Tuesday, April 22, 2014

April 22.2014/No change in gold inventory at GLD/a huge increase of 1.73 million oz of silver/gold and silver whacked again/Backwardation continues in gold and silver/Turmoil escalates again in the Ukraine/

Gold closed down $7.40  at $1280.40 (comex to comex closing time ). Silver was up 1 cents to $19.35  


In the access market tonight at 5:15 pm
gold: $1284.00
silver:  $19.40

Today is Tuesday and many have noticed that this is the signal to pump up the Dow and whack gold and silver. And today the bankers orchestrated another tiny raid on our two precious metals.  No question about it, our entire markets have been usurped by our bankers.

Today, the open interest on silver remained in the 160,000 region despite a huge drop in the price of silver yesterday coupled with high volumes on the comex. The contracts on the comex are certainly in strong hands as no matter what happens the OI remains high.  We will discuss this in the body of the commentary tonight.

So without further ado...


Let's head immediately to see the data for today.



First:  GOFO rates


For the 11th day out of 12 trading days, GOFO rates are negative and thus we have backwardation.  Today, the 6th month moved slightly positive and thus it is out of backwardation. All months moved slightly towards the  positive needle.

Still London good delivery bars are quite scare.







April 22:2014


One Month Rate:  Two Month Rate   Three Month Rate   6 month rate

-.1100%                      -.072                 -044%                     +.006%


April 17.2014:


One Month Rate  Two Month Rate   Three Month Rate  6 month Rate

-.118000%                -.08800%                 -.05800%                  -.0060000%




end


The GLD and SLV:

Today, no change in gold inventory with respect to the GLD


Silver:  The SLV recorded a huge increase of 1.73 million oz of silver inventory today. 


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 today by 387 contracts from 369,177 up to 370,187  with gold falling by $5.40 yesterday. The  big active contract month is April and here the OI rose by  5 contracts  to 749. We had 5 contracts served yesterday, so we gained another 10 contracts or 1000 additional oz that will  stand for the April contract month. The next non active delivery month is May and here the OI fell by 44 contracts  to 1,344.  The next big active delivery month is June and here the OI rose by 69 contracts.   The OI for June stands at 227,024. The estimated volume today was awful at 127,759 contracts .    The confirmed volume yesterday day was just as bad  at 105,461 . The CME has scared away many of the investor gold traders.

The total silver Comex OI surprisingly fell  by only 618 contracts despite silver being down  in price to the tune of 25 cents yesterday.  The total OI now rests tonight at 160,315 contracts. It is also surprising that we are nearing record levels of open interest happening at the same time as silver is down 61% from its all time high of $49.00 per oz. There is no doubt that some entity is trying to corner the silver comex.  They are patient waiting for their signal to take delivery on all of their silver longs that they have dutifully collected over the past 2 years. The April contract month saw it's OI fall to 2 for a loss of 20 contracts. We had 20 notices served upon yesterday so in essence we neither  gained nor lost any silver contracts  standing for the April contract month.  The big May contract month saw it's OI fall by only 1,758 contracts down to 56,771. We have a little over 1 week before first day notice and the OI for May is extremely high for this time in the delivery cycle. The estimated volume today was excellent at 68,160 contracts . The confirmed volume yesterday  was also good  at  42,332 contracts.  You can see that silver is playing to quite a different audience than gold. The silver OI seems to be in very strong hands.

Comex gold contract month


April 22.2014   the April delivery month.


Ounces
Withdrawals from Dealers Inventory in oz
 nil
Withdrawals from Customer Inventory in oz
 nil
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
 89,248.64 (HSBC,Scotia)
No of oz served (contracts) today
 68 (6800 oz)
No of oz to be served (notices)
681 contracts (68,100  oz)
Total monthly oz gold  served (contracts) so far this month
4763 (476,300 oz)
Total accumulative withdrawals  of gold from the Dealers inventory this month
 nil  oz  
Total accumulative withdrawal of gold from the Customer inventory this month


 
 213,557.78 oz



Today we had good activity in the Comex gold vaults today with 0 dealer deposits and zero withdrawals from the dealer



Total dealer deposit:  nil oz



We had 0  dealer withdrawals




total dealer withdrawals:   nil oz




We had 2 customer deposits today

i) Into HSBC:  32,055.86  oz
ii) into Scotia:  57,192.78 oz


Total customer deposit: 89,248.64  oz

we had 0 customer withdrawals:




total customer withdrawal:  nil oz


Today we had 0   adjustments




Thus tonight, we have the following JPMorgan inventory levels in gold;

  
JPM  dealer inventory remains  tonight at 317,060.418  oz or 9.861 tonnes

JPM customer inventory remains  tonight at: 1,030,042.708 oz  or  32.04 tonnes



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 68 contracts  of which 25 notices were stopped (received) by JPMorgan dealer and 24  notices stopped by JPMorgan customer account. 
  
The total dealer comex gold  remains  tonight  at  820,213.836 oz or 25.512 tonnes of gold . The total of all comex gold (dealer and customer) rests at 7,991,301.135 oz or  248.56 tonnes.

Tonight, we have dealer gold inventory for our  3 major bullion banks(Scotia, HSBC and JPMorgan) with its gold inventory  resting  tonight  at only 19.526 tonnes.


i) Scotia:  158,360.992 oz or 4.925 tonnes
ii) HSBC: 152,404,838 oz or  4.740 tonnes
iii) JPMorgan: 317,060.418 oz or 9.861 tonnes

total: 19.526 tonnes

Brinks dealer account which did have  the lions share of the dealer gold saw its inventory level rises  tonight  to 168,601.789 oz or 5.244 tonnes.  Several months ago they had over 13 tonnes of gold at its registered or dealer account.



Today we  had 68 notices served upon our longs for  6800  oz of gold.  In order to calculate what will be  standing for delivery in December, I take the number of contracts served so far this month at 4763 x 100 oz  = 476,300 oz   and add the difference between the number of OI for the front month (749) minus the number of notices filed today (68) 


In summary:

4763 notices x 100 oz per contracts already served this April month or 476,300 oz + (749) the OI for the front April month - the number of notices served today (68) x 100 oz =  544,400 oz,  the number of oz standing for the April contract month (16.933 tonnes).  We gained 1000 oz of gold that will stand in the April contract gold month.



In Summary:


i) the total dealer inventory of gold settles tonight  at a  level of 25.512 tonnes.

i)  a) JPMorgan's customer inventory rests tonight at  1,030,042.709 (32.04  tonnes)

ii  b)  JPMorgan's dealer account rests tonight at  317,060.418 oz (9.861 tonnes)


iii) the 3 major bullion banks have collectively only 19.526 tonnes of gold left in their dealer account.(JPMorgan, HSBC,Scotia)



and what is totally remarkable is the fact that little gold entered the dealer comex vaults despite December and February and now April are  the busiest months for the gold calendar . Another oddity is that the only gold that does enter the customer account are kilobars and kilobars are generally of demand from Eastern persuasion.


end








now let us head over and see what is new with silver:




Silver:


April 22/2014:  April delivery month

  

  

Silver
Ounces
Withdrawals from Dealers Inventorynil
Withdrawals from Customer Inventory 27,003.57 (Delaware,Scotia)
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory nil
No of oz served (contracts)0 contracts  (nil oz)
No of oz to be served (notices)2 contracts (10,000)
Total monthly oz silver served (contracts) 539 contracts  (2,695,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month292,000.69 oz
Total accumulative withdrawal  of silver from the Customer inventory this month 6,999,496.8  oz


Today, we  had some activity  inside the silver vaults
 we had 0 dealer deposits and 0  dealer withdrawals.





Today   dealer withdrawals:  nil oz



Total dealer deposit: nil oz






We had 0 customer deposits:








Total customer deposit: nil oz



We had  2 customer withdrawals:

i) Out of Delaware:  2005.0000 oz
ii) Out of Scotia;  24,998.57 oz (another perfectly round deposit of xx.0000) 
Total customer withdrawal: 27,003.57    oz


we had 0  adjustments

Registered (dealer) silver   : 53.400 million oz  
total of all silver:                 176.661 million oz.

The CME reported that we had 0 notices filed for nil oz today. To calculate what will stand for this non  active delivery month of April , I take the number of contracts served  for the entire  month at 539  x 5,000 oz per contract or 2,695,000 oz to which we add the difference between the OI standing for April (2) minus the number of contracts served today (0) x 5,000 oz.




Thus in summary, :  539 contracts  x 5000 oz per contract (served) or 2,695,000 oz  + (2) OI standing for April - (0)  number of notices filed today  x 5000 oz  = 2,705,000 oz.  This is rather large for a non active delivery month.


We neither gained nor lost any silver ounces standing at the silver comex for the April delivery month .

  
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:


April 22.2014:  tonnage 792.14 .  No change in inventory



April 21.2014:  tonnage:  792.14.  we lost another 3.00 tonnes of gold.  I have no doubt that this gold has left England's shores and is on its way to Shanghai.




April 17.2014:  795.14.  We lost another 3.29 tonnes of gold.  Dave Kranzler stated that he thought we would have a run on the GLD once we had negative GOFO rates.  I believe he is perfectly correct as there is no place on obtain gold needed to satiate the needs of Shanghai




April 16.2014:  798.43.  Today we lost a whopping 8.39 tonnes of gold.  China must be needing more of our ancient metal of kings.


April 15.2014:  806.82.  Today we had a gain of .6 tonnes of gold.


April 14: 2014:  806.22.  Today we had a gain of  1.8 tonnes of gold.  This is extremely good news as it confirms both demand from China and demand for gold by the GLD custodians>





April 11.2014: tonnage:  804.42/ a loss of 1.8 tonnes of gold.  It now seems that this is the last source of gold for the Chinese who use this avenue to retrieve gold to Shanghai via the refiners of Switzerland.  Judging from the return of backwardation in the front two months, and that all months are as close to negative as possible, it looks to me that our banker friend's days are numbered




April 10.2013:  tonnage 806.22/ a loss of .26 tonnes of gold (probably to pay for fees)







For today, April 21.2014:  no change in   gold inventory at the GLD




792.14 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). 


As a reminder the total comex gold had inventories of around 11 million oz in 2011. Today the total comex gold remains at   7.991 million oz  (248.56 tonnes).


The total dealer comex gold remains at : 820,213.8 oz or 25.512 tonnes.

GLD gold:  792.14 tonnes.



end



And now for silver: as of 6 pm est/ a huge increase of 1.73 million oz addition.


Net Assets$6,484,475,695
Ounces in Trust
as of 21-Apr-2014
330,599,095.50
Tonnes in Trust  
as of 21-Apr-2014
10,282.78



April 21.2014: no change:

Net Assets$6,450,887,056
Ounces in Trust
as of 17-Apr-2014
328,869,119.10
Tonnes in Trust  
as of 17-Apr-2014
10,228.97




April 17.2014:  no change

Net Assets$6,444,397,953
Ounces in Trust
as of 16-Apr-2014
328,869,119.10
Tonnes in Trust  
as of 16-Apr-2014
10,228.97




April 16.2014:


Net Assets$6,500,394,750
Ounces in Trust
as of 15-Apr-2014
328,869,119.10
Tonnes in Trust  
as of 15-Apr-2014
10,228.97


April 15.2014:  no change


Net Assets$6,490,617,589
Ounces in Trust
as of 14-Apr-2014
328,869,119.10
Tonnes in Trust  
as of 14-Apr-2014
10,228.97




April 14.2014: no change





Ounces in Trust
as of 11-Apr-2014
328,869,119.10
Tonnes in Trust  
as of 11-Apr-2014
10,228.97



Today, April 22, a huge rise of 1.73 million oz of silver inventory   at the SLV  


end




And now for our premiums to NAV for the funds I follow:



Note:  Sprott silver fund now deeply into the positive to NAV and the gold fund moved into positive terrotiry as well.




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  6.0% percent to NAV in usa funds and Negative  6.1%  to NAV for Cdn funds. April 22/2014)    

2. Sprott silver fund (PSLV): Premium to NAV rose to positive 1.71% NAV   (April 22/2014) 
3. Sprott gold fund (PHYS): premium to NAV fell to negative -0.44% to NAV (April22/.2014)


Note: Sprott silver trust back hugely into positive territory at  1.71%. 
Sprott physical gold trust is back in negative territory at  -0.44%.


Central fund of Canada's is still in jail.






end




And now your overnight gold and silver trading (from Asia /Europe this morning) and comments:




Overnight gold and silver trading last night from Europe and Asia:

(courtesy Mark o'Byrne)

Chinese Banks And 100,000 ‘Outlets’ Selling Gold - Demand To Surge Another 25%

Published in Market Update  Precious Metals  on 22 April 2014
By Mark O’Byrne

Today’s AM fix was USD 1,290.75, EUR 935.19 and GBP 767.34 per ounce.
April 17th’s AM fix was USD 1,299.25, EUR 937.48 and GBP 771.89 per ounce.
Gold fell $4.90 or 0.38% yesterday to $1,290.00/oz. Silver slipped $0.21 or 1.07% yesterday to $19.42/oz.  

Gold in Euros, YTD 2014 - (Thomson Reuters)
Gold recovered from early losses on Tuesday as the dollar gave back some gains, but sentiment among investors continued to be lukewarm despite the uncertain backdrop.
Platinum and palladium have risen and recovered from falls yesterday with platinum trading at $1,411.30/oz and palladium at $784.60/oz..
Yesterday, gold declined to $1,281.40 the day before - its lowest since April 3.  The dollar index climbed to a fresh two-week high early on today but later slipped. 

Gold in U.S. Dollars,1 Year - (Thomson Reuters)
Geopolitical tensions over Ukraine has yet to lift gold's safe-haven appeal. An international agreement to avert wider conflict in Ukraine appears to be faltering which should support gold.
Pro-Moscow separatists show no sign of surrendering government buildings they have seized. U.S. and European officials say they will hold Russia responsible and will impose new economic sanctions if the separatists do not clear out of government buildings they have occupied across swathes of eastern Ukraine over the past two weeks.
Thus, the real risk of the toxic combination of economic, financial and currency wars loom large.
Chinese Banks And 100,000 Dealers Selling Gold -  Demand To Surge Another 25%Bloomberg Television’s “On The Move Asia” had a fascinating interview with Albert Cheng, the World Gold Council’s Managing Director, Far East. He discussed China’s gold market and what’s driving the country’s demand with Rishaad Salamat.
Since 2003, we have pointed out how China’s liberalization of its gold market would have enormous ramifications for the global gold market in terms of a huge new source of demand and would ultimately lead to higher prices in the long term.
Bloomberg interviewed Goldcore nearly two years ago in May 2012, about the huge growth in demand in Asia and particularly China,  and we commented that this Chinese demand was a ‘paradigm shift’: “We could be witnessing a paradigm shift from China on bullion demand.”
We pointed out “that the gold market was liberalised in China in 2003 and prior to that gold ownership was banned in China by Chairman Mao.  The per capita consumption of 1.3 billion Chinese consumers, investors and central bank demand are very significant.” Please click here to listen to the interview on the paradigm shift that is Chinese gold demand.
Albert Cheng reaffirms the paradigm shift for the gold market that is Chinese gold demand. He points out two very important facts hitherto not known by market participants.  First, there are now over 100,000 gold bullion dealers selling coins and bars in China. Second, he says this suggests that the majority of banks are now offering gold bullion products over the counter. 
The interview is very interesting and is well worth a look.
Albert Cheng: China became the number one [gold] consumption country last year and people are starting to ask, would this be sustained? The World Gold Council report] shows that in the next four years, [Chinese gold demand] is going to increase by another 25 per cent. And the reason for that is that more and more middle class is coming on stream and people have money to spend.
Rishaad Salamat: But that's just the thing, more and more people are buying gold, but what's caused that change? You can say people have got wealthier but we saw China overtaking India where there's been a traditional demand for gold. That's not something that is traditional in China, is it? So what's driving things?
AC: I think that the key of this is investment demand. Six years ago you didn't see any investment demand in China. China opened up the investment market through banks and now literally any Chinese person can walk into a bank and buy gold products. And you look at the number of outlets where people can buy investment gold, gold bars, gold coins - there are a hundred thousand of them in China. If I make a comparison with America -- Starbucks, McDonald's and Subway together have only fifty thousand outlets. In China there are more than a hundred thousand outlets where you can buy gold. So, the availability of gold in China, in every city, is the main driver behind gold.
AC: Wedding jewellery consumption accounts for 40 per cent of jewellery consumption in China; there is about 300 tons of gold sold in jewellery form.
AC: When people buy 24-carat gold jewellery, which has a markup of less than 10 per cent if it's a popular item, 15 - 20 per cent if it's a more designer item, that is the reason why Chinese people buying gold jewellery in China is equivalent to buying a piece of metal. At the end of the day, this is a way for them to keep their money, to keep their wealth. If they want to sell it, there is always a resale price for this kind of pure gold metal.
So why China has become number one in the world is because if [people] want to save money China, there is not much alternative for them -- you either can buy property of you get into the stock market. But neither of those are very attractive at the moment to the Chinese investor. In the past few years we've seen more and more people buying gold jewellery as well as gold bars.
RS: You've got this forecast in that we've been talking about where there's a 25% gain in gold demand from China over the next four years. What are the risks here to this to the downside?
AC: We all know that China is undergoing a big economic transition from an export-driven economy to a domestic consumption economy. This year is a transitional year. With these changes there will be a lot of major disruptions to the economic life of people here, and again, the shadow banking issue, which the government has addressed, will have an effect on liquidity and it also may impact gold in the short term. Long term, if China gets on to a domestic consumption economy, it will be good for gold jewellery consumption. More and more people will be encouraged to move from rural areas into cities, the urbanisation process will continue and people who are getting rich will get into consumption of gold jewellery or buying gold bars. So short term we will see some headwind but long term, medium term, we see the gold market continue to grow.
The interview can be watched here.



end




An extremely important discussion on gold manipulation and gold backwardation from Jame Turk.

(courtesy James Turk/Eric King/Kingworldnews/GATA)




Turk describes to KWN exactly how gold was manipulated today in light trading

 Section: 
8:15p ET Monday, April 21, 2014
Dear Friend of GATA and Gold:
GoldMoney founder and GATA consultant James Turk describes to King World News exactly how the gold market was manipulated today in light trading conditions. Turk adds that gold now stands at the greatest backwardation it has seen in eight months. An excerpt from the interview is posted at the KWN blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end




An extremely important commentary from Bill Holter today.
Every day I wonder, how on earth is China getting it's gold.  This should provide answers for you:


(courtesy Bill Holter/Miles Franklin)




A little bit of math never hurt anyone.




image
The One Thing Most Desired By Chinese Consumers Is... |...
Hint: it's not designer clothes, shoes, bags or watches.

Preview by Yahoo



  When I first saw this survey of Chinese consumers I had to take a step back and wonder exactly "who" did it.  Much to my surprise, the WGC (World Gold Council) who is more "anti gold" than any group or agency that I know of was the culprit.  If they say that 25% of Chinese consumers plan to buy 24kt gold or jewelry in the next 12 months...you can bet that the real number is much higher because as long as I've been following gold, the WGC has done nothing but steer people away from it.  In my opinion they have consistently underestimated global demand and overestimated global supply since I have followed them.
  That said, let's have some fun and do a little bit of math on the back of a "WGC" napkin.  OK, so, there are 1.3 billion Chinese citizens and yes I know not all of them can buy even 1/10th of an ounce of gold but let's go from there.  1.3 billion times 25% equals 325 million (about the size of the U.S.).  If each Chinese citizen according the survey (25%) were to buy just 1/4 of 1 ounce of gold then approximately 80 million ounces of gold would be taken off of the market (320 million x 1/4 ounce= 80 million).  Umm, does the figure "80 million" ring a bell for you?  It should, "80 million" is more or less the figure of ALL gold ounces mined in 1 year on the entire planet.
  Yes I know, not all, probably not half, maybe even not even 25% of Chinese citizens have the ability to buy even 1/4 ounce of gold which at today's prices means $325.  But still, let's look at the math further because clearly ...the "desire" to buy gold is there...and "there" are a lot of potential buyers!  If just 25% of Chinese citizens were to each purchase 1/4 ounce of gold it would amount to pretty much every single ounce that every mine on the planet pulled out of the ground,,, all year long!  Is this 1/4 ounce or $325 "too much"?  Maybe it is, maybe we should just use 1/10th ounce as the realistic figure.  This would be enough for a nice set of very "delicate" earrings.  "Delicate" as in doesn't weigh all that much but let's keep going.
  Even if only 1/4 of Chinese citizens decided to purchase a "delicate" set of earrings this year that only weighed 1/10th of 1 ounce, this would speak for 40% of every ounce that is mined globally.  40%, before GLD "buys" their gold, the U.S. mint buys their gold, Austria, Switzerland. Germany, Britain and Australia buy theirs for mintage... before the PBOC buys theirs ...and before you buy your gold.  Actually, if you look at the entire global population, there is barely 1/100th of one ounce of gold mined each year for each human being on the planet.  Put another way, there are 85 or so people on the planet for each ounce of gold produced.  Does this ratio also sound familiar?  It should but if it doesn't I'll give you a hint, this is somewhere close to each "paper" ounce (via rehypothecation) representative of each real ounce on the planet.  85 to 1, 100-1...what's the difference?  Have you ever seen a 1/10th ounce coin?  It is smaller then a dime!  Have you ever seen a 1/20th ounce coin?  You can barely see it, it looks like a thin little button.  Do you have your share yet?
  Seriously, I set out in this piece to do the math regarding the Chinese because they clearly "want gold" but after doing the math it turns out that if you buy just one ounce...that is your "share" of production for the next 85 years ...compared to everyone on the planet?  Does that sound like something that is "plentiful"?  "Plentiful" as in what you are continually told is something that has a "bottomless pit"?  It turns out that gold when looked at from a macro view is anything but bottomless. 
  Before I finish this, I would be remiss if I didn't ask the "question".  The "question" being "if between China and India, every single mined ounce of gold is spoken for...then where is the supply coming from to meet the demand"?  There is one place...and ONLY one place.  Unfortunately this one place brings into view the "rule of law", or I should say the BREAKING of the rule of law.  The ONLY place that gold can be coming from to meet the current and documented demand is from "official" hordes.  "Official" as in sovereign hordes.  Unfortunately for the "sovereigns", much of their gold is not held by them...it is held by the NY Fed in "safekeeping".  Also unfortunately, if you use any common sense at all, the only place that much of the "supplied" gold can be coming from are from these official hordes which means the real "owners" are not the sellers, the custodian is.
  OK, I'm sorry for being the one to do the math and tell you the truth but the gold that is being bought...has to come from somewhere.  "Somewhere" as in "where" there is actually gold because it can't just be conjured up out of thin air.  And yes, "unfortunately" much of the world's gold is held at the NY Fed as "custodian".  I ask you this, "if" gold does not exist elsewhere that can be delivered in the amounts that are currently being demanded...then where o' where could it have come from?  This is not "crazy stuff" or conspiratorial thinking, it is merely a process of elimination. 
  I have documented for you several times and from several different angles or vantage points...supply does not meet demand and can never hope to at the current pricing.  I hope that this piece will open your eyes wide.  All you need to know are 2 things and 2 things only to protect yourself financially.  1.  Gold truly is money.  2.  Gold is being produced at a rate of 1/85th ounce per person on the planet per year.  Regards,  Bill Holter


end





First your overnight trading from Asia and Europe:

1. Stocks mixed for Asian bourses   with slightly weaker yen values (slightly rising  to 102.56).
2 Nikkei closed down 124 points or 0.85%  
3. Europe stocks up /Euro up/USA dollar index down  again at 79.84.  Chinese bourse Shanghai up as  the yuan falls  again in value to over 6.23736 per usa dollar/yuan carry traders still very nervous. 
3b  Tensions inside Ukraine at feverish pitch/Biden travelled to the Ukraine yesterday and will be in talks for the next two days.
3b  In USA earnings beat is better than expected with 70 out of the 500 S and P reporting/revenue however is below expectations.
4.  USA 10 yr treasury bond at 2.71% early this morning.

5. Details Ransquawk/





Traders Walk In On Another Sleepy Session In Search Of Its Volumeless Levitation Catalyst

Tyler Durden's picture





It has been a fairly quiet few days with traders around the world returning from the Easter long weekend this morning.
As Deutsche Bank notes, the latest developments in Ukraine have perhaps been one of the major highlights over the last couple of days. Following an extended 7-hour meeting last Thursday, Russia, Ukraine, the EU and US all agreed to put an immediate end to violence in eastern Ukraine. The Geneva accord called on illegal armed groups to surrender their weapons and leave official buildings. However, three were killed in a shooting at a checkpoint manned by pro- Russian separatists near Sloviansk early on Sunday. This has prompted accusation from the Russian Foreign Minister Lavrov who blamed the interim Kiev government for violating the Geneva accord. According to the BBC, the local separatists said the attack was carried out by Right Sector militants but Kiev called it a "provocation" staged by Russian special forces. The US has warned the next few days will be pivotal and has threatened more sanctions against Russia if it fails to abide by the Geneva accord. Russia’s Lavrov said that all attempts to isolate Russia through sanctions or other tactics would fail because Russia is “a big independent power that knows what it wants”. US vice president Joe Biden is due to visits Kiev today and tomorrow and will meet government leaders. So stay tuned for more headlines.
Staying on EM, the market is expecting S&P to publish a sovereign-rating outlook update on Russia amid the Ukraine crisis on Friday so let's see if we'll get more volatility ahead of that. For the record, Russia is now rated BBB+/Neg by S&P and its Baa1 rating is on review for possible downgrade by Moody's. On that note, S&P also noted that EM ratings are showing its highest negative bias since 2010. There were 53 EM downgrades and 10 upgrades in Q1 of 2014 led by cuts for Brazil and Ukraine. It will be interesting to see how broader EM, and in particular, the Russia/CEEMEA complex performs today.
Staying on EM but moving on to Asia, Chinese regulators are seemingly backing off earlier pledges to keep local government debt risk in check by allowing local governments financing vehicles (LGFVs) to issue new bonds to help
repay maturing debt and ensure existing infrastructure projects
continues smoothly. A total of RMB100bn (US$16.5bn) of LGFV bonds are
expected to mature this year, according to the NDRC (WSJ).
Moving onto overnight markets, apart from China we are seeing broad based gains across most Asian equities. Bourses in Japan, Korea and Australia are up +0.2%, +0.2% and +0.5% respectively whereas the Hang Seng and the Shenzhen Composite indices are down -0.2% and -1.1% as we type. The gains in broader Asia Pacific followed what was another constructive session for risk assets yesterday during US trading hours. The S&P 500 (+0.38%) rose for its 5th consecutive day partly driven by better corporate earnings from the likes of GE and Morgan Stanley.
Staying on the results season, we’ve had 70 of the S&P 500 companies  reporting so far and the usual trend is starting to emerge in which earnings beats are faring better than revenue beats. Indeed the beat:miss ratio for earnings has been strong at 77%:23% whereas revenue beats/misses are more balanced at 50%:50%. Looking ahead, markets should get ready for another big week of US earnings.
Just over 150 companies (33% of the S&P 500 index’s market cap) are due to report featuring some major corporate such as the likes of Apple, Boeing, Electrolux, Facebook, McDonald’s and Microsoft. On the macro front, we have existing home sales (today), new home sales (tomorrow), and Durable goods orders (Thurs) in the US to look forward too. In Europe, we have the BoE minutes of the April meeting on Wednesday but all eyes should be on the preliminary Euro-area PMI for April. In China, the flash HSBC Chinese PMI manufacturing for April is also due tomorrow.
Bulletin headline summary from Bloomberg and RanSquawk
  • Treasuries steady, yields holding near weekly highs before week’s $96b note auctions begin with $32b 2Y; WI yield 0.436%, drew 0.469% in March.
  • 10Y yield’s 25bp range since Jan. 24 is smallest of past decade; in only one other 12-wk period (in March 2013) has 10Y yield range been less than 30bps
  • Vice President Biden expressed U.S. support for Ukraine during a solidarity visit to Kiev, as an agreement with Russia to ease tensions in nation’s east showed signs of collapse
  • Obama’s trip to Asia this week brings him face-to-face with allies who have grown uncertain about his commitment to the region
  • French President Hollande’s biggest hurdle in pushing through a plan to cut public spending is emerging from a small yet vocal group within his own Socialist ranks
  • Sovereign yields mostly higher. Nikkei -0.9%, Shanghai +0.3%. European equity markets, U.S. stock futures gain. WTI crude and copper lower, gold little changed
US Economic Calendar
  • 9:00am: FHFA House Price Index m/m, Feb., est. 0.5% (prior 0.5%)
  • 10:00am: Richmond Fed Manufacturing Index, April, est. 2 (prior -7)
  • 10:00am: Existing Home Sales, March, est. 4.56m (prior 4.60m); Existing Home Sales m/m, March, est. -1% (prior -0.4%) Supply
  • 11:00am POMO: Fed to purchase $900m-$1.15m in 2036-2044 sector
Asian Headlines
JGBs traded lower amid early strength in the Nikkei 225 and USD/JPY. Asian stocks traded mixed with the Nikkei 225 down 0.85% flat after gapping higher at the open, bolstered by JPY weakness. The Hang Seng index traded down 0.1% weighed on by weakness in utilities. Elsewhere, the Shanghai Composite finished higher by 0.2% despite the PBoC draining CNY 100bln via 28-day repos; 19th consecutive drain. The PBoC have cut its rural RRR by 2% in a move that will not affect overall banking liquidity. (BBG) This follows on from
the reports on April 16th that China would lower the RRR for village and rural banks.
EU & UK Headlines
ECB's Coeure said the ECB has room to cut rates further whilst accommodative monetary policy is justified. Coeure also added EUR appreciation has contributed to the low levels of inflation in the Eurozone. (Le Monde)
Citi have said the ECB is likely to conduct asset purchases in H2 of 2014 and the central bank will probably cut interest rates before implementing QE. (Citi)
US Headlines
Looking ahead, US earnings take focus with Comcast, McDonald's and United Technologies due to report pre-market and AT&T and Gilead Sciences due to report after-market.
Equities
Equities have traded in the green since the get-go with healthcare names taking centre-stage following Novartis announcing major restructuring of its operations including deals with Eli Lilly and GSK and as such healthcare stocks have led the way for Europe.
FX
FX markets continue to remain relatively rangebound with some minor USD weakness stemming from JPY strength, whilst AUD outperforms after AUD/USD tripped stops overnight amid talk of cooperate name and leveraged accounts buying AUD.
Commodities
Libya's NOC says still no decision when Zueitina port might reopen, Sharara and El-Feel fields still closed. The Zueitina port was set to open with the Hariga port which resumed operations last week. (RTRS)

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OH OH the fun is just beginning:  (just love the cartoon!!)

(courtesy zero hedge)




Shrine Visit Retribution? China Seizes Japanese Cargo Vessel (Over War-Debts)

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We noted yesterday, Japan's decision to send an Abe cabinet official to the Yasukuni shrine (home of Class A war criminals) and Abe's sending of an offering, warning it will likely see retaliation from China. We didn't have to wait long. As BBC News reportsChina has seized a Japanese cargo ship (over a pre-war debt). With President Obama due to visit in days, it seems the tensions between China and Japan may force his hand to pick sides.

As BBC News reports, China's seizure of a Japanese cargo ship over a pre-war debt could hit business ties, Japan's top government spokesman has warned.
Shanghai Maritime Court said it had seized the Baosteel Emotion, owned by Mitsui OSK Lines, on Saturday.

It said the seizure related to unpaid compensation for two Chinese ships leased in 1936.

The Chinese ships were later used by the Japanese army and sank at sea, Japan's Kyodo news agency said.

"The Japanese government considers the sudden seizure of this company's ship extremely regrettable," Chief Cabinet Secretary Yoshihide Suga said on Monday.

"This is likely to have, in general, a detrimental effect on Japanese businesses working in China."
It seems the Japanese shrine visit sparked some more "war" memories for the Chinese...
The owners of the shipping company, identified by Kyodo as Zhongwei Shipping, sought compensation after World War Two and the case was reopened at a Shanghai court in 1988, China's Global Times said.

The court ruled in 2007 that Mitsui had to pay 190 million yuan ($30.5m, £18m) as compensation for the two ships leased to Daido, a firm later part of Mitsui, Global Times and Kyodo said.

Mitsui appealed against the decision, but it was upheld in 2012, Kyodo said.

Kyodo said this appeared to be the first time that a Japanese company asset had been confiscated as war-linked compensation.

...

Japan has always held that the issue of war-related compensation was settled by a 1972 agreement between the two sides when ties were normalised.

But now for the first time, a Chinese court has ignored that agreement - and the Chinese government appears to be giving full support, says the BBC's Rupert Wingfield-Hayes in Tokyo.
It seems China and Japan are testing their relationship with the US...
end









The reason for Putin smiling is because the West cannot block Russia from the Bond market.

They have enough cash to last them through 2015:

(courtesy zero hedge)






Why Putin Is Smiling At The Bond Market's Blockade Of Russia

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One of the recurring themes the western media regurgitates at every opportunity is that while the western "diplomatic" sanctions against Russia are clearly a joke, one thing that will severely cripple the economy is the capital market embargo that has struck Russian companies, which are facing $115 billion of debt due over the next 12 months.
Recall that not a single Russian Eurobond issue has successfully priced since Russia's peaceful annexation of Crimea. Surely there is no way Russia can afford to let its major corporations - the nexus of its petroleum trade - go insolvent, which is why Putin will have to restrain himself and beg western investors to come back and chase appetiziing Russian yields (with other people's money of course). Turns out this line of thought is completely wrong.
Russian companies, facing $115 billion of debt due over the next 12 months, will have the funds even as bond markets shut because of the Ukraine crisis, according to Moody’s Investors Service and Fitch Ratings.

Firms will have about $100 billion in cash and earnings at their disposal during the next 18 months, Moody’s said in an analysis of 47 businesses April 11. Almost all 55 companies examined by Fitch are “well placed” to withstand a closed refinancing market for the rest of 2014, it said in a note on April 16. Banks have more than $20 billion in foreign currency to lend as the tensions prompted customers to convert their ruble savings, ZAO Raiffeisenbank said.

The amount of cash on balances of Russian companies, committed credit lines from banks and the operating cash flows they will get is sufficient for the companies to comfortably service their liabilities,” Denis Perevezentsev, an analyst at Moody’s in Moscow, said by phone on April 17.
So, Russia can comfortably extend its Ukraine campaign well into 2015? Truly great news for Kiev, which is already bankrupt, and which is scrambling to get every last bcf of gas it can get its hands on before  Gazprom finally pulls the plug in under a month.
Ah, the miracles of positive cash flow... and how quickly it eliminates any so-called political leverage the bearer of the world's reserve currency thought it may have had, leading ultimately to this.

Biden Warns Russia "It's Time To Stop Talking, And Start Acting"

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Vice President Jo Biden's show of support arrival in Ukraine started with a somewhat back-handed statement that left some questioning Biden's diplomatic skills once again. "You face some very daunting problems and some might say humiliating threats are taking place," Biden spoke to Ukraine officials, pledging an additional $50 million to help Ukraine's beleaguered government with political and economic reforms. As CBS reports, The White House has also announced $8 million in nonlethal military assistance for the Ukrainian armed forces, including bomb-disposal equipment, communications gear and vehicles. Biden concluded his oratory with a threat - that seemed oddly worded given the 'actions' of the last few days, warning Russia that "it's time to stop talking and start acting."


As CBS reports, in the most high-level visit of a U.S. official since crisis erupted in Ukraine, Biden earlier told leaders from various political parties that he brought a message of support from President Obama as they face a historic opportunity to usher in reforms.
"The opportunity to generate a united Ukraine and getting it right is within your grasp," Biden said. "And we want to be your partner and friend in the project. We're ready to assist.

Biden met acting Ukrainian President Oleksandr Turchynov and acting Prime Minister Arseniy Yatsenyuk and democracy activists before announcing the new aid.

...

"You face some very daunting problems and some might say humiliating threats are taking place," Biden said.
And promised more aid - to help the Ukrainians deal with their humilation?
The vice president also announced the United States would provide an additional $50 million to help Ukraine's beleaguered government with political and economic reforms.

The money includes $11 million to help conduct the May 25 presidential election, including voter education, administration and oversight. It also will help fund expert teams from U.S. government agencies to help Ukraine to reduce its reliance on energy supplies from Russia. Other technical advisers will help fight corruption.

The White House has also announced $8 million in nonlethal military assistance for the Ukrainian armed forces, including bomb-disposal equipment, communications gear and vehicles.
But the anti-Russia rhetoric was strong...
In a very loosely veiled reference to the alleged Russian troops in eastern Ukraine, Biden urged Russia to "stop supporting men hiding behind masks." Russian President Vladimir Putin flatly denied that any of his special forces were in eastern Ukraine in a live television appearance last week, dismissing the claims as "nonsense."

Biden told the lawmakers a priority for the U.S. is to help them become independent from Russian energy supplies. "Imagine where you'd stand today if you could tell Russia to keep your own gas," Biden said.

...

Biden added, "You have to fight the cancer of corruption that is endemic in your system right now."

"I want you to know I do not underestimate the incredible pressure you all are under," Biden said. "I do not underestimate the challenges you all face. And I do not underestimate the frustration you all must feel when someone like me comes along to say what a great opportunity this is for you all."
Frustration indeed. But his final words were for Putin...
U.S. Vice President Joe Biden warned Russia on Tuesday that "it's time to stop talking and start acting" to reduce tension in Ukraine.
Or else...

end






OH Oh! an Ukrainian military plane is hit by gunfire over the eastern Ukraine city of Slaviansk:

(courtesy zero hedge)




Ukraine Military Plane Hit By Gunfire Over Pro-Russia Held Slavyansk

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It would seem a red-line or two have been crossed:
  • *UKRAINE MILITARY  PLANE HIT BY GUNFIRE FROM REBEL TOWN: AFP
This comes on the heels of elevated tensions in the last few days since the "deal" and Biden's arrival in Kiev. Last week saw 'unidentified' fighter jets open fire on the Pro-Russian-held Kramatorsk airfield

And more...

Tweet RT:

Antonov An-30 military plane hit by gunfire over during observation flight - Defense ministry http://on.rt.com/1q9y34 

Eastern Ukraine stands defiant against Kiev LIVE UPDATES


Ukraine: Small Arms Fire Damages Ukrainian Military Plane Over Slovyansk

Small arms fire hit and damaged a Ukrainian military surveillance plane over Slovyansk, a town held by pro-Russian militants in eastern Ukraine's Donetsk region April 22, the Ukrainian Defense Ministry said, according to a message BBC posted on Twitter.

As The Telegraph reports,
Ukrainian military aircraft hit by gunfire while on reconnaissance flight over Slavyansk, the defence ministry says

A Ukrainian military surveillance plane was hit and damaged by small arms fire as it was on a reconnaissance flight over the rebel-held eastern town of Slavyansk, the defence ministry said on Tuesday.

The plane, a propellor-driven Antonov An-30, safely made an emergency landing, a ministry spokesman told AFP. None of its crew members was hurt.

"Thanks to the professional actions, military pilots managed to land the plane at the airfield without consequences," the ministry said in a statement. "After a thorough examination and diagnosis, aircraft combat capability was fully restored."

The attack occurred just hours after US Vice President Joe Biden left Ukraine's capital at the end of a two-day visit pledging Washington's support to Kiev's fledgling leaders.


end



Escalation continues;  Ukrainian President Turchynov urges a restart of military action!


(courtesy zero hedge)





The Truce Is Over: Ukraine President Urges Restart Of Military Action

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Ukraine's Acting President Turchynov appears to be calling for an official break in the "truce" deal...
  • *UKRAINE'S TURCHYNOV URGES RESTART OF ANTI-TERRORIST OPERATION
  • *TURCHYNOV SAYS 'TERRORISTS' HOLDING EAST UKRAINE REGION HOSTAGE
  • *TURCHYNOV SAYS EAST UKRAINE SEPARATISTS SUPPORTED BY RUSSIA
So much for Joe Biden's peace-keeping salvation mission to Kiev...
As Bloomberg reports, Pro-Russian separatists have “crossed line,” Ukraine acting President Oleksandr Turchynov says in statement posted on parliament website.


end





OH OH!/USA troops heading for Eastern Europe"

(courtesy zero hedge)





Here Come The Boots On The Ground: US Troops Heading To Eastern Europe

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It seems the truce "deal" is well and truly dead...
  • 600 U.S. TROOPS HEADING TO EUROPE FOR EXERCISES: PENTAGON
  • U.S. AIRBORNE TROOPS GOING TO POLAND, LITHUANIA, LATVIA,ESTONIA
  • U.S. MILITARY EXERCISES ARE IN RESPONSE TO UKRAINE CRISIS:KIRBY
  • MORE MILITARY EXERCISES 'COMING THROUGH' NATO: PENTAGON
The question now, of course, is - what will Putin do in response to this action?
As for where these troops may be arriving from the answer is simple: that other US military intervention success story - Afghanistan. From Reuters:
The number of U.S. troops in Afghanistan may drop well below 10,000 - the minimum demanded by the U.S. military to train Afghan forces - as the longest war in American history winds down, Obama administration officials briefed on the matter say.

Since Afghanistan's general election on April 5, White House, State Department and Pentagon officials have resumed discussions on how many American troops should remain after the current U.S.-led coalition ends its mission this year.

The decision to consider a small force, possibly less than 5,000 U.S. troops, reflects a belief among White House officials that Afghan security forces have evolved into a robust enough force to contain a still-potent Taliban-led insurgency. The small U.S. force that would remain could focus on counter-terrorism or training operations.

That belief, the officials say, is based partly on Afghanistan's surprisingly smooth election, which has won international praise for its high turnout, estimated at 60 percent of 12 million eligible votes, and the failure of Taliban militants to stage high-profile attacks that day.

The Obama administration has been looking at options for a possible residual U.S. force for months.

"The discussion is very much alive," said one U.S. official who asked not to be identified. "They're looking for additional options under 10,000" troops.

There are now about 33,000 U.S. troops in Afghanistan, down from 100,000 in 2011, when troop numbers peaked a decade into a conflict originally intended to deny al Qaeda sanctuary in Afghanistan after the September 11, 2001, attacks.
Of course, it would be peak irony if the next country Russia decides to destabilize is none other than its old "buddy" Afghanistan, which lately appears far more amicable toward the Kremlin than the White House. It certainly would be an additional egg in the face of US foreign policy if Afghanistan - so critical to the US controlled heroin trade - were to show a return to some of its Taliban roots for which it is so well-known.

end


The following is a new ad campaign in England.  They must be out of cash:

(courtesy Martin Armstrong/)

Martin Armstrong Warns "Abandon The UK Before You Can't"

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The following is a new ad campaign in Britain.
As we have warned numerous times - muddle-through has failed; Martin Armstrong notes, the politicians have squandered everything and now they are hunting down capital everywhere and the view is people have to pay whatever they demand or you are just a criminal. Nobody even bothers to look at what they are doing to the world economy.
These advertisements are appearing everywhere and they will only succeed in created the worst economic collapse since the Great Depression.


Your opening 10 year Portuguese bond yield Tuesday : par in  basis points from Monday night


Portuguese 10 year bond yield:  3.74%





Your closing Portuguese 10 year bond yield Tuesday night: a loss of 4 basis points  on the day) Mrs Watanabe of Japan is still buying European debt like crazy. Looks like they are front running for direct QE from the ECB and Portugal does not get its gas from Russia.




Portuguese 10 year bond yield:  3.70%


end

Your closing Japanese yield Tuesday morning: par in basis points from Monday night:




 yield .61%

 





Japanese 10 year bond yield:  .61% 





And now for your closing Japanese 10 year bond yield from NY/par in   basis point from the morning  (THE ECONOMY IN JAPAN IS NOT PERFORMING TOO WELL)



Japanese 10 year bond yield:  .61%  




end




Your opening currency crosses for Tuesday morning:


EUR/USA:  1.3817  up   .0026
USA/JAPAN YEN  102.56   down .050
GBP/USA  1.6819  up .0030
USA/CAN  1.1015 up .0001   


This morning the Euro is a little stronger trading just above the 1.38 level at 1.3817.  The yen is a little stronger  this morning,still trading just above the all important  102 cross. It closed in Japan up 5 basis points at 102.56 yen to the dollar  (dollar down).  The pound  is now showing minor strength as it now trades just above the 1.68 level  to 1.6819.  The Canadian dollar is down again this morning with its cross at 1.1015 to the USA dollar. 





 Early Tuesday morning USA 10 year bond yield:  2.71%  flat in   basis points  from Monday night/ 



USA dollar Index early Tuesday morning: 79.84 down 10  cents



end





The NIKKEI Tuesday morning: down 124 at 0.85%

Trading from Europe and Asia : 1) Europe,  bourses all deeply in the green ; Asian bourses mixed , Nikkei and, Hang Sang in thered, Shanghai in the gree.


Gold early morning trading:  $1291.50

silver:$ 19.52 






 

end





Your closing Spanish 10 year government bond: Tuesday/down 2  in basis point in yield  from Monday night.  (Mrs Watanabe is buying European bonds and shunning Japanese bonds and front running for a possible QE from the ECB and Spain does not get its gas from Russia.)


Spanish 10 year bond yield:  3.07% 



end




Tuesday closing Italian 10 year bond yield: down 3 in basis points and trading 2 in basis points above Spain.




Italian 10 year bond yield;  3.09%



end



 IMPORTANT CLOSES FOR TODAY

Closing currency crosses for Tuesday night/USA dollar index/USA 10 yr bond: 

Euro/USA:  1.3804 up.0013
USA/Japan:  102.57 down   .040
Great Britain/USA:  1.6821  up .0032
USA/Canada:  1.1028 up .0014



The euro fell a bit  in value during this afternoon's  session, but was up on the day , closing just above the 1.38 level to 1.3804.  The yen fell slightly during the afternoon session, but it gained ground on the day by 4 basis points on the day closing well above the magical support 102 level to 102.57 (dollar down). A breach below the 102 usually sends the Dow and many bourses southbound as many key on this cross and as well if breached many of the yen carry traders must unwind their trades.  The British pound gained considerable bit of ground  during the afternoon session and was up  on the day as it closed at 1.6821. The Canadian dollar lost  a bit  during the afternoon session, but was down on the day closing at 1.1028.  Currency wars at their finest today with the help from our criminal HFT traders. 


Your closing USA dollar index:




79.89 down 3 cents on the day 



Your closing 10 year USA bond yield up 1 in  basis points on

the day.


YIELD TONIGHT:


USA 10 yr Bond Yield:  2.72%. 


Closing bourses figures for Tuesday: 





i) England FTSE up 56.41 or .85%


ii) Paris/CAC up 52.40 or  1.18%


 iii) German DAX: up 190.38 or 2.02%
  
iv) Spanish ibex  up 145.40 or 1.41%

v) Italian bourse (MIB) up 322.04 or 1.49%


and the Dow: up 65.12 or 0.40% 
Nasdaq up: 39.91 or 0.97% 




The Big USA stories:



end






Today's New York trading today:


Tuesday Pop Turns To Einhorn Drop As Stocks Stumble Into Close

Tyler Durden's picture





 
US Equity markets were on a mission today... all-time highs for the S&P and Dow were in sight, green for April for the S&P, and unchanged year-to-date for the Nasdaq and Russell was just over the horizon, but... a totaldivergence from JPY carry, bond yields, credit, and even VIX meant that a 'warning' from David Einhorn about Tech Bubble 2.0 was just enough to take the juice out of what was already a low volume levitation. It's a Tuesday so we closed green - the 6th up day in a row - longest run in 7 months. Biotechs ripped higher on M&A "get rich quick'"fever - biggest 2-day rise in 30 months. Treasuries were mixed with 30Y bond yields ripping lower and 5s30s dropping 4bps to 1.75% - new lows since 2007. Copper made modest gains on the day but gold, silver, and worst of all WTI crude all dropped on the day (WTI -2% to $102).

Trannies made new record highs... Nasdaq and Russell almost made it to unchanged for the year...

S&P and The Dow broke to green for April...

Squeeze...

S&P sectors off last week's lows...

Let's get a little context on those high-flying growth stocks... from Fed Tarullo's "valuations are stretched" comment


Biotechs were bid as M&A "get rich quick" fever took hold (biggest 2-day rise in 30 months) - though short of its 100DMA

But Bonds weren't buying it...
VIX wasn't buying it...

Credit wasn't buying it...

and nor was JPY carry...

The USD limped back from early strength (around the EU confidence, housing, Richmond Fed beats) to end the day unchanged on the week...with AUD strongest


Oil tumbled back to $102. Gold and silver limped higher after the ubiquitous morning slamdown...

The term structure continues to flatten

As the appeal of 30Y Treasury yields appears strong no matter what growth, taper, normalization is priced into stocks

One has to wonder if the Europeans have given up chasing Spanish and Italian bonds and are willing to rotate from credit risk to interest rate risk (from 10Y Spain to 30Y US) for an addtional few bps of yield...

Charts: Bloomberg


end





A very important video for you to see.  Is the USA military preparing for the collapse of the USA dollar??

(courtesy zero hedge)






Is The US Military Preparing For The Collapse Of The Dollar?


Tyler Durden's picture





It almost happened in 2008... but as this excerpt fromCasey Research's Meltdown America documentary notes, it appears the US military is preparing for the potential collapse of the US dollar. As Scott Taylor warns, "...if the carrot (of credit worthiness) is fading, and the stick (of military threat) is weak, that empire is going to come down in a hurry..." which leaves a serial economic mis-manager only one option to 'secure' the empire.

To see what the consequences of economic mismanagement can be, and how stealthily disaster can creep up on you, watch the 30-minute documentary,Meltdown America. Witness the harrowing tales of three ordinary people who lived through a crisis, and how their experiences warn of the turmoil that could soon reach the US. Click here to watch it now.

McDonalds Misses Revenue, Earnings Estimates: Blames Weather

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Another company which relies on the viability of the global consumer for its profits reports, and sure enough another company that misses: namely McDonalds.  Moments ago the fast-food giant reported Q1 revenues of $6.70 billion, missing expectations of $6.72 billion (pushing the number of companies that have missed revenue estimates this earnings season once again into the majority), and also missing EPS estimates of $1.24, printing at $1.21, which however will not be a surprise to those who have beenfollowing our reporting on MCD's same store sales growth, or lack thereof, in the US. But while the collapse of the US consumer is well-known, and will hardly be an embarrassment for McDonalds management to reveal its exposure to it, what does the CEO blame the miss on?Why the weather of course.
From the release:
First Quarter results included:
  • Global comparable sales increase of 0.5% reflecting higher average check, as well as negative guest traffic in the U.S. and Asia/Pacific, Middle East and Africa (APMEA)
  • Consolidated revenues increase of 1% (3% in constant currencies)
  • Consolidated operating income decrease of 1% (1% increase in constant currencies)
  • Diluted earnings per share of $1.21, decrease of 4% (2% in constant currencies)
  • Returned $1.2 billion to shareholders through dividends and share repurchases
In the U.S., comparable sales decreased 1.7% in the first quarter, and operating income declined 3%. Top-line results for the quarter reflected negative comparable guest traffic amid challenging industry dynamics and severe winter weather. Looking ahead, the U.S. remains focused on improving the restaurant experience through a continued commitment to operations and service excellence, customer engagement and menu choice to drive sales and profitability.
And a rather botched attempt at geopolitics:
During the first quarter, Europe grew comparable sales 1.4%, and operating income by 6% (4% in constant currencies). Positive sales performance in the U.K., France and Russia was partially offset by ongoing weakness in Germany. Across Europe, a combination of unique limited-time food events, premium offerings and everyday affordable pricing contributed to positive performance.
Uhm, strong Russia and weak Germany? Is the snow to blame for that too?
Regardless, how ironic is it that while MCD is bitching about snow in the winter, its own 2006 spin off, and the company that just keeps reporting soaring same store sales - yes, even during the harsh winter weather - Chipotle, said weather had zero impact on its own sales. Oh yes, that's right, because when it comes to excuses, anything will do, and the more companies that use the same excuse, the better. Apparently, the thinking goes, if everyone lies about the reason for their profit weakness with the same lie, it will make that lie more credible.


end





Richmond Manufacturing Index rebounds sharply this month but wages tumble to 1 year lows.
Also their 6 month outlook: down sharply!!


(courtesy zero hedge)





Richmond Fed Rebounds But Wages Tumble To 12-Month Lows

Tyler Durden's picture





 
After 2 dismal missing months in a row, the Richmond Fed manufacturing survey rebounded dead-cat-bouncedly with its biggest MoM rise since August. The bulk of the gains were a huge swing in New Orders (from -9 to +10) but average workweek was stagnant and wages dropped to their lowest in 12 months. Sadly, for those extrapolating this surge to 'escape velocity' growth any minute now, theRichmond Fed's six-month forward outlook saw shipments, new orders, employees, wages, and capex all drop...


But what really matters - wages - has seen the biggest 2-month drop in 3 years and dropped to its lowest in a year...

Charts: Bloomberg


end





Existing home sales continue to drop.  They are now at levels equal to July 2012.
As zero hedge states, cash buyers are 50% of March transactions  ( homes turning into rentals)

(courtesy zero hedge)



Existing Home Sales Drop To Lowest Since July 2012; All-Cash Buyers, Investors Are 50% Of March Transactions


Tyler Durden's picture





 
Another month, another drop in existing home sales, which in March declined once again from 4.60MM units to 4.59MM. While the good news was that this number did beat the consensus estimate of 4.56MM (based on a a range of 4.50MM to 4.85MM from 75 economist surveyed), the bad news was that once again, a near majority of the upside was once again due to investors and other all-cash buyers, who accounted for 50% of all sales. That and that like last time, of course, this was the worst existing home sales number since July 2012.
Some of the other data highlights:
  • Existing-home sales fell 0.2% after falling 0.4% prior month
  • 5.2 months supply in March vs. 5.0 in Feb.
  • Inventory rose 4.7% to 1.99m homes
  • 1st-time buyers 30% of total sales; all cash 33%; investors 17%
  • Distressed sales 14% of total sales; of which foreclosures 10%; short sales 4%
  • Median home price rose 7.9% from last year to $198,500
Everyone's favorite NAR talking head Larry Yun had this to say:
Lawrence Yun, NAR chief economist, said that current sales activity is underperforming by historical standards. “There really should be stronger levels of home sales given our population growth,” he said. “In contrast, price growth is rising faster than historical norms because of inventory shortages.”

Yun expects some improvement in the months ahead. “With ongoing job creation and some weather delayed shopping activity, home sales should pick up, especially if inventory continues to improve and mortgage interest rates rise only modestly.”
But only if it doesn't snow, or rain, and certainly not if it is windy or the sun is shining just the wrong shade of strong.  Remember in an artificial, centrally-planned economy represented by a rigged market, the phrase priced to perfection takes on a whole new meaning.
Some more details from the report:
All-cash sales comprised 33 percent of transactions in March, compared with 35 percent in February and 30 percent in March 2013. Individual investors, who account for many cash sales, purchased 17 percent of homes in March, down from 21 percent in February and 19 percent in March 2013. Seventy-one percent of investors paid cash in March.

Single-family home sales were unchanged at a seasonally adjusted annual rate of 4.04 million in March, the same as February, but are 7.3 percent below the 4.36 million pace a year ago. The median existing single-family home price was $198,200 in March, which is 7.4 percent above March 2013.

Existing condominium and co-op sales declined 1.8 percent to an annual rate of 550,000 units in March from 560,000 in February, and are 8.3 percent below the 600,000 level in March 2013. The median existing condo price was $200,800 in March, up 11.6 percent from a year ago.

Regionally, existing-home sales in the Northeast rose 9.1 percent to an annual rate of 600,000 in March, but are 4.8 percent below March 2013. The median price in the Northeast was $244,700, up 3.2 percent from a year ago.

Existing-home sales in the Midwest rose 4.0 percent in March to a pace of 1.04 million, but are 10.3 percent below a year ago. The median price in the Midwest was $149,600, which is 5.9 percent above March 2013.

In the South, existing-home sales declined 3.0 percent to an annual level of 1.92 million in March, and also are 3.0 percent below March 2013. The median price in the South was $173,000, up 6.7 percent from a year ago.

Existing-home sales in the West fell 3.7 percent to a pace of 1.03 million in March, and are 13.4 percent below a year ago. The median price in the West was $289,300, which is 12.6 percent higher than March 2013.
Finally, remember that all of the above is largely BS - the NAR is, as the name implies, an association of realtors, and as such it is in their best interest to perpetually skew the picture as far rosier than it is, just so prospective buyers aren't spooked by the reality behind the crumbling fake facade.


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An extremely important commentary from Mike Kreiger.
Sub-prime mortgages are baaack!!!

(courtesy Mike Krieger/zero hedge)





Mortgage Standards Are Plunging – It’s Muppet Fleecing Time All Over Again

Tyler Durden's picture





 
Submitted by Mike Krieger of Liberty Blitzkrieg blog,
In February, I highlighted the fact that subprime loans were about to make a return in my piece: Subprime Mortgages are Back…This Time Marketed as “Second Chance Purchase Programs.” In that article, I posited that with the “all cash” private equity shops and hedge funds no longer able to make good returns through buying new homes to rent, these investors would need some sucker to sell to in order to realize a return (Blackstone’s purchases have plunged 70% recently). That sucker, as always, will be the retail muppets, and those muppets will be lured in through subprime. This is now starting to happen in earnest.
The following article from the Wall Street Journal is both depressing and disturbing. Rather than allowing home prices to reset at a lower level after the 2008 crash where normal buyers could afford a sane 20% mortgage, our central planners decided to do “whatever it takes” to re-inflate the housing bubble. This was achieved through wealthy investment pools buying properties for all cash. The trouble is, with home prices now inflated by these financial buyers and no real increase in wages, homes are simply unaffordable. So what do you do? You bring back subprime and get the peasants long real estate with essentially zero money down all over again. Truly remarkable.
From the Wall Street Journal:
While standards remain tight by historical measures, lenders have started to accept lower credit scores and to reduce down-payment requirements.

One such lender is TD Bank, Toronto-Dominion Bank’s U.S. unit, which on Friday began accepting down payments as low as 3% through an initiative called “Right Step,” geared toward first-time buyers and low- and moderate-income buyers. TD initially launched the program last year with a 5% down payment. It keeps the product on its books and doesn’t charge for insurance. Borrowers also don’t need to put down any of their own cash if a family, state or nonprofit group provides a down-payment gift.
So a measly 5% downpayment wasn’t good enough. They had to drop it to 3%. Frightening.
The changes also are a recognition by lenders that the business of refinancing old mortgages, which had been a huge profit center for banks, is nearly tapped out. To generate future profits, banks will have to compete for borrowers who may not have perfect credit or large down payments.

Valley National Bank, a community bank based in Wayne, N.J., lowered down-payment requirements to 5% from 25% this month on mortgages for certain buyers in New York, New Jersey and Pennsylvania.Next month, Arlington Community Federal Credit Union, based in Arlington, Va., will begin accepting 3% down payments on mortgages up to $417,000, down from 5%.
Yes, you read that right, 25% to 5%. Holy fuck.
Over the past year, however, more than one in six loans made outside of the FHA included down payments of less than 10%, the highest share since 2008, according to figures from data firm Black Knight Financial Services. That still is lower than the nearly 44% of the market they accounted for at the peak of the housing bubble in early 2007.

While smaller lenders are trying to appeal to first-time buyers, larger lenders are gradually reducing down payments for jumbo loans—those too large for government backing—to woo wealthy customers. EverBank began accepting down payments of 10.1% for jumbo borrowers with strong credit this year, down from 20%, and Wells Fargo reduced to 15% from 20% its minimum down payment for jumbos last year. Bank of America made the same change for mortgages of up to $1 million.

Any easing should give more options to first-time buyers like Nathan Davenport, 26, who purchased a one-bedroom condo for $195,000 in Atlanta this month with a 5% down payment. Mr. Davenport, who works for a phone-and-Internet services provider, says he has a high credit score but was worried that if he waited longer to save up for a larger down payment he would be priced out of the market.

“Twenty percent of this price and only being out of college a handful of years would have been really hard to pull off,” Mr. Davenport said.
I’m sorry, but on what sort of bizarro crackhead planet is putting 3% down toward an asset mean you are “buying it.”
The Truman Show rolls on...
Full article here.


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Stephen Roach (ex of Morgan Stanley said what????

(courtesy zero hedge)





Ex-Morgan Stanley Chief Economist Admits "Fed Is Distorting Markets"

Tyler Durden's picture






Stephen Roach, former Chief Economist at Morgan Stanley, has never been shy to share his opinions about the world and having left the Wall Street firm is even freer to speak uncomfortable truthiness. This brief clip, as Sovereign Man's Simon Black notes, says it all so succinctly... "The market has been distorted by far bigger forces than flash trading. To me, the force that has rigged the market... is the Federal Reserve, not the flash traders."
We recommend skipping to 13:05 for about 30 seconds of brilliance if you’re pressed for time

(see zero hedge for video clip)

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I just above seen everything!!

WHAT!!!

(courtesy zero hedge)



WTF Headline Of The Day: Tax-Cheating IRS Staff Got Bonuses

Tyler Durden's picture





 
If you read this without saying "umm, what?" read it again... USA Today notes that a report by the Treasury Inspector General for Tax Administration shows the IRS handed out $2.8 million in bonuses to employees with disciplinary issues - including more than $1 million to employees who didn't pay their federal taxes.

The report by the Treasury Inspector General for Tax Administration said 1,146 IRS employees received bonuses within a year of substantiated federal tax compliance problems.

The bonuses weren't just monetary.Employees with tax problems received a total of 10,582 hours of paid time off — valued at about $250,000 — and 69 received permanent raises through a step increase, the report said. The report looked at bonuses in 2011 and 2012.

Employees' tax problems included "willful understatement of tax liabilities over multiple tax years, late payment of tax liabilities, and underreporting of income,"the report said.

The IRS said it has instituted a policy to take conduct into account when handing out bonuses to senior executives. Making that policy apply to all of the agency's workers would require negotiations with the National Treasury Employees Union. The union did not respond to a request for comment.

"We take seriously our unique role as this nation's tax administrator, and we will strive to implement a policy that protects the integrity of the tax administration system and the reputation of the service," IRS chief Human Capital Officer David Krieg said in a written response to the audit.
So - if you are a non-government-employee who doesn't pay your taxes, you get jail and accounts frozen... but if you're an IRS employee... you get a fucking bonus!!!

end



The huge Student loan bubble:
The administration is talking about some debt write off.



(from the Wall Street Journal)


Flood Of Students Demanding Loan Forgiveness Forces Administration Scramble

Tyler Durden's picture





 
"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone," is a study's warning over government plans that allow students to rack up big debts and then forgive the unpaid balance after a set period. As WSJ reports,enrollment in student debt forgiveness plans have surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion. The administration is looking to cap debt eligible for forgiveness, as President Obama's revamped Pay As You Earn scheme has seen applications soar and is estimated to cost taxpayers $14bn a year. The 'popularity' of the student loan bailout plan surged after Obama promoted it in 2012, and now the administration must back-track ascosts have massively outpaced government predictions.


We have been aggressively focused on the government's blowing of the student loan bubble...
Student debt has nearly doubled since 2007 to $1.1 trillion, disproportionately driven by the growth in graduate-school debt.
And questioned the need to incur such massive credit-fueled costs of tuition only to gain a low-paying job...
there is no point in trying to preserve the old regime. Today's emphasis on measuring college education in terms of future earnings and employability may strike some as philistine, but most students have little choice. When you could pay your way through college by waiting tables, the idea that you should "study what interests you" was more viable than it is today, when the cost of a four-year degree often runs to six figures. For an 18-year-old, investing such a sum in an education without a payoff makes no more sense than buying a Ferrari on credit.
And while government plans are nothing new, Obama has aggressively promoted them...
The government has offered some form of income-based repayment since the early 1990s, but few students found the terms enticing. But in 2007, Congress allowed borrowers working in nonprofit and government jobs to have unpaid debt forgiven after 10 years, and cut monthly payments for new borrowers to 15% of discretionary income.

In 2010, it cut those payments to 10% for borrowers who took out loans from 2014. A year later, Mr. Obama, through executive action, moved up the date when borrowers could qualify for the new terms, creating a program for those who took out loans from 2011. The White House this year has proposed making the program available to all student borrowers, regardless of when they signed their loans.

The popularity of the programs surged after the Obama administration began to promote them, starting in 2012, on the Internet and later through email to borrowers.
And it seems they are ripe for abuse...
"Income-based repayment can be a way for students responsibly to manage debt, but it should not be a bailout for students who borrow too much or for schools who charge too much," said Sen. Lamar Alexander of Tennessee, the ranking Republican on the Senate Education Committee.
But, as usual, the government screwed up...
The plans' long-term costs have greatly outpaced the government's predictions. In the last fiscal year, debt absorbed by the repayment plans from the most widely used student-loan program—Stafford loans—exceeded government expectations from a year earlier by 90%.

...

A report Monday last week from the Brookings Institution, a centrist think tank, offered one of the few preliminary examinations of the programs' impact. The most popular plan could cost taxpayers $14 billion a year if it becomes available to all borrowers as Mr. Obama has proposed, while fueling tuition inflation, it said.

"Loan forgiveness creates incentives for students to borrow too much to attend college, potentially contributing to rising college prices for everyone," the study said. The authors recommend scrapping the forgiveness provisions.
Sure enough everyone piled in looking for their handout...
Enrollment in the plans—which allow students to rack up big debts and then forgive the unpaid balance after a set period—has surged nearly 40% in just six months, to include at least 1.3 million Americans owing around $72 billion, U.S. Education Department records show.

Which means costs are soaring and the administration feels the need to do something to fix what it had broken by intervening once again...

The Obama administration has proposed in its latest budget released last month to cap debt eligible for forgiveness at $57,500 per student. There is currently no limit on such debt.

The move reflects concerns in the administration not just about the hit to the government, but over the risk that promising huge debt forgiveness could make borrowers and schools less disciplined about costs. Colleges might charge more than they would otherwise, leading students to borrow more.
And so is the government about to pop the student loan bubble by spoiling a good thing - unlimited debt forgiveness - for students and trickling down that credit tightening impact on colleges only to happy to raise tuition costs to reflect the credit-forgiveness-adjusted amount of money on the table?

end

Well that about does it for tonight
I will see you tomorrow night

harvey

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