April
City Bank, Lynnwood, WA with approximately $1.13 billion in assets and approximately $1.02 billion in deposits was closed. Whidbey Island Bank, Coupeville, WA has agreed to assume all deposits, excluding certain brokered deposits. (PR-082-2010)
Tamalpais Bank, San Rafael, CA with approximately $628.9 million in assets and approximately $487.6 million in deposits was closed. Union Bank, National Association, San Francisco, CA has agreed to assume all deposits, excluding certain brokered deposits. (PR-081-2010)
Innovative Bank, Oakland, CA with approximately $268.9 million in assets and approximately $225.2 million in deposits was closed. Center Bank, Los Angeles, CA has agreed to assume all deposits, excluding certain brokered deposits. (PR-080-2010)
Butler Bank, Lowell, MA with approximately $268.0 million in assets and approximately $233.2 million in deposits was closed. People's United Bank, Bridgeport, CT has agreed to assume all deposits. (PR-079-2010)
Riverside National Bank of Florida, Fort Pierce, FL with approximately $3.42 billion in assets and approximately $2.76 billion in deposits was closed. TD Bank, National Association, Wilmington, DE has agreed to assume all deposits, excluding certain brokered deposits. (PR-078-2010)
AmericanFirst Bank, Clermont, FL with approximately $90.5 million in assets and approximately $81.9 million in deposits was closed. TD Bank, National Association, Wilmington, DE has agreed to assume all deposits, excluding certain brokered deposits. (PR-078-2010)
First Federal Bank of North Florida, Palatka, FL with approximately $393.3 million in assets and approximately $324.2 million in deposits was closed. TD Bank, National Association, Wilmington, DE has agreed to assume all deposits. (PR-078-2010)
Lakeside Community Bank, Sterling Heights, MI, with approximately $53.0 million in assets and approximately $52.3 million in deposits was approved for payout by the FDIC Board of Directors. (PR-077-2010).
end
On Tuesday, I thought that the gold and silver banker cartel would hit again on either Thursday or Friday. They chose yesterday. (options expiry on the gold shares)
Gold closed down by $24.30 to 1136.30 and in silver it was down by 75 cents to 17.67.
The open interest with respect to the gold comex fell by a small 2157 contracts (basis Thursday) to its resting position of 524,716. However silver did the opposite
by rising a huge 2560 contracts to 128,188. These lofty open interest (OI) positions necessitated the raid whereby these crooked bankers supplied massive volumes of unbacked
silver and gold paper under the watchful eye of regulators.
At the conclusion of yesterdays market action at 4 pm, the commodity exchange released their committment of traders report (COT)
Here is the gold COT report:
The gold COT report showed:
*The large specs increased longs by 20,297 contracts and increased shorts by 3,001.
*The commercials increased longs by 8,799 contracts, but increased shorts by 27,377.
*The small specs increased longs by 2,787 contracts and increased shorts by 1,505.
end.
You can see the battle royal between the large specs and the commercials. The small specs know that the game is rigged
and they have vacated this arena.
The large specs piled on a gigantic 20,297 contracts to the long side and a few increased their shorts by 3000 contracts.
Just look at those crooked commercials: the intermediate bankers (who sense trouble) increased their longs to go along with the large specs, but
the larger bankers namely JPMorgan, HSBC etc increased further their shorts by a massive 27377 contracts.
In silver:
SILVER
For silver, as silver added 27 cents or 1.5% to $18.23 on the cash market COMEX commercial traders increased their collective net short positioning by 3,703 contracts or 7.2% from 51,686 to 55,389 contracts net short. The open interest rose a somewhat larger 4,949 contracts to 123,661 contracts open.
Here's the nominal LCNS graph for silver futures:
http://treo.typepad.com/.a/6a0120a6002285970c0133ecbd78d7970b-800wi
Thus the net short position of the commercials increased by 3703 contracts and their new net short position rose (you take the short position and subtract the longs) to 55,389.
In total with respect to silver:
the large specs piled onto the longs by 3443 contracts and the large specs that are short increased their shorts by 1361 contracts.
The commercials went to town. The intermediate commericals (the smaller banks) increased their longs by 1088 contracts. The larger commercials with contempt of the law
proceeded to short an additional 4791 contracts in full view of the CFTC regulators who are meeting to discuss how they are going to solve their dilemma.
OK lets go to the physical inventories of silver and gold:
COMEX Warehouse Stocks April 16, 2010
SILVER
30,985 ozs withdrawn from the dealer's (registered) inventory
43,718 ozs deposited in the customer (eligible) inventory
Total dealer inventory 48.85 Mozs
Total customer inventory 66.75 Mozs
Combined Total 115.60 Mozs GOLD
602 ozs withdrawn from the dealers (registered) category
1,426 ozs withdrawn from the customer (eligible) category
Total dealer inventory 2.44 Mozs
Total customer inventory 7.65 Mozs
Combined Total 10.09 Mozs
again, no major moves into gold and silver inventories.
We saw 30,985 oz withdrawn from the dealer and that no doubt went to the customer inventory
along with an additional 13000 or so oz. Very minor moves.
Lets start with gold as April is a delivery month for gold.
There were 76 delivery notices issued in the APR gold contract. The APR gold contract total for the month is 13,039 notices or 1,303,900 ozs.
So far, this month 1.304 million oz notices to deliver have been served upon the long holders. Deliveries of actual metal usually take about a month to occur.
What is left to be served?
The Open Interest in the APR gold contract is 493 or 0.05 Million ozs.
Thus there are 49300 oz left to go. So the entire month of April has: 1.304 + .0493 + .074 (options exercised last month) = 1.4273 million oz
In silver: no change. This total will be added to the May silver as May is a delivery month for this metal.
There were no delivery notices issued in the APR silver contract. The total delivery notices for the month in silver stand at 466 or 2.33 Mozs.
The numbers are huge and we are witnessing very little removal of metal from the comex.
As for the rumours yesterday, I got a little more detail. The default that we heard came from mini silver contracts. The contracts originated from December
and the recepient longs who have not been given silver as of yet number 2 in total not receiving their metal. The source of the knowledge is John Brimelow, a well respected financial writer
who we quote often in our commentaries. I will fill you in once I get details of the size of the orders. It is most unusual to wait 4 months to receive your metal. I guess the only reason it may take 4 months
is that they are sending the metal by row boat from Hong Kong to New York and the boat has no motor.
The mint has just updated levels of sales of gold and silver eagles.
From Ed steer:
Talking about silver disappearing... the U.S. Mint updated their April sales figures yesterday. They reported that 21,500 gold eagles and another 749,500 silver eagles were sold. This brings April one-ounce gold eagle sales up to 33,500... and silver eagle sales up to 1,147,000. The Comex-approved depositories reported a net inflow of a very tiny 17,950 ounces on Wednesday. But there was a lot of in-and-out movements associated with that small change... and you can view all the action here."– From Ed Steer's Gold & Silver Daily, read the full report here.
end.
Last quarter, the silver eagles reported sales of 9 million oz. So far 1.147 million oz of silver has been used to make the silver eagles. It looks like April will come in at 2.29 million oz
However the big news again comes from the SLV which saw its inventory again depleted by a huge 2,157,000 oz of silver. No gold was removed from the GLD.
Since Feb 26.2101 there have been 16.7 million oz of silver leave the Bank of England with a rising silver price. The smoke we have witnessed signals a massive fire in the silver complex.
Chris Mullen of gold seek comments:
The CME Delivery Report showed that 76 gold and zero silver contracts have been posted for delivery on Monday. The GLD ETF showed no changes yesterday...but, once again, the silver ETF stole the show, as the boys and girls over at SLV reported another huge withdrawal... the second in as many days. This time it was 2,157,100 ounces. Since February 26th... 16.7 million ounces of silver have been withdrawn in ten consecutive tranches. That's 5% of SLV's silver removed by 'authorized participants'... almost ten days of world silver production. What entity [or entities] needed silver that badly, or in such a hurry... and how tight must the supply line be if they have to resort to getting it from SLV? I can tell you this, dear reader, if the silver users who have withdrawn this metal from SLV had to source it from the Comex... I can absolutely guarantee that the price of silver would not be $18.50 spot right now!
end.
OK lets go to the big news of the day. I guess you all heard that Goldman Sachs have been charged with civil fraud in the subprime lending that started the entire financial mess that we are in.
Here is the official release on the story:
THE NEW YORK TIMES
LOUISE STORY and GRETCHEN MORGENSON
Published: April 16, 2010
U.S. Accuses Goldman Sachs of Fraud
Goldman Sachs, which emerged relatively unscathed from the financial crisis, was accused of securities fraud in a civil suit filed Friday by the Securities and Exchange Commission, which claims the bank created and sold a mortgage investment that was secretly devised to fail.The move marks the first time that regulators have taken action against a Wall Street deal that helped investors capitalize on the collapse of the housing market. Goldman itself profited by betting against the very mortgage investments that it sold to its customers…
http://www.nytimes.com/2010/04/17/business/17goldman.html?hp-END-
I am going to give you a shortened version of what this is all about
First of all, if I am not mistaken, the SEC can not charge anybody criminally on any matter. They can only charge civil and then let the Attornys General of all states charge them criminally.
The SEC does not have a mandate to charge anybody criminally. All they can do it get a dollar settlement.
Now the shortened story in plain English:
1. Goldman Sachs prepared these registered securitzed mortgaged back securities (RMBS) and sold these low grade mortgages to unsuspecting clients.
They were termed subprime because of their low quality of people who received these mortgages. They were bunched together in a bundle and sold in a bulk form.
They were graded triple A by the ratings agencies. (the rating agencies are not yet named in any fraud proceedings yet)
2. Now the fun begins. John Paulsen who runs a large hedge fund and a former Goldman employee
approaches Goldman and offers them 15 million dollars to select lousy mortages and these are put into a vehicle called Abacus 2007.
3. Goldman tells investors that an independent party ACA management selected the mortgages and Goldman failed to disclose that Paulsen selected the mortgages for Abacus 207.
4. Goldman and Paulsen then created Credit Default Swaps betting against the very product that they invented and sold to unsuspecting investors. Goldman again neglected to tell
investors that Goldman and Paulsen bought credit default swaps and bet against the very vehicle that they promoted. They neglected to tell investors that Paulsen paid 15 million dollars
for the priviledge of selecting the garbage that went into Abacus 2007 and were eventualy shorted by these two entities.
5. The party that underwrote the Credit Default Swaps was AIG who had to be bailed out by the taxpapyer.
6. Paulsen's gain on the credit default swaps was 1 billion dollars and the loss to shareholders of Abacus was 1 billion dollars.
There is no question of criminal fraud here. Goldman knew what they were doing. The key was the payment of the 15 million dollars by Paulsen
to pick the awful mortgages and then go short these by way of the credit default swaps.
Goldman will go down on this on as the public will not let them get away with this.
Here are some commentaries on this issue:
Ratigan Deconstructs Goldman, Connecticut AG Blumental Wants Criminal Charges Filed
We expected Dylan to explode during today's show. We were disappointed as he somehow managed to contain it, and did a pretty good recap of the Goldman affair (if a little too many matchbox cars on the show for our taste). The notable take home for us was that CT AG Blumenthal said that "criminal charges have to be pursued against Goldman." We are sure Cuomo is not too far from this line of thinking. And we would be remiss if we did not point out that credit has to be given where it is due: Gretchen Morgenson (whom half the blogosphere was bashing a month ago over semantics) and Louise Story broke the entire story 4 months ago, and the SEC complaint reads verbatim from the authors' December 24 article.
end
Gold Tumbles as No.1 ETF Holder Named in Goldman Sachs Fraud Charges - Friday 16th April 2010
Gold Prices fell at their fastest pace in 13 months late Friday in London, sinking 1.9% inside 3 hours as news of US government charges against Goldman Sachs spooked investors holding shares in the huge SPDR Gold Trust.
The single largest investor in the SPDR Gold Trust (ticker: GLD), the Paulson & Co. hedge fund, is named but not charged in the Washington suit.
Controlling some 8% of GLD's Gold ETF stock according to end-2009 filings – now worth $3.5 billion at current Gold Prices – manager John Paulson apparently turned $1 billion by betting against subprime mortgage-backed bonds packaged and sold to other investors by Goldman Sachs.
US regulator the Securities & Exchange Commission now claims that Goldman Sachs failed to tell those investors that Paulson & Co. was betting against them. Paulson was in fact involved in selecting which mortgage-backed securities Goldman's other clients would be sold, the SEC alleges.
"Paulson wasn't accused of wrongdoing," notes Bloomberg, although a mistaken headline atBarron's magazine online claimed that "Goldman, Paulson Defrauded Investors with CDOs, SEC Says" shortly after the story broke.
Silver Prices also sank as New York opened for business, dropping over 3% to a two-week low of $17.76 an ounce.
According to the SEC's charges – which sue both Goldman Sachs and also Fabrice Tourre, a Goldman vice president currently in London – "Paulson paid Goldman Sachs & Co. approximately $15 million for structuring and marketing ABACUS 2007-AC1", a portfolio of subprime-mortgage-backed bonds.
"By October 24, 2007, 83% of the [residential mortgage bonds] in the ABACUS 2007-AC1 portfolio had been downgraded and 17% were on negative watch. By January 29, 2008, 99% of the portfolio had been downgraded.
"As a result, investors in the ABACUS 2007-AC1 CDO lost over $1 billion. Paulson's opposite CDS positions yielded a profit of approximately $1 billion for Paulson."
Goldman Sachs' stock fell almost 10% on the news, dragging the major US indices well over 1% down.
Elsewhere, the Euro meantime sank to a 1-week low vs. the Dollar. The Gold Price in Euros fell to a 9-session low of €27,000 per kilo.-END-
Certainly there could be some truth in all this, which would be a first or second based on my experience the last decade. Remember … PRICE ACTION MAKES MARKET COMMENTARY … and that is the easiest explanation of the day, whether it holds water or not. RL has it right…
This is the very heart of the matter for gold
When the world financial structure was imploding in 2008, the gold cartel needed to invent credible "dialogue" that would be a cover for supressing gold and keeping investors from running it up to over $2000…thus, the the dialogue of ""selling all classes of assets", including paper and tangible ones was floated…I remember Joe Kernan (CNBC) almost being in shock when gold started its big fall…as the new "gold dialogue" kept being repeated, it gained credibility–Even Richard Russell insisted that the $ was being bid up-and gold sold-to pay off debt denominated in dollars…a "flight to cash" [the 'safe' dollar]…utter nonsense… I really didn't think that old trick would work anymore but it is–as I write Joe Terranova on CNBC, is saying "risk on" means lower gold Monday-"risk off" means higher gold…everybody's running with the "big lie" that gold is "risky"..and so it goes…
***
end.
Bill Holter:
BREAKING NEWS: Goldman Sachs charged by the SEC of FRAUD
All,
I don't even know where to start with this item, as it represents everything that is wrong about the crumbling nation of the United States. Fraudulent banks and hedge fund managers, financial crimes worse (if that's even possible) than Ponzi schemes, and "heroes" that turn out to be villains.
Per the attached file (the actual SEC complaint) and the below link with commentary from Zero Hedge, Goldman Sachs and "brilliant billionaire investor" John Paulson (no relation to the far more criminal Hank Paulson) defrauded investors in 2007 of more than $1 billion by creating worthless portfolios of subprime mortgages and selling them to the public while they were themselves shorting those bonds, which less than six months later has lost 83% of their value and nine months later all their value.
http://www.zerohedge.com/article/breaking-sec-charges-goldman-sachs-fraud-subprime-mortgages
Think about it, the famed John Paulson, one of the largest hedge fund managers in the world (who frankly just burst onto the scene in recent years due to all the "profits" he made shorting mortgage bonds), actually PAID GOLDMAN SACHS $15 million for the right to help them chose a portfolio of worthless assets that he would have the ability to SELL SHORT against the buyers of the fund. Goldman Sachs obviously willingly took this money to defraud its investors and enrich itself and its co-conspirator "insider" John Paulson.
By the way, this is the same John Paulson that has since become the largest holder of the fraudulent GLD gold ETF, so obviously he doesn't know everything – I cannot wait until the day that GLD, SLV, and all of the fraudulent ETF Ponzi schemes are exposed for not actually owning the gold/silver the purport to have. When I saw this guy's name surface last year as the next great genius, who supposedly made billions in the subprime mortgage fiasco, I looked at him in the same way that the old brokers at Jackson Steinem looked at Budd Foxx when he started to suspiciously make all that money with Gordon Gekko. And what do you know, he too will probably end up in prison as yet another high level lackey of Goldman Sachs.
Moreover, remember how I wrote just yesterday (and dozens of times before) about how Alan Greenspan is the individual more responsible for the collapse of the United States than any single person? Well, look at who Paulson uses to "advise" his hedge fund. Yep, Alan Greenspan.
http://dealbook.blogs.nytimes.com/2008/01/15/greenspan-to-join-paulson-as-adviser-reports-say/
end.
Here is the complete complaint filed by the SEC:
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21489 / April 16, 2010
Securities and Exchange Commission v. Goldman, Sachs & Co. and Fabrice Tourre, 10 Civ. 3229 (BJ) (S.D.N.Y. filed April 16, 2010)
The SEC Charges Goldman Sachs With Fraud In Connection With The Structuring And Marketing of A Synthetic CDO
The Securities and Exchange Commission today filed securities fraud charges against Goldman, Sachs & Co. ("GS&Co") and a GS&Co employee, Fabrice Tourre ("Tourre"), for making material misstatements and omissions in connection with a synthetic collateralized debt obligation ("CDO") GS&Co structured and marketed to investors. This synthetic CDO, ABACUS 2007-AC1, was tied to the performance of subprime residential mortgage-backed securities ("RMBS") and was structured and marketed in early 2007 when the United States housing market and the securities referencing it were beginning to show signs of distress. Synthetic CDOs like ABACUS 2007-AC1 contributed to the recent financial crisis by magnifying losses associated with the downturn in the United States housing market.
According to the Commission's complaint, the marketing materials for ABACUS 2007-AC1 — including the term sheet, flip book and offering memorandum for the CDO — all represented that the reference portfolio of RMBS underlying the CDO was selected by ACA Management LLC ("ACA"), a third party with expertise in analyzing credit risk in RMBS. Undisclosed in the marketing materials and unbeknownst to investors, a large hedge fund, Paulson & Co. Inc. ("Paulson"), with economic interests directly adverse to investors in the ABACUS 2007-AC1 CDO played a significant role in the portfolio selection process. After participating in the selection of the reference portfolio, Paulson effectively shorted the RMBS portfolio it helped select by entering into credit default swaps ("CDS") with GS&Co to buy protection on specific layers of the ABACUS 2007-AC1 capital structure. Given its financial short interest, Paulson had an economic incentive to choose RMBS that it expected to experience credit events in the near future. GS&Co did not disclose Paulson's adverse economic interest or its role in the portfolio selection process in the term sheet, flip book, offering memorandum or other marketing materials.
The Commission alleges that Tourre was principally responsible for ABACUS 2007-AC1. According to the Commission's complaint, Tourre devised the transaction, prepared the marketing materials and communicated directly with investors. Tourre is alleged to have known of Paulson's undisclosed short interest and its role in the collateral selection process. He is also alleged to have misled ACA into believing that Paulson invested approximately $200 million in the equity of ABACUS 2007-AC1 (a long position) and, accordingly, that Paulson's interests in the collateral section process were aligned with ACA's when in reality Paulson's interests were sharply conflicting. The deal closed on April 26, 2007. Paulson paid GS&Co approximately $15 million for structuring and marketing ABACUS 2007-AC1. By October 24, 2007, 83% of the RMBS in the ABACUS 2007-AC1 portfolio had been downgraded and 17% was on negative watch. By January 29, 2008, 99% of the portfolio had allegedly been downgraded. Investors in the liabilities of ABACUS 2007-AC1 are alleged to have lost over $1 billion. Paulson's opposite CDS positions yielded a profit of approximately $1 billion.
The Commission's complaint, which was filed in the United States District Court for the Southern District of New York, charges GS&Co and Tourre with violations of Section 17(a) of the Securities Act of 1933, 15 U.S.C. §77q(a), Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. §78j(b) and Exchange Act Rule 10b-5, 17 C.F.R. §240.10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest and civil penalties from both defendants.
The Commission's investigation is continuing into the practices of investment banks and others that purchased and securitized pools of subprime mortgages and the resecuritized CDO market with a focus on products structured and marketed in late 2006 and early 2007 as the U.S. housing market was beginning to show signs of distress.
end.
Dan Norcini:
Trader Dan's Commentary
I have often quipped that if some of these firms could make a profit betting against Granny's life tenure, they would do so.
One thing about this charge is that it will open the flood gates for additional litigation against Goldman from institutions and pension funds, etc, that purchased these products from Goldman Sachs. This is the nature of the non-transparent derivative market and the beast that it has spawned.
.
Consumer mood unexpectedly worse in early April
NEW YORK (Reuters) - U.S. consumer sentiment took a surprise negative turn in early April due to a persistently grim outlook on income and jobs, a private survey released on Friday showed.
A slip in economic expectations to its lowest in a year likely stemmed from consumers hearing negative information on government programs and a perception that the recovery is too slow, according to Thomson Reuters/University of Michigan's Surveys of Consumers.
"While consumers think the overall economy will continue to improve, they still hold quite negative views on their own income and job prospects," Richard Curtin, director of the surveys, said in a statement.
Consumer sentiment is seen as a proxy for consumer spending, which fuels about 70 percent of the U.S. economy.
The surveys' overall index on consumer sentiments slipped to 69.5 in early April -- the lowest in five months. This was below the 73.6 reading seen at the end of March and the 75.0 median forecast of analysts polled by Reuters.
The survey's gauge of current economic conditions slipped to 80.7 in early April, the lowest since December. This was below the 82.4 in late March and 84.0 forecast by analysts.
The survey's barometer of consumer expectations fell to 62.3 in early April, the lowest since March 2009. This was below the 67.9 seen at the end of March and fell short of the 68.7 predicted by analysts.
More than one in five consumers said they had heard negative information about government programs when asked to identify news of recent economic developments, about twice as high as a month or a year ago, the latest data showed.
Asked to evaluated federal economic policies, including healthcare reform, 45 percent rated them unfavorably, up from 40 percent in March.
Consumers' weaker expectations came despite recent data showing the biggest payroll gain in three years in March and a hefty 1.6 percent rise in retail sales last month.
"Although confidence in economic policies and legislation showed signs of weakening, it is too soon to determine if the reaction will be temporary or a more lasting concern," Curtin said.
The index of consumers' 12-month economic outlook fell to 71 from 78 in March but was up from 54 a year earlier.
Consumers polled in early April expected near-term inflation to accelerate.
The survey's 1-year inflation expectation index rose to 2.9 from 2.7 percent in late March, while the five-to-10-year inflation measure held steady at 2.7 percent in early April.
-END-
Thursday, April 15, 2010
The Comex and The Fractional Bullion System
Everyone knows the concept behind a "fractional" banking system, right? You have $1 in deposits and you lend out $10. The Romans invented the concept and it is widely understood to have been one of the ingredients that led to Rome's demise.
As per the electrifying CFTC hearings on March 26, and a fact that GATA has long understood, the Big Banks which deal in gold and silver, also known as "Bullion Banks," apply and utilize the fractional banking system to bullion dealings.
In 2007 Morgan Stanley settled a class-action lawsuit in which Morgan Stanley was selling silver to customers and charging them for storage. It turned out that Morgan Stanley was selling and storing silver that didn't exist. One of MS's defense arguments was that it was common industry practice to sell and store metal that didn't exist. And as long as the customer buys and sells thru MS without asking for the metal to be delivered, MS can get away with it because the round-trip transaction is cash in/cash out. The scheme crumbled when some investors asked for serial numbers and weights. Details are here, if you are interested: LINK
Let's apply this to the Comex. As of the most recent COT report, which shows open interest, long and short positions for speculators and commercials (primarily bullion banks), the total net short position for the bullion banks in gold was 244,900 contracts and in silver 51,700 contracts. This translates into 24.9 million ounces of gold and 258.5 million ounces of silver. Here's the problem, as of today, April 15, the total amount of gold reported by the Comex that is available to be delivered, the "registered" inventory, was 2.4 million ounces. In other words, the total paper short position of the bullion banks in gold was more than 10 times the amount of gold available to be delivered. Similarly in silver, the amount of registered silver was 48.9 million ounces. The bullion banks are short 5.3 times the amount of silver available.
The key to this scheme is that for each delivery month, a small percentage of the long position, relative to open interest and relative to the short positions, actually stands for delivery. That being the case, the CFTC and the powers that be at the Comex look the other way with regard to the absurd amount of paper gold and silver sold short in relation to the amount of underlying physical gold and silver that can be delivered. It's a complete "fractional" bullion banking system. But what will happen if some large investors - or sovereign funds or foreign Central Banks - decide to take long positions in gold in silver with the intent to take delivery? I expect that eventually this will happen and we'll see the Comex-equivalent of a catastrophic bank run.
Another interesting event has been occuring with SLV. Since February 26 thru today, 16.7 million ounces of silver has been removed from the SLV trust. At first glance, this might not seem unusual. However, a quick perusal of the data over the last two years (data history is available on the SLV website), reveals that this is an unusually large amount of silver to be withdrawn over a 6 week period. What makes it even more unusual is that since Feb 26, the price of silver has risen from $16.46 to $18.41 - nearly 12%. Typically, drops in the gold and silver held in GLD and SLV correlate with price declines and market sell-offs.
We can only speculate about what is going on. However, I would like to point out that JP Morgan is by far the predominant holder of the massive silver short position on the Comex. They are also the custodian (i.e. the keeper of the silver) for SLV. And to add one more layer of intrigue, over the past couple weeks, there has been an unusually large amount of silver which has moved in and out of the Comex warehouses. That data can be tracked here: LINK. You'll note that today ScotiaMocatta experienced a very large withdrawal from its "eligible" category. This category is the silver that Scotia safekeeps for investors and which is not available for futures delivery. Scotia's reliability as a bullion depository has recently come under intense scrutiny.
Coincidence? Only time will tell. But it is now becoming much more widely recognized by big bullion investors that it is crucial to make sure that the bullion you are invested in is being held on an "on demand" verifiable basis and that it has not been misplaced by the fractional system that is an accepted industry practice among the bullion banks.
I know exactly where my gold and silver is and I know exactly where the gold and silver (and the weights and serial numbers of the bars) owned by the fund I manage is. Do you? Are you sure you really own gold and silver, or is it a worthless paper certificate with little or no metal backing the claim?
U.S. Cities In Free Fall
Francesca Levy, Forbes.com
Apr 13th, 2010
Economic indicators in these metros have gone from bad to worse, with no sign of recovery.
Miami boasts a popular South Beach club scene, Art Deco Architecture, and perhaps the best Cuban food in the country. But residents don't have much else to celebrate.
More than three years after the economy started its downward slide, the Miami metro area, like a handful of Sun Belt cities, still hasn't begun to recover. Median home prices in Miami have fallen 38% since its market peaked in the second quarter of 2007; the city's 11% unemployment rate is above the national average and has grown more than most of the 40 cities we surveyed.
Cities in the "Sand States" of Florida, California, Arizona and Nevada, where overbuilding was rampant, are also in trouble, claiming nine of the top 10 spots in our list of cities in free fall. In Las Vegas, Riverside, Calif., and Phoenix, median home prices have fallen 50%, 44% and 37% from their respective peaks. Jobs are vanishing. Though country-wide, employers added 162,00 jobs last month, Riverside gained 13% fewer jobs in February 2010 (the latest numbers available by metro) than it did the same month three years earlier. Tampa, Fla., saw a 10% drop, and Los Angeles added 9% fewer jobs over the same time period.
These cities are also slow to absorb their glut of unsold foreclosed homes, keeping recovery at bay.
"These were highly speculative housing markets," says Jonathan Miller, president of Miller Samuel, a Manhattan-based real estate appraisal firm. "In the markets that have unloaded a lot of foreclosed housing stock there's still a lot more coming."
Sprott speaks out in this excellent interview.
If you have a sense of humor look at the advertisement. What an unlikely match they make.
you can find the video at www.jsmineset.com
scroll down and you will see it.
Following this video features Ron Paul attacking Ben Bernanke.
From this video, I think I know the origins of the 440 billion dollar loans that are showing up at the Fed balance sheet and where it went.
From the video, Ron Paul asks how the IMF is going to fund its 500 billion dollars needs
to rescue countries. Bernanke does not respond at all.
Ron Paul does not seem to know that the Fed has initiated a loan of 441 billion dollars.
It looks like the recepient is the IMF and thus the usa is going to bail out the world.
Got gold anyone?
I will leave you with this article suggesting that LA is going broke due to the huge pension costs that the city faces:
from Jim Sinclair's commentary:
Jim Sinclair's Commentary
Greece is PEANUTS compared to States of the USA. This will dawn on people like a bolt of lightening soon.
Pension funds have been the dumping ground for Wall Street junk. That is why there has been no recovery in this liquidity driven equity rally.
I have my suspicions of why the Pension Fund managers are not screaming foul.
Going for broke in L.A.?
Unless pension costs can be brought under control, the city may face bankruptcy.
By Tim Rutten
April 14, 2010
Former mayor Richard Riordan has been roiling the civic waters by arguing that the surest — and perhaps the only — way out of Los Angeles' fiscal crisis is a declaration of municipal bankruptcy, which he believes ought to come sooner rather than later.
In a conversation with The Times over the weekend, Riordan argued that bankruptcy may be the only way to attack the structural problem gnawing the heart out of the city budget: unsustainable public employee pension costs. Currently, Riordan says, the city is struggling to meet its pension obligations, and that's assuming it will receive 8% annually on the money invested on retirees' behalf. In fact, the average return over the past decade has been just 4%. Over the next few years, L.A. may be looking at $1.5 billion in pension obligations it can't meet. "We need some adults to come alive in the city and to talk through how to meet that liability," he said. "If that doesn't happen, we shouldn't rule out bankruptcy."
Mayor Antonio Villaraigosa's chief of staff, Jeff Carr, says categorically that "this mayor has made it clear that we are not going to declare bankruptcy." Moreover, while federal law lets bankruptcy judges reduce negotiated pension and health benefits in the private sector, it forbids changes in public employees' agreements.
Wherever you come down on the bankruptcy question, it's clear that anything approaching a genuine resolution of the civic financial troubles will have to involve a thorough overhaul of the pension system. Traditionally, public employment offered generous benefits because wages and salaries were lower than in the private sector for comparable work. More recently, public sector salaries have increased — in part because the governmental workforce is the most significantly unionized in the American economy — at the same time compensation in most of the private sector has been falling. When you narrow the focus of this national trend to labor-friendly L.A., the picture that emerges is fairly stunning.
I hope that everyone has a grand weekend, and I will see you on Monday.
Harvey.
