In silver…
*The large specs decreased longs by 1443 contracts and decreased shorts by 1,484 contracts.
*The commercials decreased longs by 309 contracts and increased shorts by 466 contracts.
*The small specs decreased longs by 79 contracts and increased shorts by 813 contracts.
In gold…
*The large specs reduced longs by 8,522 contracts and increased shorts by 4,034 contracts.
*The commercials increased longs by 1,643 contracts and decreased shorts by 16,717 contracts.
*The small specs decreased longs by 3,932 contracts and increased shorts by 1872 contracts.
end.
Please take a look at the commercials in gold: they increased long by 1643 contracts and decreased their shorts by a whopping 16717.
In silver the commercials are remaining comatose.
I find it amazing that Bloomberg and all newservices do not print the bank failures on Friday.
However, as I reported to you on Thursday, Corvus bank and Guaranty Bank of Austin Texas were going to fail.
On Friday night, the 10th largest bank in the usa, Guaranty Bank, along with 3 other banks were sent to morgue and shiva services will begin immediately The loss so far will be 3 billion but it should rise to around 10 bilion dollars. Here is the story:
Third largest bank failure of 2009 announced
Texas-based Guaranty Bank is bought by Spanish bank. Regulators also seize institutions in Alabama and Georgia, bringing this year's tally to 81.
NEW YORK (CNNMoney.com) -- Guaranty Bank was closed by federal regulators Friday in the third largest bank failure this year bringing the total number of failures to 81 in 2009.
The Federal Deposit Insurance Corporation was named receiver of the Austin, TX-based thrift, which had approximately $13 billion in assets and $12 billion in deposits as of June.
BBVA Compass, a U.S. subsidiary of Spanish bank Banco Bilbao Vizcaya Argentaria, agreed to assume all of Guaranty's deposits and will buy $12 billion of its assets. The FDIC said it would share losses on $11 billion of the failed bank's assets.
The 162 branches that Guaranty operated in Texas and California will reopen Monday as branches of BBVA Compass, which is based in Birmingham, Ala.
Guaranty was the third largest bank to fail in 2009. It tied for the title of 11th largest bank failure in U.S. history with First City Bancorporation, which failed in 1988.
The estimated cost of Guaranty's failure to the FDIC is $3 billion.
BBVA (BBV) emerged as the winning bidder for Guaranty's assets, beating out potential buyers including a private equity group led by investor Gerald Ford.
Jose Maria Garcia Meyer, chairman of BBVA Compass, in a statement said the transaction makes "excellent strategic sense" and represents an opportunity for BBVA to expand its presence in the "high growth Sunbelt Region."
The purchase marks the first time an overseas-based bank has bought a failed U.S. bank this year. However, the Bilbao-based bank made a series of acquisitions in Texas earlier this decade and already operates the fourth-biggest banking chain in the state by deposits.
Most of this year's failures have been small, regional banks that were brought down by rising delinquencies on home and other consumer loans as unemployment has risen to a 25-year high in one of the longest recessions on record.
Guaranty, which was the fourth Texas bank to fail this year, had a substantial number of risky mortgages made to California borrowers on its books. These loans became a severe liability as the housing market in California collapsed and borrowers defaulted in droves.
Option adjustable rate mortgages made up almost a third of Guaranty's single family mortgage portfolio, according to investor presentations on its Web site. Guaranty also had $1.2 billion of loans to homebuilders in California's overbuilt market.
BBVA said it will maintain regulatory capital ratios at a level that exceeds "well-capitalized" guidelines, and that the impact of transaction will be "immaterial" to BBVA.
California's housing woes also played a major role in last year's failures of Washington Mutual and IndyMac. WaMu, which had $307 billion in assets, was the largest U.S. bank failure on record.
Three other banks fail
Earlier in the day, regulators closed Birmingham, Ala.-based CapitalSouth Bank, which operated ten branches and had $617 million in assets and deposits of about $546 million.
Iberiabank, which is based in Lafayette, La, will assume all of the CapitalSouth's deposits and will purchase $589 million of its assets.
In Georgia, regulators closed Newnan-based First Coweta and arranged for United Bank, of Zebulon, to take over its four branches.
United Bank will pay the FDIC a premium of 1% to assume all of the First Coweta's $155 million in deposits and will buy $155 million of its assets.
Georgia regulators also closed the sole branch of Atlanta-based ebank, which will reopen on Monday as a branch of Stearns Bank.
St. Cloud, Minn.-based Stearns, which has bought a number of failed banks this year, will purchase the bulk of the failed bank's $143 million in assets and will assume all of its $130 million in deposits.
So far this year, 18 banks have failed in Georgia.
Friday's closure brings the total number of bank failures this year to 81, compared with a total of 25 in all of 2008.
The failures of CapitalSouth, First Coweta and ebank will cost the FDIC an estimated $262 million on top of the $3 billion from the failure of Guaranty Bank. Over the next five years, the agency expects roughly $70 billion in losses due to the failure of insured institutions.
Fortune's Colin Barr contributed to this report. 
Stiglitz Sees Risk to Dollar, Need for Reserve System
Aug. 21 (Bloomberg) -- The dollar’s role as a good store of value is "questionable" and the currency has a high degree of risk, said Nobel Prize-winning economist Joseph Stiglitz.
"There is a need for a global reserve system," Stiglitz, a Columbia University economics professor, said at a conference in Bangkok today. Support from countries like China should ensure orderly discussions on a new reserve system, he added.
The dollar has lost 12 percent since March 5 against an index comprising the euro, yen and four other major currencies. China, the world’s largest holder of foreign-currency reserves, and Russia have both called for a new global currency to replace the dollar as the dominant place to store reserves.
"The current reserve system is in the process of fraying," Stiglitz said. "The dollar is not a good store of value. Right now, the dollar is yielding almost no return and yet anybody looking at the dollar has to say there’s a high degree of risk."
The dollar will weaken as the U.S. pumps "massive" amounts of money into the economy, according to Curtis A. Mewbourne, a portfolio manager at Pacific Investment Management Co., the world’s biggest manager of bond funds…
Policy makers in the U.S. and Europe have flooded the global economy with liquidity, which could lead to speculative bubbles due to limited opportunities for investment, Stiglitz said. The Nobel Prize winner said he was not confident of the Fed’s claim that it would withdraw liquidity when needed.
Under Chairman Ben S. Bernanke’s stewardship, the Fed cut the benchmark lending rate to as low as zero and expanded credit to the economy by $1.1 trillion over the past year. In the euro region, the European Central Bank has reduced interest rates to a record low of 1 percent.
"As the balance sheet of the Fed has blown up, as the deficit of the U.S. and the debt has increased, people have asked the obvious question: will there be inflation in the future?" Stiglitz told the conference. "Right now we’re facing deflation, but some time in the future, there will be consequences."
Asset Bubbles
The liquidity pumped into the U.S. economy may also end up elsewhere, including in Asian property and stocks, Stiglitz said later in Bankgok.
"The liquidity is going to be spent, but not necessarily in America," he said. Asian economies may have to "protect against an American-led asset bubbles." …-END-
Here are some numbers are yesterday:
The yield on the 10 yr T Note rose to 3.55%. The dollar FELL .31 to 78.09, after recovering off of severe technical lows. The euro ended the day up .0069 to 1.4323. The pound was little changed, but the yen rose to 94.36.
Crude oil ended the day up 52 cents per barrel to $72.54.
The CRB went up 2.31 to 259.24.
end.
Yesterday was surprising for gold as it not only rose on options expiry but also on a speech on Beb Bernanke at Jackson Hole Wy. Generally, when a Fed governor speaks, they always whack gold.
we have a stalker trader who has been very reliable in the past. This was reported to us late in the day:
Just in late this afternoon ... our STALKER source called. He said they are waiting to hear back from their fabulous London trader as to what he is up to. Will get back ASAP on that one. In the meantime he said he was in touch with a New York trader friend he has known since the E.F. Hutton days of yore. Word from that trader is that Goldman Sachs and JP Morgan Chase were covering shorts today and going long December gold. Our Stalker source was skeptical and so am I. If gold had blown through $960 and roared $40 higher, breaking the 2% rule then I would be gleeful. However, gold traded like it usually does today. There was no change in the standard Gold Cartel drill.
That said, we have some smoke. Perhaps that smoke will lead to THE FIRE. It is possible they were buying, but the price shot up so much so fast, word came back to halt the advance and save the rest of their buying for another day. While Goldman and Morgan could have been operating on the OTC market, we should still see some open interest reduction on the Comex should this "word" be fact.
Either way, it is only a matter of time before we get a Commercial Signal Failure and the cabal forces get blown out of the water. There is no way the cabal shorts can cover their positions without gold going berserk.
end.
Next week, there is going to be another treasury auction. No doubt the usa government will be buying its own bonds. Last week, the Fed bought 76 billion on its own bonds:
Next week should be interesting. With another record Treasury Auction on the schedule, with the $ yet again sitting on the cliff and stock option expiration out of the way, the obvious move from the "powers to be" will be to engineer the deflation trade one more time (by allowing the stock futures to sell off). One of these times Gold is going to blow right through one of these interventions and the short squeeze will be on. Unfortunately, the Treasury’s finances continue to implode and just in the last week the Fed bought $76B in mortgages, agencies and Treasuries with newly created $’s:
end.
OK lets go to the news of the day: existing home sales shot up by 7.2%:
US July existing home sale pace fastest in 2 years
WASHINGTON, Aug 21 (Reuters) - Sales of previously owned U.S. homes in July notched their fastest pace in nearly two years, an industry survey showed on Friday, the strongest sign yet that housing was pulling out of a three-year slump.
The National Association of Realtors said that sales jumped 7.2 percent to an annual rate of 5.24 million units, the highest since August 2007, beating market expectations for a 5 million unit pace. Sales were at a 4.89 million pace in June.
July's percentage increase was the largest monthly gain since the series started in 1999 and marked the fourth straight monthly advance. The last time sales rose for four consecutive months was in June 2004, the NAR said.
end.
Please remember that many of thse homes are first time buyers who received 8,000 dollars of grant and also half are foreclosed properties.
Dave Krentzler has given his commentary on yesterdays strong home sales:
Dave from Denver…
Friday, August 21, 2009
The Existing Home Sales "Bounce" Will Be Brief
The existing home sales number released today showed a slightly better than expected number for the month of July. Given that we are in the heart of home buying season, given all of the money pumped into the system by the Fed AND especially given the $8,000 first time home buyer tax credit, we shouldn't be surprised to see a small, seasonal bounce in home sales right now.
As pointed out by Clusterstock.com: Existing Home Sales would have been negative over June if not for the increase in Northeast Condo sales, Single Family Detached sales were DOWN 5000 units June to July, and in the all-important Western region, existing sales were down 10%.
But let's look at the underlying factors and data to understand what is really going on with the "seasonally adjusted" and polished-up-for-public-presentation number released by the National Association of Realtors. Here are the factors we see that will undermine this brief respite from the ongoing housing Depression:
1) The universe of qualified first-time home buyers gets exhausted; 2) Distressed investors step away as the ever-present "shadow" inventory becomes actual inventory (shadow inventory is bank-owned homes and would-be sellers waiting for "a bounce in the market"); and 3) The massive wave of prime mortgage foreclosures will flood the market, putting pressure on prices in every price-segment AND on buyer demand.
First-time home buyers and foreclosure/short-sale buyers - so-called distressed investors - represented 61% of the estimated sales for July. This metric is not a sign of a healthy, sustainable market for a couple reasons. First-time buyers are most likely "pulling" future sales into the present, as the first-time home buyer tax credit of $8,000 is set to expire in December. Home sales drop off anyway after August, so we would expect to see an even bigger drop in the third and fourth quarters, even if Obama extends taxpayer subsidization of first-time buyers.
As for the distressed investor segment, many of these buyers will look to "flip" their "distressed" purchase fairly quickly or they'll be forced to rent out the property to avoid the negative cash flow hit from holding investment homes. But renting will be made a lot more difficult by the record inventory of rentals units currently on the market, and growing. I would expect to see a lot of "investors" look to try and unload their property if they can't rent it out or become nervous about the market.
And finally, the inventory levels are still at unusually high levels. We know for a fact that banks have been withholding foreclosed homes on their books (REO, real estate owned) from the market in an attempt to reduce supply and hold up prices. We also know, as reported yesterday, that the percentage of properties in foreclosure or delinquency hit a record high of 13.2% of all single-family mortgages. What makes this metric even more severe in terms of housing market economics is the large jump in foreclosures in prime mortgages and FHA-insured mortgages.
Up to this point, the lower priced homes, typically bought by first-timers and distressed investors, have been by far the highest component of existing homes sales. With the impending tsunami of prime mortgage foreclosures will be a flood of much higher priced homes, which will ultimately put a lot of pressure on the lower end of the market. Of course eventually these banks will have to put a lot of their foreclosure inventory on the market, which will exacerbate the problem.
Ultimately this brief "bounce" in home sales will run into the problems discussed above and, because the Fed and the Government tried to put a floor under the market, the ensuing next leg down will be even worse than what we went through over the past 18 months. It will be interesting to see if the Government decides to spend some of the trillions of dollars it's printing to become a home buyer of last resort (I say this only half-facetiously because I bet it's been discussed). Let's not forget that the taxpayer now owns outright or de facto General Motors, Fannie Mae, Freddie Mac, Citibank and AIG. So in a way I, via FNM and FRE, the taxpayer is already monetizing the housing market.
***
end.
Philadelphia is going to cut services to its 1.5 million inhabitants:
Philly mayor unveils worst service cuts since 1951
PHILADELPHIA, Aug 20 (Reuters) - Mayor Michael Nutter detailed on Thursday what he said will be the deepest cuts in public services for more than half a century, needed to balance the fiscal 2010 budget and the city's financial plan for the next five years.
"This plan would be the most radical, painful and unprecedented dismantling of City government since the Home Rule Charter created City government in 1951," Nutter said in a statement.
The revised budget, triggered by state lawmakers' refusal so far to approve budget-balancing measures, would, if implemented, reduce the work force by about 3,000 positions, close libraries, parks and recreation centers, and shutter some city departments.
Philadelphia, the most populous city in Pennsylvania with about 1.5 million inhabitants, has been hit hard by the recession, which has sent revenue tumbling as welfare costs rise. The pain that Philadelphia is facing is part of the
recession's fallout on major U.S. cities, as well as on counties and most state governments.
The cuts, previously announced in outline but now described in more detail, include the elimination of positions for 929 police officers, 120 firefighters, 520 recreation
department jobs, 490 library staff members, and 112 health workers. The actual number of layoffs won't be known until the city evaluates which of its approximately 23,000 positions are filled.
Layoff notices are scheduled to be issued on Sept. 18, and layoffs would be complete by Oct. 2, said Luke Butler, a spokesman for Mayor Nutter…
-END-
Gata lawyers have filed another Freedom of Information. I urge you to read the complaint.
http://www.gata.org/files/GATAFedAppealLetter-08-20-2009.pdf
See you on Monday
Harvey
