Good morning Ladies and Gentlemen:
gold closed down by 23.00 to 916.20. Silver fell in sympathy down to 17.84 as options expiry almost always causes the cartel to raid the precious metals arena. I cannot recall ever the cartel abstaining from raiding on option expiry Friday.
The open interest on the gold comex rose to 434000 despite Thursday's fall in gold price. Again short selling is evident.
During yesterday's session gold was trading at 947.00 when the cartel and the banking interventionists decided it was time to act. They forced the Euro down to 1.5718 after that currency hit 1.593 earlier in the morning session. The usa index rocketed to above 72. as gold, silver, oil and just about every commodity were hit.
However in the afternoon, oil rebounded from its lows to close to 116.40. The long bond continues to tank. Platinium went from negative 25 dollars to positive 2.00 dollars. And the USA index sank below the 72 mark.
Intervention never succeeds.
Wall Street rejoiced with news that Citibank's losses may not be as large as anticipated. They revealed a loss of 5 billion dollars but announced a further 60 billion dollars of toxic subprime garbage. Citi then reported that it has a further 18.3 billion exposure in the Alt A arena. The market rejoiced because at the end of 2007 it stood at 22 billion dollars.
There was considerably commentary on the misinformation on the Libor pricing. Because of this it looks like the banking problems are getting worse by the minute.
I guess the biggest news came from Barrick vs the CIBC. It seems that Barrick deposited 65 million dollars of short term money in the Asset Backed Commercial Paper market. They got the green light from the bankers the CIBC. This is the same fund that Martin Goldfarb deposited 33 million dollars after he got the green light from the Bank of Nova Scotia chairman.
In the restructuring of the ABCP pool, one of the conditions is that one cannot sue a bank for wrongful information.
The CIBC expressly told Barrick that the ABCP paper was void of subprime stuff. They were mistaken and now Barrick went to court in order for them to be allowed to go after the bankers. This will be worth watching!
Midas will resume on Monday when everyone is back from the Washington conference.
Have a great weekend
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