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Good evening Ladies and Gentlemen:
Here are the following closes for gold and silver today:
Gold: $1191.70 up $3.70 (comex closing time)
Silver: $16.97 up 9 cents (comex closing time)
In the access market 5:15 pm
Gold $1189.50
Silver: $17.00
Gold/silver trading: see kitco charts on the right side of the commentary.
Following is a brief outline on gold and silver comex figures for today:
The gold comex today had a poor delivery day, registering 0 notices served for nil oz. Silver comex registered 106 notices for 530,000 oz .
Several months ago the comex had 303 tonnes of total gold. Today the total inventory rests at 245.34 tonnes for a loss of 58 tonnes over that period. Lately the removals have been rising!
In silver, the open interest fell by 1527 contracts, due to short covering, as Monday’s silver price was unchanged. The total silver OI continues to remain extremely high with today’s reading at 174,123 contracts. The front month of March rose by 63 contracts to 604 contracts. We are still close to multi year high in the total OI complex despite a record low price. This dichotomy has been happening now for quite a while and defies logic. There is no doubt that the silver situation is scaring our bankers to no end.
We had 106 notices served upon for 530,000 oz.
In gold we had a huge rise in OI as gold was up by $3.20 yesterday. The total comex gold OI rests tonight at 447,773 for a whopping gain of 11,094 contracts. Today, surprisingly we again had 0 notices served upon for nil oz.
Today, we had no changes at the GLD/ Gold Inventory rests at 744.40 tonnes
In silver, /SLV we had a withdrawal of 835,000 oz of inventory at the SLV/Inventory, at 325.323 million oz
We have a few important stories to bring to your attention today…
1, Today we again had some short covering in the silver comex with the silver OI falling by 1527 contracts. Gold OI again rises by a whopping 11,094 contracts. Both gold and silver rose nicely today. Again we had 25,720 oz of gold leave the comex vaults. (report Harvey)
2, Soros states that there is a 50:50 chance of a Greek exit as they are going down the drain (Bloomberg)
3.On the weekend there was rioting on the streets of Spain. They are calling for a national strike in October, one month before the general elections.
(courtesy common dreams)
4. Koos Jansen reports that India so far in the month of March has imported 130 tonnes. They are heading for 150 tonnes this month. What is strange is that the 10% tax of gold is still on which indicates that smuggling still must be taking place. India will now rival China in importing the greater number of gold ounces
(Koos Jansen)
5. USA are sending in their muscle as they try to get Iran to an agreement on their nuclear ambitions.
(courtesy zero hedge.
6. Poor Chinese PMI numbers (manufacturing) seems to suggest China is heading for a hard landing.
(zero hedge)
7. Another poor manufacturing number in the uSA: today the Richmond Fed mfg survey disappoints.
(zero hedge)
we have these and other stories for you tonight
Let us now head over to the comex and assess trading over there today.
Here are today’s comex results:
The total gold comex open interest rose by a whopping 11,094 contracts from 436,679 up to 447,773 as gold was up by $3.20 yesterday (at the comex close). We are now in the contract month of March which saw it’s OI remain constant at 108 for a loss of 0 contracts. We had 0 notices filed upon on Friday so we neither lost nor gained any gold contracts that will stand for delivery in this delivery month of March. The next big active delivery month is April and here the OI fell by 11,701 contracts down to 180,814. We have 7 days before first day notice for the April gold contract month, on March 31.2015. The estimated volume today (which is just comex sales during regular business hours of 8:20 until 1:30 pm est) was poor at 122,829. (Where on earth are the high frequency boys?). The confirmed volume on yesterday ( which includes the volume during regular business hours + access market sales the previous day) was good at 218,038 contracts. Today we had 0 notices filed for nil oz.
And now for the wild silver comex results. Silver OI fell by 1527 contracts from 175,650 down 174,123 despite the fact that silver was unchanged with respect to Friday’s trading and this is in total contrast to gold. We therefore again had some more short covering by our bankers. We are now in the active contract month of March and here the OI rose by 63 contracts rising to 604. We had 39 contracts served upon yesterday. Thus we gained 102 contracts or an additional 510,000 oz will stand in this March delivery month. The estimated volume today was simply awful at 19,520 contracts (just comex sales during regular business hours. The confirmed volume on Friday (regular plus access market) came in at 46,330 contracts which is good in volume. We had 106 notices filed for 530,000 oz today.
March initial standings
March 24.2015
Gold
Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
25,720.000 oz (Manfra and Scotia???)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
0 contracts (nil oz)
No of oz to be served (notices)
108 contracts (10,800 oz)
Total monthly oz gold served (contracts) so far this month
8 contracts(800 oz)
Total accumulative withdrawals of gold from the Dealers inventory this month
114,790.651 oz
Total accumulative withdrawal of gold from the Customer inventory this month
652,108.9 oz
Today, we had 0 dealer transaction
total Dealer withdrawals: nil oz
we had 0 dealer deposit
total dealer deposit: nil
we had 2 customer withdrawals
i) Out of Manfra: 225.05 oz (7 kilobars)
ii) Out of Scotia: 25,494.95 oz (793 kilobars)
total customer withdrawal: 25.720.000 oz (800 kilobars)
we had 0 customer deposits:
We had 1 adjustment
i) an accounting error subtraction from the customer side of JPMorgan for .032 oz
Today, 0 notices was issued from JPMorgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equates to 0 contracts of which 0 notices were stopped (received) by JPMorgan dealer and 0 notices were stopped (received) by JPMorgan customer account
To calculate the total number of gold ounces standing for the March contract month, we take the total number of notices filed so far for the month (8) x 100 oz or 800 oz , to which we add the difference between the open interest for the front month of March (108) and the number of notices served upon today (0) x 100 oz equals the number of ounces standing.
Thus the initial standings for gold for the March contract month:
No of notices served so far (8) x 100 oz or ounces + {OI for the front month (108) – the number of notices served upon today (0) x 100 oz} = 11,600 oz or .3608 tonnes
we neither gained nor lost any gold ounces standing in the March delivery month.
Total dealer inventory: 658,537.414 oz or 20.48 tonnes
Total gold inventory (dealer and customer) = 7,887,972.713 million oz. (245.34) tonnes) *** somehow the total gold position was changed last night, adding around 2 tonnes of gold.
Several weeks ago we had total gold inventory of 303 tonnes, so during this short time period 59.0 tonnes have been net transferred out. However I believe that the gold that enters the gold comex is not real. I cannot see continual additions of strictly kilobars.
end
And now for silver
March silver initial standings
March 24 2015:
Silver
Ounces
Withdrawals from Dealers Inventory
nil oz
Withdrawals from Customer Inventory
65,541.935 oz (Delaware, CNT,Scotia)
Deposits to the Dealer Inventory
541,586.36 oz (CNT)
Deposits to the Customer Inventory
59,381.231 oz (Delaware,CNT)
No of oz served (contracts)
106 contracts (530,000 oz)
No of oz to be served (notices)
498 contracts (2,490,000)
Total monthly oz silver served (contracts)
2149 contracts (10,745,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month
Total accumulative withdrawal of silver from the Customer inventory this month
7,015,598.4 oz
Today, we had 1 deposit into the dealer account:
i) Into CNT: 541,586.36 oz
total dealer deposit: 541,586.36 oz
we had 0 dealer withdrawal:
total dealer withdrawal: nil oz
We had 2 customer deposits:
i) Into Delaware; 1,076.021 oz
ii) Into CNT; 58,305.210 oz
total customer deposit: 59,381.231 oz
We had 3 customer withdrawals:
i) Out of CNT: 3075.335 oz
ii) Out of Delaware; 1998.800 oz
iii) Out of Scotia: 60,541.935 oz
total withdrawals; 65,541.935 oz
we had 1 adjustment:
i) out of CNT: 6097.910 oz was adjusted out of the customer and into the dealer at CNT.
Total dealer inventory: 70.569 million oz
Total of all silver inventory (dealer and customer) 175.346 million oz
.
The total number of notices filed today is represented by 106 contracts for 530,000 oz. To calculate the number of silver ounces that will stand for delivery in March, we take the total number of notices filed for the month so far at (2149) x 5,000 oz = 10,745,000 oz to which we add the difference between the open interest for the front month of March (604) and the number of notices served upon today (106) x 5000 oz equals the number of ounces standing.
Thus the initial standings for silver for the March contract month:
2149 (notices served so far) + { OI for front month of March(604) -number of notices served upon today (106} x 5000 oz = 13,235,000 oz standing for the March contract month.
we gained an additional 510,000 oz of silver standing in this March delivery month.
for those wishing to see the rest of data today see:
http://www.harveyorgan.wordpress.com orhttp://www.harveyorganblog.com
end
The two ETF’s that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
***I do not think that the GLD will head to zero as we still have some GLD shareholders who think that gold is the right vehicle to be in even though they do not understand the difference between paper gold and physical gold. I can visualize demand coming to the buyers side:
i) demand from paper gold shareholders
ii) demand from the bankers who then redeem for gold to send this gold onto China
vs no sellers of GLD paper.
And now the Gold inventory at the GLD:
March 24/ no changes in gold inventory at the GLD/Inventory 744.40 tonnes
March 23/we had a huge withdrawal of 5.37 tonnes of gold from the GLD vaults/Inventory 744.40 tonnes
march 20/we had no changes in inventory at the GLD/Inventory at 749.77 tonnes
March 19/we had no changes in inventory at the GLD/Inventory 749.77 tonnes
March 18/ we had a withdrawal of .9 tonnes of gold from the GLD/Inventory at 749.77 tonnes
March 17.2015: no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 16/no change in gold inventory at the GLD/Inventory 750.67 tonnes
March 24/2015 / we had no changes in gold/Inventory at 744.40 tonnes
inventory: 744.40 tonnes.
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
GLD : 744.40 tonnes.
end
And now for silver (SLV):
March 24.2015/ we had another withdrawal of 835,000 oz of silver from the SLV/Inventory rests tonight at 325.323 million oz
March 23./we had a huge withdrawal of 1.174 million oz of silver from the SLV vaults/Inventory 326.158 million oz
March 20/ no changes in silver inventory/327.332 million oz
March 19/ no change in silver inventory/327.332 million oz
March 18/ no change in silver inventory/327.332 million oz
March 17/ no change in silver inventory/327.332 million oz
March 16/no change in silver inventory/327.332 million oz
March 24/2015 we had a small withdrawal of 835,000 oz of silver inventory at the SLV/ SLV inventory rests tonight at 325.323 million oz
end
And now for our premiums to NAV for the funds I follow:
Note: Sprott silver fund now for the first time into the negative to NAV
Sprott and Central Fund of Canada.
(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)
1. Central Fund of Canada: traded at Negative 8.3% percent to NAV in usa funds and Negative 8.5% to NAV for Cdn funds!!!!!!!
Percentage of fund in gold 61.5%
Percentage of fund in silver:38.1%
cash .4%
( March 24/2015)
Sprott gold fund finally rising in NAV
2. Sprott silver fund (PSLV): Premium to NAV falls to + 1.26%!!!!! NAV (March 24/2015)
3. Sprott gold fund (PHYS): premium to NAV falls -.41% to NAV(March 24 /2015)
Note: Sprott silver trust back into positive territory at +1.26%.
Sprott physical gold trust is back into negative territory at -.41%
Central fund of Canada’s is still in jail.
end
And now for your more important physical gold/silver stories:
Gold and silver trading early this morning
(courtesy Mark O’Byrne)
HSBC Not Closing Gold Vaults – Safety Deposit Boxes of Clients Being Closed
By Mark O’Byrne March 24, 2015 0 Comments
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- Incorrect rumors abound around blogosphere that HSBC is rapidly and quietly closing gold vaults
- HSBC are in fact closing down their safety deposit box facilities in vaults in branches
- Banks internationally closing boxes as not profitable and move to “cashless society”
- Incorrect speculation that HSBC move forcing gold clients to sell bullion
- Speculation understandable given poor communications from HSBC and manipulation of precious metal markets
- Salutary lesson to all – media and blogosphere – to be more rigorous
- Underlines vital importance of owning gold in allocated manner outside financial system
An incorrect rumor that HSBC is rapidly and quietly closing gold vaults where clients gold bullion was stored and gold in the GLD ETF is stored has been swirling around the internet.
After conversations with key players in the industry including a bullion dealer who used the safety deposit boxes for storage and delivery to clients, we can now confidently say that the speculation was incorrect.
What HSBC is actually doing is closing its safety deposit box facilities some of which are in vaults and strong rooms in branches. The vaults are not specialist gold vaults rather standard vaults or strong rooms which contain safety deposit boxes. These safety deposit boxes hold all sorts of valuables – from legal documents, to family heirlooms, to art works, to jewellery and of course bullion coins and bars.
Availability of safety deposit boxes is in decline in Britain and much of the world. Costs of security, insurance and opportunity to use such facilities in a more profitable manner are driving the closures. Banks in Ireland including the Bank of Ireland claim that the safety deposit boxes are “causing an unacceptable health, safety and security risk in some branches.”
While the move is understandable from a purely profit motive point of view, it must be remembered that this is a greatly needed service by many people including entrepreneurs and professionals who need to safe keep important legal documents that they are not comfortable keeping in a home or office. It is also a greatly needed service for the elderly and other people who have valuable jewelry and heirlooms that they are uncomfortable keeping in the house.
It is another case of banks blindly pursuing profit ahead of the interests of their own clients.
Banks and insolvent governments desperate for cash likely also dislike safety deposit boxes as they are means for people to protect and grow wealth and protect themselves from inflation and indeed bail-in and deposit confiscation. A percentage of box holders so store cash and bullion.
In our brave new world of the ‘cashless society’, the financial independence and freedom that a safety deposit box confers upon the citizen is frowned upon.
As a consequence citizens are being deprived of the opportunity of having their savings, valuables and wealth stored outside of the increasingly precarious financial system and digital banking system.
The implications of the rumours were significant. Analysts speculated that a precious metals market disruption might be imminent and with it delivery calls by clients who believe they own physical gold in GLD which HSBC most likely could not meet.
Such an event would likely have a dramatic upward effect on the price of gold not to mention a catastrophic effect on the finances of those who believe they actually own physical gold in ETFs. Irish Finance Minister, Michael Noonan, being one recent buyer of the gold ETF.
The misunderstanding regarding HSBC closing its deposit box facilities had led to speculation by people familiar with the underlying dynamics of precious metals markets. HSBC was implicated in a gold price manipulation scandal last year, and has been fined numerous times in the past decade for an array of corrupt practices.
As “the largest COMEX/NYMEX depository”, according to their website, they are viewed by sceptics as having both a capacity and a track record to manipulate precious metals prices.
This view was compounded back in 2012 when respected analyst, Ned Naylor-Leyland, tracked the serial number of a gold bar that was presented on CNBC as belonging to the GLD ETF, of which HSBC is custodian.
Naylor-Leyland discovered that the bar, in fact belonged to a different ETF – ETF Securities – fuelling speculation that GLD did not have the gold it claimed to be in possession of and that gold is rehypothecated.
The recent misunderstanding regarding HSBC’s gold vaults, when viewed from this perspective, is understandable. Long time observers of the precious metals markets are aware of the price suppression actions that occur.
These include the dumping of contracts for massive volumes of gold onto the market at quiet periods – often after the close of business on the COMEX or after Asian trading and before European markets commence trading. In the absence of demand, the huge supply of paper contracts for gold overwhelms the market forcing the price down and triggering stop losses which then accelerate the sell-offs.
The sellers of these contracts are clearly not looking for the best price for their asset. The aim is to force down the price in illiquid markets. The seller can then buy back contracts for the same volume of gold at a greatly reduced price for a large profit.
The incorrect information regarding the HSBC vaults thus sparked intense speculation that some major developments were afoot in the gold market and HSBC was using the closures to force clients to sell their gold.
However, it is the case that those owning gold in HSBC’s safety deposit boxes do not have to sell their gold and most won’t. They have 60 days to find new secure storage and we are already seeing flows in this regard.
The rapidity with which this information became received wisdom is a salutary lesson for the alternative media and the gold blogosphere. Bloggers need to be rigorous in establishing facts as they will be held to a much higher standard by the mainstream media – higher, even, than the latter sometimes hold for themselves.
It also again underlines the vital importance of owning allocated and segregated gold outside the global banking system, in the safest vaults in the world.
How To Store Gold Bullion – 7 Key Must Haves
MARKET UPDATE
Today’s AM fix was USD 1,193.25, EUR 1,085.56 and GBP 798.96 per ounce.
Yesterday’s AM fix was USD 1,181.40, EUR 1,086.15 and GBP 791.77 per ounce.
Gold climbed 0.625 percent or $7.40 and closed at $1,190.60 an ounce yesterday, while silver surged 1.97 percent or $0.33 at $17.06 an ounce.
Gold remained firm near its two week high reached yesterday in spite of disappointing Chinese PMI figures. In Singapore, bullion for immediate delivery initially fell prior to gains and was $1,187.46 an ounce near the end of day. These gains continued in European trading.
Dollar weakness in recent days, the chance of Greece leaving the euro and the continuing crisis in the Ukraine are all supporting gold.
John Williams, San Francisco Fed chief said in Australia yesterday that policymakers should wait no more than a
few months before considering raising U.S. interest rates from their current near-zero level. A Reuters poll of analysts show that they are expecting a U.S. interest rate hike in September now rather than June.
An Airbus operated by Lufthansa’s Germanwings budget airline crashed in southern France on this morning and all 148 on board were feared dead. French President Francois Hollande said he believed none of those on board had survived.”There were 148 people on board,” Hollande said. “The conditions of the accident, which have not yet been clarified, lead us to think there are no survivors.”
In London spot gold in late morning trading is at $1,194.96 or up 0.47 percent. Silver is $17.11 or up 0.25 percent and platinum is $1,147.96 or up 0.06 percent.
end
I was waiting for this to happen:
(courtesy GATA)
China’s Zijin in talks to buy gold, copper mines abroad
Submitted by cpowell on Tue, 2015-03-24 01:28. Section: Daily Dispatches
By Polly Yam
Reuters
Monday, March 23, 2015
HONG KONG — China’s Zijin Mining Group Co. Ltd. is in talks to buy gold and copper mining assets abroad and expects to finalise some acquisitions this year, its chairman said on Monday.
Chen Jinghe said that current market conditions were favourable for acquisitions but did not identify targets.
Some talks “have almost reached maturity. … This year there will be some important results,” Chen told a news conference in Hong Kong after the company’s 2014 earnings. …
… For the remainder of the report:
http://www.reuters.com/article/2015/03/23/zijinmining-results-ma-idUSL3N…
end
The following is huge. India still has a 10% duty (and a very thorough smuggling scheme) with respect to gold and yet they have already imported 130 tonnes of gold so far in March. They will probably import at least 150 tonnes this month. At this rate, they will import 1800 tonnes. Together with China who also demands 2200 tonnes we are looking at 4000 tonnes of gold demanded by just these two countries. We can also add an unknown quantity of Chinese sovereign gold demanded. We know that demand for jewelry is around 3300 tonnes per year, so we have a huge differential in demand over supply and this must come from somewhere. The USA has a maximum of 8,100 tonnes supposedly (USA owned gold) and the Federal Reserve bank of NY supposedly has around 6400 tonnes of gold (foreign owned gold). With demand this great it will not take long for the entire globe’s vaults to become completely bare.
(courtesy Koos Jansen)
Posted on 24 Mar 2015 by Koos Jansen
Indian Gold Import Exploding In March
March has not even ended, though preliminary data indicates India has already imported over 130 tonnes of gold this month. A conservative estimate suggests total gross import can reach 150 tonnes of gold this month.
Because of a “current account deficit” the Indian government decided in March 2012 to raise to import duty on gold from 2 % to 4 %, in June 2013 from 4 % to 8% and in August 2013 from 8 % to 10 %. Additionally, in August 2013 the 80/20 rule was implemented, which was eventually withdrawn in December 2014.
The restrictions the Indian Government implemented on gold trade spawned new life to smuggling cartels with all due consequences. Official Import fell drastically, wiping out any revenues the government collected from the import of the yellow metal. In May 2013 Indian gross gold import accounted for 168 tonnes, by September 2013 a multi year low was reached at 15 tonnes. Premiums in India, over London spot prices, skyrocketed to a staggering 25 %.
For a close look at recent import data let’s start with January; India officially gross imported a meager 39 tonnes, though up 9 % year on year. In February gross import accounted for 50 tonnes, up 57 % y/y. Then, the real surprise came this month; as said previously preliminary data (derived from daily numbers at Infodrive) suggests gross import accounts for 130 tonnes (March 2 – 21). When India’s Directorate General of Commercial Intelligence & Statistics will publish official data somewhere around April 13, we know the exact imported tonnage for March.
Perhaps surging import is caused by a falling price since the beginning of the year combined with the relaxation of import restrictions. Remarkably, premiums are staying close to 12 % (including the 10 % import duty), sourcing the metal is no problem.
From daily trade data we can see a lot of gold from Ghana going directly to India. Could it be there is some conflict gold coming from Ghana?
Monetizing Gold
A new scheme the India government is looking at to obstruct gold import is through monetizing gold, comparable to the Turkish system (read this post for the Turkish Reserve Option Mechanism). The World Gold Council’s managing director in India, Somasundaram PR, stated:
Will they allow banks to hold a part of their reserves in gold because of this deposit monetization? It is one of the recommendations. You need to give huge incentives to the banks to operate this deposit monetization.
In short, the Indian people would be able to make a gold deposit at a commercial bank, which technically is always a loan to the bank, subsequently this bank can use the gold to meet its reserve requirements at the central bank – in this case the Reserve Bank Of India (RBI). The deposits would accrue interest (in Turkey denominated in gold), however, like every bank deposit, the gold can vanish if the bank becomes insolvent. The universal rule is; no risk, no return.
Furthermore, if the gold deposit scheme will be implemented, to the likes of the World Gold Council, I wonder how the RBI will treat the gold held as reserve requirement. The Turkish central bank (CBRT) counts these reserves as official gold reserves, which is double counting.
Increases in Turkish official gold reserves are not caused by CBRT purchases on the open market, but a reflection of the amount of gold held as reserve requirement by banks at the CBRT.
According to the blogger Yunus Emre, his gold deposits for a ‘Gold’ credit card at his local commercial bank in Turkey didn’t have the option for withdraw. The gold can go into a bank, but it’s hard to get it out. Some way of monetizing gold. (please read his posts)
The World Gold Council has released two reports on gold monetization, (i) Why India Needs A Gold Policy, (ii) Turkey: gold in action. Both reports combined count nearly 90 pages, but not once are the risks of lending gold to a bank disclosed. Whereas most people own gold to explicitly avoid these banking risks.
Another plan from the Indian Government to prevent the circulation of “black money” is to require people doing gold purchases above 100,000 rupees, to show a so-called permanent account number (PAN), which is used to prevent tax evasion. This would be disastrous for the Indian jewelry industry as 80 % of the industry’s business comes from rural customers, who don’t have a PAN. Hence, Indian jewelers have threatened to go on strike against this plan.
Koos Jansen
E-mail Koos Jansen on: koos.jansen@bullionstar.com
end
(courtesy Bill Holter/Miles Franklin)
They all can see it …!
We showed you chart a yesterday suggesting markets are grossly overvalued, to me it is obvious and self explanatory.
To make the point even more stark, take a gander at this chart of the “high yield” index.
(courtesy M. Stevens)
For those who don’t know, it is proper to replace the words “high yield” with “junk bonds”. These are THE most risky, lowest rated credits there are and have soared as investors have chased yield. Does this look like a bubble to you? Has your broker suggested this arena as a way to “diversify” or to strive for added yield …safely? Do you think the smart money is chasing these blindly?
A list of billionaires and very savvy investors must have already seen these or ones quite similar as over the last year or more they have been “lining up” and getting out. The list is long, Carl Icahn, George Soros, Stanley Druckenmiller, Sam Zell, Ray Dalio, Kyle Bass, and even the quintessential establishment figure Alan Greenspan… and it’s getting longer.
A couple of names were added to the list this past week, first, the famed hedge fund manager Paul Tudor Jones said the current “market mania will end in revolution, taxes or war” http://www.zerohedge.com/news/2015-03-19/paul-tudor-jones-warns-disastrous-market-mania-will-end-revolution-taxes-or-war Most importantly he said, “this gap between the 1% and the rest of America, and between the US and the rest of the world, cannot and will not persist. we’re in the middle of a disastrous market mania“. Do you understand what he is saying? Have you heard this before on many occasions …in my writings? In plain English without actually using the word, Paul Tudor Jones is forecasting we have a “reset” in our future.
Another name added to the list and far more shocking was former Dallas Fed member Richard Fisher. He was interviewed one day after his retirement and it was a doozy! http://www.zerohedge.com/news/2015-03-20/market-hyper-overpriced-warns-retiring-fed-president-significiant-correction-coming
Please watch this interview, for the first 2:10 it was mostly niceties and he towed the Fed line quite well. The remainder, while not totally spilling the beans was VERY telling. He said the Fed is “uber accommodative, and investors are lazy for relying on the Fed”. He iced this cake when he said the markets are “hyper overpriced” amongst other goodies!
… And to think, it only took him one day of retirement to start telling some very real truths! (He also immediately joined the board of Pepsi Cola) I could only think to myself, what does he really think? I would love to play a round of golf with Mr. Fisher and get a little bit of cold Rocky Mountain (truth serum) Ale into him to hear the rest of the story. Might the timing of his retirement say anything to the thoughtful?
In any case, “they know”. They all know and I would say they “have known” for years. The truly bright knew before 2007 where this is all going but how do you stop a speeding freight train running toward a cliff where the tracks cease to even exist? There is still time to correct your position. You can still sell your stocks and bonds. You can still buy gold and silver and have them delivered to you. You can still move your bank balances into real assets with no leverage.
You can still move to protect yourselves, the question is “how much” time is left? I don’t know. The list of names above probably don’t know either as some have been as boisterous as I have been since 2007. The key is to look at the charts at the very top and understand “what” is coming. This is not going to be a crash of the real estate markets. It won’t be a crash of a “sector” of the stock market nor just the stock market. We will not watch as the bond markets seize up singularly nor will we see our currency collapsed and not affecting any other asset class.
No, what we have coming is a collapse of everything we have worked for and everything we have built and saved over our own lifetimes and that of our ancestors. All of our financial markets are connected and none will be spared. Another aspect is ALL foreign markets and their economies are tied together with everyone else’s …you could say “we are the world”! Nothing will be left unaffected. The only thing you need to know and understand is this, gold has always been money and always ultimately seen to be the most liquid safe haven on God’s green Earth. Man has never before in history been involved in a more dangerous and all engulfing mania based on a Ponzi scheme. It matters not when nor how it ends because it will end …badly What matters is how you are positioned when it does! Regards, Bill Holter
end
And now for the important paper stories for today:
Early Tuesday morning trading from Europe/Asia
1. Stocks generally mixed on major Chinese bourses ( India’s Sensex and Shanghai higher)/yen rises to 119.39/Chinese PMI’s disappoint/European PMI rises (see zerohedge article below)
1b Chinese yuan vs USA dollar/yuan strengthens to 6.2050
2 Nikkei down by 40.91 or .21%
3. Europe stocks mostly in the green/USA dollar index down to 96.78/Euro rises to 1.0974
3b Japan 10 year bond yield .31% (Japan buying 100% of bond issuance)/Japanese yen vs usa cross now at 119.39/
3c Nikkei still above 19,000
3d USA/Yen rate now below the 120 barrier this morning
3e WTI 47.75 Brent 56.15
3f Gold up/Yen up
3gJapan 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.
Japan to buy 100% of all new Japanese debt and by 2018 they will have 25% of all Japanese debt. Fifty percent of Japanese budget financed with debt.
3h Oil up for both WTI and down for Brent this morning.
3i European bond buying continues to push yields lower on all fronts in the EMU
Except Greece which sees its 2 year rate slightly falls to 20.32%/Greek stocks up by a huge 2.02%today/ still expect continual bank runs on Greek banks.
3j Greek 10 year bond yield: 11.49% (up by 15 basis point in yield)
3k Gold at 1193.00 dollars/silver $16.99
3l USA vs Russian rouble; (Russian rouble up 1 1/10 rouble/dollar in value) 57.76 rising with the higher brent price
3m oil into the 47 dollar handle for WTI and 56 handle for Brent
3n Higher foreign deposits out of China sees hugh risk of outflows and a currency depreciation. This scan spell financial disaster for the rest of the world/China may be forced to do QE!!
30 SNB (Swiss National Bank) still intervening again in the markets driving down the SF
3p Britain’s serious fraud squad investigating the Bank of England/ the British pound is suffering
3r the 7 year German bund still is in negative territory/no doubt the ECB will have trouble meeting its quota of purchases and thus European QE will be a total failure.
3s Saudi Arabia intent on restoring peace in Yemen/
3t Bloomberg calculates Greece’s shortfall in March at 3.5 billion euros.
4. USA 10 year treasury bond at 1.91% early this morning. Thirty year rate well below 3% at 2.50%/yield curve flatten/foreshadowing recession.
5. Details Ransquawk, Bloomberg, Deutsche bank/Jim Reid.
Futures At Overnight Highs On China PMI Miss, Europe PMI Beat
It is a centrally-planned “market” and everyone is merely a bystander. Last night, following a dramatic China PMI miss, which as previously reported tumbled to the worst print since early 2014 and is flashing a “hard-landing” warning, the Shanghai Composite first dipped then spiked because all a “hard-landing” means is even more liquidity by the PBOC (which as we suggested a month ago will be the last entrant into the QE party before everyone falls apart). Then, this morning, a surprise beat by the German (and Eurozone) PMI was likewise interpreted by the algos as a catalyst to buy, and at this moment both European stock and US equity futures are their session highs. So, to summarize, for anyone confused: both good and bad data… a green light to buy stocks. In fact, all one needs is a flashing red headline to launch the momentum igniting algos into a buying spasm.
Some more on the just announced Eurozone PMI numbers:
From Goldman:
The Euro area flash composite PMI rose by a robust 0.8pt to 54.1 in March, above our and consensus expectations of a more modest gain (Cons: 53.6, GS: 53.8). The expansion in the composite PMI was driven by similar robust gains in both the manufacturing and services subcomponents. The German flash composite PMI increased notably, while its French counterpart eased slightly after a strong gain in February.
The expansion in the Euro area flash composite PMI was driven by similar stronger-than-expected increases in both the manufacturing PMI and the services PM; the manufacturing PMI showed a 0.8pt gain in March to 51.9 (Cons: 51.5) and the services PMI rose by 0.5pt to 54.3 (Cons: 53.9) (Exhibit 1).
The breakdown of the March flash PMI release was positive. New orders rose by 1.3pt while stocks edged down by 0.8pt, leading to a solid 2.0pt increase in the stock-order difference. Other subcomponents of the manufacturing PMI were also on the positive side, with output and employment rising to 53.5 (+1.4pt) and 51.2 (+0.5pt) respectively. For services, the forward-looking subcomponents (which are not part of the headline services PMI figure) showed ‘incoming new business’ rising by a sizeable 2.9pt to 54.6, while ‘business expectations’ eased slightly by 0.3pt to 63.9.
In addition to the Euro area aggregate PMI, Flash PMIs were released for Germany and France. The German composite PMI came in stronger than expected at 55.3 (Cons: 54.1). This was driven by a notable 1.3pt expansion in the manufacturing PMI as well as a 0.6pt increase in the services PMI. The French composite PMI fell slightly by 0.5pt to 51.7 in March, a touch weaker than expected (Cons: 51.9). The French PMI decline in March follows a forceful 2.9pt increase in February and was driven by a 0.6pt fall in the services PMI (to 52.8) outweighing a 0.6pt increase in the manufacturing PMI (to 48.2).
The area-wide figure released today (as well as the German and French equivalents) suggests around a 1.0pt decline in the services PMI in Italy and Spain, and a 1.3pt improvement in the Euro area manufacturing PMIs outside Germany/France.
Based on historical correlations, a reading of 54.1 is associated with +0.5%qoq (non-annl.) GDP growth. Our CAI points to small real GDP growth out-turn (+0.3%). Our judgmental GDP forecast remains at +0.4%qoq for Q1 (Exhibit 3).
So with any “favorable” data being cherrypicked at will, it was only expected that with this week’s latest API data on deck which is set to report anothet massive inventory build, that oil would rise, on however one wished to interpret the overnight data. WTI, Brent up for 2nd day amid weaker dollar and better-than-expected manufacturing data in Germany and Eurozone offset speculations of another build in U.S. crude stockpiles. Median est. in Bloomberg survey of EIA shows build of 4.75m bbl. Euro-zone PMI data “slightly positive but mainly as a result of the good German data — low oil prices giving Germany a boost,” Michael Hewson, analyst at CMC Markets. “With China and Japan showing some weakness in their economies upside likely to remain capped in the short term.” Well, not if it is seen as a signal of imminent more easing.
Looking at Asian stocks, these traded mostly lower following a lacklustre Wall Street close which saw the S&P 500 finish relatively flat, after touching within 4-points of its record high. The Hang Seng and Shanghai Comp both fell in the wake of a poor Chinese HSBC Mfg. PMI release, with the headline contracting to an 11-month low (49.2 vs. Exp. 50.5 (Prev. 50.7). The Nikkei 225 also fell amid JPY strength after the currency posted back to back gains against the USD, while ASX 200 was the only index to trade in the green buoyed by basic materials.
The USD has once again been this morning’s driver after breaking below yesterday’s low print and testing the low hit in the wake of last week’s FOMC statement at 96.63. Renewed selling pressure in the currency lifted EUR/USD to fresh highs and the pair tested 1.1000 as shorts continue to be squeezed out. At the same time as these moves this morning, the DAX rallied off lowest levels to fresh highs ahead of the German PMI reading which beat expectations and caused a further lift in equities and the EUR. Despite all this newsflow has been on the light side – markets have largely overshadowed weaker than expected Chinese PMI overnight and continue to digest and consolidate moved seen last week and what the latest policy statement means for global markets.
Fed’s Fischer (Voter, Dove) said rate lift-off is probably justified before end-2015, but lift-off in June, September or a different
month depends on data. (BBG) Separately Fed’s Williams (Voter, Dove) reiterated his view that rates will start to rise this year and
the Fed will lift them gradually, said that the US economy can handle a strong USD. (BBG)
UK traders were keenly awaiting this morning’s inflation data, however despite a lower than expected headline which came in flat at 0 and at the lowest since series began, GBP only saw minor weakness as several expected an uninspiring report. GBP and rates have continued to underperform their peers in a continuation from yesterday and with lingering concerns over the political landscape ahead of May’s general election, with long gilts up ~30 ticks compared to gains of just ~10 ticks in bunds. Volumes have been relatively light however and prelim month-end extensions fairly average.
Crude futures have pared most of the overnight weakness seen in the wake of weaker than expected Chinese PMI, driven by the slide in the USD index this morning, which also lifted precious metals to highs in early trade. Late yesterday Copper futures broke to fresh 11-week highs after a technical break above the 100 DMA, supported by a weaker USD and an output deficit forecast of 475K MT reported by the Copper Study Group however this strength was pared overnight following the Chinese data release.
In summary: European shares rise with the travel & leisure and media sectors outperforming and retail, utilities underperforming. European shares gain after earlier declines as Eurozone PMI beat ests., supported by expansion in Germany. Britain’s inflation rate dropped to zero in Feb., first ever stagnation in prices since data began almost 3 decades ago. The Italian and French markets are the best-performing larger bourses, Swiss the worst. The euro is stronger against the dollar. German 10yr bond yields fall; French yields decline. Commodities gain, with nickel, wheat underperforming and WTI crude outperforming. * U.S. Markit U.S. manufacturing PMI, CPI, FHFA house price index, new home sales, Richmond Fed index due later.
Market Wrap
S&P 500 futures up 0.2% to 2099.1
Stoxx 600 up 0.2% to 402.2
US 10Yr yield little changed at 1.92%
German 10Yr yield down 1bps to 0.21%
MSCI Asia Pacific up 0.2% to 149
Gold spot up 0.1% to $1191.1/oz
Eurostoxx 50 +0.4%, FTSE 100 +0.3%, CAC 40 +0.4%, DAX +0.3%, IBEX +0.3%, FTSEMIB +0.6%, SMI little changed
MSCI Asia Pacific up 0.2% to 149; Nikkei 225 down 0.2%, Hang Seng down 0.4%, Kospi up 0.2%, Shanghai Composite up 0.1%, ASX up 0.2%, Sensex down 0.1%
8 out of 10 sectors rise with health care, utilities outperforming and consumer, financials underperforming
Euro up 0.22% to $1.097
Dollar Index down 0.2% to 96.84
Italian 10Yr yield up 1bps to 1.3%
Spanish 10Yr yield up 1bps to 1.27%
French 10Yr yield down 1bps to 0.48%
S&P GSCI Index up 0.7% to 404.7
Brent Futures up 1.2% to $56.6/bbl, WTI Futures up 1.4% to $48.1/bbl
LME 3m Copper up 0.3% to $6136/MT
LME 3m Nickel down 1.1% to $14145/MT
Wheat futures down 0.9% to 529 USd/bu
Bulletin headline summary from RanSquawk and Bloomberg
The USD drives price action once again this morning as the index touches lows hit in the wake of last week’s FOMC statement and EUR/USD tests 1.1000
Several Fed speakers hit the tape overnight including Fischer and Williams who said they expected a hike this year and the US economy can handle a strong USD
Looking ahead there is quite a bit of US data due for release with CPI, US manufacturing PMI, New Home Sales and API inventories after the US close.
Treasuries steady before week’s auctions begin with $26b 2Y notes; WI yield 0.605% vs. 0.603% last month.
Feb. consumer prices also due, est. +0.2%, ex-food and energy +0.1%.
Markit’s euro-area composite PMI rose to 54.1 in March from 53.3, higher than expected; composite gauges for Germany and France were both well above the 50-point mark
Merkel encouraged Greece’s Tsipras to follow the path set out by the nation’s creditors, saying his country belongs in Europe and she wants its economy to succeed.
Greece is now a “lose-lose game” and the chances of it leaving the euro area are now 50/50; country could go “down the drain,” billionaire investor George Soros said in a Bloomberg Television interview due to air Tuesday
Britain’s inflation rate dropped to zero in February, the first ever stagnation in prices since the data series began almost three decades ago
HSBC/Markit’s China preliminary manufacturing PMI was at 49.2 in March, missing the median estimate of 50.5 in a Bloomberg survey and down from February’s 50.7
SF Fed President John Williams said a discussion should happen mid-year about tightening policy, even as he lowered his economic growth forecast
European banks will offload EU100b of unwanted loans this year to cut costs and restructure their balance sheets, according to a report by PricewaterhouseCoopers LLP
Saudi Arabia and its Gulf partners will take “necessary measures” to restore stability in Yemen if peace talks fail to resolve the growing conflict there, the Saudi foreign minister said
Sovereign 10Y yields lower. Asian stocks mixed, European stocks mostly higher, U.S. equity-index futures gain. Crude, gold and copper gain
DB’s Jim Reid completes the overnight recap
Its also flash PMI day and already both Japan (50.4 vs. 52.0 expected) and China (49.2 vs. 50.5 expected) have disappointed. The sub-50 reading for China in particular was a new 11-month low with new orders appearing to be the main drag (49.3 from 51.2 previously) highlighting weak domestic demand. Our colleagues in China note that the reading reinforces their view of both a property slowdown and a fiscal slide starting to hit the economy. They’ve reiterated that GDP will slow in Q1 to 6.8% yoy (well below consensus of 7.2%) and a policy easing cycle will start soon. Bourses are weaker on the back of the data. The Shanghai Comp (-0.71%) and Nikkei (-0.11%) are both softer while the Hang Seng (-0.39%) is following suit.
Back to markets yesterday, there were interesting comments out of the Fed’s Fischer who said that a rate rise will ‘likely be warranted before the end of the year’ and that ‘a smooth path upward in the federal funds rate will almost certainly not be realized’. Such a comment shows the desire to raise rates is still there from the Fed but they have seemingly moved from targeting June a few months ago to signaling starting normalisation now before year end. There is definitely some timing slippage from the Fed. There were similar comments out of the Cleveland Fed President Mester too, who commented that ‘it would be appropriate to raise interest rates sometime this year’ before clarifying that this keeps June open, but doesn’t mean that this is the most necessary time frame. Meanwhile, early this morning the San Francisco Fed President Williams was quoted on Bloomberg as saying that ‘I think that by mid-year it will be the time to have a discussion about starting to raise rates’ with the article noting that the language used dropped the ‘serious discussion’ language Williams had used in a speech earlier this month’.
Markets yesterday appeared to initially