Greece/Italy/Gold rises/ MFGlobal customers will not see their money/Sears

Good evening Ladies and Gentlemen:

The price of gold rose today to the tune of $8.50 to close at $1647.80.  Silver on the other hand rose 23 cents to break the 30 dollar barrier to $30.07. Yesterday the gold/silver shares lagged the bullion price which is generally a signal that a raid was forthcoming.  However during the night, over in Europe they had successful auctions in the Italian bonds which triggered euphoria.  The trouble here is that the bonds offered were the 1 to 3 year in duration.  These bonds will be swapped from the buyers  (the banks) to the ECB for freshly minted euros in the second round of LTRO which will begin in earnest in February. The euphoria caused European bourses to rise and this signaled a risk on trade.  However on this side of the pond, the markets were stunned that the jobless went back to the 400000 level.  Thus the Dow did not join her European friends in excitement but it did close up by 21 points.

Let us head over to the comex and assess trading with respect to open interest, inventory movements and amounts of metal standing.

The total gold comex open interest fell by 3634 contracts despite gold's advance yesterday.  It rests tonight at 414,289.  The front options expiry month of January saw its OI remain constant at 30 contracts.
We had 14 delivery notices yesterday so we gained 1400 oz of additional gold standing.
The next big delivery month is February where we have 2 1/2 weeks left before first day notice.  Here the OI fell by over 11000 contracts to 181,498.  The estimated volume at the gold comex today came in at 181,498 which is quite low considering the rollovers.  The confirmed volume yesterday was also weak at 168,995.

The total silver comex OI continues to fall.  Today it registered a level of 103,882 a drop of about 500 contracts from yesterday.  The front options expiry month of January saw its OI rise from 83 to 185 for a gain of 102 contracts.  We had one delivery notice so we gained an additional 103 contracts or 515,000 oz.
Someone was in great need of physical silver.  The next delivery month is March and here the Oi slipped about 800 contracts to 55,649.  The estimated volume at the silver comex came in at 38,310.  The confirmed volume yesterday resulted in an OI of 38,952.

Inventory Movements and Delivery Notices for Gold: Jan 12 2012:

Gold	Ounces
Withdrawals from Dealers Inventory in oz	nil
Withdrawals from Customer Inventory in oz	nil
Deposits to the Dealer Inventory in oz	1099 Brinks
Deposits to the Customer Inventory, in oz	1286 (Manfra)
No of oz served (contracts) today	8 (8000)
No of oz to be served (notices)	22  (2200)
Total monthly oz gold served (contracts) so far this month	1023  (102,300)
Total accumulative withdrawal of gold from the Dealers inventory this month	4297
Total accumulative withdrawal of gold from the Customer inventory this month	160,921

We had some minor activity in the gold vaults today.
The dealer finally received a deposit but it was tiny at 1099 oz and the vault: Brinks.
The customer also received a deposit of 1,286 oz into Manfra.
We had no withdrawals of any kind whether by dealer or customer.

We had two adjustments:

1.  From the HSBC vault, 103 oz was repaid by the dealer back to the customer.
2.  From the JPMorgan vault:  a massive 22,986 oz was repaid back to the customer.

the total dealer or registered gold rests tonight at 2.499 million oz or 77.73 tonnes.
The dealer gold is declining in tonnes  ( but not settling upon our longs)

The CME notified us that we had 8 delivery notices filed for 800 oz of gold.
The total number of gold notices filed so far this month total 1023 for 102300 oz.
To obtain what is left to be served, I take the OI (30) and subtract out today's deliveries (8) which leaves us with 22 notices or 2200 oz of gold.

The total number of gold oz standing in this delivery month is as follows:

102,300 oz (served)  +  2200 (oz to be served) =   104,500 oz or 3.25 tonnes of gold.

If we add the last 3 months we have 73.93 tonnes of gold standing against an inventory of 77.73
or 95.11% of available dealer gold.

 And now for silver 

 the chart: January 12 2012:

Month of January now commences:

Silver	Ounces
Withdrawals from Dealers Inventory	nil
Withdrawals fromCustomer Inventory	3862 (brinks,)
Deposits to theDealer Inventory	596,741 (Brinks)
Deposits to the Customer Inventory	250,123(Scotia)
No of oz served (contracts)	125 (625,000)
No of oz to be served (notices)	60  (3000,000)
Total monthly oz silver served (contracts)	674  (3,370,000)
Total accumulative withdrawal of silver from the Dealersinventory this month	268,115
Total accumulative withdrawal of silver from the Customer inventory this month	1,919,956

Again volumes of silver continue to fill the comex vaults.

Today we had the following deposits:

Into the dealer Brinks:  596,741 oz

Into the customer Scotia: 250,123 oz

we had only one tiny withdrawal by the customer:

3862 oz out of Brinks.

we had no adjustments.

The registered or dealer silver is now 36.099 million oz.

The total of all silver advances to 124.7 million oz.

The CME notified us that we had a rather large 125 notices filed for 625,000 oz.

The total number of notices filed so far this month total 674 for 3,370,000 oz.

To obtain what is left to be served upon, I take the OI standing for January (185) and subtract out today's deliveries (125) which leaves us with 60 notices or 300,000 oz left to be served upon.

Thus the total number of silver oz standing in this non delivery month of January continues to advance:

3,370,000 (oz served)  +  300,000 (to be served upon) =  3,670,000

end

Let us now proceed to our ETF's SLV and GLD and then our physical gold and silver funds:

Sprott and Central Fund of Canada.

The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.

There is now evidence that the GLD and SLV are paper settling on the comex.

Thus a default at either of the LBMA, or Comex will trigger a catastrophic event.

Jan 12. 2012:

Total Gold in Trust

Tonnes:1,254.16

Ounces:40,322,451.77

Value US$:66,963,739,550.16

Jan 11.2012

TOTAL GOLD IN TRUST

Tonnes:1,254.16

Ounces:40,322,451.77

Value US$:65,895,926,430.52

we neither gained nor lost any gold at the GLD.

And now for silver Jan 12 2012: 

Ounces of Silver in Trust

305,970,641.100

Jan 11.2012:

Ounces of Silver in Trust	305,970,641.100
Tonnes of Silver in Trust	9,516.75

Jan 10.2011:

Ounces of Silver in Trust	305,970,641.100
Tonnes of Silver in Trust	9,516.75

Jan 9.2011:

Ounces of Silver in Trust	305,970,641.100
Tonnes of Silver in Trust	9,516.75

we neither gained nor lost any silver today in the SLV.

end.

end

And now for our premiums to NAV for the funds I follow:

1. Central Fund of Canada: traded to a positive 2.8 percent to NAV in usa funds and a positive 2.5% to NAV for Cdn funds. ( Jan 12 2012.).

2. Sprott silver fund (PSLV): Premium to NAV fell   to  28.69% to NAV  Jan 12 2012:
3. Sprott gold fund (PHYS): premium to NAV fell  to a 4.52% positive to NAV Jan 12. 2012). 

end.

Before proceeding we received the following during mid morning that the first stage of the Volcker rule passed the CFTC.  When this eventually passes, it may play havoc to the likes of JPMorgan.

(courtesy Bloomberg)

 

.

Volcker Rule Trading Ban Gets CFTC 3-2 Vote

Q

By Silla Brush - Jan 11, 2012 2:50 PM ET

The U.S. Commodity Futures Trading Commission proposed limits on banks’ proprietary trading and hedge fund investments under the Dodd-Frank Act’s Volcker rule.

The CFTC voted 3-2 to propose the ban, becoming the last of five regulators to seek public comment on the proposal. Today’s vote opens the measure to 60 days of public comment.

The rule, named for former Federal Reserve Chairman Paul Volcker, was included in Dodd-Frank to rein in risky trading at banks that benefit from federal deposit insurance and Fed discount window borrowing privileges.

The CFTC didn’t participate when the Fed, Federal Deposit Insurance Corp., Securities and Exchange Commission and Office of Comptroller of the Currency released a joint proposal last year. Those four agencies extended the comment period on their proposal until Feb. 13 after financial-industry groups and lawmakers cited the complexity of the rule and the lack of coordination with the CFTC in seeking an extension.

The proposed rule would ban banks from making trades for their own accounts while allowing them to continue short-term trades for hedging or market-making. It also would limit banks’ investments in private-equity and hedge funds. Dodd-Frank sets a July 21 effective date for the Volcker rule ban on proprietary trading at banks.

Swap Units

The CFTC proposed a version of the rule that is largely the same as the other agencies and sought additional feedback on how the rule would affect derivatives market participants under its jurisdiction. The CFTC would have authority over banks’ subsidiaries, such as swap-dealing units and futures brokerages.

“I think our role here is important, it’s significant, but it’s actually just a supporting member,” CFTC Chairman Gary Gensler said at the meeting. “The bank regulators have the lead role.”

Republican commissioners Scott O’Malia and Jill E. Sommers voted against the proposal, citing the rule’s complexity and difficulty to enforce.

“This rule is so bad it really merits re-proposal,” O’Malia said at the meeting. The regulation would have “unpredictable consequences” for liquidity in the $708 trillion global swaps market, he said.

The House Financial Services Committee has scheduled a Jan. 18 hearing on oversight of the Volcker rule.

‘Overly Complex’

“The current proposal twists a simple concept into an overly complex and burdensome regulation,” Representative Randy Neugebauer, a member of the committee, said in a Dec. 20 letter urging a delay in the implementation of the rule. “Going significantly beyond Congressional intent, this proposal will make it difficult for banking entities to manage risk prudently,” the Texas Republican said in the letter signed by 121 House lawmakers, including four Democrats.

The Volcker rule will affect banks’ standalone proprietary trading desks and trading for their own accounts conducted elsewhere in the companies.

Standalone proprietary-trading groups at six bank holding companies -- Bank of America Corp.,JPMorgan Chase & Co., Citigroup Inc. (C), Wells Fargo & Co., Goldman Sachs Group Inc. (GS)and Morgan Stanley -- had a net loss of about $221 million from June 2006 through the end of 2010, according to a July 13 Government Accountability Office report.

To contact the reporter on this story: Silla Brush in Washington at sbrush@bloomberg.net

To contact the editor responsible for this story: Lawrence Roberts at lroberts13@bloomberg.net

Want to save this for later? Add it to your Queue!

end

John Embry has commented on silver.  You will enjoy what he says:

(courtesy John Embry and GATA)

A fiery horse with the speed of light, a cloud of dust, and a hearty 'Hi-yo, Silver! Away!'

Submitted by cpowell on Thu, 2012-01-12 22:40. Section: Daily Dispatches

5:20p ET Thursday, January 12, 2012

Dear Friend of GATA and Gold (and Silver):

Sprott Asset Management's John Embry today jumps on to silver's saddle and rides off into the sunset, if not shouting, "Hi-yo, Silver! Away!," then at least muttering, "Don't say I didn't warn you."

First is Embry's essay in Investor's Digest of Canada, where he writes that bouts of price suppression in the monetary metals will be once again just prerequisites for the next big moves up:

http://www.sprott.com/Docs/InvestorsDigest/2011/MPLID_123011_pg461Emb.pd...

And then in an interview with King World News he speculates that the massive amount of gold being imported into China is coming from Western central banks or the main gold exchange-traded fund. An excerpt from that interview is posted at the King World News blog here:

http://tinyurl.com/6spyxy7

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end



Here are some of the big stories that occurred during the night.
The European auctions went over really well as the duration of the bonds were less than 3 years. All of these bonds are going to be swapped for Euros in the next round of LTRO where the ECB will bloat with more junk from the big European banks by adding another 400 billion euros.  The ECB bank in February will thus add an astounding 1 trillion euros to its burgeoning belly in the last 6 months!!

(courtesy zero hedge)

Key Overnight Events And What To Expect

Submitted by Tyler Durden on 01/12/2012 07:40 -0500

• Borrowing Costs
 
• China
 
• European Central Bank
 
• France
 
• Greece
 
• Italy
• Monetary Policy
 
• None
 
• World Bank

Just like during the holiday "break" the market is euphoric, however, briefly, on the fact that Italy sold Bills , however many, in a period protected by the 3 year LTRO. And just like the last time this happened, about two weeks ago, this auction shows nothing about the demand for Italian paper longer than 3 years, which unfortunately Italy not only has a lot of, but is rolling even more of it. And none of this changes what World Bank President Zoellick told Welt yesterday, namely that the Europe’s interbank market is frozen and continent’s banks only lend to each other through ECB due to a lack of confidence within the financial industry, World Bank President Robert Zoellick is quoted as saying by German daily Die Welt. He continues: "If European banks don’t lend to each other, how can others in the U.S. or in China be expected to do it." Anyway, here courtesy of Bloomberg's Daybook are the key overnight events as we prepare for the ECB 7:45 announcement and subsequent conference.

• EU peripheral bonds surging after borrowing costs fell at offerings of Spanish and Italian debt.
• Spain sold almost double the amount planned and Italy met its EU12b target.
• Spain sold EU9.98b ($12.7b) bonds maturing 2015 and 2015, compared with a target of as much as EU5b, while the yield on Italy’s one-year bills fell to 2.735% from 5.952% at the previous sale
• Investors are interpreting Sarkozy saying that France losing its AAA isn’t “insurmountable” -- to mean that France has accepted the inevitable. The question now is whether Standard & Poor’s will follow through with a threat of a two-level cut.
• Greece will have to exit the euro area as it struggles under a mountain of debt, a senior lawmaker in Chancellor Angela Merkel’s party said 
• Week’s Treasury auctions conclude with $13b 30-yr bonds. WI yields 2.995%; drew record-low 2.925% at December auction. 10-yr notes sold yesterday were awarded at record 1.90%

What to Watch:

• ECB’s Draghi will keep the bank’s main rate at 1% today, according to most economists in a Bloomberg survey, after cutting it twice in last two months and flooding the banking system with record amounts of cash
• Bank of England’s Monetary Policy Commmittee will keep its main rate at 0.50% and maintain its GBP275b bond-purchase target, according to a separate survey
• Royal Bank of Scotland Group Plc will cut 3,500 jobs at its investment bank over the next three years as it jettisons unprofitable cash equities and mergers advisory operations

end.

True to form Mario Draghi kept the Euro central rate at 1%:

ECB Keeps Rate Unchanged At 1.00% As Expected

Submitted by Tyler Durden on 01/12/2012 07:47 -0500

• European Central Bank
 
• Monetary Policy

No surprise.

12 January 2012 - Monetary policy decisions

At today’s meeting the Governing Council of the ECB decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 1.00%, 1.75% and 0.25% respectively.

The President of the ECB will comment on the considerations underlying these decisions at a press conference starting at 2.30 p.m. CET today.

Now the question is whether the ECB will announce some unconventional easing methods. We doubt it: it already has its hands full explaining why its balance sheet has grown by €600 billion in 6 months.

end.

In his testimony Mario Draghi saw huge risks to the economy:

Draghi Sees Substantial Downside Risks

Submitted by Tyler Durden on 01/12/2012 08:47 -0500

• Bond
 
• European Central Bank
 
• headlines
 
• Hungary

The ECB press conference has begun and immediately the headlines are flying and driving EUR weaker (ironically not helped by the dismal US macro data that just printed). European sovereign spreads are leaking wider, stocks are underperforming, treasuries outperforming bunds, and corporate and financial spreads are widening rapidly on his comments, via Bloomberg:

• *DRAGHI SAYS FINANCIAL MARKET TENSIONS HURTING GROWTH
• *DRAGHI SAYS ECONOMIC OUTLOOK FACING SUBSTANTIAL DOWNSIDE RISKS
• *DRAGHI SAYS FISCAL COMPACT MUST HAVE UNAMBIGUOUS WORDING
• *DRAGHI SAYS FISCAL CONSOLIDATIONS ARE UNAVOIDABLE
• *DRAGHI SAYS ECB WILL ACT AS AGENT FOR EFSF
• *DRAGHI SAYS HARD DATA DON'T YET SHOW STABILIZATION
• *DRAGHI SAYS HILDEBRAND WAS `VERY, VERY GOOD' GOVERNOR
• *DRAGHI SAYS ECB DIDN'T DISCUSS CUTTING DEPOSIT, MARGINAL RATES
• *DRAGHI SAYS ONGOING TENSIONS KEEP DAMPING ECONOMIC ACTIVITY
• *DRAGHI SAYS ECB `VERY CONCERNED' ON HUNGARY
• *DRAGHI SAYS ANY WAY TO INCREASE THE 'FIREWALL' FIREPOWER WELCOME

 And some of the less critical though still interesting headlines...

• *DRAGHI SAYS INFLATION MAY STAY ABOVE 2% FOR SEVERAL MONTHS
• *DRAGHI SAYS GOVERNMENTS MUST CORRECT EXCESSIVE DEFICITS
• *DRAGHI SAYS CASH DOESN'T `SIMPLY STAY IN THE DEPOSIT' FACILITY
• *DRAGHI SAYS BANKS THAT BORROWED FROM ECB AREN'T REDEPOSITING
• *DRAGHI SAYS FISCAL COMPACT SHOULD BE SIGNED AT END OF JANUARY
• *DRAGHI SAYS ECB NOT PART OF GREEK TALKS
• *DRAGHI SAYS `WE ALL REGRET' DEVELOPMENTS ON HILDEBRAND QUITTING
• *DRAGHI: COMFORTING TO SEE SOME OPENING IN UNSECURED BOND MARKTS
• *DRAGHI SAYS FIREWALL MUST BE OPERATIONAL, FULLY EQUIPPED

end.

Art Cashin always has a good handle on things.  You will enjoy this next indicator
as to what is really going on in Italy:

Art Cashin Explains Why The One Key Indicator That Matters For Italy Is Flashing Red

Submitted by Tyler Durden on 01/12/2012 09:41 -0500

• Afghanistan
 
• Art Cashin
 
• European Central Bank
 
• Greece
 
• Italy

While economic data may be manipulated daily, and markets can be pumped in any of many different ways (such as the ongoing preparation by the ECB to accept any collateral for the upcoming LTRO which will bring the ECB's deposit facility usage to $1 trillion), there is one true indicator of economic prospects: immigration. Long a target for immigrants from all over the world, something has changed very drastically for Italy in recent days. Art Cashin explains why the one indicator that matters - Italy's desirability for immigrants from countries such as Afghanistan and Bangladesh, means everything has changed now.

From UBS

A Change Of Direction - On Tuesday night, I had the pleasure of marinating ice cubes with a very bright friend who happens to be a successful hedge fund manager of Greek heritage. We were discussing the Euro-zone problems and how austerity programs are bumping up against cultural and local habits.

I wondered aloud how these austerity programs would hold up when they clashed with the litmus test of life in the streets. That’s when my friend related the following story.

He has relatives still living in Greece, several in Patras, the country’s third largest city and a key port on the west coast, facing Italy and much of the Mediterranean. Over the decades, immigrants from Afghanistan, Bangladesh and other poor nations would work their way to Patras. They would stay for days or weeks awaiting a chance to smuggle themselves on to a freighter headed for Italy. Once there, they could make their way north into Europe to find hope and opportunity and maybe a job.

Last week his relatives told him that things were changing. The immigrants still come to their way station of Patras (hope still blooms). But now, after a couple of weeks in Greece, they are trying to hop ships going the other way. They are going back home. Life was better, or at least no worse, where they came from and they had friends and family for support back there.

If that’s what’s going on in the initial days of austerity, what will the streets of Athens or Napoli or Marseilles look like when austerity really takes hold? This will not be settled in days or weeks or months - and its impact will be felt for decades.

end.

A Merkel Party insider says that Greece must leave the Eurozone opposite to Merkel's view;

(courtesy zero hedge)

Merkel Party Lawmaker Says Greece Must Leave Eurozone

Submitted by Tyler Durden on 01/12/2012 08:18 -0500

• CDS
 
• Contagion Effect
 
• Creditors
 
• Eurozone
 
• Germany
 
• Greece
 
• Italy
• Nicolas Sarkozy
 
• Transaction Tax

Even as we are drowned by yet another avalanche of lies and cow feces that the Greek private sector bailout negotiation is going well, despite everyone knowing very well by now that various hedge funds like Saba, York and CapeView are holding the entire process hostage and the culmination will be a CDS trigger, the underlying dynamics of the Greek "bailout" once again resurface, which are and always have been all about Germany and the tensions within its various political parties. And unfortunately at this point things are looking quite bad for Greece. As Bloomberg reports, "Greece will have to exit the euro area as it struggles under a mountain of debt, unable to regain its competitiveness without having its own currency to devalue, a senior lawmaker in Chancellor Angela Merkel’s party said. The comments by Michael Fuchs, the deputy floor leader for Merkel’s Christian Democratic Union,contradict the chancellor’s stance in a sign of the domestic headwinds she faces in leading Europe’s efforts to keep the 17-member euro area intact. With the debt crisis into its third year, Merkel is due to join CDU lawmakers at a two-day policy meeting beginning tomorrow in the northern German city of Kiel." The truth hurts: "For Greece, “the problem is not whether they are capable of paying their loans -- they will not, not at all, never." So, why are we optimistic on Europe again? Oh yes, because European banks issued tons of equity and now have a capital buffer to the imminent hurricane that will be unleashed once the Greek restructuring finally enters freefall mode and the country leaves the Eurozone. No wait, that's not right: only UniCredit tried that and its stock collapsed by 50%. Must be something else then - oh yes, Italy successfully sold debt maturing in one year!

From Bloomberg:

Merkel’s Bavarian sister party, the Christian Social Union, last week reinforced its position that member states unwilling or unable to commit to necessary reforms should be given the chance to exit the euro area.

Merkel said at a joint press conference Jan. 9 with French President Nicolas Sarkozy that they would ensure no country leaves the euro, while urging Greece to finish negotiations for a debt writedown with creditors as soon as possible to win its next tranche of aid.

Fuchs dismissed the prospect that letting Greece go would trigger speculative attacks against indebted countries such as Spain or Italy. Italy is a “rich” country and banks would be able to withstand any contagion effect, said Fuchs, who also coordinates economic policy for the CDU caucus in the lower house of parliament, or Bundestag.

Fuchs also contradicted Merkel’s support for a financial- transaction tax among euro-area members. The Bundestag would probably veto any such levy that doesn’t include the U.K., the lawmaker said.

Asked about the chancellor’s position on Greece, Fuchs said his prediction of a Greek exit from the single currency is a matter of arithmetic.

Merkel “is also capable of calculation,” he said. “She studied physics. And to study physics you need mathematics as well.”

And the posturing parade continues on.

end.
Hedge funds are buying Greek bonds at 25 cents on the dollar with the sole purpose to try and receive par.  They are playing hardball with the Troika:
(Bloomberg) 

Hedge Funds Try to Profit From Greece

By Jesse Westbrook and Julie Cruz - Jan 12, 2012 4:43 AM ET

Hedge funds in New York and London are trying to profit from trading Greek government bonds as European banks brace for losses from a debt swap.

Saba Capital Management LP, founded by former Deutsche Bank AG (DBK) credit trader Boaz Weinstein, York Capital Management LP, the $14 billion fund started by Jamie Dinan, and London-based CapeView Capital LLP are among managers that now hold Greek bonds, according to people with knowledge of the transactions who declined to be identified because they weren’t authorized to speak publicly about the trades. Officials at the three firms declined to comment.

They’ve amassed the stakes as the government lobbies investors to accept a swap that would cause losses of more than 50 percent for bondholders. For the deal to avoid triggering credit-default swaps that could cause losses for more of the region’s banks, the agreement has to be voluntary. Hedge funds may not agree to the deal.

“I would expect to see some holdouts,” said Sudeep Singh, a hedge fund manager at Matrix Group Ltd. who doesn’t own Greek debt. “The industry breaks down into guys who want to keep on fighting and into guys who just want to get the best deal and move on. It’s all a question of what price you got in at.”

Some fund managers say they have little incentive to accept the swap, and are seeking full payment. If Greece refuses to pay the funds what’s owed to them, the funds may seek to trigger the credit-default swaps. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

‘Credit Event’

European officials, including former European Central Bank PresidentJean-Claude Trichet, have tried to avoid a default that would cause what he called a “credit event.” Triggering the CDS could encourage traders to increase their bets against other indebted European nations such as Italy, Portugal and Spain --worsening the debt crisis.

Saba bought Greek debt maturing in one year, Weinstein said at an investment conference in September. The price paid factored in at least a 75 percent chance of default, said Weinstein, whose New York-based hedge fund oversees about $5 billion. His biggest fund climbed 9.3 percent last year, according to a person briefed on its performance. New York-based York Capital also owns Greek sovereign debt, according to another two people.

Greek officials held meetings last year with CapeView Capital, the fund started by former Deutsche Bank executive and Trafalgar Asset Managers Ltd. founder Theo Phanos, to discuss the firm’s sovereign debt investments, said another two people, who declined to be identified because the meetings were private.

Sarkozy, Merkel

Officials led by German Chancellor Angela Merkel and French President Nicolas Sarkozypersuaded banks in October to agree to exchange their Greek bonds for new securities with longer-dated maturities and lower coupon rates, as part of a tentative accord aimed at slashing the nation’s debt and halting the spread of a crisis that has plagued Europe for more than two years. Banks and politicians are still negotiating the exact level of losses imposed on private bondholders in the swap.

Greek Finance Minister Evangelos Venizelos said yesterday that discussions with private bondholders on the swap “have advanced and are now at a very good point,” according to a statement released by the government. Venizelos is scheduled to meet in Athens today withCharles Dallara, a managing director at the Institute of International Finance, which represents banks that hold Greek debt.

ECB Holdings

Of the 355 billion euros ($450 billion) of outstanding Greek debt, about a third is held by the ECB, the European Union and the International Monetary Fund, according to estimates by Open Europe, a research Group based in London and Brussels.

The swap would slice about half of Greek’s remaining 200 billion euros of debt, most of which is owned by banks. About 80 billion euros is held by overseas investors such as insurers, sovereign wealth funds and hedge funds, Open Europe said.

The ECB has purchased about 36 billion euros of Greek debt since 2010, according to a Jan. 6 report by Laurent Fransolet, head of fixed income strategy at Barclays Capital in London.

Trichet, who was succeeded by Mario Draghi in November, repeatedly said he was opposed to any bond restructuring that forces investors to accept haircuts. ECB council member Athanasios Orphanides last week called in a Financial Times column for euro-area leaders to drop haircuts to convince markets it’s safe to invest in the region again.

‘Free Ride’

Losses from the ECB’s holdings of Greek debt could require it to raise new capital from its euro-zone member central banks. Niels Buenemann, a spokesman for the ECB, declined to comment.

Hedge funds shouldn’t swap their Greek bonds for new debt as long as the ECB refuses to do so itself because it’s legally difficult for a sovereign to default on payments to one holder while providing full payment to another, said Andreas Koutras, an analyst at InTouch Capital Markets Ltd. in London. Funds stand a good chance of getting paid out at face value, especially on debt maturing in coming months, should the ECB decline to take part in any exchange, he said.

“If the ECB is out, then for sure you should try to free ride on the back of the ECB,” Koutras said. “You’d be stupid to actually participate if the ECB does not.”

The first test of that trade is in March, when about 14.4 billion euros of debt matures.Government bonds redeemable on March 20 fell to a 52-week low of about 40 cents on the euro on Nov. 29, according to data compiled by Bloomberg. The bonds rose to 49 cents on Dec. 19. It traded at about 44 cents as of yesterday.

Collective Action Clauses

Trun-Tin Nguyen, a hedge fund manager at TTN NG in Zurich, said he’s been buying the bond on the expectation that policy makers will fail to reach an agreement before March.

“The bet is that either way, they will repay this one,” Nguyen said in an interview. “Before March, no solution should be achieved, whether it’s a haircut or a default.”

Officials may include collective actions clauses in any agreement, which would blur the voluntary nature of the swap, said a person with direct knowledge of the negotiations. Such a clause would give Greece’s lenders the right to impose the exchange on all holders if a majority of holders agree to it.

Policy makers expect the clause would push more investors, including hedge funds, to agree to the swap, said the person, who declined to be identified because the negotiations are private. Inserting the clause wouldn’t be a credit event, while a decision by Greece to act on it would probably trigger the CDS, the person said.

Still, CDS prices show investors are wagering that Greece will default and that swaps will be triggered. Contracts insuring against a default within the next five years have more than doubled to 7,819 basis points since October, when officials announced the debt swap.

To contact the reporters on this story: Jesse Westbrook in London atjwestbrook1@bloomberg.net; Julie Cruz in Dusseldorf via jcruz6@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net.

end.

Finally, here are 3 additional stories on the Greek problems: (definition : PSI  private sector involvement)

(courtesy Reuters)

Greece may need more money if PSI falls short: Reuters cited comments from Greek Deputy Finance Minister Filippos Sachinidis, who told Skai radio that Greece may need more money from other Eurozone countries if the PSI falls short.. The article noted that Sachinidis sidestepped a question about whether Greece would insert collective action clauses to force all creditors to participate in the swap. His comments came ahead of yet another round of talks on Thursday in Athens between the IIF and Greek government officials.

story no. 2

Questions need to be asked about ECB's holdings: The FT discussed how the PSI would impact the ECB's holdings of Greek debt. The paper said that the ECB's unwillingness to participate in the PSI will cost Greece tens of billions in debt relief and has provoked a fierce reaction among private bondholders expected to take the pain. It added that while the central bank would theoretically be subject to the insertion of collective action clauses, it has a lot of leverage in negotiations with Athens given the liquidity support it is providing.

story no 3:

IMF funds for Greece not assured: Reuters, citing sources, noted that IMF chief Christine Lagarde is warning Europe that Greece's economic prospects are deteriorating and the EU will either have to pony up more money to rescue Athens or debt holders will have to take deeper losses. The article also discussed concerns among some countries, including the US, about providing more support for the IMF to help Greece and other troubled Eurozone states. In addition, it noted that IMF officials privately acknowledge that Greece is already stretched to the limit by its austerity programs, a dynamic that makes further spending cuts difficult and puts more of the burden on bondholders.

end


Graham Summers of Phoenix Capital Research believes that Germany is just buying time..there will be no bailout money:

(courtesy Graham Summers)

Germany Is Just Buying For Time… More Bailout Funds Aren’t Coming

Submitted by Phoenix Capital Research on 01/12/2012 18:36 -0500

• Central Banks
 
• Eurozone
 
• Germany
 
• Greece
 
• Gross Domestic Product
• International Monetary Fund
 
• Italy
 
• Market Conditions
 
• Reality
• Reuters

Deflation, particularly the dreaded debt deflation that Central Banks fear, is fast spreading throughout the financial system as the European banking system collapses.

Indeed, the EU, in its current form, is most certainly in its final chapter as both the political environment and market conditions have rendered all proposed “solutions” to the crisis moot.

To wit, the most recent proposals from EU leaders are:

1) To draft new budgetary requirements for EU members.

2) To move the launch of the Emergency Stability Mechanism (ESM) one year ahead of its original launch date to July 2012.

3) To send the IMF 200 billion Euros to use as aid in dealing with the EU Crisis

The media hailed these proposals as a bold step towards solving the current EU Crisis. However political and market realities show all of these proposals to be absurd, if not impossible.

Regarding #1, the EU already had budgetary constraints via the 1991 ratification of the Maastricht Treaty (all members were to maintain Deficit to GDP ratios lower than 3% and Debt to GDP ratios lower than 60%) which NO ONE has followed (not even Germany). So how does a new set of budgetary requirements change anything?

Secondly, in order to enact these new budgetary requirements, there needs to be unanimous consent from all EU members. Even if there was unanimous consent here (there isn’t nor will there be), basic math shows these new budgetary requirements to be pointless: how on earth does anyone expect a country like Greece, which is still bankrupt after two bailouts and quite a bit of debt forgiveness,

to get its budget under control (hint: it would have to wipe out at a minimum 50% of ALL of its outstanding debt).

As for the proposal to the move the launch of the ESM a year earlier... the EU has already failed to fund ONE bailout fund (the EFSF hasn’t been able to raise even ten billion Euros in capital). So the idea that launching a second bailout fund earlier than originally intended is pointless.

The final and most absurd proposal concerns EU nations sending 200 billion Euros

to the IMF for use in combating the EU Crisis. Setting aside the fact that this is completely insane (bankrupt EU countries are going to give money to the IMF to bail out other bankrupt countries?!?!), the political environment in Europe won’t permit this to happen.

Case in point, Germany’s Bundesbank (its central bank) which is the real de facto monetary backstop for the EU today, has said it will send additional funds to the IMF

ONLY IF:

1) The German parliament agrees to the move (it won’t)

2) Other EU members do the same (who has the funds?!)

3) Other, non?EU members do the same (how could this work? No one in the

G20 let alone the EU wanted to send money to the EFSF!!!)

In simple terms, the Bundesbank is willing to give more money to bailout Europe if everyone else in the developed world does the same. This is a strong signal from

Germany that the money tap is being closed off and additional funds are not forthcoming: the Germans know there demands are impossible to meet.

We get confirmation of this from recent developments in the German legislature:

German parliament wants more say over EU deals: report

German lawmakers from Angela Merkel's coalition want more say in

agreements made with European partners, a paper to be presented to MPs

says, firing a warning shot to the chancellor that all major deals to save

the euro zone must go past them first.

The paper, approved by parliamentary floor leaders from Merkel's Christian

Democrats (CDU), the Christian Social Union (CSU) and Free Democrats

(FDP), calls on the government to inform and consult parliament when

they deal with EU issues or involve the use of EU institutions.

http://www.reuters.com/article/2011/12/12/us?eurozone?germanyparliament?idUSTRE7BB1RV20111212

So while German leader Angela Merkel talks about moving forward to maintain the

Euro, the German political landscape is rapidly becoming less concerned with the EU and more concerned with domestic issues.

Folks, the bailout funds aren't coming. Germany is just buying for time. The reality is that the Powers That Be can't even fix the Greek issue... and there's absolutely no way they can manage Italy or Spain. As soon as the market begins to realize this we're going down down DOWN.

If you’re looking for specific ideas to profit from this mess, mySurviving a Crisis Four Times Worse Than 2008 report can show you how to turn the unfolding disaster into a time of gains and profits for any investor.

Within its nine pages I explain precisely how the Second Round of the Crisis will unfold, where it will hit hardest, and the best means of profiting from it (the very investments my clients used to make triple digit returns in 2008).

Best of all, this report is 100% FREE. To pick up your copy today simply go to: http://www.gainspainscapital.com and click on the OUR FREE REPORTS tab.

Good Investing!

Graham Summers

On this side of the pond, Bill Gross is doubles down on his bet for QEIII by monetizing Mortgaged Back Securities:

(courtesy zero hedge)

Pimco Doubles Down On All In Bet Fed Will Monetize MBS

Submitted by Tyler Durden on 01/12/2012 00:53 -0500

• Bill Gross
 
• Mortgage Backed Securities
 
• PIMCO
 
• SocGen
 
• Total Return Fund

When back in December we observed that Pimco's Total Return Fund (which contrary to rumors actually closed the year at $244 billion, or $4 billion more than in the beginning) had a $60 billion margin "cash" position, the proceeds of which were used to purchase a near record $103 billion in Mortgage Backed Securities we thought this is about as far as Bill Gross would go betting the ranch on QE3, and specifically that kind of QE3 that assumes at least a big portion is used to buys MBS (the sameinstrument that SocGen believes, along with gold, will benefit the most from an imminent QE3 announcement). It turns out we were wrong, and in December the fund doubled down on its QE3 all in bet, by "borrowing" even more cash, or a record $78 billion, using the proceeds to buy even more MBS, as well as Treasurys, which hit a combined 31% of the TRF's holdings. In other words, between MBS and USTs, Pimco holds a whopping 79% of total, mostly in very long duration exposure. In fact, this combination of long duration and pre-QE exposure has not been seen at PIMCO since late 2008, early 2009, meaning that as many banks have been suggesting, Gross is convinced that the Fed will announce if not outright QE3 this January, then at least intimate it is coming.

Yet while Gross timed the advent of QE2 perfectly as well, when he bought up USTs in the summer of 2010 ahead of the August announcement of the second easing, he did mistime the latest build up in MBS in late 2010, which did not benefit from a transition of QE2 into a MBS-focused program. Needless to say, PIMCO was net short treasurys starting in March 2011, just as the security was about to become one of the best performing asset classes paradoxically ahead of the US downgrade. Yet something tells us this time Gross is correct. The only question is whether, as SocGen believes, the QE3 hint will come at theJanuary 25 FOMC meeting or the subsequent one. And since NFP will have to be a rather big disappointment ahead of a major re-monetization episode, it just may be that the formal announcement will be delayed by a few weeks.

Average:

and then this from Bill Gross:

Central Banks 'Printing Money Like Gangbusters': Gross

Published: Wednesday, 11 Jan 2012 | 5:13 PM ETBy: Margo D. Beller
Special to CNBC.co
The world's central banks are "printing money like gangbusters," which could revive the threat ofinflation Pimco founder Bill Gross told CNBC Wednesday.
By putting "hundreds of billions" in currency in circulation, the central banks "can produce reflation—that's why we’re seeing the pop in oil, gold" and other commodities, he said in a live interview.At the same time, "there’s the potential for deflation .if the private credit markets can’t produce some sort of confidence and solvency going forward," Gross said. "So we’re at great risk here, not only in the U.S. but on a global basis."
Gross has previously predicted a "paranormal" market in 2012 characterized by "credit and zero-bound interest rate risk" and fewer incentives for lenders to extend credit.
He said stock and bond investors must lower their expectations when it comes to returns, with 2 percent to 5 percent as good as they get this year.He also told CNBC he expects the Federal Reserve will keep interest rates "exactly where it is at 25 basis points for the next three to four years."
Gross's Total Return Fund, the world's largest bond fund, had over $10 billion in outflows in 2011, but Gross stressed the fund "started 2011 at $240 billion and ended it at $244 billion."

end

Early this morning, the following caused the Dow to falter as the initial jobless claims roared back over 400,000:

(courtesy zero hedge)

Houston, We Have Recoupling - Initial Claims Back Over 400,000 (Post Next Week's Revision), Retail Sales Ex Autos Worst Since Early 2010

Submitted by Tyler Durden on 01/12/2012 09:04 -0500

• Black Friday
 
• BLS
 
• Bureau of Labor Statistics
 
• Continuing Claims
• Recoupling
 
• recovery
 
• Sears
 
• Unemployment
 
• Withholding taxes

Remember that whole "US is decoupling" theme so pathologically spread around by two-bit propaganda media outfits staffed by journalism B.A. majors? Time to put it in the trash where it belongs. As long expected, the temp hire surge, so effectively used by retailers to dump inventory below cost (just ask Sears), is over, and in the first week of 2012, Seasonally Adjusted claims soared to 399,000, the highest since November and a number which next week will be revised over 400,000, a decimation of expectations of 375,000 (naturally last week's number was revised upward from 372K to 375K - a long-lasting BLS tradition of fudging data that everyone knows about now). The Non-Seasonally adjusted number was +102,314 claims in the first week of the year. And the real question is how many of these real departures were of the banker type, where the impact on lost withholding taxes going forward, and thus government revenues, will be quite dire. Continuing claims also missed expectations, rising to 3628K from a revised 3609K (expectation was for an unchanged print, pre-revision, of 3595K). And the worst news is that the 99-week cliff continues to grab more and more, with 48k people dropping off all rolls, and thus from the labor force completely, meaning the labor force participation rate in January will likely drop to another fresh 30 year low. But the horrendous jobs update was only one part. The other one focuses on actual consumer spending, as confirmed by the major miss in retail sales which were up 0.1% on expectations of 0.3%, but the entire gain was due to car purchases primarily driven by cheap govt-funded subprime credit for GM vehicles. Sales ex-autos actually declined by 0.2%, on an expectation of 0.3% rise: this was the first decline and worst print since early 2010. So much for the consumer-led recovery. And so much for the unemployment pick up. And so much for the decoupling. The chart below shows what will happen as the world finally reconverges, as was posted yesterday.

Some more thoughts on retail sales via Bloomberg and CRT:

• Control sales drop “a very bad sign for the condition of the consumer, bodes ill for personal spending” in 1Q, says Bloomberg economist Joseph Brusuelas
• Underlying detail “suggests a very difficult holiday sales season,” points to “difficult earnings season for retailers": Brusuelas
• Supply/production estimates on commodities ‘‘much stronger than expected,’’ means ‘‘several commodities could weaken further,’’ says Bloomberg economist Rich Yamarone
• "Big surprise” in 0.4% decline for non-store retailers, proxy for Internet sales: Brusuelas
• Weaker-than-forecast retail sales data suggest are “more in line with the post Black Friday anecdotes,” David Ader, strategist at CRT Capital, writes in note.
• "Weakness in the core core area is disturbing; while seasonals play into it, it looks odd to see electronics and non-store retailers (i.e. On line) come in with negatives": Ader

Retail sales ex autos:

SA Initial Claims:

Charts Bloomberg

end

Then this dandy where CIT the factoring company bolted away from Sears.
It looks like this company is toast:

(courtesy  zero hedge)

Sears Noose Tightens As CIT Leaves Company Cold With No Vendor Financing

Submitted by Tyler Durden on 01/12/2012 08:06 -0500

• CIT Group
 
• default
 
• MF Global
 
• Sears

Two weeks ago, when we first announced the catastrophic earnings preannouncement by Sears we noted that we were stunned "that as part of its preannouncement, Sears has decided it would be prudent to provide an update on its credit facility status as well as availability. As a reminder to anyone and everyone - there is no more sure way of committing corporate suicide than openly inviting the bear raid which always appears whenever the words "revolving credit facility" and "availability" appear in the same press release. Just recall MF Global. And here, as there, we expect shorting to death to commence in 5...4...3..." Subsequently, when the company was downgraded to triple hooks S&P we said that "Accounts Receivable about to become one big perpetition charge off", the implication naturally being that the company is about to lose its vendor financing - which for retailers is the last step before outright default. Sure enough, the WSJ reports that this is precisely what happened. "Struggling Sears Holdings Corp. suffered another setback when a large lender said it would no longer finance loans to suppliers awaiting payment from the company. Sears representatives played down the decision by CIT Group Inc., the largest U.S. provider of what are known as factoring services for vendors, saying the payables the firm had financed amounted to only about 5% of the retailer's inventory." Basically this means that the company Net Working Capital is about to go poof, as there will be nobody to finance the Receivable-Payable spread, SHLD will have to demand COD or even cash upfront, vendors will balk and switch to other, and slowly Sears will suffer an inventory liquidation stranglehold which will culminate with the company's bankruptcy unless Lampert provides a massive liquidity injection, which also however will have a brief impact, as the company is now perceived by all as Dead Man Walking. In other news, we are hearing that several bankruptcy advisors are already preparing the K-Mart pre-pack/freefall pitchbooks... all over again.

More:

"We disagree with their action, in fact we'd point out that other factors are approving shipments to Sears Holdings," company spokesman Chris Brathwaite said in a statement.

Nonetheless, the decision highlights growing anxiety among companies doing business with the amalgam of Sears and Kmart stores created by hedge fund financier Edward S. Lampert, which announced that it would be closing up to 120 stores and taking up to $2.4 billion in quarterly charges last month after reporting weak holiday sales.

Representatives for CIT, which sought bankruptcy protection in 2009 amid the height of retailing's struggles during the downturn and emerged from restructuring later that same year, declined to discuss the Sears situation. "We don't comment on specific customers," said spokesman Curt Ritter. Its decision was initially reported by Bloomberg.

Sears has been seeking to reassure investors and business partners in recent days that it remains financially sound. All three major credit-rating firms have downgraded its debt, citing the deterioration of its earnings over the past 12 months, including a $421 million loss last quarter.

Mr. Brathwaite said Wednesday that the company had about $4.2 billion in liquidity at the end of December, including cash balances of about $900 million and $3.3 billion in prearranged credit facilities.

We give sears a few months at best before the liquidity crunch forces it to line up in front of that infamous building at 1 Bowling Green.

end

December retail sales were anemic:

(courtesy Dow Jones)

DJ US Dec Retail Sales +0.1%; Consensus +0.2%
Thu Jan 12 08:31:06 2012 EST
WASHINGTON (Dow Jones)-U.S. retail sales rose slightly in December as a surge in car purchases offset declines in sales of electronics, groceries and gasoline.Retail and food services increased 0.1% from November to a seasonally adjusted $400.61 billion, the Commerce Department reported Thursday. Sales were up 6.5% year over year.
The biggest jump came in auto sales, which rose 1.5% from the previous month and 8.8% year over year.
Economists surveyed by Dow Jones Newswires had forecast a 0.2% increase in December retail sales from the previous month.
But exluding autos, retail sales fell 0.2%, marking the first decline in that category since May 2010. Economists surveyed by Dow Jones Newswires had forecast a 0.3% rise in sales excluding autos.
The continuing rise in retail sales reflect consumers' willingness to spend even amid high unemployment and anxiety about turmoil in Europe. That spending has been propped up recently by a decline in Americans' savings rate and a recent rise in consumer credit, including credit-card debt.
Thursday's report showed that sales excluding the volatile auto and gasoline sectors were flat.
December spending at restaurants and other food services rose 0.7% from the previous month. Sales of food and beverages and at gasoline stations and department stores fell. The biggest decline came in sales at electronics and appliances stores, which fell 3.9% from the previous month.

end

With respect to MFGlobal this is totally outrageous:

MF Global May Not Be Able to Pay Clients Back: TrusteeThe trustee liquidating MF Global Holdings's collapsed brokerage does not believe the brokerage will have enough money left over after paying back creditors to close any shortfall in customer accounts.
The roughly $290 million in general estate funds — that is, money reserved for creditors that are not MF Global customers — may not be enough to make customers whole, James Kobak, an attorney for trustee James Giddens, said at a customer meeting in New York on Thursday.
Giddens has estimated that about $1.2 billion is missing from customer accounts at the brokerage. Some customers have argued that they should be allowed to make up for that shortfall by recovering money from the non-customer creditor pool.
"We might support that in certain circumstances, but at this point there simply isn't a substantial amount of general property available to make up for shortfalls," Kobak said.
-

END-.

And now a class action lawsuit has been filed by our friends over at Berger Montague:

Dear Friend of GATA and Gold:

Our friends at the Philadelphia law firm of Berger and Montague this week brought a class-action lawsuit in federal court in New York, charging theft and misappropriation, against people connected with the failed commodity brokerage firm MF Global, including its former CEO, former New Jersey U.S. Sen. and Gov. Jon Corzine; MF Global's enabler and supposed regulator, CME Group; and the investment bank JPMorganChase. The lawsuit is brought under both the Commodity Exchange Act and the Racketeer-Influenced Corrupt Organizations Act -- the famous RICO. (Maybe the lawsuit can determine where MorganChase put Judge Crater.)

MF Global clients interested in participating in the lawsuit should contact Berger and Montague's Merrill Davidoff at mdavidoff@bm.net or 215-875-3084 or Michael DellAngelo at mdellangelo@bm.net or 215-875-3080.

The lawsuit's complaint is posted at GATA's Internet site here:

http://www.gata.org/files/MFGlobalClassAction-01-12-2012.pdf

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end


And tonight the drama over the debt ceiling starts;

Obama Sends Request To Congress For $1.2 Trillion Debt Ceiling Increase

Submitted by Tyler Durden on 01/12/2012 15:09 -0500

• Barack Obama
 
• Debt Ceiling
 
• Gross Domestic Product

Update:

• HOUSE TO VOTE JAN. 18 ON OBAMA'S DEBT-LIMIT INCREASE REQUEST

Two days ago we wondered how long it would take for Obama to restart the debt ceiling theater. Not that long it turns out.

• OBAMA SENDS CONGRESS REQUEST TO RAISE DEBT CEILING
• OBAMA NOTIFICATION STARTS 15-DAY CLOCK FOR CONGRESS TO VOTE

So with Congress in recess, will Obama succeed in passing another automatic vote using base trickery? The same Obama, who as recently as 3 hours ago warned Congress that any attempts to pass approval on the Keystone Pipeline without his involvement are "counterproductive"... In other news, America' new debt ceiling of $16.3 trillion, or 107% of GDP is now just a formality, about to be interrupted by a little circus clowning.

From Bloomberg:

President Barack Obama formally notified Congress today that that the government needs more borrowing authority.

The written certification to raise the debt ceiling to $16.394 trillion starts a 15-day clock for Congress to consider and vote on a joint resolution disapproving of the increase.

Under legislation passed Aug. 2 after months of wrangling between the
administration and Republican lawmakers, the president is given the
power to veto any disapproval resolution that clears both chambers of
Congress.

The law calls for Obama to notify Congress when the debt came within $100 billion of the current $15.194 trillion limit.

While the threshold was reached Dec. 30, when the president was in
Hawaii and Congress was on holiday break, Obama agreed to a request from
congressional leaders to delay the notification request, ensuring the
deadline for congressional action didn’t lapse before lawmakers returned
to Washington.

end

I will see you on Saturday:

Harvey