Saturday, March 13, 2010

March 13.10 commentary.

Good morning Ladies and Gentlemen:
 
First off, we had 3 bank failures on Friday and one on Thursday:
 
Statewide Bank Covington LA 29561 March 12, 2010
The Park Avenue Bank New York NY 27096 March 12, 2010
Old Southern Bank Orlando FL 58182 March 12, 2010
LibertyPointe Bank New York NY 58071 March 11, 2010
 
Gold closed down by $6,50 to 1101.50.  Silver fell by ll cents to 17.03.  This is the first time that I can recall that the cartel bankers
 
raided gold for three straight days at the start of comex trading.  This is the first time that a continued raid occurred after the completion
 
of the bond auctions.
 
The total OI comex gold basis Thursday, declined by a small 2645 contracts to 491264.  Silver's OI declined by 1127 contracts
 
to 111,003.
 
The committment of traders report on gold and silver is quite revealing.  First the official tally:
 
The silver COT report showed:

*The large specs increased longs by 3,330 contracts and reduced shorts by 777.

*The commercials decreased longs by 1,814 contracts and increased shorts by 3,045.

*The small specs increased longs by 1,185 contracts and increased shorts by 433.

 

and gold:

 

The gold COT report:

*The large specs increased longs by 1,103 contracts and increased shorts by 281.

*The commercials increased longs by 11,252 contracts and increased shorts by 11,502.

*The small specs decreased longs by 903 contracts decreased shorts by 331.

 

Lets see what this shows:

In silver the long specs decided that the silver situation looked to good to pass up so they increased their longs in fine fashion.

They also decided to cut some of their losses by reducing their shorts.

 

The commercials interestingly paid the piper.....they provided the paper short to these longs.  The commercials decreased their longs by 1800 contracts and

increased their shorts by a cool 3045 contracts.  In essence the large specs received their contracts from the commercials who went short.

The small specs nimbled their way back into the silver arena by increasing their longs by 1185 contracts but also increased by shorts by a tiny 433.

 

 

In gold, the large specs took a vacation.  The entire gladiator battle took place between two sets of commercials.  One set of commercials increased their longs by 11252 contracts

and the other set increased their shorts by 11502.

 

There is only one explanation for this COT report

 the major bank shorters like JPMorgan and HSBC continued supplying the gold paper/and

. The smaller intermediate bankers who sense trouble ahead bought the supply from their larger brethren!.

 

end.

 

Continuing on with our physical gold and silver report, lets get a picture of the gold and silver inventory!:

 

COMEX Warehouse Stocks Mar 12, 2010

SILVER

321,063 ozs deposited in the dealer's (registered) inventory 
296,745 ozs deposited in the customer (eligible) inventory 
Total dealer inventory 50.87 Mozs 
Total customer inventory 60.37 Mozs 
Combined Total 111.24 Mozs

GOLD

 

3,000 ozs deposited in the dealers (registered) category 
ZERO ozs withdrawn from the customer (eligible) category 
Total dealer inventory 1.66 Mozs 
Total customer inventory 8.34 Mozs 
Combined Total 10.00 Mozs

 

Notes:

 

Note No 1. we see a rather large 321063 oz of silver deposited into the dealer inventory. It could have come from the mines or from SLV.

 

However please note for the last 12 days we have not witnessed any silver leaving the dealer inventory.

 

Note 2  gold:  very little activity.

 

Lets go to the delivery notices of silver and gold:

 

First gold:

There were 16 delivery notices issued in the MAR gold contract. The MAR gold contract total for the month is 376 notices or 37,600 ozs.

 

Note 3:  the total number of oz of gold standing from options exercised total 37600 oz of gold.

 

In silver:

 

There were 55 delivery notices issued in the MAR silver contract. The total delivery notices for the month in silver stand at 3,342 or 16.7 Mozs. JPM issued 54 and stopped 7, and BNS issued 0 and stopped 34.

 

Note 4:  a total of 55 delivery notices were issued for silver and the new total for the month stands at 16.7million oz.

 

Lets see what is left to be serviced:

The open interest in the MAR gold contract is 82 contracts, in silver it stands at 523 contracts. 

 

Note 5:  In gold, there remains 82 contracts or 8200 oz of gold.  Lets add the 37600 oz to the 8200 oz and one gets 45800 oz of gold, pretty close to Thursday total.

Note 6:  in silver, there remains 523 contracts or  2.615 million oz.  Add the 4.6 million of silver options exercised in February for March delivery and the 16.7 million oz of silver already serviced, one gets:

 

              4.6 million oz + 2.615 million oz +  16.7 million oz =   23.95 million oz.

This value is rising!!. There are many players anxious to get their hands on the physical silver. The fact that no silver is leaving the comex is quite revealing. The many adjustments in silver seem to suggest

that leasing of customer silver is the order of the day, or quite possibly the silver is coming from the SLV.  There is no question that silver is in short supply.

 

end.

 

Rob Kirby discovered this yesterday in searching through countless documents of usa data;

 

Rob Kirby with a fascinating find:

Subject: looky here 

Go to the Fed's "flow of funds report" Q4/09 just released toady at this link:http://www.federalreserve.gov/releases/z1/Current/z1.pdfScroll down to page 24 [Flow of Funds with Rest of Word] and observe line # 14 on that page. It states that the U.S. Fed sold 190.7 billion dollars worth of gold / SDRs in Q3/09. 190.7 billion @ 1,000 per ounce would be 5,937 tonnes of gold .

A Chartered Financial Analyst subscriber of mine follows this release every quarter and alerted me to the "back-dating" of the gold sales for Q3/09 in the release today. Note: In the same flow of funds report for Q3/09 at this appended link - there was no mention of gold / SDR sales - period:http://www.federalreserve.gov/releases/z1/20091210/z1.pdfI've attached the Flow of Funds Report for both Q3/09 and Q4/09 for comparison purposes.

Question: has the Federal Reserve just "papered over" the disgorgement of nearly 6,000 metric tonnes of sovereign U.S. Gold bullion? 
best, 
Rob Kirby

 

end.

 

The report is from the federal reserve government releases and it shows the flow of funds in the 4th quarter.

I checked the government data and sure enough on page 24, line 14  the usa sold 190.7 billion dollars of gold (SDR's translated into real oz).  At 1000 dollars per oz that translates into 5937 tonnes of gold.

The previous quarter on the flow of funds reports showed no gold activity.  Looks like the usa is trying to paper over their sale of 6000 metric tonnes of gold.

The usa has 8133 tonnes of gold so 73% of the usa gold reserves have been liquidated.

The problem here is that the gold belongs to its citizens and not government.  The government needs congressional approval to sell the gold.

Trouble ahead on this front!

 

Lets now go to the economic news of the day.

 

First we got a big story on the potential for new foreclosures on the housing front:

 

New wave of foreclosures threatens market 

Up to 7 million homes are potentially eligible but haven't been repossessed

By Renae Merle 
The Washington Post
updated 4:52 a.m. CT, Fri., March. 12, 2010

WASHINGTON - The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize. 

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. 

And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can't obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete. 

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market. 

The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.

-END-

 

 

The economy cannot steamroll ahead with this monkey around their neck.  The banking situation continues to deteriorate.

 

This next story gives you a flavour of how the crooked banks work.  They do not care who they devour:

Morgan, Citigroup helped cause Lehman's collapse, examiner finds

Bloomberg News
Thursday, March 11, 2010

NEW YORK -- JPMorgan Chase & Co. and Citigroup Inc. helped cause the illiquidity that led to the collapse of Lehman Brothers Holding Inc., the bankrupt bank's examiner said today in a report filed in Manhattan federal court.

Lehman tumbled into its $639 billion bankruptcy, the biggest in U.S. history, because it didn't have enough liquidity and lost the confidence of its counterparties, according to a 2,200-page report from Anton Valukas, the U.S. Trustee-appointed examiner.

By changing guarantee agreements and making new demands for collateral, JPMorgan and Citigroup helped to precipitate the liquidity crisis that doomed Lehman, Valukas said.

"The demands for collateral by Lehman's lenders had direct impact on Lehman's liquidity pool," he said. "Lehman's available liquidity is central to the question of why Lehman failed."

Lehman executives including former Chief Executive Officer Richard Fuld, former Chief Financial Officer Erin Callan, former executive vice president Ian Lowitt, and former managing director Christopher O'Meara certified misleading statements, the report said.

Commenting on Barclays Plc's purchase of Lehman's North American brokerage, Valukas said a "limited amount of assets" belonging to Lehman were "improperly transferred to Barclays." …

http://www.bloomberg.com/apps/news?pid=20601087&sid=aeMnMvXnUYHc&pos=1

-END-

 

John Williams has brought out his shadowgovernment stats on the 3 major economic news of this week:

He states that the trade deficit is still GDP neutral in dollars ie no advance.

He also states that the retail sales figures have been rigged a little:

Here is his commentary:

Retail Sales Revisions Boosted January Headline Gain but Reduced Reported Sales Levels 
- Sales Still Bottom-Bouncing Net of Inflation  
- January Trade Deficit Was GDP-Neutral 
- Fleeting Census Jobs Creation Will Have Offsetting Losses

"No. 285: Outlook Update, Retail Sales, Trade Deficit" 
http://www.shadowstats.com/

 

In his report, you can see that the undemployed remains at 22% and that the real CPI is around 5%

You can see that the M3 continues to contract down to negative 4%. This is scarry!.

As I indicated to you during the week with a Tyler Durden paper, the monetary base continues to skyrocket.  It is now 2.2 trillion dollars

and excess reserves at the banks total 1.3 trillion.  The Fed continues to pay interest on this money.  Strangely this money is not included in the debt

ceiling because it is basically swap money and eventually in the year 2942 AD this money will be returned to the banks.  These banks offloaded their junk to the Fed Reserve in return

for freshly minted dollars bills.  As I mentioned above, the Fed even has the nerve to pay interest on the dollar bills created which were given to the banks.  The junk is probably worth 15 cents on the dollar.

 

end.

 

Here is a story on the plight of usa states.  They are contemplating holding onto citizens tax refunds to conserve cash:

 

States may hold onto tax refunds for months

By William M. Welch, USA TODAY

Residents eager to get their state tax refunds may have a long wait this year: The recession has tied up cash and caused officials in half a dozen states to consider freezing refunds, in one case for as long as five months.

States from New York to Hawaii that have been hard-hit by the economic downturn say they have either delayed refunds or are considering doing so because of budget shortfalls.

"It's an indicator of how bad it is," says Scott Pattison, executive director of the National Association of State Budget Officers. "You know things are bad when you have to do that."

New York, hit with a $9 billion deficit, may delay $500 million in refunds to keep the state from running out of cash, says Gov.David Paterson.

Hawaii's Department of Taxation says some residents may not see state income tax refunds until the end of August, TheHonolulu Advertiser reported. It was part of a plan by Gov.Linda Lingle to deal with a revenue drop-off by pushing costs into the next fiscal period, which begins in July.

More…

 
This is not good news for the usa:
 

Jim Sinclair's Commentary

The US dollar is no Safe Haven

U.S. credit rating at risk. 
The triple-A credit rating of the U.S. is at risk, warned ratings agency S&P, unless the country creates a credible medium-term plan to rein in fiscal spending. If no action is taken, "external creditors could reduce their U.S. dollar holdings, especially if they conclude that eurozone members are adopting stronger macroeconomic policies." This could hurt the dollar's status as a global reserve currency and consequently "weigh on the AAA rating on the U.S."

 
 
end.
 
and this story on all the states:
 

States Facing Financial Doomsday as Debts Mount 
By Dunstan Prial 
FOXBusiness

That's not some apocalyptic bumper sticker. It's the learned opinion of numerous financial experts when describing the budget crises facing a number of U.S. states, notably Illinois, California and New Jersey.

"This is an unprecedented crisis," said Laurence Msall, president of the Civic Federation, an influential Illinois-based tax and fiscal policy research group.

While a General Motors-style bankruptcy is off the table – states are prohibited by law from filing for protection from their debtors – the alternative is no less alarming.

Msall said that in a worst-case scenario, states sliding toward insolvency will simply stop paying their bills, whether they be to public colleges, private vendors or municipalities. And when they do, those entities will either have to eat the losses or make up the difference.

It's already happening in Illinois, Msall said, where the state has reneged on payments promised to public colleges, and those colleges in turn have threatened 20% tuition increases.

Private vendors, as they did last year in California, will have to accept government vouchers – IOUs in effect – or lose their money, and municipalities will have to raise property taxes in order to cover their own expenses.

In other words, the money needed to keep insolvent states running at some minimum operational level will have to come from somewhere.

More…

 
Here is a story on  homes in Detroit selling for a whopping 10 dollars

Detroit family homes sell for just $10 
Family homes in Detroit are selling for as little as $10 (£6) in the wake of America's financial meltdown. 
Published: 10:05AM GMT 12 Mar 2010

The once thriving industrial city has suffered a dramatic decline following the global economic crisis.

According to Tim Prophit, a real estate agent, the crisis has led to a unprecedented portfolio of homes, but they are failing to sell.

He said there were homes on the market for $100 (£61), but an offer of just $10 (£6) would be likely to be accepted.

Speaking on a BBC 2 documentary, Requiem for Detroit, to be screened on Saturday, Mr Prophit said: "The property is listed by the city of Detroit as being worth $35,000 (£22,000), but the bank know that is impossible to ask.

"This part of town has got a lot of bad press in the media because it featured in Eminem's film 'Eight Mile', but that particular road is fifteen minutes up the road and that is a long way in Detroit."

Homes offered in viewing brochures as early 1920s example of colonial architecture would once have made handsome homes but are no longer sought after.

Mr Prophit, of The Bearing Group, said: "This house was foreclosed by the bank a couple of months ago and was offered to us to sell.

More…


Here is a story on how the FDIC is using taxpayer money funding the losses from the banks:
 

he following FDIC press release is remarkable in a number of ways:

1. We now have a new form of US Government Agency debt, namely, FDIC-backed residential mortgage backed securities ("RMBS").

2. The $1.8 billion of notes are backed by loans with "aggregate unpaid balances of approximately $3.6 billion." Translation: they had to take 50 cents on the dollar to unload these loans.

3. "The timely payment of principal and interest due on the notes are guaranteed by the FDIC, and that guaranty is backed by the full faith and credit of the United States." Translation: We the People are on the hook for these RMBS.

Not even Fannie Mae and Freddy Mac RMBS came with such a specific guaranty of backing by the US taxpayer.

If there was still any doubt that the US Taxpayer will be on the hook for any losses the FDIC cannot absorb, that has now been put to rest. QE to Infinity!

Respectfully yours, 
CIGA Richard B.

FDIC Closes on Sale of $1.8 Billion of Notes Backed by Mortgage-Backed Securities 
Transaction Adds Liquidity to DIF and Stimulates Investor Demand 
FOR IMMEDIATE RELEASE 
March 12, 2010

The Federal Deposit Insurance Corporation (FDIC) today closed on a sale of notes backed by residential mortgage backed securities (RMBS) from seven failed bank receiverships. The sale was conducted through a private placement priced and allocated on March 5th. The transaction was met with robust investor demand, with over 70 investors participating across fixed and floating rate series. The investors included banks, investment funds, insurance funds and pension funds. All investors were qualified institutional buyers.

The $1.81 billion of notes is backed by 103 non-agency residential mortgage-backed securities. The aggregate unpaid balance of the 103 securities was approximately $3.6 billion at the time of the sale. The FDIC retained an equity interest in each series.

The transaction features two series of senior notes, each backed by a separate pool of RMBS. The larger series of approximately $1.3 billion, is based on option ARMS and has a floating rate tied to the one-month LIBOR. The smaller series of $480 million is based mostly on fixed-rate RMBS and pays a fixed rate. Both series priced at rates comparable to Ginnie Mae collateralized mortgage obligations.

The timely payment of principal and interest due on the notes are guaranteed by the FDIC, and that guaranty is backed by the full faith and credit of the United States.

Full release: 
http://www.fdic.gov/news/news/press

 
 
end.
 
Here is another story on recoveries from the FDIC bank failures. :  from JIm sinclair commentary:
 

Jim Sinclair's Commentary

Please read this is OUTSTANDING analysis of bank closings by CIGA Richard. Please note the most salient point, which is a direct gift of FASB's capitulation, which allowed for rampant overvaluation of assets on the books of ALL USA financial entities. This once again made balance sheets and earnings statements world class dangerous cartoons.

Dear Jim,

Between Friday, February 26, 2010 and Thursday, March 11, 2010, the FDIC announced the closings of seven relatively small banks. That brought the year's total (so far) to 27.

The seven banks had combined assets of approximately $2.1 billion and combined deposits of approximately $1.68 billion. The FDIC's estimated cost of the closures was $432.7 million – about 26% of deposits.

While that cost figure is certainly not the worst seen in this crisis, there continues to be a huge disparity between the stated values of the closed banks' assets and their market values estimated by the FDIC. Taken as a whole, the estimated market value of the seven banks' assets ($1.25 billion) was only about 59% of the value claimed.

The largest of the banks closed, Rainier Pacific Bank of Tacoma, Washington, had stated assets of $717.8 million and deposits of $446.2 million, and the FDIC's loss estimate was $95.2 million. That means the FDIC valued Rainier's assets at about $351 million, only 49% of the value claimed.

Similarly, Centennial Bank of Ogden, Utah, had stated assets of $215.2 million and deposits of $205.1 million, and the FDIC's loss estimate was $96.3 million. That means the FDIC valued Centennial's assets at $108.8 million, only 51% of the value claimed.

Yesterday's announcement of the closing of Liberty Pointe Bank of New York, NY, was unusual in that it came on a Thursday. It will be interesting to see what Friday evening brings.

Respectfully yours, 
CIGA Richard B.

 

I hope that you all have a grand weekend, and I shall see you on Monday.
Harvey
 
 

March 13.10 commentary.

Good morning Ladies and Gentlemen:
 
First off, we had 3 bank failures on Friday and one on Thursday:
 
Statewide Bank Covington LA 29561 March 12, 2010
The Park Avenue Bank New York NY 27096 March 12, 2010
Old Southern Bank Orlando FL 58182 March 12, 2010
LibertyPointe Bank New York NY 58071 March 11, 2010
 
Gold closed down by $6,50 to 1101.50.  Silver fell by ll cents to 17.03.  This is the first time that I can recall that the cartel bankers
 
raided gold for three straight days at the start of comex trading.  This is the first time that a continued raid occurred after the completion
 
of the bond auctions.
 
The total OI comex gold basis Thursday, declined by a small 2645 contracts to 491264.  Silver's OI declined by 1127 contracts
 
to 111,003.
 
The committment of traders report on gold and silver is quite revealing.  First the official tally:
 
The silver COT report showed:

*The large specs increased longs by 3,330 contracts and reduced shorts by 777.

*The commercials decreased longs by 1,814 contracts and increased shorts by 3,045.

*The small specs increased longs by 1,185 contracts and increased shorts by 433.

 

and gold:

 

The gold COT report:

*The large specs increased longs by 1,103 contracts and increased shorts by 281.

*The commercials increased longs by 11,252 contracts and increased shorts by 11,502.

*The small specs decreased longs by 903 contracts decreased shorts by 331.

 

Lets see what this shows:

In silver the long specs decided that the silver situation looked to good to pass up so they increased their longs in fine fashion.

They also decided to cut some of their losses by reducing their shorts.

 

The commercials interestingly paid the piper.....they provided the paper short to these longs.  The commercials decreased their longs by 1800 contracts and

increased their shorts by a cool 3045 contracts.  In essence the large specs received their contracts from the commercials who went short.

The small specs nimbled their way back into the silver arena by increasing their longs by 1185 contracts but also increased by shorts by a tiny 433.

 

 

In gold, the large specs took a vacation.  The entire gladiator battle took place between two sets of commercials.  One set of commercials increased their longs by 11252 contracts

and the other set increased their shorts by 11502.

 

There is only one explanation for this COT report

 the major bank shorters like JPMorgan and HSBC continued supplying the gold paper/and

. The smaller intermediate bankers who sense trouble ahead bought the supply from their larger brethren!.

 

end.

 

Continuing on with our physical gold and silver report, lets get a picture of the gold and silver inventory!:

 

COMEX Warehouse Stocks Mar 12, 2010

SILVER

321,063 ozs deposited in the dealer's (registered) inventory 
296,745 ozs deposited in the customer (eligible) inventory 
Total dealer inventory 50.87 Mozs 
Total customer inventory 60.37 Mozs 
Combined Total 111.24 Mozs

GOLD

 

3,000 ozs deposited in the dealers (registered) category 
ZERO ozs withdrawn from the customer (eligible) category 
Total dealer inventory 1.66 Mozs 
Total customer inventory 8.34 Mozs 
Combined Total 10.00 Mozs

 

Notes:

 

Note No 1. we see a rather large 321063 oz of silver deposited into the dealer inventory. It could have come from the mines or from SLV.

 

However please note for the last 12 days we have not witnessed any silver leaving the dealer inventory.

 

Note 2  gold:  very little activity.

 

Lets go to the delivery notices of silver and gold:

 

First gold:

There were 16 delivery notices issued in the MAR gold contract. The MAR gold contract total for the month is 376 notices or 37,600 ozs.

 

Note 3:  the total number of oz of gold standing from options exercised total 37600 oz of gold.

 

In silver:

 

There were 55 delivery notices issued in the MAR silver contract. The total delivery notices for the month in silver stand at 3,342 or 16.7 Mozs. JPM issued 54 and stopped 7, and BNS issued 0 and stopped 34.

 

Note 4:  a total of 55 delivery notices were issued for silver and the new total for the month stands at 16.7million oz.

 

Lets see what is left to be serviced:

The open interest in the MAR gold contract is 82 contracts, in silver it stands at 523 contracts. 

 

Note 5:  In gold, there remains 82 contracts or 8200 oz of gold.  Lets add the 37600 oz to the 8200 oz and one gets 45800 oz of gold, pretty close to Thursday total.

Note 6:  in silver, there remains 523 contracts or  2.615 million oz.  Add the 4.6 million of silver options exercised in February for March delivery and the 16.7 million oz of silver already serviced, one gets:

 

              4.6 million oz + 2.615 million oz +  16.7 million oz =   23.95 million oz.

This value is rising!!. There are many players anxious to get their hands on the physical silver. The fact that no silver is leaving the comex is quite revealing. The many adjustments in silver seem to suggest

that leasing of customer silver is the order of the day, or quite possibly the silver is coming from the SLV.  There is no question that silver is in short supply.

 

end.

 

Rob Kirby discovered this yesterday in searching through countless documents of usa data;

 

Rob Kirby with a fascinating find:

Subject: looky here 

Go to the Fed's "flow of funds report" Q4/09 just released toady at this link:http://www.federalreserve.gov/releases/z1/Current/z1.pdfScroll down to page 24 [Flow of Funds with Rest of Word] and observe line # 14 on that page. It states that the U.S. Fed sold 190.7 billion dollars worth of gold / SDRs in Q3/09. 190.7 billion @ 1,000 per ounce would be 5,937 tonnes of gold .

A Chartered Financial Analyst subscriber of mine follows this release every quarter and alerted me to the "back-dating" of the gold sales for Q3/09 in the release today. Note: In the same flow of funds report for Q3/09 at this appended link - there was no mention of gold / SDR sales - period:http://www.federalreserve.gov/releases/z1/20091210/z1.pdfI've attached the Flow of Funds Report for both Q3/09 and Q4/09 for comparison purposes.

Question: has the Federal Reserve just "papered over" the disgorgement of nearly 6,000 metric tonnes of sovereign U.S. Gold bullion? 
best, 
Rob Kirby

 

end.

 

The report is from the federal reserve government releases and it shows the flow of funds in the 4th quarter.

I checked the government data and sure enough on page 24, line 14  the usa sold 190.7 billion dollars of gold (SDR's translated into real oz).  At 1000 dollars per oz that translates into 5937 tonnes of gold.

The previous quarter on the flow of funds reports showed no gold activity.  Looks like the usa is trying to paper over their sale of 6000 metric tonnes of gold.

The usa has 8133 tonnes of gold so 73% of the usa gold reserves have been liquidated.

The problem here is that the gold belongs to its citizens and not government.  The government needs congressional approval to sell the gold.

Trouble ahead on this front!

 

Lets now go to the economic news of the day.

 

First we got a big story on the potential for new foreclosures on the housing front:

 

New wave of foreclosures threatens market 

Up to 7 million homes are potentially eligible but haven't been repossessed

By Renae Merle 
The Washington Post
updated 4:52 a.m. CT, Fri., March. 12, 2010

WASHINGTON - The housing market is facing swelling ranks of homeowners who are seriously delinquent but have yet to lose their homes, and this is threatening a new wave of foreclosures that could hit just as the real estate market has begun to stabilize. 

About 5 million to 7 million properties are potentially eligible for foreclosure but have not yet been repossessed and put up for sale. Some economists project it could take nearly three years before all these homes have been put on the market and purchased by new owners. 

And the number of pending foreclosures could grow much bigger over the coming year as more distressed borrowers become delinquent and then, if they can't obtain mortgage relief, wade through the foreclosure process, which often takes more than a year to complete. 

As these foreclosed properties add to the supply of homes for sale, they could undercut housing prices, which have increased modestly through December, according to the most recent figures in the S&P/Case-Shiller home prices index. That rise partly reflected a slowdown in the flow of foreclosed homes onto the market. 

The rate at which J.P. Morgan Chase seized properties, for example, peaked in the middle of 2008 and fell steadily last year, according to a February investor report. But the bank expects repossessions to increase this year, nearly doubling to 45,000 by the fourth quarter.

-END-

 

 

The economy cannot steamroll ahead with this monkey around their neck.  The banking situation continues to deteriorate.

 

This next story gives you a flavour of how the crooked banks work.  They do not care who they devour:

Morgan, Citigroup helped cause Lehman's collapse, examiner finds

Bloomberg News
Thursday, March 11, 2010

NEW YORK -- JPMorgan Chase & Co. and Citigroup Inc. helped cause the illiquidity that led to the collapse of Lehman Brothers Holding Inc., the bankrupt bank's examiner said today in a report filed in Manhattan federal court.

Lehman tumbled into its $639 billion bankruptcy, the biggest in U.S. history, because it didn't have enough liquidity and lost the confidence of its counterparties, according to a 2,200-page report from Anton Valukas, the U.S. Trustee-appointed examiner.

By changing guarantee agreements and making new demands for collateral, JPMorgan and Citigroup helped to precipitate the liquidity crisis that doomed Lehman, Valukas said.

"The demands for collateral by Lehman's lenders had direct impact on Lehman's liquidity pool," he said. "Lehman's available liquidity is central to the question of why Lehman failed."

Lehman executives including former Chief Executive Officer Richard Fuld, former Chief Financial Officer Erin Callan, former executive vice president Ian Lowitt, and former managing director Christopher O'Meara certified misleading statements, the report said.

Commenting on Barclays Plc's purchase of Lehman's North American brokerage, Valukas said a "limited amount of assets" belonging to Lehman were "improperly transferred to Barclays." …

http://www.bloomberg.com/apps/news?pid=20601087&sid=aeMnMvXnUYHc&pos=1

-END-

 

John Williams has brought out his shadowgovernment stats on the 3 major economic news of this week:

He states that the trade deficit is still GDP neutral in dollars ie no advance.

He also states that the retail sales figures have been rigged a little:

Here is his commentary:

Retail Sales Revisions Boosted January Headline Gain but Reduced Reported Sales Levels 
- Sales Still Bottom-Bouncing Net of Inflation  
- January Trade Deficit Was GDP-Neutral 
- Fleeting Census Jobs Creation Will Have Offsetting Losses

"No. 285: Outlook Update, Retail Sales, Trade Deficit" 
http://www.shadowstats.com/

 

In his report, you can see that the undemployed remains at 22% and that the real CPI is around 5%

You can see that the M3 continues to contract down to negative 4%. This is scarry!.

As I indicated to you during the week with a Tyler Durden paper, the monetary base continues to skyrocket.  It is now 2.2 trillion dollars

and excess reserves at the banks total 1.3 trillion.  The Fed continues to pay interest on this money.  Strangely this money is not included in the debt

ceiling because it is basically swap money and eventually in the year 2942 AD this money will be returned to the banks.  These banks offloaded their junk to the Fed Reserve in return

for freshly minted dollars bills.  As I mentioned above, the Fed even has the nerve to pay interest on the dollar bills created which were given to the banks.  The junk is probably worth 15 cents on the dollar.

 

end.

 

Here is a story on the plight of usa states.  They are contemplating holding onto citizens tax refunds to conserve cash:

 

States may hold onto tax refunds for months

By William M. Welch, USA TODAY

Residents eager to get their state tax refunds may have a long wait this year: The recession has tied up cash and caused officials in half a dozen states to consider freezing refunds, in one case for as long as five months.

States from New York to Hawaii that have been hard-hit by the economic downturn say they have either delayed refunds or are considering doing so because of budget shortfalls.

"It's an indicator of how bad it is," says Scott Pattison, executive director of the National Association of State Budget Officers. "You know things are bad when you have to do that."

New York, hit with a $9 billion deficit, may delay $500 million in refunds to keep the state from running out of cash, says Gov.David Paterson.

Hawaii's Department of Taxation says some residents may not see state income tax refunds until the end of August, TheHonolulu Advertiser reported. It was part of a plan by Gov.Linda Lingle to deal with a revenue drop-off by pushing costs into the next fiscal period, which begins in July.

More…

 
This is not good news for the usa:
 

Jim Sinclair's Commentary

The US dollar is no Safe Haven

U.S. credit rating at risk. 
The triple-A credit rating of the U.S. is at risk, warned ratings agency S&P, unless the country creates a credible medium-term plan to rein in fiscal spending. If no action is taken, "external creditors could reduce their U.S. dollar holdings, especially if they conclude that eurozone members are adopting stronger macroeconomic policies." This could hurt the dollar's status as a global reserve currency and consequently "weigh on the AAA rating on the U.S."

 
 
end.
 
and this story on all the states:
 

States Facing Financial Doomsday as Debts Mount 
By Dunstan Prial 
FOXBusiness

That's not some apocalyptic bumper sticker. It's the learned opinion of numerous financial experts when describing the budget crises facing a number of U.S. states, notably Illinois, California and New Jersey.

"This is an unprecedented crisis," said Laurence Msall, president of the Civic Federation, an influential Illinois-based tax and fiscal policy research group.

While a General Motors-style bankruptcy is off the table – states are prohibited by law from filing for protection from their debtors – the alternative is no less alarming.

Msall said that in a worst-case scenario, states sliding toward insolvency will simply stop paying their bills, whether they be to public colleges, private vendors or municipalities. And when they do, those entities will either have to eat the losses or make up the difference.

It's already happening in Illinois, Msall said, where the state has reneged on payments promised to public colleges, and those colleges in turn have threatened 20% tuition increases.

Private vendors, as they did last year in California, will have to accept government vouchers – IOUs in effect – or lose their money, and municipalities will have to raise property taxes in order to cover their own expenses.

In other words, the money needed to keep insolvent states running at some minimum operational level will have to come from somewhere.

More…

 
Here is a story on  homes in Detroit selling for a whopping 10 dollars

Detroit family homes sell for just $10 
Family homes in Detroit are selling for as little as $10 (£6) in the wake of America's financial meltdown. 
Published: 10:05AM GMT 12 Mar 2010

The once thriving industrial city has suffered a dramatic decline following the global economic crisis.

According to Tim Prophit, a real estate agent, the crisis has led to a unprecedented portfolio of homes, but they are failing to sell.

He said there were homes on the market for $100 (£61), but an offer of just $10 (£6) would be likely to be accepted.

Speaking on a BBC 2 documentary, Requiem for Detroit, to be screened on Saturday, Mr Prophit said: "The property is listed by the city of Detroit as being worth $35,000 (£22,000), but the bank know that is impossible to ask.

"This part of town has got a lot of bad press in the media because it featured in Eminem's film 'Eight Mile', but that particular road is fifteen minutes up the road and that is a long way in Detroit."

Homes offered in viewing brochures as early 1920s example of colonial architecture would once have made handsome homes but are no longer sought after.

Mr Prophit, of The Bearing Group, said: "This house was foreclosed by the bank a couple of months ago and was offered to us to sell.

More…


Here is a story on how the FDIC is using taxpayer money funding the losses from the banks:
 

he following FDIC press release is remarkable in a number of ways:

1. We now have a new form of US Government Agency debt, namely, FDIC-backed residential mortgage backed securities ("RMBS").

2. The $1.8 billion of notes are backed by loans with "aggregate unpaid balances of approximately $3.6 billion." Translation: they had to take 50 cents on the dollar to unload these loans.

3. "The timely payment of principal and interest due on the notes are guaranteed by the FDIC, and that guaranty is backed by the full faith and credit of the United States." Translation: We the People are on the hook for these RMBS.

Not even Fannie Mae and Freddy Mac RMBS came with such a specific guaranty of backing by the US taxpayer.

If there was still any doubt that the US Taxpayer will be on the hook for any losses the FDIC cannot absorb, that has now been put to rest. QE to Infinity!

Respectfully yours, 
CIGA Richard B.

FDIC Closes on Sale of $1.8 Billion of Notes Backed by Mortgage-Backed Securities 
Transaction Adds Liquidity to DIF and Stimulates Investor Demand 
FOR IMMEDIATE RELEASE 
March 12, 2010

The Federal Deposit Insurance Corporation (FDIC) today closed on a sale of notes backed by residential mortgage backed securities (RMBS) from seven failed bank receiverships. The sale was conducted through a private placement priced and allocated on March 5th. The transaction was met with robust investor demand, with over 70 investors participating across fixed and floating rate series. The investors included banks, investment funds, insurance funds and pension funds. All investors were qualified institutional buyers.

The $1.81 billion of notes is backed by 103 non-agency residential mortgage-backed securities. The aggregate unpaid balance of the 103 securities was approximately $3.6 billion at the time of the sale. The FDIC retained an equity interest in each series.

The transaction features two series of senior notes, each backed by a separate pool of RMBS. The larger series of approximately $1.3 billion, is based on option ARMS and has a floating rate tied to the one-month LIBOR. The smaller series of $480 million is based mostly on fixed-rate RMBS and pays a fixed rate. Both series priced at rates comparable to Ginnie Mae collateralized mortgage obligations.

The timely payment of principal and interest due on the notes are guaranteed by the FDIC, and that guaranty is backed by the full faith and credit of the United States.

Full release: 
http://www.fdic.gov/news/news/press

 
 
end.
 
Here is another story on recoveries from the FDIC bank failures. :  from JIm sinclair commentary:
 

Jim Sinclair's Commentary

Please read this is OUTSTANDING analysis of bank closings by CIGA Richard. Please note the most salient point, which is a direct gift of FASB's capitulation, which allowed for rampant overvaluation of assets on the books of ALL USA financial entities. This once again made balance sheets and earnings statements world class dangerous cartoons.

Dear Jim,

Between Friday, February 26, 2010 and Thursday, March 11, 2010, the FDIC announced the closings of seven relatively small banks. That brought the year's total (so far) to 27.

The seven banks had combined assets of approximately $2.1 billion and combined deposits of approximately $1.68 billion. The FDIC's estimated cost of the closures was $432.7 million – about 26% of deposits.

While that cost figure is certainly not the worst seen in this crisis, there continues to be a huge disparity between the stated values of the closed banks' assets and their market values estimated by the FDIC. Taken as a whole, the estimated market value of the seven banks' assets ($1.25 billion) was only about 59% of the value claimed.

The largest of the banks closed, Rainier Pacific Bank of Tacoma, Washington, had stated assets of $717.8 million and deposits of $446.2 million, and the FDIC's loss estimate was $95.2 million. That means the FDIC valued Rainier's assets at about $351 million, only 49% of the value claimed.

Similarly, Centennial Bank of Ogden, Utah, had stated assets of $215.2 million and deposits of $205.1 million, and the FDIC's loss estimate was $96.3 million. That means the FDIC valued Centennial's assets at $108.8 million, only 51% of the value claimed.

Yesterday's announcement of the closing of Liberty Pointe Bank of New York, NY, was unusual in that it came on a Thursday. It will be interesting to see what Friday evening brings.

Respectfully yours, 
CIGA Richard B.

 

I hope that you all have a grand weekend, and I shall see you on Monday.
Harvey
 
 

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