid-19/story
 
Hillary Defeated Again: Hulu Passes on ‘Rodham’ After Nearly 2 Years in Development
https://www.dailywire.com/news/hillary-defeated-again-hulu-passes-on-rodham-after-nearly-2-years-in-development
 
Americans can obtain eight more free Covid tests per household: https://www.covid.gov/tests
 
Today is Weird Wednesday and May VIX option expiration.  The big question for today: Did Tuesday’s rally appropriate too much firepower from the usual expiry upward manipulation?
 
SPY option volume on Monday was lower than usual for expiry week.  SPY May 400 put volume was 42,151.  SPY May 400 calls had volume of 27,301.  SPY closed at 400.09.  Yesterday SPY May 410 call volume was 81,018; SPY May 400 volume was 90,546.  SPY closed at 408.32 on Tuesday.
 
It was highly unusual for trading sardines to decline on the first day of an expiry week.  Usually, traders of various classes pour into Fang options for the expected expiry upward manipulation.  Traders of various classes incontinently bought trading sardines on Tuesday.  Nasdaq soared 2.76%; the Nasdaq 100 surged 3.24%; and the NY Fang+ Index exploded 3.49%.  It was an expiry-related rally!
 
ESMs are +1.25 and USMs are -10/32 at 20:05 ET.  Watch SPY May option volumes for guidance!
 
Expected economic data: April Housing Starts 1.759m, Permits 1.82m; Phil Fed Pres Harker 16:00 ET
 
S&P 500 Index 50-day MA: 4322; 100-day MA: 4421; 150-day MA: 4487; 200-day MA: 4475
DJIA 50-day MA: 33,855; 100-day MA: 34,456; 150-day MA: 34,835; 200-day MA: 34,849
 
S&P 500 Index – Trender trading model and MACD for key time frames
MonthlyTrender and MACD are negative – a close above 5016.24 triggers a buy signal
WeeklyTrender and MACD are negative – a close above 4389.19 triggers a buy signal
Daily: Trender and MACD are negative – a close above 4148.26 triggers a buy signal
Hourly: Trender and MACD are positive – a close below 4016.94 triggers a buy signal
 
Elon Musk says Biden overuses his teleprompter, compares president to ‘Anchorman’
“The real president is whoever controls the teleprompter. The path to power is the path to the teleprompter,” said the Tesla mogul.
https://justthenews.com/government/white-house/elon-musk-says-biden-overuses-his-teleprompter-compares-president-anchorman
 
Sen. John Kennedy (R-LA): “You can lead a man to the presidency, but you can’t make him think.”
 
Tucker: No race politics is better than others – it’s all poison
Over just two days, at least 104 Americans were shot to death in major American cities. That’s a lot…. Well for perspective, on the single deadliest day of the Iraq war, that would be January of 2005, a total of 37 Americans died…
    What is hate speech? Well, it’s speech that our leaders hate. So, because a mentally ill teenager murdered strangers, you cannot be allowed to express your political views out loud. That’s what they’re telling you. That’s what they’ve wanted to tell you for a long time, but Saturday’s massacre gives them a pretext, a justification…. What sort of person uses mass murder as an excuse to give a campaign speech or seize more political power?…
    Biden has decided to attack people who disapprove. According to Politico, “Biden has taken to telling his aides that he no longer recognizes the GOP, which he now views as an existential threat to the nation’s democracy.” People who disagree with Joe Biden, according to Joe Biden, are now an “existential threat” to the nation like al-Qaeda or climate change, a threat that, by definition is so profound we must declare war upon it if we’re to survive… No president has ever spoken like this, ever. Joe Biden does it regularly and he’s certain to do it again tomorrow, but most painful and destructive at all. Biden is likely to use racial wounds in order to make his point. There is no behavior worse than this.
    Race politics always makes us hate each other and always in a very predictable way… Race politics is a sin. Race politics always leads to violence and death. They learned that lesson in Rwanda in 1994…  https://www.foxnews.com/opinion/tucker-tucker-no-race-politics-better-than-others-its-all-poison
 
Joe Biden condemns ‘poison’ of white supremacy behind Buffalo shooting
President calls on Americans to reject racist ‘replacement theory’ during visit to city
https://www.ft.com/content/6d865dd2-64bd-40a4-88b3-264629642dec
 
Chuck Schumer writes letter to Rupert Murdoch and Fox News executives demanding they ‘cease’ pushing the ‘Great Replacement Theory’   https://www.dailymail.co.uk/news/article-10825871/Chuck-Schumer-writes-Rupert-Murdoch-demanding-Fox-cease-pushing-Great-Replacement-Theory.html
 
Ex-DJT Sr. Advisor @StephenM: You have to marvel at the brazenness of Dems openly bragging for years they’d use large-scale migration to change US politics—unbothered by the deeply regressive impact on labor markets, education, healthcare, safety—then angrily denounce anyone in GOP who questions their policy.
 
Dems advocate high immigration to gain political power; and smear Republicans when called on it
The left-wing Center for American Progress issued a report in 2013 titled “Immigration Is Changing the Political Landscape in Key States.” It summarized its argument thus: “Supporting real immigration reform that contains a pathway to citizenship for our nation’s 11 million undocumented immigrants is the only way to maintain electoral strength in the future.”… Books were written about this idea
    “The Emerging Democratic Majority” by John Judis and Ruy Teixeira called the Democrats “the party of transition” as “white America is supplanted by multiracial, multiethnic America.” In 2016, Steve Phillips published “Brown Is the New White: How the Demographic Revolution Has Created a New American Majority.”… the left wants to create rules that define it as perfectly acceptable for Democrats to advocate high levels of immigration as a means of gaining political power and out of bounds for Republicans to call them on it…
https://nypost.com/2022/05/17/dems-advocate-high-immigration-to-gain-political-power-and-smear-republicans-when-called-on-it/
 
GOP @SenTomCotton: The Waukesha mass murderer, the NYC subway shooter, the Congressional baseball practice shooter—Did Chuck Schumer blame left-wing media? Of course not. This is just politics.  Chuck Schumer’s motivations are political—he wants to distract Americans from everything the Democrats have mismanaged: from inflation to baby formula to Title 42 to the crime wave. The list goes on… Even by Chuck Schumer’s low standards, this is shameless.
 
@lindsaywise: Asked Republican Sen. Ron Johnson, who is running for re-election in Wisconsin, to respond to Biden’s call in Buffalo today for all Americans to reject replacement theory.  He said Biden should be asked why his administration has opened up the border.
 
Migrant encounters at Southern Border hit highest monthly figures ever
https://justthenews.com/government/security/border-encounters-hit-highest-month-ever-migrant-busy-season-yet-come
 
@RMConservative: 2.7 million known apprehensions at the border since Biden took office. That is the size of Chicago.
 
@RyanGirdusky: For the better part of 4 decades, a plurality or majority of Americans has said in poll after poll they want to reduce immigration by at least 50%. Yet our politicians refuse to listen to the American public… yet they blame a cable news host for spreading a conspiracy
 
With Plunging Enrollment, a ‘Seismic Hit’ to Public Schools
The pandemic has supercharged the decline in the nation’s public school system in ways that experts say will not easily be reversed…America’s public schools have lost at least 1.2 million students since 2020…There are roughly 50 million students in the United States public school system..
https://www.nytimes.com/2022/05/17/us/public-schools-falling-enrollment.html
 
BLM founder Patrisse Cullors paid her baby father $970,000 for ‘creative services’, her brother $840,000 for security, a fellow director $2.1m and…
https://www.dailymail.co.uk/news/article-10823779/New-tax-filings-reveal-BLM-founder-Patrisse-Cullors-spent-foundations-funds.html
 
Hunter Biden laptop repairmen says FBI ‘didn’t seem interested’ in reviewing hard drive
“Maybe this was our firsthand experience with a two-tiered justice system – by which ordinary citizens get thrown the book for petty crimes… while the rich and powerful get whiteglove treatment. Maybe this was one bad agent not wanting to touch this case with a ten-foot pole. Either way, we were sure that we were now on someone’s radar and were in a worse situation than before.”

Let us close today with this offering courtesy of Greg Hunter INTERVIEWING CHARLES HENNER

Third of Global Population Killed in Next War Cycle – Charles Nenner

By Greg Hunter On May 17, 2022 In Political Analysis48 Comments

By Greg Hunter’s USAWatchdog.com 

Renowned geopolitical and financial cycle expert Charles Nenner says his analysis shows the world will start a huge war cycle by 2023.  This type of war is similar to WWII but much bigger.   Nenner explains, “The cycle work I do on wars starts at the Mandarin Empire 3,000 years before Jesus came into this world.  The long cycle only picks up the big wars.  Wars in Korea and Iraq do not show up.  So, I say the big War Cycle is up, and this is going to be a big war because the small ones don’t even show up.  So, I am very worried. . . . There was a Jewish prophet that once said, ‘The last war is going to take 8 minutes.’  Nobody took this serious because how can a war last 8 minutes?  Now we have an idea why a war can only take 8 minutes.  Things could calm down in the short term this summer.  Then, next year, it can start full force again, and the whole thing is very dangerous.”

How many casualties will there be in the next world war?  Nenner estimates, “It’s very interesting how you calculate something like that.  It’s the same way you calculate a cycle in IBM.  When you see IBM going down, you can get an upside price target, which we have.  You can do the same thing on the war cycle.  About one third of the population is not going to survive in this world.

So, more than 2.5 billion people are going to die in the next world war that is just around the corner?  Nenner says, “Yes, the numbers say if you have a world war, it’s going to take out 1/3 of the population.”

On the financial front, Nenner says, “There is a catastrophe going on in bonds.  They lost their capital and are not going to get it back.  It’s the same thing that is happening in stocks.”

Nenner advised to get out of both the bond and stock markets at the beginning of the year, and he was on target.  Nenner predicts it’s going to get worse for stocks and bonds.  Nenner says the next downside target is “15,000 on the DOW,” and it will eventually hit around “5,000 on the DOW.”

Nenner says food will never be cheaper and expects food shortages and big price increases for years into the future.  Nenner also says he thinks oil will keep rising and will hit $150 per barrel, and it could eventually hit “$250” per barrel.

Nenner is still long term bullish on gold and says it will hit “$2,500” in the not-too-distant future.  Nenner says if the world goes back on a gold standard, “gold will hit $40,000 per ounce.”

Nenner says people who are getting a pension should expect big cuts in the future and also expect big inflation too.  It will be the worst of both worlds.

On top of that, expect civil unrest in America to keep growing.

There is much more in the 40 min. interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with renowned cycle analyst and financial expert Charles Nenner. (5.17.22)

(To Donate to USAWatchdog.com Click Here)

See you on THURSDAY

3 comments

  1. R Japp · · Reply

    Harvey: Robert Hryniak is a misiformationist. You should stop republishing his horse shit.

    Like

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