IMF 1, Greece 0.

Baltic Dry Index. 580 unch.      Brent Crude 56.80

LIR Gold Target in 2019: $30,000.  Revised due to QE programs.

Any sudden event which creates a great demand for actual cash may cause, and will tend to cause, a panic in a country where cash is much economised, and where debts payable on demand are large. In such a country an immense credit rests on a small cash reserve, and an unexpected and large diminution of that reserve may easily break up and shatter very much, if not the whole, of that credit.

Walter Bagehot. Lombard Street 1873.

We open this Friday with yet another red flag on China. Bloomie thinks it’s much worse than the numbers foretell. While the official growth rate posts GDP growing at 7 percent, many analysts think it’s growing at only half that, while lately, some analysts have begun to question whether China’s economy is growing at less than 1 percent. Time to be out of risk and into cash. “Sell in May, go away,” came early this year, I think.

We Travelled Across China and Returned Terrified for the Economy

8:18 PM BST April 9, 2015

China’s steel and metals markets, a barometer of the world’s second-biggest economy, are “a lot worse than you think,” according to a Bloomberg Intelligence analyst who just completed a tour of the country.

What he saw: idle cranes, empty construction sites and half-finished, abandoned buildings in several cities. Conversations with executives reinforced the “gloomy” outlook.

“China’s metals demand is plummeting,” wrote Kenneth Hoffman, the metals analyst who spent a week traveling across the country, meeting with executives, traders, industry groups and analysts. “Demand is rapidly deteriorating as the government slows its infrastructure building and transforms into a consumer economy.”

The China Steel Profitability Index compiled by Bloomberg Intelligence barely rose in March, a time after the annual Lunar New Year when demand would usually surge, and so far this month has resumed its decline. Steel use this year is down 3.4 percent, after slumping as much as 4 percent in 2014, according to BI. It had steadily risen for more than a decade.

Prices for commodities from iron ore to coal are sinking as China’s leadership tries to steer the economy away from debt-fueled property investment and smokestack industries, embracing services and domestic-led consumption. At the same time, President Xi Jinping is stepping up efforts to combat pollution, further squeezing industry.

Deteriorating economic data has led traders and analysts to speculate that China’s central bank will act to revive growth. The bank has said it will keep an “appropriate balance between loosening and tightening” of interest rates. It has cut interest rates twice since November and lowered lenders’ reserve-requirement ratios once.

Economists are forecasting 7 percent growth in China for this year, in line with government targets and down from 7.4 percent in 2014, according to the median of 59 estimates compiled by Bloomberg. That’s about half the last decade’s peak rate of 14.2 percent in 2007.

The slowing steel and metals activity suggests the outlook could be grimmer.
More
http://www.bloomberg.com/news/articles/2015-04-09/we-travelled-across-china-and-returned-terrified-for-the-economy

Yesterday those tax and work shy Greeks, decided not to welch on their debt to the IMF. Faced with a harsh reality, Greece blinked.  On to next week, and then the Greece killer month of May. Quite who gains from all this brinkmanship is hard to say. From London, it seems to me, no one gains but all lose out, except of course the IMF which just got paid. For the record, it's not Christine Legarde's money, it's global taxpayers money.

European Central Bank boosts Greek banks as IMF default is averted

Athens steps back from threats to renege on the International Monetary Fund as hopes of bail-out deal rise

By Mehreen Khan, and Szu Ping Chan 7:47PM BST 09 Apr 2015

The European Central Bank bolstered its emergency funding for Greece’s stricken banks, as Athens made good on its promise to pay back the International Monetary Fund, averting an unprecedented default.

Having threatened to deliberately miss a €448m loan repayment to the Fund without a guarantee of fresh bail-out cash, Athens sent its latest payment on Thursday morning, according to finance ministry officials.

Christine Lagarde, the managing director of the International Monetary Fund, confirmed Greece had made its loan repayment on time. “Yes – I’ve got my money back,” she told an audience in Washington.

The cash-strapped government has warned its paymasters it would run out of funds to make its loan obligations and continue to pay out a €1.7bn monthly social security bill without a release of bail-out cash. Finance Minister Yanis Varoufakis sought reassurance from Ms Lagarde that Athens would be given enough “flexibility” to ensure it could still meet its public sector wages and pensions obligations on Monday.

Greece averted falling into an arrears process but will still need to repay a further €9.2bn to the IMF this year.

The move came as the ECB hiked its cap on emergency funding (ELA) for Greek banks by €1.2bn.
This is the largest reported single increase in ELA funding since the central bank removed its ordinary lending operations to the country in February.

ELA, which is reviewed on a weekly basis by the ECB, has been drip-fed to Greek banks and now stands at more than €73bn.

A two-month stalemate in Greece’s bail-out negotiations has seen capital flee the country’s banks, which have repeatedly hit the limit on the emergency cash. The ECB’s latest move will just cover the €1.12bn that was withdrawn from banks from March 30 to April 8.

Greece's finance minister hit out at the central bank's disciplinarian stance, claiming the ECB had become a "highly politicized central bank".

More
http://www.telegraph.co.uk/finance/economics/11526366/European-Central-Bank-boosts-Greek-banks-as-IMF-default-is-averted.html

Staying with Europe for now, the prospect of yet another hung Parliament after next month’s UK general election is finally making UK bond buyers nervous. UK bonds, called “gilts” since the time UK bonds were printed with a gold i.e. gilded edge, are how the UK’s version of the universal central bankster Ponzi scheme is run. If enough Johnny Foreigners balk at buying John Bull’s “gilts,” the bonds not the UK’s female pigs, the Old Lady of Threadneedle Street will have to step in a buyer of last resort.  Life is getting pretty dicey in the Last Chance Saloon of the Great Nixonian Error of fiat money.

Gilts strike as foreigners shun UK on gridlock fears

The worry is that the latest gilts strike by foreigners may be part of longer term 're-rating' of the UK economy

By Ambrose Evans-Pritchard 6:30PM BST 09 Apr 2015

Foreign investors are slashing holdings of British gilts at a record pace on concerns over electoral gridlock and the long-term stability of sterling.

Data from the Debt Management Office show that non-residents sold a net £14bn of gilts over the two months of January and February, an even bigger sell-off than during the white heat of the financial crisis in early 2009.

The bid-to-cover ratio at gilt auctions has been slipping relentlessly across all maturities for the past nine months, dropping to a six-year low of 1.19 at a sale of five-year debt on Wednesday.

“The data suggest some kind of buyers’ strike,” said Andy Chaytor, head of European interest rates strategy at Nomura. “This is entirely consistent with the idea that non-residents may wish to reduce gilt holdings in the face of a very uncertain election.”

Nomura said the big Japanese investors appear to be shunning UK debt, opting for US Treasuries and Australian bonds. Quantitative easing in the eurozone has yet to produce the expected leakage into gilts. The money is flowing out of Europe and into the US or Asian debt markets instead.

The Bank of England has until recently been the buyer-of last resort for gilts, mopping up £375bn of bonds from 2009 to 2012 under quantitative easing. At one stage it was covering almost the entire fiscal deficit. The QE effect shielded the gilts market from a possible storm before the 2010 election.

This time British debt is more exposed to market forces, although there is no sign yet that domestic investors are stepping back. Yields on 10-year bonds have nudged up to 1.55pc from 1.33pc in January but are still near historic lows.

More
http://www.telegraph.co.uk/finance/economics/11525768/Gilts-strike-as-foreigners-shun-UK-on-gridlock-fears.html

We end with better UK news, especially for England in its continuous sparring with the anti-English Scots. Soon England won’t need to pander to Scotland for the sake of North Sea oil. Holders of long dated “gilts” can breathe easier too. The gilt buyers strike looks like being very short lived.

Over £300bn worth of oil 'discovered' in West Sussex

UKOG claims the site has the potential to be a "world class potential resource" but industry experts sound notes of caution

By Ben Wright 3:30PM BST 09 Apr 2015

The exploration company UK Oil & Gas Investments claims that it has made a significant oil find close to Gatwick Airport in West Sussex.

The company, which is chaired by entrepreneur David Lenigas, announced that analysis conducted on the site means that the well could yield up to 158 million barrels of oil per square mile. The company's licenses cover 55 square miles of the Weald Basin, a region spanning Kent, Sussex, Surrey and Hampshire.

This suggests that the site could hold over 8.6 billion barrels of oil - just under a fifth of the amount that has been pumped out of the North Sea in the past 40 years.

At the current oil price of around $58 a barrel, the amount of oil UK Oil & Gas Investments claims is lying under the West Sussex countryside would be worth just under $500bn, or £336bn. However, the company cautioned that it may only be able to extract a fraction of those reserves from the site.

A number of industry experts have expressed scepticism about the size of the discovery.

----Stephen Sanderson, the chief executive of UKOG, said that his company had drilled the deepest well in the region in 30 years. It has also been able to call on cutting-edge technology and data interpretation techniques. This had "comprehensively change the understanding of the area's potential oil resources".

He added: "Appraisal drilling and well testing will be required to prove its commerciality, but this 'Weald hybrid play' has the potential for significant daily oil production."

UKOG said the area near Gatwick, sometimes dubbed "Britain's Dallas", had the potential to be a "world class potential resource".

More
http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/11524135/Over-300bn-worth-of-oil-discovered-in-West-Sussex.html

Did you hear about the thoughtful Scotsman who was heading out to the pub? He turned to his wifie before leaving and said, 'Jackie - put on your hat and coat lassie.'

She replied, 'Awe Iain that's nice - are you taking me to the pub with you?'

'Nae, I'm switching the central heating off while I'm oot.'

At the Comex silver depositories Thursday final figures were: Registered 62.23 Moz, Eligible 113.14 Moz, Total 176.37 Moz.  

Crooks and Scoundrels Corner

The bent, the seriously bent, and the totally doubled over.

This morning, the future of money? How will old dinosaurs like me cope?

Samsung Plans to Take Bitcoin Technology Beyond Virtual Currency

3:49 AM BST  April 10, 2015

Samsung Electronics Co. is working with International Business Machines Corp. to use bitcoin technology for new applications.

While bitcoin’s price has almost halved in the past year and the prospects for the digital currency are uncertain, its underlying software is attracting companies like phone makers, carriers and banks.
That’s because the technology can be tweaked to record changes in ownership of any asset in a public ledger using a distributed network of computers or mobile phones. It could help facilitate all types of online transactions.

Samsung Research America, a division based in Silicon Valley, has researchers looking at using the so-called bitcoin blockchain to design better ways to verify “that what you say is authentic is authentic,” said Steven Rahman, director of strategy at the research division.

Samsung makes electronics ranging from Galaxy smartphones to home appliances and TVs. The Suwon, South Korea-based company also runs music radio and video services, a mobile-payment service, and offers a variety of apps.

“The blockchain technology is very interesting in general, and it can be applied in a lot of areas,” Rahman said. “Currency, it’s just the first use case. You could imagine that anything, like prescriptions, could be managed with the blockchain technology.”

Samsung Research America usually develops technologies that may be used in commercial products in two to five years, he said, declining to provide further details about the bitcoin project.

The bitcoin blockchain could allow for cheaper money transfer and be used for storage of files like songs and videos, which currently require companies to either buy hundreds of servers or lease capacity from other service providers.

Other companies have become interested in the technology. Orange SA’s Silicon Valley-based venture-capital arm has said it’s looking to invest in bitcoin startups. This year Nasdaq OMX Group Inc. licensed its technology to a bitcoin trading company, while the New York Stock Exchange invested in bitcoin startup Coinbase.

Steve Tomasco, a spokesman for IBM, didn’t respond to a request for comment.
http://www.bloomberg.com/news/articles/2015-04-10/samsung-plans-to-take-bitcoin-technology-beyond-virtual-currency

Another weekend, and thanks to Athens yesterday, we probably don’t have to worry about a Geek default until May 12^th. Time to enjoy God’s high spring. The blossoms, new leaves and early wild flowers are all now exploding in the hedgerows, fields and woodlands of southern England. Dog walking is now a pleasure in the ever strengthening sun and much milder breeze. The air is full of the sounds of chattering birdsong, until later in the year replaced by the screeching, deafening sound of “Dallas” oil rigs. Have a great weekend everyone.

At an art auction in Edinburgh, Scotland, a wealthy American lost his wallet containing £20,000.  He announced to the gathering that that he would give a reward of £200 to the person who found it.

From the back of the hall a Scottish voice shouted, “I'll give £250.”

The monthly Coppock Indicators finished March

DJIA: +118 Down. NASDAQ: +209 Down. SP500: +161 Down.