Thursday, March 21, 2013

Russia adds 200,000 oz to its inventory/Looks like one bank in Cyprus will fail/Cyprus planning on raiding its pension funds/gold and silver rise/

Good evening Ladies and Gentlemen:


Gold closed down  $5.30 to $1613.80 (comex closing time).  Silver rose by 40 cents to $29.18.

Here are the final access closing of gold and silver:

gold:  $1615.30
silver: $29.20


In physical news at the comex, the CME reported 2 gold delivery notices filed equal to 200 oz , the number of gold ounces standing for delivery  rose by  1 contract or 100 oz and thus 12.84 tonnes of gold is standing for March delivery.  No doubt this is a record for gold deliveries in the off delivery (non active) delivery month.


The big news of the day is Cyprus again. This morning we were greeted with news that all deals with Russia are now off the table. Cyprus is scrambling with Plan C to rape the private pension funds and replace them with worthless sovereign Cyprus bonds, and possibly sell their 13.9 tonnes of gold. It looks to me like Russia is waiting for Cyprus to fail and then they will swoop in and take the prize assets for pennies on the dollar.

Jim Sinclair has provided another important commentary on the Cyprus affair but before we head into those stories......... 

Let us now head over to the comex and assess trading over there today:




The total gold comex open interest fell by 5662 contracts falling from 440,712 down to 435,050.    The non active front month of March saw it's OI fall by 180 contracts from  219 down to 39 .  We had a huge 181  notices filed yesterday so in essence we gained 1 contract or 100  oz of additional gold will stand for March delivery.  The next big active delivery month is April which is less than  2 weeks away from first day notice.  Here the OI fell by 11,403 contracts from  164,175 down to 152,272.  The estimated volume today was mediocre at 144,117.  The confirmed volume yesterday was slightly better at 166,888.

The total silver open interest rose by 72 contracts from 151,525 up to 151,593.
The open interest in silver refuses to budge .  The OI for the entire complex remains elevated. The active front month of March saw it's OI fall by 189 contracts from 567 down to 378. We had 200 delivery delivery notice filed on Wednesday so in essence we gained 11 contracts or 55,000 oz of additional silver oz will  stand for the March delivery. The non active April contract fell by 21 contracts down to 383.  The next big active delivery month contract for silver is May and here the OI fell by 217 contracts from  80,510 down to 80,293 .  The estimated volume today was very weak at 34,391.   The confirmed volume on Thursday was even weaker at 29,284 contracts. 


Comex gold/March contract month:
March 21.2013    




Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
92,655.894 (HSBC, JPM)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
980.12 (Brinks)
No of oz served (contracts) today
 2   (200  oz)
No of oz to be served (notices)
37 (3,700) oz
Total monthly oz gold served (contracts) so far this month
4093  (409,300 oz) 
Total accumulative withdrawal of gold from the Dealers inventory this month
xxxx
Total accumulative withdrawal of gold from the Customer inventory this month


 
 xxxxx




We had huge activity at the gold vaults.
The dealer had 0 deposits and 0   withdrawals.



We had 1   customer deposits:

Into Brinks:  980.12 oz



total deposit: 980.12   oz



We had 2  customer withdrawals :

Out of HSBC:  51,752.809 oz
 Out of JPM:   40,903.085 oz

total customer withdrawal:  92,655.894  (another huge withdrawal)




We had 1  adjustment:

i) out of JPM vault: 27,138.43 oz was adjusted out of the dealer account and into the customer account at HSBC.



Thus the dealer inventory rests tonight at 2.439 million oz (75.86) tonnes of gold.

The CME reported that we had 2 notices filed for 200 oz of gold today.   The total number of notices so far this month is thus 4093 contracts x 100 oz per contract or 409,300 oz of gold.  To determine how much will stand for March,  I take the OI standing for March (39) and subtract out today's notices (2) which leaves me with 37 notices or 3,700 oz left to be served upon our longs.

Thus the total number of gold ounces standing in this non  active month of March is as follows:

409,300 oz (served ) + 3,700 oz (to be served upon) = 413,000 oz or 12.84 Tonnes.

we gained another 1 contracts or 100 additional gold ounces will stand in March.  The amount standing is extremely large for a non active delivery month and I believe a record for a non delivery (non active) gold month.



Silver:



March 21.2013:   The March silver contract month




Silver
Ounces
Withdrawals from Dealers Inventorynil
Withdrawals from Customer Inventory 33,149.09  oz (Scotia)
Deposits to the Dealer Inventory 71,232.99 (Brinks)
Deposits to the Customer Inventory  630,403.90 (Scotia)
No of oz served (contracts)14  (70,000, oz)  
No of oz to be served (notices)364  (1,820,000  oz) 
Total monthly oz silver served (contracts) 1986  (9,930,000  oz) 
Total accumulative withdrawal of silver from the Dealers inventory this monthxxxxx
Total accumulative withdrawal of silver from the Customer inventory this monthxxxxx


Friday, we  had good activity  inside the silver vaults.

 we had 1 dealer deposits and 0 dealer withdrawal.

Dealer deposit at Brinks:  71,232.99 oz


We had 1 customer deposits of silver:

i) Into Brinks: 630,403.90 oz




 total customer deposit: 630,403.90  oz









we had 1  customer withdrawals:

Out of Scotia:  37,149.09


total customer withdrawal: 37,149.09 oz






we had 1 adjustment:

Out of the Delaware vault:  25,445.529 oz leaves the dealer at Delaware and enters the customer.


Registered silver remains Friday at :  42.551 million oz
total of all silver:  163.5 million oz.




The CME reported that we had 14 notices filed for 70,000 oz of silver for the March active contract month. To obtain what is left to be served upon our longs, I take the OI standing for March (378) and subtract out today's notices (14) which leaves us with  364 notices or 1,820,000 oz left to be served upon our longs. 

Thus the total number of silver ounces standing for delivery in silver is as follows:

9,930,000 oz (served)  +  1,820,000 oz (to be served upon)  =  11,750,000 oz

we gained 55,000 oz of additional  silver standing.











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.

Now let us check on gold inventories at the GLD first:



March 21/2013:







Tonnes1,221.26

Ounces39,264,720.83

Value US$63.343   billion








 March 20.2012:

Tonnes1,222.16

Ounces39,293,746.33

Value US$63.145  billion






March 19.2013:








Tonnes1,222.16

Ounces39,293,746.33

Value US$63.273  billion







March 18.2013:










Tonnes1,219.45

Ounces39,206,667.98

Value US$62.859  billion










we neither gained nor lost any gold at the GLD.



And now for silver:



March 21.2013:


Ounces of Silver in Trust340,262,979.100
Tonnes of Silver in Trust Tonnes of Silver in Trust10,583.36


March 20.2013

Ounces of Silver in Trust340,262,979.100
Tonnes of Silver in Trust Tonnes of Silver in Trust10,583.36


 March 19.2013:

Ounces of Silver in Trust345,095,059.100
Tonnes of Silver in Trust Tonnes of Silver in Trust10,733.66


March 18.2013:

Ounces of Silver in Trust345,095,059.100
Tonnes of Silver in Trust Tonnes of Silver in Trust10,733.66





 Today the inventory at the SLV remained the same.


end 




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





Sprott and Central Fund of Canada. 




(both of these funds have 100% physical metal behind them and unencumbered and I can vouch for that)




1. Central Fund of Canada: traded to a positive 1.6 percent to NAV in usa funds and a positive 1.5%  to NAV for Cdn funds. ( March 21 2013)   

2. Sprott silver fund (PSLV): Premium to NAV fell to 1.67% NAV  March 21/2013
3. Sprott gold fund (PHYS): premium to NAV  rose to 1.92% positive to NAV March 21/ 2013.



end






And now for the major physical stories we faced today:

 There will now be a referendum with the proposal to ban all future gold sales as well as 20% of it's assets in gold.
With the SNB purchasing massive amounts of euros to stem the rise in the Swiss francs, this will force the central bank to purchase massive amounts of gold. The Swiss want all gold held in NY to be returned to Switzerland.

(courtesy Reuters/GATA)


Swiss petition succeeds for referendum to ban gold sales, require repatriation

 Section: 
Swiss Right Wing Forces Referendum on Banning SNB Gold Sales
By Katharina Bart and Albert Schmieder
Reuters
Wednesday, March 20, 2013
http://www.reuters.com/article/2013/03/20/us-swiss-gold-idUSBRE92J0Z3201.


ZURICH, Switzerland -- The right-wing Swiss People's Party (SVP) has gathered enough signatures to force a referendum on a proposal to ban the country's central bank from selling any of its gold reserves.
The proposal, dubbed "Save our Swiss Gold," would prohibit the Swiss National Bank (SNB) from offloading its gold reserves as well as force it to hold at least 20 percent of its assets in gold, the committee behind the plan said on Wednesday.
"Gold reserves aren't speculative objects for the SNB or politicians. They belong to the people," SVP politician Luzi Stamm, whose party began its push for a referendum more than two years ago, said in a statement.
At the end of 2012, the SNB held 1,040 tonnes of gold valued at nearly 50.8 billion Swiss francs ($54 billion), just over 10 percent of its total assets of 499.4 billion francs.
The SNB has built up huge reserves of foreign exchange under interventions to defend the 1.20 per euro lid it imposed on the Swiss franc in 2011 to protect the economy from recession and deflation as the safe-haven currency soared.
SNB spokesman Walter Meier said: "The SNB has considerable concerns, in particular of a monetary policy nature, about the initiative's demands."
The initiative's organizers called on the SNB to begin topping up its gold reserves toward the 20 percent mark and selling the euros it has accumulated through interventions.
The SNB sold 250 tonnes of gold throughout 2007 and 2008, arousing public criticism at the time. The central bank has since said it won't sell any more gold holdings but it is wary of any rules that might curb its freedom of maneuver in shaping monetary policy.
A bullion price rally fuelled a 1.4 billion franc windfall on the SNB's gold holdings last year. The SNB's overall net profit for 2012 was 6 billion francs amid gains on a variety of investments.
Swiss citizens can bring initiatives, a key feature of Swiss direct democracy, if they collect 100,000 signatures within 18 months. However, a popular vote on the gold initiative may be years off and isn't likely to win majority backing, after a similar attempt failed in Swiss parliament.
The initiative also states the SNB's gold would have to be stored within Switzerland. At present, where exactly the gold reserves are stored is a closely guarded secret of the SNB.
In 2003 then-Swiss Finance Minister Kaspar Villiger famously told parliament he couldn't divulge where the gold bars are stored because "I don't know either, don't have to know, and don't want to know."
In the past the SNB has said its physical gold reserves are stored domestically and internationally, with crisis scenarios being the main reason for decentralizing storage. Since 2005 the majority has been held in Switzerland, the SNB said.

end



Zero hedge weighs in on the above:

(courtesy zero hedge)





Swiss To Vote On Gold Repatriation

Tyler Durden's picture




The Swiss National Bank (SNB), which supposedly guarantees price stability in Switzerland, currently holds about 1,040 tons of gold reserves after gradually selling off at least 1,550 tons and now members of the Swiss People's Party, the far-right Swiss Democrats and the Lega dei Ticinesi movement, is confident a nationwide vote will be called (after they gathered 106,000 signatures) on stopping the sale of gold reserves held by the SNB. It also wants gold bars stored in the US to be returned. AsSwiss Info reports, the People's Party leader Luzi Stamm comments, "Gold reserves guarantee the stability of the Swiss franc. They ensure that that private savings, salaries, pension keep their value," warning that gold must not be the object of speculation for the SNB or for politicians and demanding the SNB keep a minimum of 20 per cent of its assets in gold, twice the current level. In addition, they want to force the government to disclose where the gold reserves are stored, since "it is only in safe hands if it is kept in Switzerland."

A rightwing group has submitted more than 106,000 signatures to the federal authorities, seeking a vote on stopping the sale of gold reserves held by the Swiss National Bank (SNB). It also wants gold bars stored in the US to be returned.

The group, led by members of the Swiss People’s Party, the far-right Swiss Democrats and the Lega dei Ticinesi movement, is confident a nationwide vote will be called on the issue once the signatures are verified. A date still has to be set by the government.

...

Gold reserves guarantee the stability of the Swiss franc. They ensure that that private savings, salaries, pension keep their value,” Stamm said.

He warned gold must not be the object of speculation for the SNB or for politicians.

The initiative also seeks to enshrine in the constitution a clause obliging the central bank to keep a minimum of 20 per cent of its assets in gold, twice the current level. Promoters say higher gold reserves will boost the SNB’s credibility.

In addition, they want to force the government to disclose where the gold reserves are stored.

An important part of the reserves are kept in the United States, according to People’s Party parliamentarian Lukas Reimann. He doubts whether the heavily indebted country can be trusted with the Swiss gold.

It is only in safe hands if it is kept in Switzerland,” he told journalists.

...

The SNB, which has to guarantee price stability in Switzerland, currently holds about 1,040 tons of gold reserves after gradually selling off at least 1,550 tons.
...



The media seems to have caught onto the Sprott story whereby huge amounts of gold must have left the official sector.  Sprott calculated that 4500 tonnes of gold had to have left to satisfy demand.  If you include the swaps the USA was entertained that no doubt all of their official gold has been compromised.

(courtesy Mineweb)

Yesterday's Top Story: Sprott on banks, gold and silver – mania, manipulation and meltdown

Eric Sprott may have surprised a new audience with some very pessimistic views on banks and the global economy, but spoke very positively on the investment merits of gold – and particularly of silver.

And now for our more important paper stories which will have an influence on gold and silver.

Author: Lawrence Williams
Posted: Wednesday , 20 Mar 2013 

HONG KONG (MINEWEB) - 
In introducing his talk to the audience at the first full day of Mines & Money Hong Kong (Conference and Exhibition) mega precious metals bull Eric Sprott opened by explaining why he titled his presentation Mania, manipulation and meltdown – although those who follow him will already be pretty well aware of his views, and his strong track record.
The bulk of his talk was taken up by examining the politico-economic aspects of what is going on in the world today with the main theme that government debt has become so big – and is continuing to grow – that it has passed its Minsky Moment – the point at which debt has become so large that it can never be paid off. 
In many respects, according to Sprott, this is because the banking system has become too large so that, in many cases it is bigger in value than the country in which it is domiciled.  Following the Lehmann Brothers collapse nearly bringing down the entire global banking system, banks are just being bailed out at ever increasing cost if they become totally illiquid for fear of the first domino falling and bringing down the rest of the system – they are just getting too big to fail at whatever cost, but eventually the dam could burst.
‘Think of bank, think of risk’ is one of Sprott’s mantras and his overt view is that it is foolish to keep one’s money in the banking system as other options are far safer – notably precious metals.
Bank deposits can still be subject to currency devaluations – even if the banking system itself is not allowed to fail whereas safe haven assets like gold tend to keep, or even increase, their value despite efforts by the central planners to control the precious metals prices.
He has long stated that gold was the investment of the past decade – and a long term chart he showed demonstrated that the HUI ‘gold bugs index’ in the U.S. has hugely outperformed the various general stock market indices over the past 10-12 years.
Coming back to gold, Sprott questions how supply can possibly be keeping up with demand given that new mine supply has been virtually static at around 4,000 tonnes a year, Central Banks, which had been selling around 400 tonnes a year are now buying around 500 tonnes a year (a net turnaround equivalent to nearly a quarter of total gold production), a huge increase in demand in China and continuing high demand levels from India). 
His attested viewpoint is that this supply can only be coming from leased gold from the Central Banks entering the market through the bullion banks – which then begs the question of how much gold the Central Banks actually have left – and how long this situation can continue. 
As we have ourselves in these columns before, he questions the fact that it is taking Germany 7 years to receive back the 350 tonnes of gold it is clawing  back from its holdings stored at the New York Fed – a point further emphasised in how much gold is being imported into China via Hong Kong in a single month which suggests there is no problem in moving large amounts of the precious metal in a short space of time.
But Sprott’s main focus is on silver as potentially being a far better investment even than gold.  As he has stated before he reckons silver is the investment of the current decade.  He follows the mathematics of silver supply and notes that there is around 11 times more silver produced in the world than gold of which a high proportion is taken up by the investment sector leaving only about three times more silver than gold being available for investment – yet, going by U.S. Mint gold and silver coins sales, and his own experience in Canada, that 55x more silver than gold is being purchased by bullion investors.  This, he feels has to lead to a severe shortage of supply for the investment sector, sooner rather than later.  He has often stated, although not actually on this occasion, that he expects the gold:silver ratio (GSR) to return to its historic level of around 16:1 and although we do not necessarily expect this to occur, there could well be a big fall in the GSR from its current level of around 55:1 which would indeed make silver a better investment choice than gold in pure value terms.
On global economic recovery, Sprott is more than a little sceptical about the political spin suggesting we are coming out of recession.  ‘We are all being conned’ he says.  Economic crisis follows economic crisis – Cyprus being just the latest.
In a media briefing following his presentation, Sprott puts some more meat on his predictions.  He feels that silver returns will be around three times higher than that of gold – and that gold will move substantially higher as, some day, Central Banks will lose the battle to keep precious metals prices under control which they try to do to convince the world that financial propriety reigns – which it doesn’t!
Overall Sprott’s message is as follows:  There is more reason to own gold than ever before; Silver will be an even better investment than gold; Don’t invest in bonds – they can ultimately be worth zero if banks and countries default; Don’t hold your money in banks – banks may eventually be allowed to fail – and in any case as today’s fiat currencies are debilitated through monetary expansion policies they will devalue against precious metals.  (Indeed he said as an aside that he wouldn’t be caught dead with his money in the bank!).  Sprott’s financial acumen has made him a billionaire – maybe he has a point.

end 

 

 

 Peter Grandich discusses manipulation of gold and GATA

(courtesy Peter Grandich)

Grandich discusses manipulation and GATA; Sprott's address in Hong Kong

 Section: 
11:09a HKT Thursday, March 21, 2013
Dear Friend of GATA and Gold:
Interviewed by Kevin Michael Grace for Resources Wire, market analyst and mining company consultant Peter Grandich discusses gold market manipulation and GATA's work to expose it:
And MineWeb's Lawrence Williams, reporting from the Mines and Money conference in Hong Kong, covers Sprott Asset Management Chairman Eric Sprott's address, "Mania, Manipulation, and Meltdown":
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end



You do not want to this interview with Rick Rule of Sprott asset Management

(KING WORLD NEWS/Rick Rule/GATA)

Cyprus can't happen in the U.S.? But it already has, Rule notes

 Section: 
4:45p HKT Thursday, March 21, 2013
Dear Friend of GATA and Gold:
Interviewed by King World News, Sprott Asset Management's Rick Rule notes that the suppression of interest rates in the United States, depriving savers of nearly all interest income, is as much theft as the planned confiscation of or "tax" on bank deposits in Cyprus. That is, the question whether such expropriation can happen in the United States has already been answered, and savers might do well to store some savings in a vehicle that has no counterparty risk and resides outside the banking system. An excerpt from Rule's interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.


end




I brought this to your attention yesterday but it is worth repeating!!


(courtesy Peter Cooper/Arabian money/Sprott Asset Management) 

Massive hidden US gold sales by the Fed have kept the gold price down reveals Sprott study

Posted on 21 March 2013



New research from Sprott Asset Management has revealed that huge sales of gold by the Federal Reserve over the past two decades have kept the gold price below where it ought to be if market forces were setting the price. It’s a red letter day for gold price conspiracy theorists.
Sprott researchers looked back though US trade data and found that the US has been consistently exporting large amounts of gold, and that ‘the amount of gold the US has been exporting is above and beyond what the US should be capable of exporting…
‘In December 2012 the US exported over $4 billion worth of gold and imported around $1.5 billion worth of gold, representing a net export of $2.5 billion or almost 50 tonnes.’ Tracing the data back Sprott discovered a similar pattern of net gold exports going back 21 years.
Supply surpriseIt is Sprott’s view that the sale of this amount of gold explains why gold prices have not gone much higher given the higher levels of demand so evident in the global economy. In short the supply of gold to satisfy this demand has to be coming from somewhere or the price would be shooting up. The study points out…
‘India and China have emerged as strong buyers, consuming over half of the mine supply in recent years. Central banks have switched from being sellers of gold to being net buyers, with their gold purchases in 2012 increasing by 17 per cent to almost 535 tonnes. Exchange traded products around the world have continued to add to their gold hoards, as have institutions and private investors.
‘Furthermore, central banks, such as South Korea and Russia, have added to their bullion reserves early in 2013, which points to sustained strength in demand. These facts are important because, over the past decade, the annual supply of gold has stayed flat at approximately 4,000 tonnes.’
If the supply of gold was really static then the price ought to be much higher in the face of all this increased demand. Sprott thinks it has discovered the missing gold supply in these massive net sales from the US which can only have come from one source, the US Federal Reserve.
Why would the Fed be manipulating the gold price down like this? For one thing it helps to validate low inflation figures and keep interest rates down. For another it directs investment into productive assets and away from precious metals sat in vaults.
Running out?But after 21 years of selling, how much gold would the Fed have left? You cannot sell your gold indefinitely. The Sprott study hazards an estimate:
‘The inclusion of the private investor on the demand side would in fact skew the ‘gap’ of 4,500 tonnes higher to a figure that would lie somewhere between 4,500 tonnes and 11,200 tonnes, which represents the gross exports out of the US. The only US seller that would be capable of supplying such an astonishing amount of gold is the US Government, with a reported gold holding of 8,300 tonnes.’
On that reckoning then the US Federal Reserve has sold somewhere between half and all of its gold! And if the Fed really is close to the bottom then there will come a point when it can no longer keep the gold price down.
Indeed, the Fed will need higher gold prices then to rebalance its own balance sheet or it will go bankrupt. How far are we away from that day? Only the Fed knows that.
-END-





 Russia every month purchases 200,000 oz of gold.  Their reserves are now 31.6 million oz or 982 tonnes of gold.

(courtesy Ed Steer commentary)



(Click on image to enlarge)




end




And now for our paper stories:

Major points:

1.Horrifying PMI numbers from Europe
2.  German Manufacturing PMI: 48.9 vs 50.3 last month  (expectations 50.5)
3. German  services PMI: 51.6 down from 54.6  (expectation: 55.0)
4. French Manufacturing PMI: 43.9 (still major contraction)  expectations  44.0
5. French service PMI plummeted to 41.9 from 43.7  (expectations 44.3)

6. overall Europe PMI down to 46.6 from 47.9
7. Chaos in Cyprus see below.
8 Details from Jim Reid of Deutsche Bank


(courtesy zero hedge)



No Overnight Futures Levitation Due To Abysmal European PMIs, Deteriorating Cyprus Chaos

Tyler Durden's picture




Those wondering why the overnight ramp has not yet materialized despite promises from BOJ's new governor Kuroda to openly-endedly monetize Fukushima radiation if necessary in order to reflate the economy, will have to look at Europe where a raft of horrifying PMIs confirms what most have known: the relapse into a multi-dip European recession is progressing nicely, and the hoped for rebound in the core economies of France and Germany is once again on track to not happen, but at least there will be Cyprus to blame it all on this time.
The excuse this time was French and German Flash Manufacturing and Services PMI for March, all of which came far below expectations: German Mfg PMIs printed at a contracting 48.9 vs Exp. 50.5 (down from 50.3), while Services came at 51.6, down from 54.6 on expectations of a rise to 55.0, while French Mfg PMI stayed stubbornly flat at 43.9, despite hopes of a "bounce" to 44.3, even as the Service number ticked even lower from 43.7 to 41.9, below expectations of 44.3 and thelowest since February 2009. End result: Eurozone March Services PMI down from 47.9 to 46.5, vs Exp. of 48.2, while Manufacturing slid from 47.9 to 46.6 on hopes and prayers of a bounce to 48.2.
So much for the economy, which as everyone now knows is irrelevant for the market which means that all else equal we can expect K-Hen and the BIS boys to do everything in the next few hours to return the futures levitation ramp on schedule.
Which then takes us back to Cyprus, where things are not fixed yet, where the parliament is not expected to vote for a revised Bailout proposal yet, and where we got a cornucopia of brilliant one liners, such as these from the new Eurogroup head, who is filling in the shoes of his predecessor Juncker in style, and proving quite well that "things are serious":
  • Dijsselbloem Says Additional Loan by Russia Wouldn’t Help Cyprus: “If the Russians were to say we could lend more, that wouldn’t help on the  sustainability of the debt situation,” Dijsselbloem says. “Building up the debts in Cyprus doesn’t help them to work     toward a new future,” Dijsselbloem says at EU Parliament
  • Dijsselbloem Says Not Sure Cyprus Package Has Completely Failed, Says doesn’t see many alternatives for Cyprus
  • Dijsselbloem Says Most Cyprus Deposits Are Investors, Not Savers: “The vast amount of deposits in Cyprus are not really savers, are investors,” Eurogroup head Jeroen Dijsselbloem says at the European Parliament.
  • Dijsselbloem Says ECB Not ‘Using Threats’ With Cyprus Deadline: “I don’t think the ECB is using threats,” Eurogroup head Jeroen Dijsselbloem says. “What they are doing is doing as much as they can within their mandate,” Dijsselbloem says at European Parliament
Then we got a reparte from Russia which said it doesn't want a separate Cyprus deal with the EU, even as the ECB earlier said there would be ELA liquidity for Cyprus provided until March 25, which as already noted is a bank holiday in Cyprus. It is unclear what happens afterwards.
Then we got headlines out of Cyprus itself:
  • Cyprus’s parliament speaker Yiannakis Omirous says initial decisions on how to tackle the country’s crisis taken today, in comments to reporters broadcast live on state-run CYBC.
  • Spoke after meeting with President Nicos Anastasiades, political party leaders
  • European attitudes to Cyprus “unacceptable,” Omirou says
  • All solutions will go through euro area, Omirou says
Finally, putting the cherry on top, Germany's deputy parliamentary leader of Merkel’s CDU party, Michael Fuchs had a raft of his own pearls, as follow:
  • Even 12 percent tax on Cyprus deposits “is not too much,” Merkel ally Fuchs says in Bloomberg TV interview.
  • Germany ready to help “as much as we can” but can’t ask German taxpayers “to pay everything” for Cyprus
    Michael Fuchs is deputy parliamentary leader of Merkel’s CDU party
  • “We want them in the euro -- no question,” Fuchs says
  • Don’t believe there will be contagion
  • Don’t want any country to be a tax haven
  • If Cyprus bankrupt, business model is gone
To summarize - absolute, and total chaos, with ad hoc decision attempts out of everyone, even as Fitch itself says that Cyprus stalemate shows the dangers of ad hoc crisis respones in Europe. Which if funny, because in Europe everything is an ad hoc response.
For all the rest in the overnight action, here is DB's Jim Ried
I suppose when the Fed is continuing to buy $85bn a month of securities it puts the argument over where to find the €5.8bn in Cyprus in some perspective, however dramatic the situation remains. Indeed just over 2 days worth of Fed activity would get us to the amount the Cypriots are trying to conjure. After  last night’s FOMC and press conference the most interesting remark was from the Chairman himself who said of a potential slowing in asset purchases that “we need to see sustained improvement (in the labour market)….so we’re just going to have to keep providing support for the economy and see how things evolve.” This suggests that payrolls need to maintain their recent improvements for a few months before they would consider changing the rate of purchases. Over the last couple of years payrolls have dipped into mid-year after a strong start so this is what Bernanke is referring to and he is therefore likely to want to see us get through the equivalent period with still elevated jobs numbers before he sanctioned a change.
The comments capped a better day for risk assets with the S&P 500 (+0.67%) closing near the session highs, following a stronger day for Eurostoxx (+1.38%). As we look ahead to today, it’s a fairly important day in terms of data headlined by the Euro area’s flash PMIs. Following the disappointment in the core last month, expectations are for only small improvements in this month’s readings. Starting with the manufacturing PMIs, consensus is for only a marginal uptick in France (44.2 vs 43.9 previous), Germany (50.5 vs 50.3 previous) and the Euroarea (48.2 vs 47.9 previous). Similarly, the consensus is looking for a 0.3pt improvement across each of the service PMIs in France (44.0 expected), Germany (55) and the Euroarea (48.2). Although we don’t get the Italian flash PMIs today it'll be interesting to try to imply a guestimate from the overall EU flash as the survey period will include the Italian election. Hard to believe that the election was almost 4 weeks ago now and we're still no nearer to a Government and that markets don't seem to care much.
Ahead of today’s euro PMIs, China has kicked off proceedings in a robust manner overnight with a flash manufacturing PMI reading of 51.7 (vs expectations of 50.8) which is up 1.3pts from the previous month’s print. The surprisingly strong PMI comes after a disappointing month for a number of Chinese-related assets. Iron ore, the Shanghai Composite and copper prices are down 14%, 4% and 8% respectively since mid-February. While there are probably seasonal factors at play following February’s Lunar New Year Holidays we should highlight that the index has now printed above 50.0 for five straight months, with month-on-month increases seen in four out of five of those months.
The stronger Chinese data has buoyed Asian equity markets with most bourses seen around 0.25% to 0.5% higher overnight. In what is becoming a familiar story, the Nikkei (+1.3%) is leading gains helped by chatter that the BoJ’s Kuroda will detail a shift in monetary policy at his first press conference as governor which is scheduled for 6pm Tokyo time today (9am London). Also in Japan, the trade data for February recorded the largest deficit (JPY1.0866trn vs JPY1102trn expected) since the Lehman period – in part driven by the J Curve effect.
The yen is trading marginally weaker against the USD at 95.9 while 10yr JGB yields hit their lowest level in almost a decade.
Returning to the situation in Cyprus, Bloomberg is reporting that President Anastasiades is set to draft a new funding plan following a cabinet meeting yesterday evening. The plan is said to include a revised version of the deposit levy according to the article and follows the stalling of talks between Cypriot Finance Minister Sarris and his counterpart in Moscow yesterday. The Ekathimerini wrote that the possibility of Moscow demanding involvement in the extraction of Cypriot natural gas or a naval or air force base on the island remains an option. Other alternatives appear to be closing though, with Russian lenders VTB and Gazprombank denying they were set to take over Cyprus Popular Bank or were unwilling to buy the bank for a symbolic sum while taking over its capitalization needs (Ekathimerini). Meanwhile the ECB is likely to delay a decision on whether to continue to supply Cypriot banks with liquidity as it awaits clarity on the government’s bailout plans, according to Bloomberg who cite EU officials.
Turning to the day ahead, aside from the all important Euro PMIs there is also an active data docket in the US with February existing home sales, the Philly Fed survey, the flash Markit PMI and weekly jobless claims. In the UK, retail sales for February are scheduled. The Eurogroup’s Dijsselbloem addresses the European Parliament’s Economic and Monetary Affairs panel (8am London) which may make for interesting viewing given the recent events in Cyprus. Spain and France will be holding bond auctions, and party leaders from Italy’s Five Star Movement will be meeting with President Napolitano as part of the latter’s  consultations with major parties in the attempt to form a government.

end





A major discussion on the 7 big newsworthy events during the last 24 hours

(courtesy Marc to Market)



Thursday's Seven

Marc To Market's picture




A nervous calm continues to cast a pall over the capital markets. The US dollar is narrowly mixed, but within the ranges seen yesterday. Asian markets were mixed, new that HSBC's flash Chinese manufacturing PMI rose to 51.7 in March from 50.4 in February failed to have much impact. European bourses opened softly and, encouraged by disappointing flash PMI figures, sold off further. Near midday in London, the Dow Jones Stoxx 600 is off about 0.5, led by tech and basic materials.
Peripheral European bond markets are firm. Italian bonds continue to outperform Spain, with the latter perhaps hindered by anticipation of today's supply. The 10-year spread has moved almost 15 bp in Italy's favor over the past five sessions. Greek bonds also are recovering for the second session after falling for the previous seven. A general exception to the pattern comes from emerging market stocks, where the MSCI benchmark has fallen to new lows for the year.
There are seven developments between yesterday and today that are shaping the investment climate.
1. The FOMC tweaked its macro-forecasts a bit and recognized that the Q4 slowdown was temporary. It will continue to purchases $85 bln a month in long term assets. The pace of purchases may vary as the economic conditions change. We think it will take the real Troika (Bernanke, Yellen and Dudley) a few more months to feel confident that the improvement that the Fed recognizes is not temporary, as it has proven in the recent past. While the Fed is continuing to evaluate the effectiveness of its purchases and discuss the exit strategy, the situation is still fluid. It will take several more months at least for this to be worked out. Bernanke did indicate a period between the end of the asset purchases and the beginning of the remove of accommodation is anticipated.
2. The UK budget projected GBP61 bln greater borrowing through 2017-2018 than anticipated three months ago.That means the peak in debt/GDP is not seen until 2015-2016 and at over 100%. This may spur more speculation of a credit downgrade by Fitch and S&P. There was a small adjustment to the BOE's remit, which seemed to largely affirm the flexible approach the MPC has shown regarding the fact that inflation has been above target for 3 years and counting. A further change is anticipated around shortly after Carney takes his post that will involve the BOE's forward guidance.
3.Separately, the UK reported much stronger than expected Feb retail sales and this lifted sterling back toward yesterday's highs and weighed further on UK gilts. Retail sales rose 2.1% in March, four times what the consensus expected. This is the largest rise in nearly a year and is more likely to reflect the rebound from the weather-induced weakness (-0.7%) in January. Key resistance in sterling is seen in  he $1.5200 area, a neckline of technical pattern that would project toward $1.56.
4. The flash PMI readings for Germany and France were disappointing. German manufacturing PMI slumped back below 50 to 48.9 and the services reading fell back to 51.6 from 54.1. While Q1 GDP may still be positive, it is clear that with headwinds from its neighbors, Germany is struggling. France saw a small uptick in its manufacturing PMI, but at 43.9 (from 43.6), it is hardly inspiring. And the flash service PMI was worse. It fell to 41.9 from 42.7. This produces a composite that is the lowest since March 20009.
5. The Cyprus crisis continues. It has become clear in recent days that the creditors are demanding 5.8 bln euros from Cyprus, but Cyprus officials continue to pursue particularly onerous and odorous ways of raises those funds. The new elected President had favored the tax on small depositors. When this was rejected, Plan B is yet another way to throw its people under the proverbial bus. It has reportedly floated the idea of capturing the state pension assets and in exchange providing government bonds backed by future revenue tied to the gas discoveries and then raising the remainder (~1.6 bln euros) with a tax on large deposits. The Troika will not be able to sanction this as it does not stabilize the country's debt/GDP ratio. Separately, the ECB which we understand had previously threaten to deny Cyprus banks to any more ELA funds as of today appears now to have given Cyprus the weekend to reach an agreement.
6. Australia's PM Gillard withstood a leadership challenge and is set to lead Labour into the Sept election. However, the fissures in the party have not closed and support for the party is flagging. Separately, New Zealand reported a stronger than expected Q4 GDP (1.5% vs 0.9% consensus)which gave the local currency boost. Although the RNBZ has indicated no rate hike this year, many in the market continue to see the risk of a year end move.
7.  At pixel time, the market is still awaiting BOJ Kuroda's first press conference.  He is expect to indicate willingness to buy more government bonds and with longer maturities (5 year instead of 3 years currently).  The open-ended nature of the operation, which was to being next year will likely begin sooner.  Separately, Japan reported a February trade deficit of JPY777.5 bln, which while a bit smaller than expected is still the eighth consecutive monthly deficit.  The details were disappointing as exports fell 2.9% after rising in Jan for the first time in eight months.  Imports rose 11.9%, a little less than expected, but well above the 7.3% pace seen in Jan.   While we recognize the data may be skewed by the lunar new year, we also see how the price of imports is rising faster than the yen's weakness is helping exports.  

end





Citizens remove as much cash as they can.  ATM's very low on cash:

(courtesy zero hedge)



Cyprus ATMs Low On Cash, Credit Card Payments Refused; Medvedev Compares Europe To USSR

Tyler Durden's picture




So far the market has been largely oblivious of the shattered trust and changed dynamic in European banking dynamics for one simple reason: Cyprus banks have been closed, and likely will be closed indefinitely, preventing the mass media from broadcasting what happens when an entire population, and foreign depositors, decide to clear out the holdings of their bank accounts, either physically or electronically, and the public anger the will result when they find that courtesy of fractional reserve banking, only a tiny amount of said deposits is actually present.
In the meantime, retail depositors have had their withdrawals limited through a form of capital controls, allowing them to pull only as much as the daily limit is on given ATMs. So far the banks have had enough cash to keep ATMs stocked up to the daily required minimum, but that may soon be ending. BBC's Mark Lowen, in Nicosia, reports that "Cyprus' banks are still giving out cash through machines - although with limits, and some are running low." Ironically, as physical cash becomes ever scarcer, merchants are now clamping down on electronic payments unsure if they will ever be able to convert electronic euros into actual ones: "Some businesses are now refusing credit card payments, our correspondent reports."
Logically, this progression of limited transactions will accelerate exponentially until by some miracle, either normalcy returns and faith in the local banking system is restored, or every form of commerce, trade and exchange grinds to a halt, leading to a localized, at first, manifestation of the "just-in-time" supply-chain cross contagion that was explained in painful detail in "Trade-Off: a study in global systemic collapse."
Since we don't believe in miracles, our money is increasingly on the latter. This sentiment is further reinforced by former Russian president, current Prime Minister, and Putin mouthpiece, Dmitry Medvedev, who said that what Europe has done is nothing shy of what the USSR used to do in its attempt to destroy faith in private property, and thus, capitalism.
From the FT and Reuters:
Mr Medvedev said the EU and Cyprus had acted “like an elephant in a China shop”.

“All possible mistakes that could be made have been made by them,” he added.

"We are living in the 21st century, under market economic conditions. Everybody has been insisting that ownership rights should be respected.”

Mr Medvedev also criticised the decision to freeze the Cypriot banking system, and not just withdrawals from troubled banks, warning that if this continued for any length of time it could “result in losses . . . even bury the whole banking sector of Cyprus. It will cease to exist,” he said.
...

The proposed bank levy, rejected by the Cypriot parliament on Tuesday, had a "clearly confiscatory, expropriating character," RIA quoted him as saying - remarks that echo earlier criticism by Russian President Vladimir Putin.

It was, Medvedev said, "absolutely unprecedented". 

"I can only compare it some of the decisions taken ... by Soviet authorities, who did not give a thought to the savings of the population."

Alas, it is not just in Cyprus that the current failing status quo has become the USSR incarnate: one can see it in the central planning of the stock market, in the general approach toward the wealthy, in the absurd penetration of cronyism and the terminal corruption of the system.
And while we commiserate with the simple people of Cyprus (and soon everywhere else), who have for no fault of their own become the first pawns to be sacrificed in the systemicendspiel, we are grateful to Europe for proving us, once again, correct.
Because our only purpose with this media experiment has been to warn our readers that concentrating unlimited decision-making power in the hands of a very few conflicted individuals, without checks and without balances, always, always, ends in absolute disaster, bloodshed, and ultimately war.
Sadly, at this point there is nothing that can change the final outcome of what is an ongoing systemic failure. One can, at most, prepare as much as possible and hope for the best.

end




Here is why they are removing as much as they can:




Busted Cyprus considers confiscating pension funds next

 Section: 
Cyprus Scrambles to Avert Meltown; EU Threatens Cutoff
By Michele Kambas and Matt Robinson
Reuters
Thursday, March 21, 2013
NICOSIA, Cyprus -- Cyprus considered nationalizing pension funds and ordered banks to stay shut till next week to avert financial chaos after it rejected the terms of a European Union bailout and turned to Russia for aid.
Crisis talks among the political leadership in Nicosia are set to resume on Thursday after late-night meetings to discuss a "Plan B" broke up on Wednesday without result.
EU officials voiced frustration but little sympathy for an ambitious but now bust banking system that extended itself well beyond the island. Russia, whose citizens have billions to lose in those Cypriot banks, called the EU a "bull in a china shop."

The deputy leader of his Democratic Rally warned time was running out: "We don't have days or weeks; we have only hours to save our country," Averos Neophytou told reporters.
Banks, shut since the weekend, are to stay closed for the rest of the week and so not reopen till Tuesday after a holiday weekend, a government official told Reuters, extending the misery of Cypriot businesses already feeling the pinch.
Without a resolution, the fate of the small nation of just 1.1 million has shaken confidence in the single-currency euro zone and raised geopolitical tension between the EU and Russia.
Finance Minister Michael Sarris extended a stay in Moscow, where Russian officials said he asked for a further 5 billion euros on top of a five-year extension and lower interest on an existing 2.5-billion euro loan from Moscow.
In a vote on Tuesday, the island's tiny legislature threw out a proposed tax on bank deposits in exchange for a 10-billion euro bailout from the EU, a stunning rejection of the kind of strict austerity accepted over the past three years by crisis-hit Greece, Portugal, Ireland, Spain, and Italy.
Russian Prime Minister Dmitry Medvedev, who was preparing to meet an EU Commission delegation in Moscow on Thursday, said the bloc had behaved "like a bull in a china shop" and likened its proposals, which would force Russian customers to contribute to the rescue of Cypriot banks, to Soviet-era confiscations.
But the European Central Bank kept the pressure on, warning that it would have to pull the plug on Cyprus unless the country, one of the smallest of the 17 members of the euro zone, took a bailout quickly.
Despite the looming threat of default and a banking collapse, Cypriots on Tuesday balked at EU demands for a levy on bank deposits to raise 5.8 billion euros, once taboo in Europe's handling of the stubborn debt crisis.
Anastasiades chaired meetings throughout Wednesday with party leaders, ministers and officials from the troika of EU, ECB and International Monetary Fund lenders. The government said a "Plan B" was in the works.
Officials said it could include: an option to nationalize pension funds of semi-government corporations, which hold between 2 billion and 3 billion euros; issuing an emergency bond linked to future natural gas revenues; and possibly reviving the levy on bank deposits, though at a lower level than originally planned and maybe excluding savers with less than 100,000 euros.
With Cypriot Energy Minister George Lakkotrypis also in Moscow, officially for a tourism exhibition, speculation was rife that access to untapped offshore gas reserves could be on the table as part of a deal for Russian aid.
Finance minister Sarris said talks with his Russian counterpart, Anton Siluanov, would continue, but there had not yet been any offers, "nothing concrete."
Cyprus is a haven for billions of euros squirreled abroad by Russian businesses and individuals -- a factor too in the reluctance of Germany and other northern euro zone states to bail out Cypriots without a contribution from bank depositors.
The island's banking sector has been crippled by its exposure to bigger neighbor Greece. Athens said Greek branches of Cypriot banks would also stay shut till the weekend.
The proposed levy on deposits would have taken nearly 10 percent from accounts over 100,000 euros. Smaller accounts would also have been hit, although the government proposed softening the blow to spare savers with less than 20,000 euros.
Chancellor Angela Merkel, facing an election this year in Europe's main paymaster Germany, said it was fair to expect those with savings over 100,000 euros -- the normal limit for EU state deposit insurance - to contribute to a bailout.
While taxing even small savers was politically explosive, the Cypriot government had balked at sparing them by imposing a higher tax on big depositors -- fearing for an offshore banking business that accounts for a big share of its economy.
European officials were growing increasingly exasperated. But the idea of bankruptcy for a member of the euro zone, however small, raises fears for confidence in the currency.
"There is no obligation to accept help," said Polish Foreign Minister Radoslaw Sikorski, whose country does not use the euro. "Cyprus has the possibility of living with its own mistakes."


end



And now this:





EU Weighs 40% Haircut On Uninsured Cypriot Deposits In Bad-Bank Plan

Tyler Durden's picture




More details are appearing on the latest and greatest plan in the shambles to solve Cyprus' (and Europe's unsolvable) problem. It appears the European Group is implicitly declaring economic war on the 'wealthy' depositors (we noted here non-domestic depositors dominated recent inflows) as these headlines hit:
  • *EURO AREA SAID TO WEIGH CLOSING CYPRUS POPULAR, BANK OF CYPRUS
  • *EURO AREA SAID TO WEIGH GOOD BANK, BAD BANK FOR CYPRUS BANKS
  • *UNINSURED DEPOSITS COULD GO TO CYPRUS BAD BANK, FACE 40% LOSS
We assume followed rapidly by some eurozone law-breaking capital controls to stop the remaining 60% flooding out instantaneously...

end

Then this:

Cyprus Popular Bank To Be Shuttered (UPDATE: Central Bank Denies)

Tyler Durden's picture




UPDATE: Cyprus Central Bank says hasn't been informed of closure (and then back-pedals)...
  • *CYPRUS CENTRAL BANK HASN'T BEEN INFORMED, TAKEN SUCH DECISION
  • *CYPRUS CENTRAL BANK SAYS REORGANISATION NOT SAME AS CLOSURE

Refuting earlier comments from the regulator that Cyprus Popular Bank would not be shuttered, CYBC is reporting (following the failure to sell it to the Russians) that the bank is to be shut down, split into good-bank-bad-bank, and that deposits under EUR100,000 will be protected.
  • *CYPRUS POPULAR BANK TO BE SHUT DOWN, STATE-RUN CYBC SAYS
  • *CYPRUS POPULAR BANK TO BE SPLIT IN GOOD, BAD BANKS: CYBC
  • *CYPRUS POPULAR BANK ASSET PROCEEDS TO BE RETURNED TO DEPOSITORS
  • *CYPRUS POPULAR BANK DEPOSITS OF LESS THAN EU100,000 GUARANTEED
Of course, we await the re-refutation but for now it seems the latest news trumps the regulators 'lies' earlier.

end

Followed by this:

The Cyp-Riots Begin - Live Stream

Tyler Durden's picture




Local TV station CYBC reports that police in the Cyprus' capital are scuffling with protesters (including employees of Cyprus Popular Bank) outside the nation's parliament:
  • *CYPRUS POLICE CLASH WITH BANK EMPLOYEES OUTSIDE PARLIAMENT
  • *CYPRUS SCUFFLES BROADCAST LIVE ON STATE-RUN CYBC
CYBC says more protesters gathering at Parliament House
Via @giopso





Via @Tesa_RT




Live stream to come - link here

end





Eurogroup Concludes 'Inconclusive' Call; Cyprus Dismisses Deposit Levy; Moar Troika Needed




Tyler Durden's picture




Surprise! No decision came out of the Eurogroup conference call (and none is expected this evening) as:  
  • *EUROGROUP EXPECTS CYPRUS TO SUBMIT NEW RESCUE PROPOSAL QUICKLY and
  • *EUROGROUP SAYS IMPORTANT TO GUARANTEE DEPOSITS UNDER EU100,000
  • *EUROGROUP SAYS TROIKA ANALYSIS NEEDED ON NEW CYPRIOT PROPOSAL
However, Cyprus has decided that it will only undertake small deposit levy (if at all) and prepares to present a new proposal. And just to rub some salt in the wound:
  • *CYPRUS CUT TO CCC FROM CCC+ BY S&P; OUTLOOK NEGATIVE
So, Laiki has only hours of liquidity; the government hasn't voted on a proposal yet; Eurogroup won't act until Troika analyzes the proposal; and Cypriot Central banker wants major capital controls.


Saxo Bank CEO: "Is Cyprus Deposit Levy The First Sign Of Widespread Wealth Tax?"

Tyler Durden's picture




Authored by Lars Seier Christensen, via his blog atTradingFloor.com,
Confusion reigns supreme in the Cyprus bailout. So it is fairly risky to stick out your neck commenting on an unknown outcome that could leave you exposed to ridicule in hours if things change. And this blog is not intended to be a daily or even weekly commentary as I am not providing short-term trading advice, meaning that it is tempting to just wait and see what the outcome will be.
However, as this is so far the most important macroeconomic event of 2013 and it is continuously developing in new and perplexing ways, I feel it is necessary to try to make some sense out of what we are observing and hearing.
What we know now is that the Cypriot parliament has rejected the bailout package after a poker game with the Troika, trying to deal many different hands varying from zero percent deposit tax for the smaller depositors to 15 percent on the larger ones. None of the combinations have proved sufficiently appetising to secure a deal so far.
We also know that France has categorically ruled out that a plan B will be made available. This sounds plausible as we are already at least at plan D or plan E. We also know that the Russians are now heavily involved behind the scenes, despite being understandably ticked off about the whole process. We know that this is now turning into a geopolitical chess game, where important European oil and gas reserves may actually find their way into Russian control, in spite of all the ambitions of the past decades to achieve the exact opposite with regard to the European energy supply. We know that Merkel cares more about positioning for the upcoming domestic election than the future fate of Cyprus.
Furthermore, we know that Cyprus banks are closed until at least Thursday [ZH: Now Monday], but also that they will not open until some kind of deal is in place - or the issue of a deposit levy will be irrelevant, as there will not be a penny left in Cyprus, certainly not of foreign money.
We know that the Cyprus finance minister may unsuccesfully have tried to submit his resignation and that the British are flying in cash Euros to their 3,000 military personel.
We know that a consortium of banks has offered a private solution to the crisis, but apparently not been seriously considered.
On a lighter note, we now also know that the first name of the Cyprus central bank governor is Panicos, indicating that the old saying, "Your name is your destiny" may indeed hold some truth... sorry, excuse the pun, but I could not help myself. Actually, I feel for the man who may well hold one of the least desirable jobs in the world right now.
That is a lot to take in after just 72 hours of action. Where will it all end? What have we learned from this?
A number of things. We have seen again that the Eurozone is unable to deal rationally with its problems. This has got to be the most incompetent handling of a Euro crisis event so far, but underlines the hopeless situation the 17 countries that share the common currency are in. The panic is so great that no step is too extreme to preserve the doomed project and to defend the political capital invested in this monumental failure. That we have already come to a stage where politicians blatantly attempt to confiscate innocent and weak citizens' savings is a new low that was somewhat unexpected already at this point. It bodes ill for what can happen when the crisis deepens in the future - which it will.
The idea of a one-off wealth tax, however, is not new.Several research reports have pointed in recent years to the fact that the desperate need for funding in the public sector could - and probably will - eventually lead to confiscation of wealth in a monumental scale. Boston Consulting Group suggested in a recent report that about 29 percent of ALL private wealth, not just deposits, will eventually be likely to be confiscated to cover the debts already incurred.(Read the article on Zerohedge.com). So we had better get used to seeing our money being appropriated by money-hungry politicians. This is just the beginning. The cat is out of the bag, no matter if this particular deal should fall apart.
What astonishes me is that such an important and extreme move is risked for such a modest prize. The slow realisation that confiscating our money will be the next move in the debt crisis has been made very acute by this blatant move. The most important game changer in years and the most frightening tool in the tool box has been pulled out in the open for a mere USD 5.8 billion. The impact could trigger massive asset capital flows and asset devaluations to the tune of hundreds of billions. The loss of trust will be detrimental to all weak economies. Why on earth did the Troika not save this shocker for a substantial occasion, say a bailout of Spain or Italy? Incompetence? Lack of market understanding? Or even more frighteningly - perhaps because of a wish to introduce this new tax tool to get the voter populations used to new ideas for milking the rich in the future?
This is intriguing and fascinating - it is just a great shame that the population of Cyprus needs to go through such heartache for problems they did largely not create themselves, and have no way to avoid.
Who will be next to find themselves in such a situation is the prudent question to ask?
Be safe out there.



end



An extremely important conversation between Eric King and Jim Sinclair.

I would like to point out that the French police raided Christine Lagarde's apartment yesterday.
The case is 20 years old:

(very important Kingworldnews/Jim Sinclair)


Sinclair – Lagarde’s IMF Disaster Forces Bernake Out Of Fed

Courtesy of KingWorldNews.com
Dear CIGAs,
Today legendary trader Jim Sinclair told King World News that Lagarde’s IMF Cyprus disaster, in stunning fashion, has now forced Chairman Ben Bernanke out of the Fed.  Sinclair, who was once called on by former Fed Chairman Paul Volcker to assist during a Wall Street crisis, takes readers on a trip down the rabbit hole that has become know as “The Cyprus Catastrophe” in this extraordinary and exclusive interview:
Eric King:  “Remarkably, just a day and a half ago you stated on King World News that ‘Putin has faced down the International Monetary Fund, which by the way is located in Washington, DC, and is in fact Washington itself.  So in the sense of a Cold War, you have Washington vs Moscow, and Moscow won this round.  The bottom line here is Lagarde took on Putin, but Putin has checkmated both her and the IMF the same way a Russian grandmaster chess player would destroy his opponent.’  Within hours of KWN reporting that news, Lagarde’s apartment was raided by police and she is now scrambling.”
Sinclair:  “The important point is, how long has this case been going on in which there was a police raid on the Lagarde’s apartment?  This is a 20-year old case, making it look a little less like just a coincidence.  I would also add to that I don’t think it’s any coincidence that the Chairman of the Federal Reserve has now indicated the possibility that he will not be reappointed, and that he will not accept the reappointment….

end



The following caused the yen to plummet this morning!!!


4.9

Japanese Exports Drop More Than Expected Smashing Adj. Trade Balance To New Record Low

Tyler Durden's picture




It appears Abe and his henchmen had better stop doing things and say something as the huge devaluation of the JPY so far is NOT having the effect he had hoped for. Exports dropped 2.9% - more than expected - and while imports rose less than expected, the currency drop still meant an 11.9% surge in imports. All this means is that on a seasonally-adjusted basis, the Japanese Trade Balance just hit a new all-time record low (negative). USDJPY is strengthening on the news... it seems that well-placed non-news headline at 2am Japan time is well worth it now to cover this debacle... We assume the lesson is - just wait, "if we devalue, they will come."


and the reaction...



First  your early market sentiment which shaped the trading in NY:


our early Thursday morning currency crosses;  (8 am)

 
Thursday morning we  see minor euro weakness against the dollar   from the close on Wednesday, still trading below  the key 1.30 mark at 1.2914. The yen this the morning  is a touch weaker  against  the dollar,   at 95.35 yen to the dollar.  This will eventually cause problems as Japanese citizens bail out of their bond/yen holdings because of inflation.    The pound, this morning is a littler stronger against the USA dollar breaking into the 1.52 barrier at  1.5202. The Canadian dollar is stronger  against the dollar at 1.0237.   We have a  risk is off  situation  this morning with the major European bourses in the red.  Gold and silver are higher  in the early morning, with gold trading at $1608.30 (up $1.60) and silver is at $28.91 up 9 cents in early morning European trading.

The USA index is down 6 cents at 82.78.



Euro/USA    1.2914  down .0024
USA/yen  95.35  down .590
GBP/USA     1.5202 up .0109
USA/Can      1.0219 down .0037

end





And now your closing Spanish 10 year bond yield:


a fall of .09 in yield:  (yields back over 5%)





SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE

GSPG10YR:IND

4.880.09 1.89%
As of 13:00:00 ET on 03/21/2013.










end


And now our Italian 10 year bond yield:  (a drop of .06%)



ITALY GOVT BONDS 10 YEAR GROSS YIELD

 

Italy Govt Bonds 10 Year Gross Yield

 + Add to Watchlist

GBTPGR10:IND

4.590.05 1.04%
As of 13:00:00 ET on 03/21/2013.
Yesterday's yield;


GBTPGR10:IND

4.640.09 1.88%
As of 12:59:59 ET on 03/20/2013.

end


Your 5:00 pm closing Monday currency crosses:


The Euro fell badly  this afternoon settling at 1.2897. The yen strengthened  this afternoon  to finish at 94.92 . The pound weakened a bit this afternoon  finishing at 1.5108.  The Canadian dollar weakened a bit  against the dollar closing at 1.0243. 

The USA index remained constant from the morning session with the final index number down 1 cent to 82.81. 


Euro/USA    1.2897 down  .0041
USA/Yen  94.92 down 1.02
GBP/USA     1.5168  up 0068
USA/Can      1.0246  up  0010







end.




Your closing figures from Europe and the USA:

red ink


i) England/FTSE down 44.15  or 0.69%

ii) Paris/CAC down 54.71 or 1.43% 

iii) German DAX:  down 69.46 or .87%

iv) Spanish ibex down 65.10 points  or  .77%

v) Italian bourse (MIB) down 79.99  points or .50%


and the Dow down 90.24  (.62%)



end




And now for some USA news:





DJ US Jobless Claims Rise By 2K To 336,000

Thu Mar 21 08:30:14 2013 EDT


WASHINGTON--The number of Americans claiming unemployment benefits rose slightly last week but remained at a level indicating a strengthening labor market.
Initial jobless claims, an indication of layoffs, increased by 2,000 to a seasonally adjusted 336,000 in the week ended March 16, the Labor Department said Thursday. That was slightly below economists' forecast of 340,000 new claims.
Claims for the week ending March 9 were revised up slightly to 334,000 from an initially reported 332,000.
A more closely watched measure of claims remained at a five-year low. The four-week moving average, which smoothes out week-to-week volatility in the data, fell by 7,500 to 339,750.
Economists generally believe the labor market is strengthening when claims are below 400,000.
The report is the latest sign that the labor market has picked up since the new year. Unemployment fell to 7.7% in February from 7.9% the prior month, with employers adding 236,000 jobs last month.
Still, unemployment remains historically high, and Federal Reserve officials expect only slight improvement in the labor market for the rest of the year. Fed Reserve Chairman Ben Bernanke this week described the recent improvement in the labor market as modest. Fed officials signaled this week they don't plan to end the central bank's stimulus programs, including $85 billion a month in bond purchases, any time soon.
The labor market is also facing headwinds, including the roughly $85 billion in federal spending cuts, under the so-called sequester, that began this month.
Thursday's data showed the number of continuing unemployment benefit claims--those drawn by workers for more than a week--increased by 5,000 to 3,053,000 in the week ended March 9. Continuing claims are reported with a one-week lag.
The number of workers requesting unemployment insurance was equivalent to 2.4% of employed workers paying into the system in the week ended March 9.





-END-



JPMorgan Chase could suffer more ‘London Whale’ fines after OCC review

JPMorgan could face gov’t fines anew

  • By MARK DECAMBRE
  • Posted: 12:39 AM, March 21, 2013
JPMorgan Chase’s primary regulator may not be done punishing the bank over its $6.2 billon London Whale trading loss.
The Office of the Comptroller of the Currency could decide in about a month to further penalize CEO Jamie Dimon’s bank after digesting the additional information it received about the bank’s Whale trading fiasco during last week’s withering Senate hearing.
The regulator could take a month — and perhaps longer — to review findings in the 301-page report put out by Sen. Carl Levin’s (D-Mich.) Permanent Subcommittee on Investigations, a person familiar with the matter told The Post.
Reuters
With the Comptroller of the Currency expected in a month to issue a report on JPMorgan Chase’s $6.2B London Whale trading loss, CEO Jamie Dimon is not likely to shake off the stench of the misadventure anytime soon.
The OCC, which maintains a chilly relationship with JPMorgan, is ready to ding Dimon’s bank with a fresh fine or an additional censure if the agency determines that JPM needs to implement further remedies to rehab its trade-processing and risk-management operations.
An OCC spokesman declined to comment as did a JPMorgan spokesman.
The Securities and Exchange Commission also is looking at the bank’s Whale trade and could choose to penalize the bank this year as well.
To be sure, the OCC could decide to take no further action against JPM.
The $6.2 billion Whale trading losses already resulted in JPMorgan slashing Dimon’s pay in half and overhauling its management ranks.
The OCC already downgraded JPMorgan’s management rating, according to reports by the Wall Street Journal.
OCC boss Tom Curry, who has been at the helm of the regulator for less than a year, wants to toughen the regulator’s approach to institutions considered too big to fail, sources tell The Post.
During last week’s testimony, Levin highlighted the OCC’s complaining that Dimon stymied the regulators’ efforts to obtain required trading reports.
mark.decambre@nypost.com


end


I will leave you tonight with this great commentary courtesy of Michael Snyder of
Economic Collapse


(courtesy Michael Snyder)



The Global Financial Pyramid Scheme By The Numbers

Tyler Durden's picture




Via Michael Snyder of The Economic Collapse blog,
Why is the global economy in so much trouble?  How can so many people be so absolutely certain that the world financial system is going to crash?  Well, the truth is that when you take a look at the cold, hard numbers it is not difficult to see why the global financial pyramid scheme is destined to fail.  In the United States today, there is approximately 56 trillion dollars of total debt in our financial system, but there is only about 9 trillion dollars in our bank accounts.  So you could take every single penny out of the banks, multiply it by six, and you still would not have enough money to pay off all of our debts.
Overall, there is about 190 trillion dollars of total debt on the planet.  But global GDP is only about 70 trillion dollars.  And the total notional value of all derivatives around the globe is somewhere between 600 trillion and 1500 trillion dollars.  So we have a gigantic problem on our hands.  The global financial system is a very shaky house of cards that has been constructed on a foundation of debt, leverage and incredibly risky derivatives.  We are living in the greatest financial bubble in world history, and it isn't going to take much to topple the entire thing.  And when it falls, it is going to be the largest financial disaster in the history of the planet.
The global financial system is more interconnected today than ever before, and a crisis at one major bank or in one area of the world can spread at lightning speed.  As I wrote aboutyesterday, the entire European banking system is leveraged 26 to 1 at this point.  A decline in asset values of just 4 percent would totally wipe out the equity of many of those banks, and once a financial panic begins we could potentially see major financial institutions start to go down like dominoes.
We got a small taste of what that is like back in 2008, and it is inevitable that it will happen again.
Anyone that would tell you that the current global financial system is sustainable does not know what they are talking about.  Just look at the numbers that I have posted below.
The following is the global financial pyramid scheme by the numbers...
-$9,283,000,000,000 - The total amount of all bank deposits in the United States.  The FDIC has just 25 billion dollars in the deposit insurance fund that is supposed to "guarantee" those deposits.  In other words, the ratio of total bank deposits to insurance fund money is more than 371 to 1.
-$10,012,800,000,000 - The total amount of mortgage debt in the United States.  As you can see, you could take every penny out of every bank account in America and it still would not cover it.
-$10,409,500,000,000 - The M2 money supply in the United States.  This is probably the most commonly used measure of the total amount of money in the U.S. economy.
-$15,094,000,000,000 - U.S. GDP.  It is a measure of all economic activity in the United States for a single year.
-$16,749,269,587,407.53 - The size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.
-$32,000,000,000,000 - The total amount of money that the global elite have stashed in offshore banks (that we know about).
-$50,230,844,000,000 - The total amount of government debt in the world.
-$56,280,790,000,000 - The total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.
-$61,000,000,000,000 - The combined total assets of the 50 largest banks in the world.
-$70,000,000,000,000 - The approximate size of total world GDP.
-$190,000,000,000,000 - The approximate size of the total amount of debt in the entire world.  It has nearly doubled in size over the past decade.
-$212,525,587,000,000 - According to the U.S. government, this is the notional value of the derivatives that are being held by the top 25 banks in the United States.  But those banks only have total assets of about 8.9 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 24 to 1.
-$600,000,000,000,000 to $1,500,000,000,000,000 - The estimates of the total notional value of all global derivatives generally fall within this range.  At the high end of the range, the ratio of derivatives to global GDP is more than 21 to 1.
Are you starting to get the picture?
Every single day, the total amount of debt will continue to grow faster than the total amount of money until the day that this bubble bursts.
What we witnessed back in 2008 was just a little "hiccup" in the system.  It caused the worst economic downturn since the Great Depression, but global financial authorities were able to get things stabilized.
Next time it won't be so easy.
The next wave of the economic collapse is quickly approaching.  A full-blown economic depression has already started in southern Europe.  Unemployment is at record highs and economic activity is contracting rapidly.
The major offshore banking centers in Cyprus are on the verge of collapsing.  It was just announced that they will now be closed until Tuesday, but nobody really knows for sure when they will be allowed to reopen.  And there is already talk that when they do reopen that there will be strict limits on how much money people can take out.
And now the IMF is warning that the three biggest banks in Slovenia are failing and that a billion euros will be needed to bail them out.
The dominoes are starting to tumble, and the United States won't be immune.  In fact, the greatest financial problems that the United States has ever seen are on the horizon.
But you can just have faith that Ben Bernanke, Barack Obama and the U.S. Congress know exactly what they are doing and will be able to save us from the coming financial collapse if you want.
The mainstream media will provide you with all of the positive economic news that you could possibly want.  They are giddy about the fact that the Dow keeps hitting all-time highs and they would have us all believe that we are in the midst of a robust economic recovery.  You can listen to them if you want to.
But when you are tempted to believe that everything is going to be "okay" somehow, just go back and look at the numbers there were posted above one more time.
There is no way that the global financial pyramid scheme is going to be able to hold up for too much longer.  At some point it is going to totally collapse.  When that happens, will you be ready?

end


I will see you bright and early Saturday morning

all the best

Harvey

6 comments:

Jack Lee said...

I guess Harvey has zapped all the trolls. Oh well they won't be missed.

Cyprus has taught us we are taking a huge gamble on any funds in the bank, as all electronic money can be erased with a mouse click. A scary thought. But one more reason to buy Gold and Silver. Physical assets only.

Phil50 said...

US Monetary Sypply is at $2.976 trillion based on today's print. At the current rate it will exceed $3.0 on the first print in April, 14 days from today. I had thought that the price of gold would have been higher at this point due to an excess supply of USD driving the USD down and the price of gold up. I suppose the demand for USD is still strong so the increase in the price of gold that I had expected has not happened.....yet.


USD's are still being printed and the world is still in financial difficulty. Must be patient.

reo said...

Every Month the Delivery Notices are huge But Gold and Silver just don't go anywhere. I don't think these Comex Delivery notices or any of the Info is at all accurate. They..central Bankers...know that investors use this info to base their decisions...so they put out whatever information they want to get the reaction they want...and RIP YOU OFF accordingly.

Jack Lee said...

COMEX is not a real market. It is a paper market. The supply of paper is endless. In my opinion, both Gold and Silver will stay flat until COMEX is shut down with the coming worldwide collapse.

salle said...

thanks for share.....

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