Massive Raid on Silver and Gold..Minimal damage

Good evening Ladies and Gentlemen:

Gold closed the comex session down $17.20 to $1412.20.  Silver responded in kind also losing $1.00 to close the day at $35.04.  As you will see below, the volume was huge and that is the chief ingredient to the raid.  The Dow had a miserable day down 228 points as the plunge protection team could not bid up any stocks. The market did not like the PIMCO report stating that they had eliminated USA government bonds from its flagship bond fund.  All of the PIMCO bond funds will follow suit.

Before I head over to the comex, for those newcomers, let me outline how the raid is orchestrated over at the comex.  First the bankers send a signal the day before that a raid is coming.  You need to get all the bankers in line that the raid is on for the next trading day. Then the bankers who also represent investors tell investors to hold their bids for later in the day.  They will obtain gold and silver cheaper and thus they withhold their bids.
Then the bankers offer huge number of contracts at the opening with hardly anybody bidding.  This dramatically forces the price down and in turn it trips all of those stop losses which in turn fuel another downturn.  The bankers do not have any signal for a retreat.  They only know to keep supplying massive contracts.  With 20 minutes to go, they start covering their shorts as quick as they can.  Whatever they cannot cover, it increases the banks total shorts in the precious metals and he see this in the COT report.  I will report on this on Saturday but the COT report is from last Tuesday to this past Tuesday.  I will not pick up the major raid today.

That is the mechanics of the raid.  Later in the commentary, I will talk about the mechanics of the short sales on the mining companies.  As a rule when you see gold and silver rise big time and the shares of big mining companies remain stationary or fall, generally that is the signal that a raid will begin in full force the next day.  Also a raid generally begins the day before the big  (phony) jobs report on the first of every month.

OK let's head over to the comex and see the damage for today.  First gold;

The total gold comex open interest surprisingly rose by 5923 contracts to 521,137 from yesterday's reading of 515,214.  The front options delivery month of March saw its open interest fall from 120 to 39 for a drop of  81 contracts.  We had 50 deliveries yesterday so we lost some gold.  I do not believe we had any cash settlements.
I believe that the comex folk could not get their act together and give the right OI numbers the previous two days.  All eyes shortly will turn to the front delivery month of April in gold. Today the OI fell marginally from 297,888 to 294,925.  This is beginning to get a little worrisome for our bankers as the front month of April is still very high in OI.

The estimated volume today was enormous at 190,927.  Generally the estimated volume is underestimated by 15-20%.  The confirmed volume yesterday was rather high at 148,413.  Generally equilibrium between buyers and sellers at the gold comex is around 130,000 contracts.  If you throw 190,000 plus contracts, (and this is totally unbacked) this causes the price to fall.  If you remove your bids, then the price drops dramatically and that was done today.

And now for silver:

The total silver OI surprisingly held steady with a gain of only 7 contracts.  Notice the big difference between the gold OI and silver OI.  The new reading of OI today is 133,492 and yesterday it registered 133,485.
The entire universe are fixated on the next data, the OI standing for silver in March.  The front delivery month of March saw its OI fall to 1427 from 1516 for a loss of 89 contracts.  We had 79 deliveries yesterday so we only lost 10 contracts to cash settlements.  It looks to me like these boys are resolute and determined to wait it out and take on Blythe. (chief of commodities at JPM)

The estimated volume today was enormous as well rising to 73,421.  The confirmed volume yesterday was very high at 66,561 contracts.

Here is a chart for March 10. 2011 on deliveries and inventory changes at the comex:

Silver
Withdrawals from Dealers Inventory	4736 oz
Withdrawals from customer Inventory	102,798 oz
Deposits to the dealer Inventory	zero oz
Deposits to the customer Inventory	419,342 oz
No of oz served (contracts ) 88	440,000 oz
No of notices to be served  1339	6,695,000 oz
Gold
Withdrawals from Dealers Inventory	25,565 oz
Withdrawals from customer Inventory	zero oz
Deposits to the dealer Inventory	zero oz
Deposits to the customer Inventory	46,850 oz
No of oz served (contracts)  3	300 oz
No of oz to be served 36 notices or 3600 oz	3600 oz

Let us begin with gold.  Today the dealer received zero oz  in this delivery month.  Most strange!!
However he did withdraw 25,565 oz and it does not seem that the customer received that inventory.
The customer received two lots of gold:

1. deposit of 32,150 oz in one warehouse
2.deposit of 14,700 oz in another warehouse.

total deposit   46,850 oz.
the 25,565 oz withdrawal from the dealer seems not to have entered the customer and I doubt if any settlements occurred with that transaction.  There were no adjustments.

The comex folk notified us that a total of 3 contracts were served upon our longs for a total of 300 oz of gold.
The total number of notices sent down so far this month total 1040 for a total of 104,000 oz of gold.
To obtain what is left to be served upon, I take the OI for March at 39 and subtract out today's deliveries  (3)
leaving me with 36 notices or 3600oz of gold left to be served upon.

Thus the total number of gold oz standing in this non delivery month of March  (and delivery month for options exercised) is as follows:

104,000 oz (already served)  +  3600 oz (to be served)  =  107,600 or 3.346 tonnes of gold if you are keeping score.  Yesterday we had a reading of 3.44.  I believe that the comex people corrected their math from the previous strange reporting in the last couple of days.

Let us now see how silver fared:

As you can see, we had another chaotic day in the silver vaults.  The dealer received no silver today but did withdraw 4,736 oz.  I doubt very much if this silver landed into a customer's registered comex vault.
However the customer received two lots of silver totalling 419,342 oz  (customer no1,  404,905 and customer no 2,  14,437  oz).  Another two customers removed 102,798 oz with the bulk coming from one customer to the tune of 100,811.

We had a few strange adjustments to report.
The first adjustment is very straightforward.  A customer decided out of the goodness of his heart to lease silver to the dealer to the tune of 10,229 oz  (2 silver contracts).  The next entry is a good one;

there is a negative  78,772 oz to the dealer
and a positive       80,853 oz to the customer

this is one transaction leaving the customer with an extra  2081 oz  coming from sources totally unknown to all.  I do not make this up.

The comex folk notified us that a total of 88 notices were served upon our longs today for a total of  440,000 oz of silver.  The total number of silver notices sent down so far total 495 for a total of  2,475,500 oz.
To obtain what is left to be served, I take the OI at 1427 and subtract out today's deliveries at 88 which leaves me with 1339 notices or  6,695,000 oz left to be served.

Thus the total number of physical silver oz standing in this delivery month of March is as follows:

2,475,000 oz (already served)  +  6,695,000 oz (to be served) =   9,170,000 oz
Yesterday's total was 9,200,000 so we lost only 30,000 oz to cash settlements.  The boys remaining are resolute.

Let's check out our non physical ETF's.

First GLD:  March 10.2011

Total Gold in Trust

Tonnes: 1,217.30

Ounces:39,137,259.44

Value US$:
55,302,921,145.05

yesterday:  identical.
we neither gained nor lost any gold.

How about SLV:

Ounces of Silver in Trust	352,824,122.500
Tonnes of Silver in Trust	10,974.06.

Yesterday's total:

identical.

we neither gained or lost any "inventory".


And now for our physical ETF's:

The Sprott silver fund still has an astronomically high 18.41% premium to NAV.

The Sprott gold fund has a premium to NAV of 4.60%.  This is not final as they have published only their silver fund tonight.  They have given an inter-day premium and that is 4.79%

The central fund of canada which is equal silver and gold had its premium remain at 6.3% over NAV.




end.

Let us now see the big news of the day.  Now question about this one as thousands storm the Capitol building in Madison WI:

Thousands storm Capitol as GOP takes action

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State Journal staff | (299) Comments | Posted: Thursday, March 10, 2011 8:45 am

The state Capitol in Madison, Wis., has been reoccupied by protesters who rushed into the building after hours, Wednesday evening, March 9, 2011.M.P. KING – State Journal

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Thousands of protesters rushed to the state Capitol Wednesday night, forcing their way through doors, crawling through windows and jamming corridors, as word spread of hastily called votes on Gov. Scott Walker's controversial bill limiting collective bargaining rights for public workers.

The Capitol overnight crowd had gone mostly silent by 2:15 a.m. Thursday after a nearly continuous stream of protest songs, drumming and the occasional bagpiping since about 7:30 p.m. Wednesday. Protesters on the ground floor of the state Capitol rotunda led others in Woody Guthrie's "This Land Is Our Land" just after 2 a.m. then joined about 200 others snoozing in sleeping bags along the Capitol walls.

Outside the Assembly chambers, about 50 protesters were sleeping and planned to remain until the body takes up the Senate's amended budget-repair bill, scheduled for 11 a.m. Thursday. Police and protesters continued to get along, with no incidents reported and no arrests.

Some union leaders interviewed at the Madison Labor Temple said the abrupt passage could lead to strikes. Officials with Madison Teachers Inc. and the Wisconsin Education Association Council urged teachers to show up to work Thursday, despite a call for a mass demonstration Thursday morning.

"The Senate's improper and illegal action will be challenged in court," predicted John Matthews, MTI's executive director.

Marty Beil, executive director of the Wisconsin State Employees Union, declared that the governor and his Senate "cronies" had "turned our proud state of Wisconsin into a banana republic."

"Senate Republicans have exercised the nuclear option to ram through their bill attacking Wisconsin's working families in the dark of night," added Phil Neuenfeldt, president of the Wisconsin State AFL-CIO. "Tonight's events have demonstrated they will do or say anything to pass their extreme agenda that attacks Wisconsin's working families."

Shortly after 8 p.m. Wednesday, hundreds of protesters gathered outside the locked King Street entrance to the Capitol, chanting "Break down the door!" and "General strike!"

Moments later, police ceded control of the State Street doors and allowed the crowd to surge inside, joining thousands who had already gathered in the Capitol to protest the votes. The area outside the Assembly, which is scheduled to take the bill up at 11 a.m. today, was crowded with protesters who chanted, "We're not leaving. Not this time."

Some said they planned to spend the night in the Capitol. Last week, a Dane County Circuit Court judge ordered dozens of protesters who occupied the Capitol for more than two weeks to leave.

"I'm staying. I'm angry enough," said UW-Madison student, Nathaniel Adragna, who stayed overnight during earlier protests. "It feels good to be back."

Department of Administration spokesman Tim Donovan said although protesters were being encouraged to leave, no one would be forcibly removed. Madison Mayor Dave Cieslewicz said he had instructed Madison Police Chief Noble Wray not to allow his officers to participate in removing demonstrators from the building.

At one point, officials estimated up to 7,000 people had spilled into the Capitol, some coming through doors and windows opened from the inside, including one legislative office and several bathrooms. Some door knobs and door handles were removed, Donovan said.

Officers eventually retrenched to the third floor, Donovan said, adding, "it was felt by several law enforcement officials that the best solution was to keep everybody safe" and stop trying to keep the crowds out.

Rob Koening, who has been involved in Madison protests for decades, exhorted protesters to remain peaceful.

"I ... encourage all my brothers and sisters to not make keeping this house our priority," Koening said. "It's not about maintaining this space. It's about building this movement."

Cieslewicz joined the protest, calling the bill's stealth passage "disgraceful." Former Mayor Paul Soglin, who is challenging Cieslewicz in the April election, urged protesters to boycott businesses whose executives supported Walker.

The budget repair bill was stalled in the Senate since the body's 14 Democrats fled Wisconsin on Feb. 17 in a desperate gambit to slow or stop passage of the measure, which affects about 175,000 public employees.

Representatives of the union that represents blue-collar, technical and safety officers at UW-Madison said the possibility of a general strike has been discussed. "Anything is possible," said Local 171 steward Carl Aniel.

Aniel said only locals can call a strike, and it would be up to each one to do so individually.

Anne Habel, a steward with AFSCME Local 171, said Wednesday's action will further inflame the unions, which have staged repeated protests since Walker introduced his budget repair bill in mid-February.

"Every time something happens, people become more militant," Habel said.

Jim Roberts, a retired Madison Fire Department lieutenant, was among those who raced to the Capitol after hearing about the impending vote. Wearing a fire helmet and carrying a protest sign, Roberts said Wednesday's vote made it clear to him that the real goal was busting unions, not balancing the state budget.

Ted Lewis, a union representative for Rock Valley Education Professionals, led protesters in a cheer referring to the effort to recall Walker, in office for two tumultuous months.

"Scott you don't remember me," Lewis chanted, "but I can recall you."

State Journal reporters Sandy Cullen, Steven Verburg, Ron Seely, Dan Simmons, Devin Rose, Patricia Simms and Dee J. Hall contributed to this report.

Copyright 2011 madison.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Posted in Govt-and-politics on Thursday, March 10, 2011 8:45 am Updated: 12:52 pm. Scott Walker Budget, Scott Walker, General Strike, Governor, American Federation Of State County And Municipal Employees, Madison Wisconsin,University Of Wisconsin Madison, State Street, Tim Donovan, Carl Aniel, Wisconsin State Capitol, Anne Habel, Robert Kraig, Ted Lewis

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end.

They government released the trade figures and they were awful, a huge 46 billion deficit.  The must subtract this figure from GDP as a deficit is a negative to the national consumption figure.  (courtesy Reuters)


January trade gap widens on surging imports






WASHINGTON (Reuters) - The trade deficit widened much more than expected in January to $46.3 billion, as surging imports of oil, capital goods and cars overpowered record exports.
Analysts had expected the trade gap to grow moderately to $41.5 billion, from a revised estimate of $40.3 billion in December. The closely watched trade gap with China also widened in January.
Led by higher oil prices, U.S. imports of goods and services leapt 5.2 percent in January to $214.1 billion for the largest month-to-month gain since March 1993.
The strong growth was a sign of improved U.S. demand, but the bigger-than-expected gap could prompt analysts to scale back their estimates of first-quarter U.S. economic growth.
The average price for imported oil soared to $84.34 per barrel, the highest since October 2008, and imports from the Organization of Petroleum Exporting Countries (OPEC) also rose to the highest since that month.
Imports of capital goods, such as industrial machinery, engines and medicinal equipment, hit a record $41.7 billion while imports of foods, feeds and beverages were a record $8.5 billion.
Car imports were the highest since February 2008.
U.S. exports of goods and services grew 2.7 percent to a record $167.7 billion, with both exports of goods and exports of services at record highs.
The previous record of $165.7 billion was set in July 2008, just before the global financial crisis which caused world trade to plummet.
Despite export growth to the rest of the world, U.S. exports to China fell more than 20 percent in January to $8.1 billion while U.S. imports from China grew slightly to $31.4 billion.
That resulted in a bilateral U.S. trade deficit of $23.3 billion during the month that Chinese President Hu Jintao was in the United States for talks with President Barack Obama.
The trade deficit with China is a sore point in relations and both sides have promised steps to bring trade more into balance.
-END-



The jobless number increased last week instead of going down



Jobless claims rise 26,000 last week
WASHINGTON (Reuters) - New claims for unemployment benefits rose more than expected last week, a government report showed on Thursday, but held below a key level associated with labor market recovery.
Initial claims for state unemployment benefits increased 26,000 to a seasonally adjusted 397,000, the Labor Department said, after falling to a 2-1/2 year low the prior week.
Economists polled by Reuters had forecast claims rising to 378,000. The prior week's figure was revised slightly up to 371,000 from the previously reported 368,000.
-END-


The market did like this report from Bank of America:  (courtesy Washington Business Journal)
I wonder what the banks are going to use as collateral?

Bank of America says nearly half its mortgages are ‘bad’ Washington Business Journal 
Date: Wednesday, March 9, 2011, 6:56am EST

Bank of America Corp. is segregating almost half its 13.9 million mortgages into a “bad” bank comprised of its riskiest and worst-performing “legacy” loans, Bloomberg News reported, citing Terry Laughlin, who is running the new unit.

“We are creating a classic good bank, bad bank structure,” Laughlin told investors at a meeting in New York Tuesday, according to Bloomberg. He was promoted last month to manage the costs of resolving disputes stemming from the company’s 2008 purchase of Countrywide Financial Corp. “We’re going to get after this, we’re going to do it the right way and we’re going to put it to bed in the next 36 months,” he said.

More…

On the international front, Spain debt has now been downgraded by Moody's

Moody’s cuts Spain rating, cites higher bank costs By Elisabeth O’Leary 
MADRID | Thu Mar 10, 2011 7:08am EST

MADRID (Reuters) – Moody’s downgraded Spain’s sovereign debt rating by one notch on Thursday and warned of further cuts to come due to fears that bank restructuring will cost more than twice what the government expects.

"(Moody’s) believes there is a meaningful risk that the eventual cost of the recapitalization effort could considerably exceed the government’s current projections," the ratings agency said in a statement.

The cut in the rating — to Aa2 from Aa1 — drove the euro to session lows against the dollar and the premium investors charge for Spanish 10-year debt instead of German Bunds expanded to its widest point in two months at 232 basis points before narrowing again to 226.

The Bank of Spain will release its own report on banks’ capital needs after markets close on Thursday.

The government and central bank have forecast no more than 20 billion euros would be needed to recapitalise weak banks.

More…

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end

The banks have basically stopped the foreclosure process due to the heavy class action lawsuits:


Foreclosure filings at 3-year low in February: RealtyTrac
NEW YORK (Reuters) - Foreclosure filings dropped to a 3-year low in February due to an ongoing backlog following last year's halt in activity, according to a RealtyTrac report on Thursday.
Notices of default, auctions and bank repossessions tumbled 13.9 percent from January to 225,101, the lowest since February 2008. Filings dropped 27 percent from February of last year, the biggest year-over-year drop since RealtyTrac started the report in 2005.
Investigations into the foreclosure process prompted temporary halts from some servicers late last year.
A bottleneck among lenders, servicers and attorneys as they refile paperwork that was improperly done means homes that would otherwise be delinquent aren't being processed, said Rick Sharga, senior vice president at RealtyTrac.
"The drop-off was too severe to be organic," said Sharga. "There's nothing in the underlying conditions that are causing foreclosures to suggest they
should be going down yet."
Banks foreclosed on 64,643 properties in February, down 17 percent from the month before.
Nevada saw the highest state foreclosure rate for the 50th month in a row with a foreclosure filing for one in every 119 homes. Overall, 10 states accounted for more than 70 percent of total national filings, and California alone accounted for a quarter.
-END-





I brought this to your attention yesterday.  The market reacted to this today big time:

PIMCO Total Return dumps U.S. government-related debt By Jennifer Ablan 
NEW YORK | Wed Mar 9, 2011 6:12pm EST

(Reuters) – The world’s largest bond fund has gone ultra bearish on the United States, dumping all of its U.S. government-related debt holdings.

The move by Bill Gross’s $236.9 billion PIMCO Total Return fund completed last month comes in the wake of a vicious Treasury market sell-off and just days after he questioned who will buy Treasuries once the Federal Reserve halts its latest round of bond purchases in June.

Gross, who also helps oversee a $1.1 trillion investment portfolio as PIMCO’s co-chief investment officer, has repeatedly warned against U.S. deficit spending and its inflationary impact, which undermine the value of government debt and push up yields as investors demand more compensation for risk.

Over the last five months, worries over the ballooning U.S. budget gap estimated at $1.645 trillion for 2011, political stalemate in Washington over how to narrow it and inflationary fears have all contributed to a steep sell-off in Treasuries. The benchmark 10-year note has seen its yield, which moves inversely to price, rise more than one percentage point since early October to 3.46 percent by Wednesday’s close.

Gross expects further carnage. Just last week, he told Reuters Insider that a 4.0 percent yield for 10-year notes is a "rational expectation" if the Fed "disappears as the buyer of last resort."

More…

It seems that the French are anxious to remove Qaddaffi:

Dispatch: French Support For Intervention in Libya March 10, 2011 | 2028 GMT

Editor’s Note: Transcripts are generated using speech-recognition technology. Therefore, STRATFOR cannot guarantee their complete accuracy.

The French government said on March 10 that it would recognize the Libyan National Transitional Council as the sole representative of the Libyan people. It will soon move its ambassador to Benghazi from Tripoli. This comes as French President Nicolas Sarkozy said he would call for airstrikes against Libyan forces at the March 11 EU Council meeting.

France has been one of the most vociferous supporters of a no-fly zone in Libya. However, the issue for French involvement is the capacity of Paris to enforce such a zone on its own. The French aircraft carrier Charles de Gaulle is the only aircraft carrier in the Mediterranean Sea at the moment. However, its (around) 35 aircraft alone would be insufficient to set up the initial zone. Therefore, the question is: To what extent can France enforce the zone on its own?

The logic for the call to an intervention is largely a domestic one for Paris. Initially, France took a lot of criticism for how it responded to the wave of protests in Tunisia and Egypt. France’s then-Foreign Minister, Michele Alliot-Marie, took a lot of criticism not only for vacationing in Tunisia by flying in a private jet of a businessman close to the regime, but also for offering the regime help from French security forces in repressing its protesters three days before the Tunisian president fled the country. Sarkozy ultimately had to replace Alliot-Marie with veteran Alain Juppe. The replacement was a considerable embarrassment for Sarkozy and for the French government. Therefore, one aspect of the logic for France’s support of a no-fly zone is the compensatory for the earlier lack of clarity on French policy toward change in the Middle East.

More…

end.

Many are calling me about the gold and silver shares.  I think you should all be careful here as we are playing with crooks.  The bankers are shorting gold and silver shares like crazy and they do not cover their shorts.
They use the money received for their nefarious activities.  When time comes to deliver the shorted stock certificate, they say sorry I do not have the certificate.  They are then in default and go on a list called failure to deliver or FTD's. The list of FTD's is enormous!! and  our regulators do nothing to correct this!!
The owner of the clearing house in the states is the DTC and you guessed it..who owns this fraudulent vehicle? JPMorgan and fellow bankers.

So please be careful when you buy mining companies.  Please register your certificate and do not loose sleep over a falling mining share prices. However make sure your mining company is a producing mine and in good geographical areas where there could not no confiscation.

I will see you in full bloom on Saturday.

Harvey