www.lemetropolecafe.com James Joyce table Ron Kirby’s Paper.
Good morning Ladies and Gentlemen:
Gold had a good day yesterday closing up by $4.20 to 926.40 and silver rose by 10 cents to 17.32.
The volume at the comex yesterday, was estimated to be 212000 contracts The switch effect was around 35000 so the net gold comex purchases were around 177000. The volume at comex was absolutely huge. To give you an idea of size: 212000 contracts means 21 million oz of gold. The last 4 days saw volume in excess of 200,000 each day or 84 milllion oz of gold for the last 4 days. The world only produces 75 million oz of gold per year. And the comex is not the largest in gold trading. The LBMA trades 75 million oz of gold contracts and the OTC market is even greater in size on a daily basis.
The front month of August saw its OI decline slightly to 155000 contracts with one day left. There are 18000 contracts of calls on comex gold in the money. There is 550 contracts standing for delivery from calls exercised for contracts in May. Total OI rose by 4000 contracts with the rise in gold on Thursday.
My number 2 son Lenny, my chief statistician tells me that roughly 45000 contracts will switch on Monday and again on Tuesday. July 31.08 is the first day for contracts to be hit. Judging from previous switches, it looks like we may have over 4000 of contracts standing or 4 million oz of gold.
That will be unbearable pressure on the comex. We extremely doubt that they have owners of gold wishing to part with 3.0 million oz. I will be watching this and comment on this every day next week.
Monday, is the last trading day for the August contract and for options. Expect more criminal activity by the cartel as they try to stop the 18000 contracts from taking delivery from the options side of things.
I would like to comment on Ron Kirby’s Paper at Lemetropole.
Last week, we saw a huge price escalation in the shares of the financials after the SEC commissioner Cox outlawed the shorting of 19 financial stocks. I have appended the list for you (with the loss of each up to the outlawing of short selling).
YTD % change
BNP Paribas Securities Corp.
BNPQF or BNPQY
Bank of America Corporation
Credit Suisse Group
Daiwa Securities Group Inc.
Deutsche Bank Group AG
Goldman, Sachs Group Inc
Royal Bank ADS
HSBC Holdings PLC ADS
HBC and HSI
J. P. Morgan Chase & Co.
Lehman Brothers Holdings Inc.
Merrill Lynch & Co., Inc.
Mizuho Financial Group, Inc.
Kirby noted that 15 out of the 19 were members of the LBMA. Some are not even domiciled in the
What is even more intriguing is that two banks were not on the list and their financial situation was deteriorating faster than these 19. The two who were not on the list were Washington Mutual and
Wachovia. The 4 members who are not LBMA members are Fannie, Freddie, Royal Bank of
It is now obvious that the 15 members needed protection because of their exposure to their huge gold shorts. They were seeing the abyss as their stock was plummeting. Commissioner Cox, the SEC watchdog allowed criminal activity to occur in which Banks bought calls and/or stock with the Fed TAF money and routed the shorts.. Fannie and Freddie needed help because their stock had deteriorated by over 66%. The Royal bank of
I guess the powers to be felt that Washington Mutual and Wachovia could not be saved. We will probably see funeral arrangements for these two.
As for Washington Mutual , they have a total of 261 billion dollars of mortgage assets out of a total of 320 billion dollars. They have only 7 billion in cash. The total ARMS held by the bank total 107 billion dollars and these escalate in terms beginning next month.
Last month we saw Goldman Sachs unload these same type of assets at 44 cents on the dollar. If we were to take the mark to mark value as placed by Goldman then Washington Mutual would have a negative retained earnings of 129 billion dollars. In other words, they are totally bust.
What is worse, is that the huge loss will totally obliterate the FDIC when these guys knock on the front door of WM. The FDIC would need over 60 billion dollars to bail out depositors at Washington Mutal.
You can also use the same analysis for Wachovia and come to the same conclusion. They have negative retained earnings.
ON Thursday, I reported to you that the Fed has negative non borrowings of 122 billlion dollars meaning that all of depositors money have vaporized. I give it 3 weeks until we see the entire financial scene vaporize.
Here are the closing prices of some of the financials yesterday:
Lehman Brothers lost $1.47 to $17.05.
Fannie Mae gave up 47 cents to $11.55.
Freddie Mac sank 54 cents to $8.27. end
It is going to be extremely difficult for
Perhaps the biggest news of the day re the shape of the financial scene can be summed up by this:
US foreclosures rise 14 pct in 2nd qtr -RealtyTrac
NEW YORK, July 25 (Reuters) - U.S. home foreclosure filings rose 14 percent in the second quarter, the eighth consecutive quarterly climb, and more than doubled from the same period a year-earlier, real estate data firm RealtyTrac said on Friday.
Home foreclosure filings during the second quarter were reported on 739,714
The figure is a total of default notices, auction sale notices and bank repossessions between April and June.
"Although much of the fallout from foreclosures is being driven by rampant activity in a few states, such as Nevada, California, Florida, Ohio, Arizona and Michigan, most areas of the country are seeing at least some increase in foreclosure activity," James J. Saccacio, chief executive officer of RealtyTrac, said in a statement.
Indeed, 48 of 50 states and 95 out of the nation's 100 largest metro areas experienced year-over-year increases in foreclosure activity in the second quarter, he said.
The surge in foreclosures indicates an increasing number of homeowners are struggling to make mortgage payments amid the worst
RealtyTrac, based in Irvine, California, said the national foreclosure rate in the second quarter was one foreclosure filing for every 171
The banks are in severe distress and their collateral sinks daily. Banks cannot and will not lend because of the gaping hole in the balance sheet. They only have one way to repair their balance sheet and that is trading. They will trade in the oil. They will trade in the own stock. They will short their own stock. And…they do not have to worry about any watchdog. The SEC watchdog Christopher Cox is giving his full blessing to this criminal activity.
When the financial scene finally vaporizes, Cox and his cronies will share a cell with the banking presidents.
I would like to comment on the bank of
There is now zero chance that these two will be merged.
I can see only two scenarios:
1. create a new vehicle and move the mortgage junk onto them. The bond holders would use the same collateral that they had in Countrywide. This would be criminal activity but who cares, nobody is watching.
2. go bellyup.
By bet: no. 2.
Have a great weekend