Bank Closing Information – October 22, 2010
These links contain useful information for the customers and vendors of these closed banks.
In one of my commentaries, I told you that I was writing to the Commissioner O'Malia of the CFTC. He is the swing vote
and he is attempting to delay implementation of position limits due to lack of trading data. Here is what I wrote to him
and the complaint is copied to Chairman Gensler and Commissioner Chilton. I invite your comments:
Russia’s Central bank has reported adding 700,000 ozs (21.77 tonnes) to its FX Reserves in September. In a development certain to boost gold’s popularity in influential circles, the Iranian Central Bank Governor has boasted the country’s gold holdings are "unprecedented". See
It seems that the manipulative huge short position implemented by JPMorgan and HSBC has kept the price of gold and silver too low. The resultant action is the accumulation of physical precious metals
by sovereign accounts and these countries then load the boat with the metal and move it onto their shores.
A default would be catastrophic but it looks to me like that is where it is heading. You cannot say we did not warn you.
There is another subject that is deeply disturbing.
It seems that Judge Painter who is retiring from the CFTC handed over all of his cases and not one of these cases was the silver manipulation case.
Judge Painter is alleging that Judge Levine told him that there was not going to be any findings for a complaintant at any CFTC hearing. It seems that Judge Levine is handling the Silver probe case, and
I guess that explains why we have not seen any findings on the matter.
I urge you to clean this matter up immediately.
With the scandal at the MBS arena starting to pick up speed, I feel it is imperative that you set an example such that we have fair and non manipulative markets. By delaying the implementation of position
limits, and the implementation of the elimination of phony exemptions to JPmorgan and HSBC. you send a clear message to all of world that you encourage manipulation to continue on USA soil. We need free and fair
and fair markets. It seems that we are getting just the opposite.
I encourage you to vote forposition limits on silver and gold and the elimination of all of those phony exemptions to the big banks with their massive unbacked paper shorts.
Gold closed yesterday at $1324.30 down 30 cents from Thursday's close. Silver remained flat at $23.12.
Here are the summaries for the gold and silver comex trading yesterday:
the total open interest for the gold comex closed at 614,117 for a healthy loss of 9333 contracts. The bankers were somewhat successful in fleecing some of the smaller
speculators. We have seen a contraction in OI from 638,000 to the present 614,000 and a corresponding drop in gold from $1384 to $1324.00 per oz. This is very healthy and will provide
the platform for gold's continued meteoric rise.
The front month of December saw its OI fall to 412,375. This is the area that the bankers watch and this is where the next physical delivery will occur.
The front delivery month of October has OI remain stubbornly high at 359 ie. 35,900 oz of gold are waiting to be serviced.
The total volume on the comex today was a healthy 159,859 contracts which is estimated.
The total volume on the comex on Thursday came in at 228,268 much higher than previously estimated. You can see the determined actions of the bankers
in trying to remove the speculators from their long gold contracts.
A little different story.
The total OI (open interest) for silver remains high and refuses to lower. It came in at 151,279 contracts. The day before we got 151,239 contracts, so
in essence we lost only 40 contracts. This is a massive defeat for the silver banker cartel.
The front delivery month of December has an OI of 95,171, which is quite normal but still too high for our bankers.
The option delivery month of Oct saw its OI drop to 23 contracts.
The volume on the comex yesterday was a very strong 54,342 which is of course estimated.
Get a load of the final volume recorded on the comex at Thursday's session: 83,099.
The bankers again threw the kitchen sink, along with a washing machine, some elephants, some cars..you name it
they tried to shake the silver tree and no leaves fell!!
Friday night saw the release of the Committment of traders report.
we can see the results at Goldseek.
Here is a summary of that report and it is basis Tuesday night:
In the gold COT report:
those large specs that have been long gold lessened their holdings by a very healthy 5289 contracts.
those large specs that have been short gold also lessened their short holdings by a large 4652 contracts.
In the commerical sector:
those intermediate bankers and swap dealers that are close to gold and are generally on the long side of gold increased those long positions by 296 contracts.
those commercial bankers that are always short on gold ie. JPMorgan and HSBC decided to shed some of their shorts to the tune of 6644 contracts.
and now for our small specs sector:
the small specs that have been long increased those positions by 1546 contracts.
those small specs that have been short gold increased those shorts by 2364 contracts.
We did not glean much information from the COT report as the raid occurred on Wednesday.
In the silver COT report:
those large specs that have been long silver lessened those positions by a strong 3337 contracts.
those large specs that have been short silver also decreased those positions by 1282 contracts.
In the all important commercial category:
the commercials ie. intermediate bankers and swap dealers that have been long decreased those positions by a tiny 296 contracts.
those commericals that are always short and the subject of the silver probe ie. JPMorgan and HSBC decreased their shortage by a very large 6644 contracts.
the small specs in silver are generally not important but for completeness:
those small specs that have been long increased those positions by 1546 contracts and those that have been short increased their positions by 2364.
Now we shall go to the inventory changes and delivery notices at the comex:
|Withdrawals from Dealers Inventory||65,472 oz|
|Withdrawals from customer Inventory||86,935|
|Deposits to the dealer Inventory||n/a|
|Deposits to the customer Inventory||900,971 oz|
|No of oz served (contracts=20 )||100,000 oz|
|No of oz to be served 23 contracts)||115,000 oz|
|Withdrawals from Dealers Inventory|| |
|Withdrawals from customer Inventory||zero oz|
|Deposits to the dealer Inventory||5000 0z|
|Deposits to the customer Inventory||1708 oz|
|No of oz served (contracts = 34||3400 oz|
|No of oz to be served (contracts=359||35900 0z|
In the silver notices and inventory changes:
please note the withdrawals of 65,472 oz from the dealer without going into the customer. This is silver fleeing the comex
from a dealer. We saw also another sizeable removal of silver from the customer to the tune of 86,935 oz. Again we are seeing massive
movements of silver from all directions.
The total number of notices served upon our option holders in silver was 20 or 100,000 oz of silver served upon.
The total number of notices served thus far this month total: 100 or 500,000 0z of silver.
The total number of notices or OI remaining to be served total 23 or 115,000 0z of silver.
Thus the total number of silver oz standing in this delivery month is as follows:
500,000 oz (already served) + 115,000 ( to be served) = 615,000 oz . (as promised to you..this number is increasing as we conclude October)
This is a sure sign of the difficulty that the bankers have in acquiring the silver metal. They are even having trouble during a non delivery month to service the option holders.
And now for the all important gold comex:
Again, no withdrawals of gold from either the customer or dealer and a very small deposit of gold into the dealer and customer
of 5000 oz and 1708 respectively. Generally I would expect to see big deposits enter the vaults to service the long which has not happened as of yet.
The comex notified us that 34 notices were served on our longs for a total of 3400 0z of gold.
The total number of gold notices sent so far this month has been updated to 6335 or 633,500 0z of gold
The toal number of gold remaining to be served equals a very high 359 or 35,900 oz of gold
The total number of gold standing in this delivery month of October is as follows:
633,500 0z (already served) + 35,900 (oz to be served) + 70,800 0z (prev options month of Sept) = 740,200 0z or 23.06 tonnes of gold.
Please note: the gold ounces are increasing. Somebody is in need of gold as well!!
This Tuesday we will see options expire on both silver and gold. Expect another volatile trading day on Monday and Tuesday.
Also keep in mind that November is neither a delivery month for gold or silver so only options will be execised and I will report on that.
All eyes will then focus on the biggest of all delivery months for gold and silver and that will be December.
I will report extensively on that.
In other physical news, our two ETF's had their premiums reduced due to the raid by the banking cartel. The premium to NAV on the central fund of canada
slipped to 4.2 % and our PHYS fell to4.29 %. The previous day had the CEF ad 8.2% and PHYS at 4.62%
Here is John Brimelow:
The bullion vehicles were downcast: CEF dropped to a 4.2% premium to NAV and PHYS to 4.29% (8.2% and 4.62%).
Interstingly enough, GLD shed another .9115 tonnes of gold. This has been the 3th straight day that they have shed the same exact amout of gold:
The GLD ETF, curiously, shed exactly 0.9115 tonnes for the third day running - 29,300 ozs. Is someone inside sending a message? In the past 5 business days, GLD has shed 6.0768 tonnes to 1,298.26556 tonnes:
The SLV saw no change to its inventory where it remains at 328 million oz.
And now for the big economic stories of the day.
Professor Black, who has been very vocal and accurate on the mortgage mess gave an interview on Bloomberg yesterday.(I have referred to Prof Black on many occasions in my previous commentaries)
He basically he stating that the securitized mortgage instruments are ALL fraudulent. The Fed is holding a huge amount of these mortages and they are valueless and the author of these instrument are criminals.
you can view at the following link:
and here is JIm Sinclair on this very important interview:
Jim Sinclair’s Commentary
Bloomberg had an interview this afternoon with Professor Black who is the author of The Best Way to Rob a Bank is to Own One.
He could not be silenced. Professor Black said, amongst other javelins in the heart of MOPE, the following:
1. Securitized mortgage instruments are all fraudulent.
2. The Fed is holding a huge amount of these as collateral.
3. They are valueless.
4. The manufacturers of these are, under commercial and criminal statute and law, criminals.
The interviewer almost swallowed her tongue.
Gold will trade at and above $1650. QE to infinity is not a choice, it is all that is left.
This weekend we have a G20 summit meeting but already there are major disagreements between the nations:
Here is this article from Bloomberg:
G-20 Nations Split Over Geithner's Trade Plan as Talks Near End
Group of 20 finance chiefs are struggling to agree whether to set targets for their current account imbalances as a way of defusing tension over currencies before it sparks a trade war.
G-20 finance ministers and central bankers began talks in Gyeongju, South Korea, today after weeks of wrangling over whether nations from the U.S. to China are relying on weaker exchange rates to spur growth.
Seeking a solution, U.S. Treasury Secretary Timothy F. Geithner proposed G-20 members pursue policies to reduce trade gaps "below a specified share" of their economies, according to an Oct. 20 letter obtained by Bloomberg News. That suggestion today split the emerging and industrial countries…
The only real number worthy to report is the private ECRI report showing leading indicators falling flat on its face:
here is this important Reuters report:
Economic growth gauge falls to six-week low: ECRI
NEW YORK (Reuters) - A measure of future U.S. economic growth fell to a six-week low in the latest week, while the index's annualized growth rate rose to an 18-week high, a research group said on Friday.
The Economic Cycle Research Institute, a New York-based independent forecasting group, said its Weekly Leading Index fell to 122.1 in the week ended October 15 from 122.2 the previous week.
That was the lowest since September 3, when it stood at 121.9.
The index's annualized growth rate rose to minus 6.8 percent from minus 7.0 percent a week earlier. That was the highest since June 11, when it stood at minus 6.1 percent.
Occasionally the index level and growth rate can move in different directions, because the growth rate is derived from a four-week moving average, the research institute said.
The very prestigious forum the :The Financeand Economics.Org came out with this paper on the problems facing the big commercial banks are their shortage of gold.
They are basically indicating what I have been telling you that the big banks are short 20,000 tonnes of gold.
Here is this paper in full for you to read:
Where can we find 20,000 tonnes of gold?
Having broken out convincingly into new high ground, gold and silver have now paused for breath. Despite the sharpness of this week’s reaction, their performance indicates good underlying strength.
This is not to say there is no speculative froth – of course there is. Rather, speculators play a distant second fiddle in this market. Bullion is still doing what it has been doing for the last year: when the commercials on Comex hit the price it backs off rapidly on little volume, until someone very big takes the opportunity to clean the market out. It becomes another ratchet on the torturer’s rack for the commercial shorts, who find that every time this happens they end up being stretched further.
On last week’s rise there were early signs of panic, as the commercials attempted to reduce their exposure. However, the commercials’ net short position on Comex is still a very high 933 tonnes. Convention suggests that the commercials know best, and even if they have an extreme position, they will still crush you. And indeed, the big commercials, being too big to fail and with the comfort of the Fed’s antipathy to gold, could increase their short positions even further. This is now developing into the biggest game of chicken the markets will probably ever see.
However, the TBTF commercials are not having things all their own way. Ten years of bull market must have pretty well exhausted the central banks’ bullion supplies, but parting with the physical has not been the only way gold has been suppressed. The very structure of the market might have been designed to neutralise speculative demand: on Comex physical settlement is little more than token, and in London forwards and leases are rolled or closed out by matching transactions. These markets encourage users to avoid delivery of the physical. True demand has been siphoned off into side-bets.
Investors may have been unaware of this, and while wheeling and dealing in these derivatives, they will be unaware that the truly wise long-term players have been quietly hoarding the physical, upon which this house of cards rests. In the ‘80s and ‘90s, central banks leased gold to the market that was then bought and accumulated by oil producers in the Middle East, and when it was ridiculously cheap large amounts were converted into jewellery. In this last decade the central banks themselves in aggregate have begun to accumulate bullion. It is important to understand that none of these earlier buyers will resupply much to the markets at higher prices.
The entry of China, Russia, India and a growing list of other politically-motivated nations into the market as limitless buyers of gold has created enormous difficulties for the old guard of interventionists, and a solution is desperately needed. It has developed into a power-struggle between this old guard, which is trying to manage a way through a crisis of its own making, and the new which so far has not managed to acquire enough bullion. Furthermore the new is building up excessive amounts of fiat paper issued by members of the old; paper which they know is loosing value at an increasing pace. On this basis gold is simply underpriced in paper currency terms.
The struggle between the old and new guards is illustrated by the IMF’s gold sales, the stated purpose of which was to raise funds to help smaller nations through the credit crisis. The inner circle at the Bank for International Settlements must have been tearing its hair out to see these Keynesian clots gift half this invaluable ammunition to India. And why is the IMF selling bullion to Bangladesh and Sri Lanka, when their policy objective is to provide “concessional finance” to these struggling nations? (These sales were agreed for this purpose at the London G20 summit chaired by none other than Gordon Brown - second time unlucky.)
But what must have really got under the skin of the BIS is that it knows the real value of bullion is considerably in excess of the market price. It knows gold is underpriced, because the BIS and its senior members have been suppressing the price for the last forty years, which has resulted in an acute shortage of stock. But when they embarked on this course in the 1970s they would not have foreseen how gold would be made available to the masses through yet-to-be-invented ETFs; nor could they have foreseen the emergence of Russia and China from deep communism into aggressive capitalist-style development, generating hundreds of millions of new gold-loving savers. Consequently the old-guard BIS members have lost embarrassing quantities of bullion and cannot confess this to the markets. Presumably they had hoped that by withholding this information they could bluff it out; and they might have succeeded had it not been for the very serious financial and economic deterioration in the global economy, which raises the possibility of a Fed-induced dollar crisis, triggering new demand for physical bullion.
As well as these problems there is growing evidence of disruptive intent behind the gold policy of the ex-communist nations. I recently covered this in an article that tied in the relationships of the Shanghai Cooperation Council. In that article I pointed out that the substantial majority of today’s gold-buying nations are members of, or are associated with this organisation. As if to confirm these fears, in the last few days Iran, which is an associate member of the SCO, announced it is now buying gold. Furthermore, China is restricting the export of rare earth metals, which with the energy policies emanating out of the SCO membership, has the appearance of a coordinated attack on the Western economic system. If such a conspiracy exists, gold is central to it.
The result of forty years of gold price suppression is not only the disappearance from the markets of unquantifiable amounts of physical into the firmest of hands, but also an accumulation of claims for physical bullion through the growth of unallocated accounts at the bullion banks; and the secret we would all love to know is how large this commitment has become. In the absence of hard facts, we have to make a reasonable estimate.
The only major bullion bank that declares its bullion holdings is HSBC, which at the end of 2009 held gold valued at $13.757bn (392.6 tonnes)[i]. We shall assume that this bullion is held against HSBC’s unallocated accounts and we shall further assume a reasonable fractional reserve multiple of 10, which gives us net uncovered liabilities of 3,533 tonnes for HSBC alone.
However, there are 35 banks listed as full members of the LBMA, and it can be assumed that nearly all of them offer unallocated account facilities[ii]. It is also possible, even likely, that the fractional reserve multiple for many of these banks is higher than 10, because banks have been generally reluctant to hold the one reserve currency that pays no interest.[iii] Furthermore, some of these banks are among the largest in the world. Taking all this into account, it is possible that LBMA members are short of over 20,000 tonnes on their unallocated accounts.
This liability is unlikely to be hedged, because it is difficult to see who would take the other side of such large amounts. And this brings us back to the theme of this article: the key market participants are desperately short of bullion.
As a result, the ratio of turnover in forwards futures and options to the underlying physical has become improbably high, and is still rising. The deteriorating economic outlook for the US, Europe, the UK and Japan is now beginning to generate new hoarding demand all over the world. And all this is before portfolio investors have even begun to invest: the statistics indicate that portfolio exposure is amazingly low at less than 1%, so the point where more hoarding triggers market dislocation cannot be far off. Indeed, a small bullion bank worried about its unallocated exposure would be wise to cover its position on Comex, and demand for long futures from these sources may soon become a market factor.
So, before any pundit makes a price forecast, and before anyone lucky enough to own gold thinks about selling, they should dwell on this important question: in this extraordinary market where the central banks are at war, where the devil and at what price are we going to find 20,000 tonnes of gold?
22 October 2010
All eyes will now focus on the big FOMC meeting on Nov 2 to Nov 3. The usa election is on Nov 2 so the results of that meeting will occur after the election.
The stock market is telling us that QE II will be upon us and that 1/2 trillion to one trillion dollars will be earmarked for spending. If that figure is lower then the stock market will tank
and gold will see another of their big raid jobs.
The lone voice of disapproval of QEII is Thomas Hennig of the Kansas City Fed. He correctly is asking his fellow board members to exercise caution in approving this next level of spending:
here is this report courtesy of James Sinclair:
More Fed easing would risk another bubble: Hoenig
Oct. 21, 2010, 11:56 p.m. EDT
By V. Phani Kumar
HONG KONG (MarketWatch) — The U.S. Federal Reserve should refrain from easing its monetary policy further as that would increase the risk of another economic bubble, Kansas City Federal Reserve’s President Thomas Hoenig said on Thursday, according to reports. Hoenig, a voting member of the Federal Open Market Committee, said he was "very unhappy" with the high level of unemployment, but added that more asset purchases could threaten the U.S. economic recovery. "If you try and bring [unemployment] down too rapidly, you are in danger of creating the next problem," Hoening said, according to Reuters. He made the remarks at the New Mexico Economic Forum in Albuquerque.
It looks like Fannie and Freddie may need to pump over 300 billion in the housing crisis:
Fannie, Freddie May Draw $363 Billion, FHFA Says
By Lorraine Woellert – Oct 21, 2010 5:13 PM PT
Fannie Mae and Freddie Mac, the mortgage-finance companies operating under U.S. conservatorship, could draw a total of $363 billion in Treasury Department aid through 2013 if the housing market worsens, the Federal Housing Finance Agency said.
The FHFA, which oversees the government-sponsored entities, offered the estimate today as the worst-case in an analysis modeled on the stress tests conducted on the nation’s biggest banks last year. The actual total cost to taxpayers under the regulator’s most dire scenario would be $259 billion, because almost 30 percent of the funds would come back to Treasury as dividend payments on its holdings of senior preferred stock.
Under the best-case scenario, which assumes a strong near- term recovery in the housing market, the total cost to taxpayers would be $221 billion, or $142 billion after dividends. A middle-ground scenario would require total aid of $238 billion, or $154 billion after dividends. So far the companies have drawn $148 billion and returned $13 billion in dividends to Treasury.
“These projections are intended to give policy makers and the public useful snapshots of potential outcomes for the taxpayer support of Fannie Mae and Freddie Mac,” FHFA Acting Director Edward J. DeMarco said in a statement released with the report. “The results reflect the potential effects of a limited set of hypothetical changes in house prices.”
I hope you all have a grand weekend. My new computer arrives today with better graphics etc so my reports should be a lot cleaner.
all the best