www.lemetropolecafe.com
Good evening Ladies and Gentlemen:
Gold closed up by 7.40 to 725.30 Silver was up 6 cents to 9.81
The open interest on gold comex fell by 1300 contracts. The silver comex OI continues to fall with an additional 630 contracts contracting. The new Oi is another record low of 92779.
There are strange events occurring at the silver comex pit. First Bryant noticed that as soon as silver metal enters the comex it leaves the same day. On top of this, 95% of all silver contracts are supplied by JPMorgan. He reasons that this is very unusual and it either means that:
- the 130 million of silver is not there or
- the owners of the 130 million oz do not wish to sell.
On the first day notice, I saw that only 2 contracts were fulfilled. We have no idea as to the total of silver options standing for delivery.
Today, at 4 o’clock in the afternoon, the comex decided to give their update on the days events. Usually, we get the data no later than 11:30. In another strange development a further 2 contracts of silver were hit. So the total for the first two days is 4 contracts or 20,000 oz of silver. Usually, the first two days we get at least 50% of the total for the month hit. Judging from the activity in the options for the November contract, we estimate that 7 milllion oz are standing. Yet only 20,000 have been hit so far.
This is getting very ominous for JPMorgan and his cartel buddies. Here is the passage that a fellow Café member, Bryant commented on the silver comex deliveries:
Below are COMEX silver warehouse flows for last Thursday:
| METAL WAREHOUSE STATISTICS
As of the Close of Business: 10/30/2008 |
| SILVER | | | | | | | |
| Troy Ounce | | | | | | | |
| | | | | | | | |
| DEPOSITORY | PREV TOTAL | RECEIVED | WITHDRAWN | NET CHANGE | ADJUSTMENT | TOTAL TODAY |
| | | | | | | | |
| BRINK'S, INC. | | | | | | |
| Registered | | 7,623,896 | | | 0 | | 7,623,896 |
| Eligible | | 1,118,802 | 599,997 | 599,997 | 0 | | 1,118,802 |
| Total | | 8,742,698 | 599,997 | 599,997 | 0 | | 8,742,698 |
| | | | | | | | |
| SCOTIA MOCATTA | | | | | | |
| Registered | | 25,762,251 | | 48,100 | -48,100 | | 25,714,151 |
| Eligible | | 5,592,064 | | | 0 | | 5,592,064 |
| Total | | 31,354,315 | 0 | 48,100 | -48,100 | 0 | 31,306,215 |
| | | | | | | | |
| HSBC BANK, USA | | | | | | |
| (NEW YORK) | | | | | | | |
| Registered | | 46,126,337 | | | 0 | | 46,126,337 |
| Eligible | | 32,905,246 | | | 0 | | 32,905,246 |
| Total | | 79,031,583 | | 0 | 0 | 0 | 79,031,583 |
| | | | | | | | |
| DELAWARE DEPOSITORY | | | | | | |
| Registered | | 3,442,104 | | | 0 | | 3,442,104 |
| Eligible | | 7,919,794 | | | 0 | | 7,919,794 |
| Total | | 11,361,898 | 0 | 0 | 0 | 0 | 11,361,898 |
| | | | | | | | |
| TOTAL REGISTERED | 82,954,588 | 0 | 48,100 | -48,100 | 0 | 82,906,488 |
| TOTAL ELIGIBLE | 47,535,906 | 599,997 | 599,997 | 0 | 0 | 47,535,906 |
| COMBINED TOTAL | 130,490,494 | 599,997 | 648,097 | -48,100 | 0 | 130,442,394 |
I have looked at these reports for years and they used to show silver deposits coming and going with no correlation to each other. Then for the last couple of months I noticed that a volume of silver would be received and the next day the exact same amount would be withdrawn. Thursday’s data shows that 599,997 ounces was received and then withdrawn on the same day. COMEX silver stocks have become a revolving door. It appears that the 130 million ounces of COMEX silver either does not exist or is not for sale at these prices. JP Morgan used to have nothing to do with silver and I doubt they hold significant stocks of it at the COMEX warehouses. JP Morgan is however forced to deliver all most all of the silver contracts taken for delivery because of their effort to manipulate the silver price. It appears that they are selling these contracts naked and bringing silver into COMEX for delivery after the fact. If significant amounts of silver are purchased in December at these prices, I do not know if JP Morgan will be able to source the silver. Regards,
In economic news today, I would like to highlight many developments.
First, the ISM manufacturing index.:
10:00 Oct ISM Manufacturing reported 38.9 vs. consensus 41.0
Prices Paid reported 37.0 vs. consensus 48.0. Prior readings were 43.5 and 53.5, respectively. End
This is the usa as a country and it details how strong the manufacturing sector is behaving.
Anything over 50 is positive, anything less than 50 is bearish. As you can see 38.9 is horrific.
Then this from Chicago:
Businesses expect sharp downshift in U.S. economy
CHICAGO, Nov 2 (Reuters) - U.S. business conditions took a sharp downturn in the third quarter and the near-term outlook is even more gloomy, according to a quarterly survey conducted by the National Association for Business Economics.
For the first time since 2001, more respondents pointed to declines rather than growth in demand for their firms' goods and services. That measure has been a reliable indicator of a looming recession since 1982.
"Respondents were considerably more negative than they were in July, suggesting that the ongoing financial crisis is pulling down the overall economy," Ken Simonson, chief economist at the Associated General Contractors of America, said in summarizing the results.
"The survey's measure of demand growth fell by the largest amount in the history of the survey," Simonson said.
Some 90 percent of panelists said their outlook for 2009 growth had slipped since July, and falling profit margins outpaced rising margins by three to one, the worst reading since 1982.
As profits stagnate or fall, more U.S. companies suggested they would cut payrolls in the next six months through a combination of attrition and significant layoffs. The most dramatic job cuts were foreshadowed in goods-producing companies…
-END.
I thought that banks were relaxing on their lending restrictions. Guess again:
4:05 Federal Reserve says banks tighten lending standards on commercial and industrial loans
Comments are from the US Senior Loan Officer Survey. Banks also reported reducing credit card limits and that demand for loans has weakened. Nearly all of the banks increased the spread on borrowing rates over the cost of funds on loans to large and mid-sized firms versus July.
This news stunned Wall Street. The entire auto sector is in disarray:
U.S. Auto Sales Tumble; Month Was Worst Since 1945, GM Says
Nov. 3 (Bloomberg) -- U.S. auto sales plummeted in October in what General Motors Corp. called the worst month since 1945, as reduced access to loans and a weaker economy kept consumers off dealer lots.
GM said in a statement today that its sales of cars and light trucks tumbled 45 percent from a year earlier. Ford Motor Co. reported a 30 percent decline and Toyota Motor Corp. posted a 23 percent drop. Honda Motor Co.'s were down 25 percent and Nissan Motor Co.'s slid 33 percent.
``If you adjust for population growth, it's the worst sales month in the post-World War II era' for the industry, said Mike DiGiovanni, GM's chief sales analyst, on a conference call. ``Clearly we're in a dire situation.'
Industrywide U.S. auto sales fell for the 12th straight month in October, extending the longest slide in 17 years. Tight credit, falling consumer confidence and the weakening economy, the same forces that suppressed buying in September, hurt automakers again last month…
-END-
All 3 auto companies are in severe decline posting huge declines in auto sales. Only a merger can save them. However thousands will be unemployed and the sector that supplies auto parts will be devastated.
The usa economy is contracting big time.
The 17th bank to fail was reported on Saturday. The bank is the Freedom Bank of Florida in Bradenton. Here is the passage:
Florida's Freedom Bank Is 17th in U.S. to Be Closed This Year
Nov. 1 (Bloomberg) -- Freedom Bank of Bradenton, Florida, became the 17th U.S. bank seized by regulators this year as the deepest housing slump since the Great Depression triggers record foreclosures and mounting losses.
Freedom, with $287 million in assets and $254 million in deposits, was shut yesterday by the Florida Office of Financial Regulation and the Federal Deposit Insurance Corp. was named receiver. Fifth Third Bancorp of Cincinnati will assume the deposits and buy $36 million of assets, the FIDC said. Freedom's four offices will open Nov. 3 as Fifth Third branches…\ end
I hope everyone caught this. The quarterly funding for the usa treasury for the Oct to Dec period is expected to total 550 billion dollars.
15:03 US Treasury to borrow record $550B in Oct-Dec quarter - wires
Headlines. Jan-Mar '09 borrowings are expected to total $368B. Treasury borrowed $530B, including the Fed program, in July-Sept quarter. Treasury's survey of primary dealers sees $988B in '09 deficit. End.
If all 4 quarters are 550 billion then the deficit will reach 2.2 trillion dollars.
My goodness: the authorities are starting to question the sheer size of the bailout of AIG? Here is the passage.
Effectiveness of AIG's $143 Billion Rescue Questioned
By Carol D. Leonnig
Washington Post Staff Writer
Monday, November 3, 2008; A18
A number of financial experts now fear that the federal government's $143 billion attempt to rescue troubled insurance giant American International Group may not work, and some argue that company shareholders and taxpayers would have been better served by a bankruptcy filing.
The Treasury Department leapt to keep AIG from going bankrupt on Sept. 16, and in the past seven weeks, AIG has drawn down $90 billion in federal bailout loans. But some key AIG players argue that bankruptcy would have offered more structure and greater protections during a time of intense market volatility.
AIG declined to comment on the matter.
Echoing some other experts, Ann Rutledge, a credit derivatives expert and founding principal of R&R Consulting, said she is not sure how badly the financial system would have been rocked if the government had let AIG file for bankruptcy protection. But she fears that the government is papering over the problem with a quick fix that was not well planned.
"What we see now are a lot of games by the government to keep these institutions going with a lot of cash," she said. "This is to fill holes in companies' balance sheets, and they're trying to hold at bay the charges that our financial system is insolvent."..
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/02/AR2
008110202150.html?nav=rss_world
I have been alerted to .899 gold showing up in Europe. Actually it is .91 gold and this gold is generally coin melt.
There is only 1 official gold in the world that is not .999 gold and that is the usa’s gold. They confiscated all of citizens gold in 1933 and melted the gold coins into bars. They did not purify the gold and this gold was moved into Fort Knox in 1937. This gold is suppose to be all there and in total should be 6900 tonnes. Somehow in 1968, Lyndon Johnson moved some gold into West Point , and the Federal Bank of NY secretly. It is this gold that is surfacing now throughout Europe.
It looks like the American authorities did not have time to purify the gold to 999. They are in a hurry to sell the gold in its present form. This is very ominous. Here is the passage:
Recently we have been hearing of ".899" Gold turning up all over the world. Believe it or not, Gold has its own fingerprint or "DNA" so to speak. The speculation is that this .899 Gold is actually metal received from the confiscation back in 1933. Back then the government made it illegal to hold Gold personally, recalled Gold coins and melted them into bars that were stored in West Point, N.Y.. If it turns out that this .899 Gold is in fact from West Point there will be hell to pay. Already on a global basis, Gold is becoming scarce and difficult to obtain physically. If the world perceives that coin melt Gold is being dishoarded we could witness a global panic into the metal. For over 60 years the US has been thought of as having the largest Gold holdings on the planet, can you imagine the ramifications if the world began to believe that we were selling Gold from the bottom of the barrel? end
This is true: I bought a lot of these Russian Czar Nicholas II gold 10 and 5 rouble coins. Two years ago the price was basically spot. Today they are triple in price above spot due to their scarcity: here is the passage:
Hi Bill, I just had a "thought from the past" that was buried deep. I don't know if you remember this or not but back in 1990 or '91 about 1 month before the Soviet Union fell, gold with the Czar's stamp started turning up worldwide. The Soviets were dumping "unpure" Gold similar to the coin melt for use as hard currency. I told my wife at the time that the jig was up as soon as I had heard this news. I think the same thing is now happening with the coin melt bars. They are down to the bottom of the barrel! Regards, Bill H end
This is absolutely huge: Greek shipping is in serious trouble as measured by the Baltic Dry goods Index. Please read Ambrose Pritchard Evans:
Investors shun Greek debt as shipping crisis deepens
Freight rates for shipping are crashing at the fastest pace ever recorded as banks shut off credit lines to the industry, precipitating a sudden crunch in world trade.
By Ambrose Evans-Pritchard and Rowena Mason
Last Updated: 5:20PM GMT 03 Nov 2008
Comments 31 |
Investors shun Greek debt as shipping crisis deepens
The Baltic Dry Index measuring rates for coal, iron ore, and grains, and other dry goods plummeted below 1000 yesterday, down 92pc since peaking in June.
The daily rental rates for Capesize big ships have dropped $234,000 to $7,340 in weeks, leaving operators stuck with heavy losses on long leases. Empty ships are now crowding Singapore and other global ports.
"It is extremely serious, " said Jeremy Penn, president of the Baltic Exchange. "Freight rates have never fallen this steeply before. It is telling us that world trade in raw materials has slowed dramatically. Shippers are having genuine difficulty obtaining letters of credit from banks," he said.
The shipping crisis is another blow to the City of London, which earned £1.3bn in foreign receipts from the industry last year. Maritime services employs 14,500 staff in the UK.
It is also beginning to cause strains in Greece, where the yield spread between Greek 10-year bonds and German Bunds rocketed to a post-EMU record of 123 basis points yesterday.
The upheavals on the bond markets came as Iceland was forced to raise interest rates 6 percentage points to 18pc by the IMF as a condition for its $2bn (£1.3bn) rescue package.
The draconian terms raise fears that the IMF will apply the same medicine to Hungary, Ukraine, Belarus, Serbia, as well as Pakistan and a long list of other countries that may soon need a bail-out. Critics says the Fund risks repeating errors it made in Asia's 1998 crisis when it imposed a one-size-fits-all contraction policy on the region, causing bitter anti-Western feelings and arguably making matters worse.
A deflationary strategy of this kind could prove counterproductive –or worse – if applied in enough countries simultaneously. It would defeat a key purpose of the rescues, which is to stabilise the global financial system.
The Icelandic krona traded for the first time in a week, but dealers said it was changing hands at roughly 240 to the euro compared with the rate of 152 to the euro fixed by the central bank.
Ominously for Greece, this is the first time its debt has broken its tight linkage with Italian bonds – which traded at spreads of 100 yesterday. The markets are now clearly singling out the country as the most vulnerable of the EMU members.
"This shipping slowdown is a worry for Greece, " said Chris Pryce, a director of Fitch Ratings, which downgraded the country's credit outlook last week. Fitch warned that Greece has a public debt of 92pc of GDP, leaving it no safe margin for fiscal stimulus in a downturn.
"Shipping has overtaken tourism to become the country's biggest industry. They get their finance from other countries, so I think there are going to be a lot of worried bankers in London," he said.
Shipping specialists say the Royal Bank of Scotland and HSBC provide the lion's share of loans for both the bulk goods and tanker fleets, exposing these two banks to further potential losses.
Greek shipping families control a third of the global freight market for bulk goods, with operations split between London and Pireaus.
Mr Pryce said Greek banks had expanded rapidly in the Balkan region and Turkey, with heavy exposure to Serbia and Macedonia. "They saw this as a growth region, but they may be thinking differently about it now," he said.
Michael Klawitter, a credit strategist at Dresdner Kleinwort, said the market flight from Greek bonds marked a dangerous moment for the euro. "There has been a massive widening of spreads. We are no longer having a theoretical discussion about the viability of monetary union. People are really concerned for the first time," he said.
"It is not surprising that they are looking closely at Greece. Greek banks have been buying all kinds of assets across the Balkans and they are heavily exposed to the housing market," he said.
Greece has a current account deficit of 15pc of GDP, the highest in the eurozone. Investors were willing to turn a blind eye to this during the credit boom, but they have now become wary of any country with a deficit in double digits.
Mr Klawitter said Greece is not the only country in the eurozone that is coming under the microscope. "The spreads on what was once rock-solid Austrian debt have reached 90. Investors have started to look at the numbers and they realise that cross-border loans by Austrian banks to Eastern Europe are over 80pc of GDP, and that is really worrying in this turmoil. They have seriously begun to think that one – or several – East Europe an countries are going to fail to get their act together and go the way of Iceland," he said. END
Shipping is the mainstay of the Greek economy. Greece is now a candidate for bankruptcy. The Ukraine looks like it is in serious trouble. Pakistan was put on high alert by the IMF. Bankruptcy looks imminent for this Muslim country and a friend of the usa.
That is all for today.
Speak to you tomorrow
Harvey.
