Thursday, April 18, 2013

The USA mint posts a huge 63,000 oz of gold sales/IMF warns Spain that its debt is unsustainable/The CBC airs its gold manipulation documentary tonight/

Good evening  Ladies and Gentlemen:

 
Gold closed up $9.80 to $1392.00 (comex closing time).  Silver fell by 6 cents  to $23.24 (comex closing time). 

In the access market at 5 pm:

gold: $1392.10
silver: $23.28



At the comex, the open interest in silver fell considerably to 154,640 contracts but still holding at elevated levels . The open interest on the gold contract  fell by a tiny 733 contracts to 412,350. Generally, I would say that 390,000 OI would be rock bottom for gold but in this environment anything goes.  The total amount of gold ounces standing for April fell slightly to 34.35 tonnes but silver  had an increase to 3.725 million oz standing.


Today we learn that the USA mint sold in one day 63,000 oz of gold or 2 tonnes.  This is without a doubt a record day. Dave from Denver comments on this huge sales of gold.

Keith Barron, Ross Pixley and Chris Martenson all talk about the huge retail demand for gold and silver and the unintended consequences of a lower price spiking higher demand.
  
In paper news, the IMF has now warned Spain that its debt is unsustainable.
In the USA the new jobless claims number is up again.  Also the Philly Manufacturing index was down.
  
 We will go over these and other stories but first.........................

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


The total gold comex open interest fell by  733 contracts today  from  413.083  down to 412,350,  with gold falling by $3.00. yesterday.  The front April OI fell by 30 contracts from 668 down to 638. We had 7 notices filed on Wednesday so we lost 23 contracts or 2300  gold oz will not be standing for the April gold contract month. The next non active contract month is May and here the OI rose by 48 contracts to 1429. The next big contract month is June and here the OI fell by   1712 contracts from 256,184 down to 254,472.  The estimated volume today was huge at 247,297 or 24.297 million oz.  The world produces around 70 million oz ex China ex Russia.  Thus today's volume equates to around 35% of global annual production. The confirmed volume on Wednesday was also huge at 272,693 (approx 848 tonnes of gold). 

The total silver comex OI  fell again by a very large 2662 contracts from 157,302 down to 154,640. It still looks like we still have some  stoic longs who seem impervious to pain. The front non active delivery month of April saw its OI fall by 32 contracts from 63 down to 31 . We had 34 delivery notices filed on Wednesday, so in essence we gained 2 contracts or an additional  10,000 oz of silver  will stand for delivery in April.  The next big delivery month for silver is May and here the OI fell by 5922 contracts to stand at 47,841. We are less than 2  weeks away from first day notice for the May silver delivery month.   The estimated volume today was huge, coming in at 74,501 contracts which equates close to 373 million oz of silver. The world produces 700 million oz per year ex China ex Russia so in essence today's volume equates to 53% of annual silver production. We had confirmed volume on Wednesday at 115,920 contracts which is a huge volume day . (.5795 billion oz or 82.8% of annual silver production)


Comex gold/April contract month:



April 18.2013      April gold.




Ounces
Withdrawals from Dealers Inventory in oz
nil
Withdrawals from Customer Inventory in oz
 65,716.191 (JPM,Scotia)
Deposits to the Dealer Inventory in oz
nil
Deposits to the Customer Inventory, in oz
nil
No of oz served (contracts) today
 7  (700  oz)
No of oz to be served (notices)
631  (63,100)  oz
Total monthly oz gold served (contracts) so far this month
10,415  (1,041,500 oz) 
Total accumulative withdrawal of gold from the Dealers inventory this month
11,227.021
Total accumulative withdrawal of gold from the Customer inventory this month


 
250,110.13




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


We had 0   customer deposits:


total customer deposit:  nil oz



We had 2  customer withdrawals :


i) Out of JPM:  a huge 64,108.691 oz
ii) Out of Scotia:  1607.500 oz

total customer withdrawal:  65,716.191 oz  


We had 2  adjustment:

Out of the JPMorgan vault: a humongous 367,753.665 was adjusted out of the dealer and into the customer account. (over 11 tonnes of gold)

Out of the HSBC vault:  another huge 41,917.061 oz was adjusted out of the dealer and back into the customer account.

total of adjustments from the dealer to the customer account  409,670.726 oz




Thus the dealer inventory  rests tonight at 2.371 million oz (73.74) tonnes of gold.
The total of all gold at the comex rests at 8.95 million oz or 278.3 tonnes.
The comex is slowly losing its gold both at the dealer end and the customer. 

The CME reported that we had 0 notices filed for nil oz of gold today.   The total number of notices so far this month is thus 10,415 contracts x 100 oz per contract or 1,041,500 oz of gold. In order to establish what will be the total number of gold ounces standing, I take the OI for April (638) and subtract out Thursday's delivery notices (0) which leaves us with 638 contracts or 63,800 oz left to be served upon our longs. 

Thus  we have the following gold ounces standing for metal:

1,041,500 (served)  + 63,800 oz (left to be served upon )  =  1,104,600 oz or
34.35 tonnes of gold.

we lost 2300 oz  of additional gold standing for the April gold contract. This is turning out to be a very big delivery month!1




Silver:



April 18.2013:  April silver: 


Silver
Ounces
Withdrawals from Dealers Inventory599,490.226 (Scotia)
Withdrawals from Customer Inventory 78,143.22 oz (Brinks,CNT,Delaware,Scotia)   
Deposits to the Dealer Inventory nil
Deposits to the Customer Inventory  599,490.226 (JPM)
No of oz served (contracts)3 contracts  (15,000 oz)  
No of oz to be served (notices)28  (140,000 oz)
Total monthly oz silver served (contracts) 717  (3,585,000 oz)
Total accumulative withdrawal of silver from the Dealers inventory this month1,272,381.0 oz
Total accumulative withdrawal of silver from the Customer inventory this month4,308,186.4


Today, we  had good activity  inside the silver vaults.

 we had 0 dealer deposits and 1  dealer withdrawals.

Out of Scotia:  599,490.226 oz leaves the dealer and this silver enters the vault of JPM.


We had 1 customer deposit:

i) Into JPM: 599,490.226 oz 

Total deposits:  599,490.226  oz

We had 4 customer withdrawals:

i) Out of Brinks:  3,986.60 oz
ii) Out of CNT:  8,295.52 oz
iii) Out of Delaware:  1002.60 oz
iv) Out of Scotia:  64,838.50 oz




total customer withdrawal: 78,143.22 oz






we had 1  adjustments:

Out of the JPM vault:  661,907.28 oz gets adjusted out of the dealer account and enters the customer account.


Registered silver  at :  40.673 million oz
total of all silver:  165.354 million oz.




The CME reported that we had 3 notices filed for 15,000 oz of silver  for the non active contract month of April. In order to calculate the number of silver ounces that will stand, I take the OI for April silver (31) and subtract out Thursday's notices (3) which leaves us with 28 notices or 140,000 oz left to be served upon our longs.

Thus the total number of silver ounces standing in this non active delivery month of April is as follows:

3,585,000 oz served  +   140,000 oz to be served  =  3,725,000 oz

we gained 10,000 oz of additional silver standing.
This is also turning out to be a very good delivery schedule for what is usually a quiet month as April is a non active month for silver.




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:



April 18.2013:





Tonnes1,132.99

Ounces36,426,619.21

Value US$50.752   billion






april 17.2013:




Tonnes1,134.79

Ounces36,484,650.02

Value US$50.770  billion.











April 16.2013:



Tonnes1,145.92

Ounces36,842,510.43

Value US$50.827 billion














april 15.2013:



Tonnes1,154.34

Ounces37,113,325.95

Value US$51.757  billion












Tonnes1,158.56

Ounces37,248,735.63

Value US$57.181  billion







april 11.2013:












Tonnes1,181.42

Ounces37,983,860.22

Value US$59.431  billion






april 10.2013:










Tonnes1,183.53

Ounces38,051,570.10

Value US$59.918   billion








april 9.2013:

 

Tonnes1,200.37

Ounces38,593,255.69

Value US$60.859   billion






april 8.2013:






Tonnes1,205.31

Ounces38,752,008.51

Value US$61,001  billion







we  lost another  1.8 tonnes gold  at the GLD today following 22 tonnes on Friday and 4.2 tonnes on Monday  over 8 tonnes on Tuesday, and 11.13 tonnes of gold yesterday.



Ladies and Gentlemen, this is no gold liquidation..this is gold that China is demanding over in London. If any of our readers happen to be GLD shareholders, I urge you to depart from this vehicle and buy Sprott or Central Fund of Canada.

As a reminder the total comex gold had inventories of around 11 million oz in 2011. Today it broke below 9 million oz.Despite China's slowdown, it still have an insatiable appetite for gold.


end




And now for silver:




April 18.2013:


Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,451.01


april 17.2013



Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,451.01


April 16.2013:




Ounces of Silver in Trust336,007,785.800
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,451.01




april 15.2013

Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,497.59



 april 12.2013:


Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,497.59


 april 11.2013:

Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,497.59


april 10.2013
Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,497.59



april 9.2013:


Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,497.59


april 8.2013:
Ounces of Silver in Trust337,505,197.400
Tonnes of Silver in TrustTonnes of Silver in Trust
One metric tonne is equivalent to 1,000 kilograms or 32,150.7465 troy ounces.
10,497.59


today we lost zero oz of silver from the SLV.
Please note the big difference between the Gold at GLD and the silver at SLV 
I am now more convinced than ever to that fact that London England is out of silver.  They are not out of gold yet but must be getting real close.



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  at  negative 2.5% percent to NAV in usa funds and a negative 2.7%  to NAV for Cdn funds. ( April  18.2013)   

2. Sprott silver fund (PSLV): Premium to NAV rose to -0.18% NAV  April 18/2013
3. Sprott gold fund (PHYS): premium to NAV  rose to- .95% positive to NAV April 18/ 2013.


this is the first time we have ever seen a negative to NAV in Sprott's gold fund
this is the first time in 40 years that we have seen such a huge negative to NAV in the central fund of canada. The bankers are declaring war against real money.



end


And now for the major physical stories we faced today:



First off, we have your gold trading commentary from  Europe early Monday morning

The big laugh of the day:  CFTC probing gold plunge!!

(courtesy Goldcore)


CFTC Probe Gold Plunge, “No Visible Central Bank Activity” Say Blackrock

Tyler Durden's picture





From GoldCore
CFTC Probe Gold Plunge, “No Visible Central Bank Activity” Say Blackrock
Today’s AM fix was USD 1,397.00, EUR 1,070.17 and GBP 917.09 per ounce.
Yesterday’s AM fix was USD 1,379.00, EUR 1,046.12 and GBP 903.14 per ounce.
Cross Currency Table – (Bloomberg)
Gold lost $0.20 or 0.01% yesterday to $1,373.20/oz and silver also finished with a slight loss of 0.9%.
Lower gold prices have led to a rush to buy gold coins and bars globally. Value investors and store of wealth buyers are more than happy to exchange devaluing paper currencies for physical gold at these much cheaper prices.
It is ironic that manipulative selling by a large hedge fund or bullion bank may have ignited a mini gold rush globally.
US Mint data shows that a record 63,500 ounces, or a massive 2 tons, of gold were sold on Wednesday (April 17th) alone. This means that total sales for the month of April have surged to a significant 147,000 ounces. This is more than the previous two months combined with just half of April gone.
Similar strong demand is being seen throughout Asia and in western markets. We saw more buying than selling again yesterday and most of the selling was of small orders, less than fifty ounces, while buy orders were lumpier and from high net worth clients.
Demand is again particularly strong in India as Indian consumers are buying gold jewelry, coins and bars in record numbers which will boost gold imports this quarter as traders and banks run out of gold bullion inventories.
Overseas purchases may jump 36% to 305 metric tons in the three months ending June from 225 tons a year earlier, Mohit Kamboj, president of the Bombay Bullion Association Ltd., said in a phone interview with Bloomberg.
Imports may climb as much as 20% this month from year earlier, he said.
Buyers are flocking to jewelry stores and bank outlets to buy ornaments, coins and bars ahead of India’s main wedding and festival seasons after gold slumped to a two-year low.
The Commodity Futures Trading Commission (CFTC) is looking at the role of market speculators, CFTC Commissioner Bart Chilton told Bloomberg TV overnight after gold futures on Monday suffered their biggest one-day decline since at least 1983. Some have said that it was the largest decline ever.
The CFTC may take a deeper look into the price of gold following Monday's price plunge. Democratic CFTC Commissioner Bart Chilton told Bloomberg TV today that the drop doesn't necessarily mean "anything nefarious" happened but whenever something like this happens "we got to look at it."
“When you see such sharp move that is obviously something that raises our concern and we look at the trades and see what is going on,” he said. 
Regulators must look out for end-users first and ensure markets perform “properly”.

XAU/GBP, Daily – (Bloomberg)
The CFTC is already scrutinizing whether gold prices are being manipulated in London by a handful of banks who meet two times a day to set the spot price for a troy ounce of physical gold. The CFTC said in March that it is looking at issues including whether the setting of prices for gold—and the smaller silver market — is transparent and if it is fixed.
The $20 billion gold futures sale and concentrated selling of gold futures on the COMEX on Friday and Monday is far more likely to be “nefarious” than the gold fixings in London.
The CFTC’s track record to date has not been great and regulatory capture remains a real risk with the CFTC seeming to be reluctant to hold Wall Street banks who may be involved in price manipulation in the futures market to account.
After the Libor revelations, it is surprising that there is not more scrutiny and hard questions asked of banks and regulators in this regard.
Separately, large institutional fund manager Blackrock said that there was “no visible central bank activity” as the gold price plunged. 
They said that gold's fundamentals remain strong and that the fall in price was driven by an outflow of "hot money" and that gold prices are now near the marginal cost of new supply which should provide strong support at these levels and lead to higher prices again.

NEWS
Coin Sales Surge Despite Drop in Metal – Wall Street Journal

COMMENTARY
end

Yesterday the mint recorded a whopping 63 500 oz of gold eagles etc sold in one day.
So much for the comex being a price discovery mechanism!!

(courtesy zero hedge)



US Mint Sells Record 63,500 Ounces Of Gold In One Day

Tyler Durden's picture




One of the more curious revelations of the New Normal is the fundamental dichotomy when investing between paper "investors", or those who chase returns based on intangible, fiat-based and central bank-backed promises, such as capital appreciation or cash flow streams, and those who would rather convert their paper money into hard assets, even if said assets can not be, in the immortal words of Warren Buffett, fondled, or otherwise generate a cash-based return. Such as gold.
Today provides perhaps the perfect example of how the former increasingly trade on nothing but momentum and speculative mania (such as the previously reported record inflow of foreign capital into the Japanese stock market well after the bulk of the easy upside has already been made and at this point there is mostly downside) and where buying begets only more buying, while rampant selling only leads to liquidations, while those who invest in hard assets (and thus have little to no leverage) have become the true value investors, purchasing more as the price of the underlying asset drops. Yes, a novel concept to most High Frequency Trading vacuum tubes, and the momentum-chasing, equity trading "expert" du jour, but nothing new to Indians,AustraliansChinese or the Japanese.
And apparently to at least some Americans.
According to today's data from the US Minta record 63,500 ounces, or a whopping 2 tons, of gold were reported sold on April 17th alone, bringing the total sales for the month to a whopping 147,000 ounces or more than the previous two months combined with just half of the month gone.
Punchline number one, as the chart below shows, is that the more the price of gold fell, the more aggressive the purchases of physical gold through the Mint became, rising to 96,500 oz in the last two days alone. Buying more of something you want when the price drops: what a stunning concept - explain that to the algos who nearly crashed the German stock market overnight.
Punchline number two, of course, is that the US mint charges a hefty premium for purchases: much more so than traditional vendors like Apmex or Gainesville Coins, and is usually the last resort for when nobody else has any physical at a lower premium to spot (or any metal in inventory).
So how long until the US mint "runs out" of American Eagles and Buffaloes in inventory, along with the depletion of all other precious metal vendors? And what happens if the price of paper gold hits zero (or goes negative) courtesy of bank and financial institution liquidation selling of paper derivative contracts nebulously referencing some yellow metal somewhere, even as suddenly there is no physical to be delivered to anyone, anywhere?
Inquiring minds really want to know.
h/t Alex, source US Mint


end





Dave Kranzler of Dave from Denver describes the huge gold sales at the Mint:

(courtesy Dave from Denver/the GoldenTruth)


THURSDAY, APRIL 18, 2013

The Law Of Unintended Consequences

Gold has worked down from Alexander's time... When something holds good for two thousand years I do not believe it can be so because of prejudice or mistaken theory.  -  Bernard M. Baruch
Something most unusual happened yesterday - in the aftermath of the one of the most brutal one-day price drops in gold that I've ever witnessed  -  a paper/futures driven sell-off, mind you - U.S. retail buyers bought 63,500 ozs of gold American eagles from the U.S. mint.  This is by far a one-day record.   This is nearly 2 tonnes of gold purchased in one day by retail buyers.  A staggering amount.  That's 20% of the amount the falsely-reported gold sale from the Cyprus Central Bank.   What's most stunning about this is that historically, gold/silver buyers have scattered like frightened deer when gold undergoes a big price drop.  But this time was different.

While the widely reported price drop in gold has made great media "shock and awe" headlines, quietly the nationwide coin dealer supply of 1 oz. silver eagles and maple leafs has been rapidly depleted.  Dealers two weeks ago were selling silver eagles for spot +$2.50 +/-.  Yesterday I spoke with a very large owner of silver  eagle mint boxes (500 ozs/box) who was offered (bid) spot +$3.75 by two large coin dealers for everything he owned.

In fact, if you can find dealers with silver eagles to offer, you'll pay spot + $7.50-8.50 plus shipping.  So, in fact, despite the big sell-off in the price silver - again, driven by the paper/futures Comex - the true price of 1 oz. of real, physical silver that gets delivered to your possession has not declined at all (large buyers might be able to find silver eagles in quantity at more like spot +$4.50-5.00). 

If you see offers from your bank or insurance company-employed financial advisor to invest in an account that has gold/silver in it, run the other way.  ABN/Amro - the large Dutch bank - recently defaulted on investors who invested in a gold "account" and who wanted delivery of that gold:   LINK  If you had invested in that account and called to have the account liquidated and the gold sent to you, you got a letter back with a check in it.  This is exactly what gold market professionals have been warning about for years.  Coming soon to a fractional, paper precious metals account near you.

And don't think that can't happen in this country - like many Americans are delusionally wont to believe.  But it already has.  Morgan Stanley settled a big lawsuit several years ago because it defaulted on a silver investment account product.  When enough investors went to redeem their account and have the silver delivered, Morgan Stanley didn't have the silver.  The account was a Ponzi scheme:
The lawsuit, filed in August 2005, alleged that Morgan Stanley had told clients it was selling them precious metals that they would own in full and that the company would store. But Morgan Stanley was actually making either no investment specifically on behalf of those clients or making an entirely different investment of lesser value and security, according to the complaint.  LINK
The unintended consequence of all this banking system and corporate fraud that is going unprosecuted by the Obama Administration - contrary to what he promised to do in 2008 when he was campaigning - is that a larger cross-section of the American public are starting to catch on to the game being played by the banking and political elite.  Yesterday's gold sales by the mint is proof.

A paper currency that has no wealth-backing in the form of real, substantiated economic growth - or stored wealth created in the form of gold and silver (see Bernard Baruch's quote above) - is illegitimate.  Any Government that issues and prints such a currency is illegitimate.  The U.S. Government is illegitimate and the massive and growing amount of unpayable Treasury debt and unpayable future liabilities is the proof.

That more Americans are understanding the necessity of converting illegitimate paper dollars into physical gold and silver - especially when given the gift of a big price correction - is the unintended consequence of the past week's attempt to discredit the legitimacy of gold and silver by the banking/political elite.

end




Bullion dealer, Keith Barron reports on huge retail demand for both gold and silver and this is giving fits to UBS over in Switzerland and Scotiabank in Toronto. He believes that with demand for physical this high it will be impossible for our crooked bankers to smash our two metals any further in price.



(courtesy Keith Barron/Kingworldnews/GATA)



Bullion banks see huge metal offtake, mining entrepreneur Barron says

 Section: 
6:13p ET Wednesday, April 17, 2013
Dear Friend of GATA and Gold:
Mining entrepreneur Keith Barron tells King World News tonight that enormous retail demand for the monetary metals is swamping bullion banks UBS in Switzerland and Scotiabank in Canada. With supplies of real metal drying up, Barron doesn't expect the price smashing to last long. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end




The following will be watched by many in Canada. It will not be aired into the USA or Europe.
I will provide the tape for you on Saturday.  One whistleblower Maguire is definitely being interviewed by the hosts and maybe there is another one!!...stay tuned

we have been sitting on this for some time fearing another cancellation of a vital expose.

Bill Murphy...of GATA


 "OK, so here is what I have been sitting on since early August, or what I was informed of re the CBC documentary tonight. There were two whistleblowers who worked for JPM who went to the CFTC about JP Morgan rigging the precious metals markets. This most inept and corrupt agency in the world would not deal with it. One of the whistleblowers was so scared for his life in the aftermath he moved to China and won’t tell anyone where he is. He was interviewed via Skype for the documentary tonight. We shall see if it survived the editors."




(courtesy GATA)


'Secret World of Gold' celebrates metals market rig whistleblower Maguire

 Section: 
Brian McKenna Explores 'The Secret World of Gold'
Documentarian Reveals the Drama and Danger Behind One of the World's Oldest Currencies
By T'Cha Dunlevy
Montreal Gazette
Wednesday, April 17, 2013
MONTREAL -- Brian McKenna didn't predict the recent nosedive in gold prices, but he knows someone who did.
"Andy sent me an email early Friday morning," recounted the Montreal director. "He said, 'There's a big event happening. Someone's dumping 500 tons of gold into the market.' That ended up driving the price down by $78 an ounce. And 500 tons is 16 million ounces -- we're talking about a serious intervention here. Who's got that kind of money?"
"Andy" is Andrew Maguire, a key source in McKenna's fascinating new film "The Secret World of Gold," which premieres Thursday at 9 p.m. on CBC-TV. The hour-long documentary plunges into the dramatically rich narrative of gold, unveiling some shocking facts along the way.
"I was just going to do a history piece, until I stumbled over a whistleblower," McKenna said.
A former gold and silver trader, Maguire denounces the shady tactics of the industry of which he was once an integral part, breaking down the ways in which precious metal prices are manipulated using insider trading.
"He was tremendous," McKenna said. "It took me eight months to persuade him to come on camera, but I was willing to wait. I knew he was critical to the film. It turns out he was burned by the BBC. He spent seven months showing them everything, going online and showing them the way things worked. Then after all that, they said, 'The show's been killed.'
"Word on the street is that Tony Blair, who is on a retainer to JPMorgan for $2 million a year, made a call (and the story was dropped). Did that happen? I don't know. It's an opinion that people hold; it doesn't make it so. But something made the BBC stop an important investigation into which they had probably invested three-quarters of a million dollars."
McKenna's film also explores the secretive smuggling of European gold reserves during the Second World War, and how gold has gone from a reliable physical currency to an abstract concept, bought and sold in the blink of an eye on the stock market, taking on all the baggage of modern global finance in the process.
An investigative journalist and historian, McKenna estimates he has made 100 films over his career, including many provocative documentaries on war and politics. The topic of gold presented itself to him in the form of a rumour.
"A long time ago, I heard a story which I wasn't sure was true," he said, "about all this gold coming to the Sun Life Building's vaults, far below the surface at the height of the Second World War. I thought, 'That's curious,' but it turned out to be a critical moment in the war: If that gold had ended up at the bottom of the ocean, England wouldn't have had the money to buy arms from the U.S., which was operating on a cash-and-carry basis, and fight off Hitler."
Vast amounts of French and English gold were shipped to North America to avoid being claimed by the Nazis, McKenna reveals, with Montreal and Ottawa becoming important for storage. It's but one example among millions of gold being moved, hidden, stolen, reclaimed, and sunk to the bottom of the sea through the ages, making and breaking many a nation along the way.
Those expecting an escapist narrative about the enduring allure of one of the world's oldest currencies don’t know McKenna. A founding producer of The Fifth Estate, he's like the anti-Midas: he can't help but dig up the dirt on anything he touches.
His 1992 CBC documentary "The Valour and the Horror" received five Gemini Awards, while sparking a CRTC investigation, a Senate inquiry, and a $500 million lawsuit by Air Force veterans, which was dismissed. All to say, the man is used to ruffling feathers. In keeping with tradition, "The Secret World of Gold" is far from a puff piece.
"It's the toughest documentary I've ever made," McKenna said. "It took over a year and led me down so many corridors. Once you go down one corridor, two doors open, and you don't know which one to take. This happened over and over. It's virgin territory. No one has been down this path before to report it."
Though his film reveals amazing things about humanity's conflicted relationship with gold, McKenna was most excited by the human story at its centre. Maguire may well have put his life on the line by speaking out, the director explained.
"We weren't able to include it in the film, because it's still a mystery, but it looks like somebody tried to kill him. Two days after he blew the whistle (to the Gold Anti-Trust Action Committee, in 2010), out of nowhere a van rammed and almost demolished his car. And there was almost no investigation.
"Andrew Maguire standing up as a gold and silver trader and saying, 'This is wrong' -- that's the kind of courage I like to capture in my documentaries, whether it's people who (survived) Auschwitz, who escaped, and lived to tell their story, or veterans who thought bombing women and children in the Second World War was not the best strategy, and stood by me when all hell broke loose.
"Celebrating heroes -- I like to do that."



end




Ross Norman of Sharp Pixley states that paper gold may be down in price but physical demand is unprecedented:





Gold crashes but physical demand sees unprecedented demand



The monumental short selling on COMEX on Friday and Monday had the desired effect — it took out key technical levels and precipitated a cascade of further selling as traders who were long the June contract capitulated. The selling begat more selling and the rest is history. A classic short squeeze executed to perfection.
The trading decision to short gold was taken, we think, after successful smaller attempts by a few hedge funds in January and December who had “cased the joint” following what appeared to be a 'normalizing economy,' an argument strengthened by gold’s apparent failure to rally on Cyprus, Bank of Japan QE and of course North Korea. It was then a question of timing...  On the gold futures exchange, the traders have a gearing of about 20:1 over the physical traders aided in great part by a reduction in the margin requirements by CME last November (they have since reversed that position).
Since then, the Q1 economic growth story has faded fast, but the trap had already been set. The selling on COMEX was large and fast — a really spectacular display of shock and awe. There is no other way.
With gold falling to a low of $1,335, physical demand started slowly but has picked up momentum. The Indian market was the first to respond as prices bottomed (no surprise there — they are always adept at spotting bargains), followed soon after by Dubai, Japan, Europe and now China. Sourcing small denomination bars is now proving difficult as stocks evaporate and dealers can expect to wait between 4 and 6 weeks for fresh stocks from the gold refiners. Premiums on bars, as one might expect, are rising fast.
Rarely has the gold market seen such a clear split, with the paper traders heading south while the physical heads north. The former has the advantage of leverage (via the futures) while the latter has scale.
Most encouragingly for gold bulls has been the resoluteness of gold ETF buyers — a hybrid if you will of physical and paper — who are the real investors and appear to be largely unshaken by the decline; in the week to April 17, ETF holdings have fallen by only 1.8 moz to 80.21 moz in holdings — a decline of about 2%. Figures from the CFTC have not yet been released but we would expect futures selling to outweigh this by a factor of about 300-fold.
Disappointingly on the other hand for gold bulls has been the price reaction to the decline, which again can only be described as lackluster — we would have expected prices to rise to $1,450 (a 50% retracement on the move lower) and then the key technical level of $1,540.
This leaves the market with a large long and large short position — and they cannot both be right — gold is therefore set up over the next few weeks as specs take on investors. Place your bets please ...
About the Author
Ross Norman
Ross Norman
Ross Norman is owner and chief executive officer of the London-based gold broker Sharps Pixley Ltd.


end

Long time analyst John Brimelow comments that the recent plunge in the gold price was orchestrated by one single entity to panic the market.  He believes that that entity is the Federal Reserve Bank and he believes this was done to keep investors in the stock market and not bail out of equities.  So they raided gold to keep this investment "ugly"

(courtesy John Brimelow/GATA)

Gold plunge was 'orchestrated,' likely by Fed, Brimelow says

 Section: 
2:05p ET Thursday, April 18, 2013
Dear Friend of GATA and Gold:
Gold market letter writer John Brimelow, a longtime GATA supporter, tells Kevin Michael Grace at Resources Wire that the recent plunge in the gold price was "orchestrated" by a single entity to panic the market. Brimelow adds that the Federal Reserve may have decided to attack the gold market because it competes for investment with the stock market. The interview is headlined "Orchestrated Panic" and it's posted at Resources Wire here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
end




Another great piece from Chris Martenson on the unintended consequences of the gold and silver smash Friday and Monday and that is huge demand from India and other gold loving nations:

(courtesy Chris Martenson/Peak Prosperity/GATA)

Chris Martenson: The unintended consequences of the gold and silver smash

 Section: 
11:30a ET Thursday, April 18, 2013
Dear Friend of GATA and Gold:
Market analyst Chris Martenson today notes that the smashing of gold and silver prices has unleashed frenzied demand around the world for the real stuff. Martenson also notes "numerous oddities" in the timing of the smash. His commentary is headlined "Unintended Consequences Are Increasing World Demand for Gold" and it's posted at his Internet site, Peak Prosperity, here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end



In part II of his interview with Eric King, Keith Barron talks about the great length of time the Germany is giving the USA to repatriate its gold"

(part ii/Kingworldnews/Keith Barron/GATA)

Barron notes unavailability of German gold, possibility of Swiss purchases

 Section: 
10:24a ET Thursday, April 18, 2013
Dear Friend of GATA and Gold:
Mining entrepreneur Keith Barron, interviewed by King World News, notes the unavailability of most German gold for return from the Federal Reserve Bank of New York, likely because of its impairment by leases, as well as the political movement in Switzerland to require the Swiss National Bank to buy 1,000 tonnes of the monetary metal:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

end  




My favourite chief executive Gord McEven  (formerly CEO of Goldcorp) talks about what he believes we will see in gold:

(Gord McEwan/BNN )


Gold bug McEwen still sees $5,000 bullion

Scott Anderson, BNN.ca


11:57 AM, E.T. | April 18, 2013


Gold has hit bottom and will eventually top $5,000 US an ounce as interest rates move higher, Canadian gold industry executive Rob McEwen tells BNN.
"I think we are at the bottom for gold. We have seen the bottom and some time this fall it will be a lot easier [for gold producers] to raise money," says McEwen, chairman and chief executive of McEwen Mining.
McEwen says a future rise in interest rates will translate into higher prices for gold, predicting bullion will eventually exceed the $5,000 mark.
"Investors need to look at the fact that gold goes through these cycles with a fair amount of regularity. At the moment the gold shares are trading at levels we haven't seen since 1999, which was a very opportune time to get into the market."
Gold was hovering around $1,394 US an ounce on Thursday after plunging earlier this week on weak data from China and worries about slowing global economic growth.
McEwen expects the industry will see very little financing over the next six months until an uptick in the price of gold sparks a new round of financing opportunities in the fall.
"At the moment it is very difficult to raise money in the sector…," McEwen says.
A recent study showed that for the first time in more than a decade Canada's mining sector did not register a single initial public offering in the first quarter of the year on the Toronto Stock Exchange or Venture Exchange.
But McEwen, the founder and former chief executive of Goldcorp (G-T 28.93 0.98 3.51%), says some members of the industry will have an easier time raising money than others.
"The mid-tier and some of the larger juniors are probably going to be active in the space and the exploration companies without any cash are going to be at the mercy of the market," he says.
However, he maintains that the big companies are doomed for the next 12 months as they tread cautiously amid shareholder criticism about the underperformance of their share prices.
"The seniors are going to be dead in the water for the next 12 months," McEwen says. "In many cases they have fired their CEOs and the boards are probably quite vulnerable in thinking they are next because they endorsed the CEO strategy."


http://www.bnn.ca/News/2013/4/18/Gold-bull-McEwen-still-sees-5000-bullion.aspx


-END-


  Brent Johnson CEO Mountainstargold reports on Barrick and how it looks like these guys have lost the Pascua Lama deposit in the courts.


If Barrick loses its entire deposit it has other related problems in that it has sold to Silver Wheaton all of its silver production.  Barrick would have to get the silver from its other mines but it has already leveraged these.  Barrick may be in some very serious trouble.





\
Brent Johnson...
To everyone,


The announcement that the courts have shut down Barrick at Pascua, is the catalyst that has put them into serious trouble. When Jorge and I gave depositions with the Fiscal Attorney General on Oct. 15th last year, the department of geology shut them down two days later. Barrick kept this as quiet as possible.
Barrick have lost the Pascua deposit and have known it for at least one year. Management of MSX is working on several fronts to bring this to a good conclusion for us shareholders. This includes a large financing which is progressing at this time. THIS WILL FINISH BARRICK AT PASCUA and send MSX on our way to success.
Jorge is back in Chile and has had his first court success on Monday. Keep tuned.
Brent.

end 





And now for our paper stories




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

Overnight sentiment will come from zero hedge

Major points:

1.Europe rebounds lifted by our two most important crosses:  the Euro/USA and USA/Japan
with the Euro rising against the dollar and the yen falling in value also against the dollar as these carry trades try to lift bourses around the world.

2. The lower yen value did not help Japan with the Nikkei falling by 1.22%

3. The Shanghai composite rises by .17% even though home prices are rising in 68 out of 70 cities surveyed.  Last month it was 66 out of 70.  China must deal with hot speculative money causing this bubble as well as rising prices

4. Germany approved the Cyprus bailout and its plunder of gold.

5. As we explained yesterday, the Cypriot parliament must approve the bailout. This must be watched.

6. The Italian police search through the offices of J.P.Morgan in Milan for clues in the Monte de Paschi scandal.

7.  Spain sold 4.71 billion euros worth of sovereign bonds with the buyers being the following:

     i) the Spanish pension funds which are now close to 100% of total holdings.
     ii)the Spanish banks, seeking yield
     iii Japanese banks  seeking yield.

8.  Bloomberg economist, David Powell states that Spanish sovereign debt is unsustainable despite a lower yield on the 10 year bond lately.

9.Citibank's Jurgen Michels states that in May the central ECB must lower rates as the economy is faltering. He expects to see the dollar rising against the Euro.

9b  UK Retails sales down this morning.

10.  A recap of this morning's trading:



MARKETS
  • Spanish 10Y yield down 6bps to 4.62%
  • Italian 10Y yield down 5bps to 4.2%
  • U.K. 10Y yield up 2bps to 1.7%
  • German 10Y yield up 2bps to 1.25%
  • Bund future down 0.13% to 146.05
  • BTP future up 0.37% to 113.12
  • EUR/USD up 0.24% to $1.3063
  • Dollar Index down 0.2% to 82.52
  • Sterling spot up 0.02% to $1.5241
  • 1Y euro cross currency basis swap up 1bp to -21bps
  • Stoxx 600 up 0.61% to 285.47

11. Soc Gen and Deutsche Bank provide details of this morning's trading and sentiment



Overnight Sentiment: Attempting A Rebound

Tyler Durden's picture




Following yesterday's most recent Europe-led rout, the market is attempting a modest rebound, driven by the usual carry funding currency pair (EURUSD and USDJPY) levitation, although so far succeeding only modestly with not nearly enough overnight ramp to offset the bulk of yesterday's losses. In a centrally-planned, currency war-waging world, it is sad that only two key FX pairs matter in setting risk levels. But it is beyond hypocritical and highly ironic that according to a draft, the G-20 will affirm a commitment to "avoid weakening their currencies to gain an advantage for their exports." So the G-20 issues a statement saying nobody is doing it, when everyone is, thus making it ok to cheapen your exports into "competitiveness"? In other words, if everyone lies, nobody lies. Of course, also when everyone eases, nobody eases, and the world is back to square one. But that will only become clear eventually.
Nikkei's drop of 1.22% overnight, a market which has become as bad as penny stocks in its daily volatility, driven by a rise in the USDJPY has not helped (especially in the aftermath of the record foreign capital surge into Japanese stocks), and the modest 0.17% rise in the Shanghai Composite is actually far better than expected considering China reported new home prices rising in 68 out of 70 cities in March (compared to "only" 66 in February), meaning the country will continue to focus on eliminating hot, speculative money from its economy.
In Europe, Germany officially approved the Cyprus "bailout", and the associated plunder of its gold. Now the decision is back in the hands of the Cypriot parliament. In Italy, the Bersani and Berlusconi parties are said to be close to backing Senate speaker Franco Marini as a presidential candidate but we will believe a compromise when we see it.  More importantly, the Italian financial police, after allegedly confiscating €1.8 billion worth of Nomura assets several days ago, has now searched through the offices of JPM in Milan in its ongoing Monte Paschi probe. In Spain, the country sold €4.71 billion in 2016 and 2023 bonds, more than the target, with local banks (who reported an amusing drop in the bad loan ratio from 10.78% to 10.39% - must be all those loans handed over to the bad banks) and the pension funds, as well as Japanese banks, likely buying. Ironically hours prior, Bloomberg's economist David Powell said the Spanish sovereign debt is close to unsustainable.
Also speaking of Europe, Citi's Jurgen Michels said it is likely that the ECB will lower rates in May and again later this year, with euro area in recession and poor funding conditions in periphery countries. He added that he expects generalized dollar strength in the coming months.
Back in the US earnings season so far is off to a rather miserable start: today we will get Morgan Stanley, IBM, Microsoft and Google. Initial jobless claims will be closely watched as they cover the survey period for April’s payrolls. We also have the Philly Fed survey, where the market is looking for an improvement to 3.0 (vs 2.0 previous month).
A quick recap of European markets, which have so far proven less prone to flash crashing than yesterday:
MARKETS
  • Spanish 10Y yield down 6bps to 4.62%
  • Italian 10Y yield down 5bps to 4.2%
  • U.K. 10Y yield up 2bps to 1.7%
  • German 10Y yield up 2bps to 1.25%
  • Bund future down 0.13% to 146.05
  • BTP future up 0.37% to 113.12
  • EUR/USD up 0.24% to $1.3063
  • Dollar Index down 0.2% to 82.52
  • Sterling spot up 0.02% to $1.5241
  • 1Y euro cross currency basis swap up 1bp to -21bps
  • Stoxx 600 up 0.61% to 285.47
SocGen provides the key macro catalysts for the day:
Risk appetite has considerably diminished this week as volatility has returned to two-month highs and the correction in commodities is causing ripples across fx, equities and rates: mixed US and Chinese indicators triggering a downward revision to inflation expectations and ongoing ultra-accommodative monetary policies within the G10 make it difficult for investors to get a handle on the medium-term outlook. With gold and the yen visibly having lost their safe haven status, where can investors turn? Bond markets appear to be the asset of choice at the moment, with the ECB's Weidmann yesterday in uncharacteristic fashion beating the ‘easy policy' drum: since the beginning of the week, Portugal, Sweden, the Netherlands, Spain and Italy bond markets have outperformed in Europe. Treasuries and Gilts are also in demand. So much for fears of a bond bubble.
Right now, investors are still hunting for yield by moving further down the curve and picking up lower credit quality, supported by the flood of liquidity and the stimulative central bank policies in the West. However, it is still difficult to determine whether bullish trends in most asset classes will prove sustainable as signs of a macro slowdown emerge. In particular, we note that European stress has not disappeared, even though the ECB's OMT is still suppressing underlying budget and credit anxieties as discussions over banking supervision are ongoing. Italy will welcome a new president mid-May as the selection process gets underway today. However, the country still has no government, though optimists would argue that day-to-day affairs are run by PM Monti and government funding has proceeded without difficulty.
The G20 may address some of these topics this weekend, not to mention the threat of competitive devaluation in Japan (a source of friction at the G7 in Moscow earlier this year). Against this backdrop, short-term investment strategies will have to factor in uncertainty and remain prudent: this continues to be a favourable backdrop for global bonds, US and Japanese equities in particular, and positive overall for the dollar.
* * *
And a full summary of the past 24 hours from DB's Jim Reid
Markets were also fairly depressed yesterday and it continues to be a year where risk perhaps feels healthier than all the actual hard numbers suggest. With yesterday's sell-off, where the DAX and CAC were down -2.34%, and -2.35% respectively, these two markets are now in negative price territory YTD. Indeed within the G20, although the Nikkei (+28% YTD), the S&P 500 (+8.8%), the ASX200 (+7.2%) and the FTSE (+5.9%) are among the stand-out performers, only 9 of the bourses in the G20 countries are higher for 2013 (all in local currency terms). There also is a sizeable dispersion within the EM side of the G20 as evidenced by the strong performance of Indonesia’s Jakarta Composite (+16%) and Mexico’s IPC (+20%) against the YTD losses for Brazil’s BOVESPA (-13%).
Commodities are also lower across the board, while fixed income and credit remain strong relative performers. Overall it does seem to be turning into a year of weaker correlations between asset classes.
Back to yesterday, Germany’s DAX set the tone early on with chatter that the country’s credit ratings could be downgraded. Investors feared a downgrade from S&P and Moodys but it was the lesser-known Egan-Jones who eventually came out with the downgrade towards the end of the US session (from A+ to A). The news had little effect on US equities which were well and truly trading in the red at the time. Even a relatively upbeat Fed Beige Book failed to buoy the S&P500 which closed near the lows of -1.43% as technology stocks led the declines.
Amongst the notable moves, Apple dropped 5.5% after one of its audio chip suppliers, Cirrus Logic, reported an inventory glut that investors interpreted as suggesting a shortfall in iPhone sales. In other asset classes, credit again showed some resistance to the rest of the market with the CDX IG and European iTraxx indices trading unchanged for much of the day before closing a touch weaker. 10yr UST yields firmed a 1bp to 1.68% while core bond yields elsewhere rallied around 3-4bp. In the commodities space, gold (+0.67%) traded firmer while Brent (-2.75%) fell for the sixth straight day. Copper was also down 4%.
Earnings were on the disappointing side yesterday, with nine out of 14 S&P500 companies missing revenue expectations and one-third missing EPS expectations. Amongst the highlights was Bank of America who missed earnings estimates after recording a 20% yoy drop in FICC trading revenues which DB’s equity analysts point out is softer than peers which have seen revenue declines of 5-10%.
Turning to the overnight news, the G20 is expected affirm its commitment to avoid competitive currency devaluations in a draft communiqué being prepared for this week’s IMF/G20 meetings (Bloomberg). The USDJPY initially traded lower following the headline, but it has since rallied back up towards 98.2 to be unchanged on the day, probably because the language essentially maintains the G20’s pledge made in February to “.move towards more market-determined exchange rates”. Staying in Japan, local newswires are reporting that the BoJ will raise its forecasts for consumer price growth and may say it expects to achieve 2% inflation as early as spring 2015 at its policy board meeting on April 26th (Nikkei).
Elsewhere in Asia, equities are trading lower taking the lead from yesterday’s risk sentiment in the US and Europe, although most Asian bourses are off the early lows. Losses are being paced by the Hang Seng (-0.1%), Nikkei (-0.3%) and KOSPI (-0.7%). The AUD is unchanged against the greenback at around 1.03 while most commodities continue to edge lower overnight. In China, the focus is on the latest property price data which showed that prices in 70 cities rose 1.5% month-onmonth in March, including sharp gains in some major cities. There is talk of distortion in the data as a number of property buyers purchased in March ahead of new government austerity measures which were implemented at the start of April Later today, the Italian parliament will convene to elect a successor to President Napolitano. Yesterday, the center-left’s Bersani proposed former Senate speaker Franco Marini as candidate for Italy's president. Marini, a former unionist, also got the support of the caretaker PM Mario Monti and center-right leader Berlusconi.
Nevertheless, Marini’s election still has an element of uncertainty. Marini faces opposition from within Bersani's own coalition, with Bersani’s main party rival, Matteo Renzi, immediately saying he would not back the candidacy. Renzi described Marini as "a candidate from the last century" (Reuters).
Moving on to the day ahead, Morgan Stanley, IBM, Microsoft and Google will highlight a busy day on the earnings calendar. Initial jobless claims will be closely watched as they cover the survey period for April’s payrolls. We also have the Philly Fed survey, where the market is looking for an improvement to 3.0 (vs 2.0 previous month).
end




Then just before NY opens we get this from Europe:


Euro Hit By Two-Headline Punch

Tyler Durden's picture




Yesterday it was headlines from Bini-Smaghi and Weidmann punching the lights out for the Euro (which as we have been saying all along, needs to be lower not higher to promote some glimmer of hope for Europe). Moments ago it was two new headlines, which if not market crushing on their own, show how increasingly precarious Europe is.
  • ITALY PARLIAMENT FAILS TO ELECT PRESIDENT IN FIRST BALLOT
  • MERKEL FALLS SHORT OF COALITION MAJORITY ON CYPRUS VOTE
In other words, despite hopes that the Italian political chaos would stabilize following a compromise presidential candidate (which we noted earlier today we would believe when we saw), Italy continues to be an ungovernable chaos. As for Germany, Merkel was forced to rely on opposition votes to pass the critical Cyprus rescue package on which she has literally bet the future of Germany and her political career. While not unexpected, this portends poorly for the Chancellor's September reelection chances, especially if the German anti-Euro party continues its recent surge in popularity in the past few weeks.
Bloomberg has the breakdown:
  • Chancellor Merkel gained 303 votes from her own coalition lawmakers in a vote today to approve aid for Cyprus, fewer than needed to secure their own simple majority in the 620-seat lower house of parliament, the chamber’s press office said in an e-mailed statement.
  • 220 CDU-CSU lawmakers backed the aid program of EU9b while 10 rejected the package; 83 FDP lawmakers backed the move and 8 rejected it, meaning Merkel depended on opposition parties to get the package approved
EUR reaction is swift, although it may be discounting the amount of "political capital" invested...

end



Goldman now confirms the huge slowdown in the global economy:

(courtesy Goldman Sachs/zero hedge)

Goldman Confirms Slowdown Accelerating

Tyler Durden's picture




Two weeks ago we showed the notable cyclical collapse inGoldman Sachs' business cycle 'Swirlogram', due to a combination of downward revisions in over-adjusted data and actual economic decline. The latest 'swirlogram' shows that thesituation has gone from bad to worse. While hope remains due to strength in AUD and CAD (commodity) currencies,Consumer confidence, global PMIs, and Industrial metals have all worsened significantly pushing the Global Leading Indicator momentum down notably. The next key indicators Goldman are watching are Belgian and Dutch manufacturing, Japanese Industrial Production Inventory/Sales, and Korean exports and they remain cautious of the increasing fiscal drag in the US.

How quickly we flopped from expansion to slowdown...

and Goldman's GLI points to future deterioration inglobal industrial production...

Charts: Goldman Sachs

IMF Warns Spanish Debt-Load Is Unsustainable

Tyler Durden's picture




In the six months since the IMF last provided its economic forecasts, the situation in Spain has gone from bad (but sustainable) to worse (and unsustainable). Their current forecasts show no 'peak' in debt-to-gdp ratios at least as far as 2018 with the budget deficit primarily to blame.

As Bloomberg Briefs notes, general government primary borrowing, a measure that excludes the cost of paying interest on government debt, was revised up to 7.9% of GDP from 4.5% for 2012.

The inability to narrow the budget deficit, surprise surprise, appears partially due to lower real GDP growth forecasts and even then a recent study has found that World Economic Outlook real GDP growth forecasts showed a tendency to systematically exceed outcomesThis phenomenon was particularly prevalent in countries with an IMF-supported program.

The IMF warns Spain "will need to undertake unprecedented fiscal efforts to bring their debt ratios to traditional norms," as most countries have never experienced debt levels similar to current ones; and seemed to think a debt restructuring is more likely and will "entail substantial and long-lasting economic and social costs."



end




At least the USA issues food stamps.
The following is very sad!!

(courtesy zero hedge)


The Euro Legacy: In Greece, Children Pick Through Trash Cans For Food

Tyler Durden's picture




"We have reached a point where children are coming to school hungry," as with an estimated 10% of Greek elementary and middle school students suffering from 'food insecurity', the troubled nation has fallen to the level of some African countries. As the NY Times reports, unlike the US, Greek schools do not offer subsidized cafeteria lunches. Exacerbated by the austerity measures including cuts in subsidies for larger families, the cost has become insurmountable for many. With 26% of Greek households on an 'economically weak diet', children are starting to steal for food and picking through trash cans as they proclaim, "our dreams are crushed." What is frightening is the speed at which it is happening, "a year ago it wasn't like this," as one family talks of the 'cabbage-based diet' which it supplements by foraging for snails in nearby fields. Programs are being started to help from wealthier Greeks, but as one parent said,"unless the EU acts, we're done for."

As an elementary school principal, Leonidas Nikas is used to seeing children play, laugh and dream about the future. But recently he has seen something altogether different, something he thought was impossible in Greece: children picking through school trash cans for food; needy youngsters asking playmates for leftovers; and an 11-year-old boy, Pantelis Petrakis, bent over with hunger pains.

...

“Not in my wildest dreams would I expect to see the situation we are in,” Mr. Nikas said. “We have reached a point where children in Greece are coming to school hungry. Today, families have difficulties not only of employment, but of survival.”

...
Last year, an estimated 10 percent of Greekelementary and middle school students suffered from what public health professionals call “food insecurity,” ... “When it comes to food insecurity,Greece has now fallen to the level of some African countries,” she said.

Unlike those in the United States, Greek schools do not offer subsidized cafeteria lunches. Students bring their own food or buy items from a canteen. The cost has become insurmountable for some families with little or no income. ...

... classmates are frequently hungry, she said, and one boy recently fainted. Some children werestarting to steal for food, she added. While she does not excuse it, she understands their plight. “Those who are well fed will never understand those who are not,” she said.

“Our dreams are crushed,” added Evangelia, whose parents are unemployed but who is not in the same dire situation as her peers. She paused, then continued in a low voice. “They say that when you drown, your life flashes before your eyes. My sense is that in Greece, we are drowning on dry land.”

...

This year the number of malnutrition cases jumped. “A year ago, it wasn’t like this,” Ms. Perri, said, fighting back tears. “What’s frightening is the speed at which it is happening.”

...

Mr. Petrakis said he felt emasculated after repeatedly failing to find new work. When food for the family ran low, he stopped eating almost entirely, and rapidly lost weight.

“When I was working last summer, I even threw away excess bread,” he said, tears streaming down his face. “Now, I sit here with a war running through my head, trying to figure out how we will live.”

When the hunger comes, Ms. Petrakis has a solution. “It’s simple,” she said. “You get hungry, you get dizzy and you sleep it off.”

A 2012 Unicef report showed that among the poorest Greek households with children, more than 26 percent had an “economically weak diet.” The phenomenon has hit immigrants hardest but is spreading quickly among Greeks in urban areas where one or both parents are effectively permanently unemployed.

...

He has not found work for three years. Now, he said, his family is living on what he called a“cabbage-based diet,” which it supplements by foraging for snails in nearby fields. “I know you can’t cover nutritional basics with cabbage,” he said bitterly. “But there’s no alternative.”

...

“I’m not saying we should just wait for others to help us,” he said. “But unless the European Union acts like this school, where families help other families because we’re one big family,we’re done for.”


end

From the Wall Street Journal, Hollande is now ready to abandon austerity:

(courtesy Wall Street Journal)_


France slams brakes on austerity: The WSJ discussed France's decision to slow its deficit-reduction push in an effort to avoid sending the economy deeper into recession. Recall that France's abandonment of a plan to reduce its budget deficit to 3% this year had already been telegraphed and widely reported in the press. The article noted that France's revised deficit-reduction trajectory now calls for a gap of 3.7% of GDP in 2013 and 2.9% in 2014, following a worse-than-expected 4.8% in 2012. It also highlighted comments from French President Hollande, who stressed that he views more austerity at this stage as a risk, not a remedy. The paper went on to point out that so far, investors have ignored concerns that the government is not doing enough to put the country's finances on the right path.


end


Auditor warns China debt crisis could dwarf GFC




There are warnings that China could face a financial crisis bigger than the United States or Europe unless it gets its debt under control.
One of China's top auditors has revealed his accounting firm has stopped approving requests from local governments to increase their debt exposures…


http://www.abc.net.au/news/2013-04-18/auditor-warns-china-d
ebt-crisis-could-dwarf-gfc/4636648




-END-








Early Thursday morning currency crosses;  (8 am)


Thursday morning we  see euro strength against the dollar from the close on Wednesday  with this time trading just above the  1.30 mark at 1.3065 . The yen this  morning  resumes its bleeding  against  the dollar for now,  trading above the 98 column early in the session  at  98.433 yen to the dollar.  . The pound, this morning is a lot stronger against the USA dollar at 1.5271 . The Canadian dollar is a bit stronger  against the dollar at 1.0231.   We have the sentiment this morning with a  risk on situation as all European  bourses are all in the green.   The Nikkei exchange finished mildly in the red on the day even as  it is on steroids with the massive QE announced.  Gold and silver are way up  in the early morning, with gold trading at $1397.20 (up $15.00)  and silver is at $23.54 up 34 cents in early morning European trading.

The USA index is down 12 cents at 82.50.



Euro/USA    1.3065  up  .0034
USA/yen  98.433  up .306
GBP/USA     1.5271 up .0032
USA/Can      1.0231 down .0031

end






And now your closing Spanish 10 year bond yield: (drop of .01 in yield)




SPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE

GSPG10YR:IND

4.670.01 0.30%
As of 12:00:00 ET on 04/18/2013.




end


Your Italian 10 year bond yield;  (rise in yield of .01)





Italy Govt Bonds 10 Year Gross Yield

GBTPGR10:IND

4.260.01 0.24%
As of 11:59:00 ET on 04/18/2013.







end





The Euro weakened  this afternoon (see zero hedge story) settling at 1.3048 .  The yen strengthened a tiny bit late in the afternoon  at 99.212.  The pound also strengthened a bit this afternoon finishing at 1.5277.  The Canadian dollar  weakened this afternoon  against the dollar closing at 1.0262.



The USA index fell  from the morning session with the final index number down 4 cents to 82.58

Euro/USA    1.3048 up  .0017
USA/Yen  98.212    up  .10
GBP/USA     1.5277  up .0038
USA/Can      1.0262     flat







end.




Your closing figures from Europe today. 

mixed today with the only bright spots being Spain and Italy.
Germany and USA hit hard.


i) England/FTSE down 0.54  or 01.%  

ii) Paris/CAC up .13 or 0.00% 
  
iii) German DAX:  down 29.30 or 0.39%
  
iv) Spanish ibex up 9.50 points  or 0.12%


v) Italian bourse (MIB) up  96.80  points or 0.63%


and the Dow down 81.45 (0.56%)  


end



And now for some USA news:




She will no doubt be another joke as this new SEC chairwoman probes into High Frequency trading and other issues.  She will just sit there for 4 years and do absolutely nothing.

Actually, I like her hair style. It reminds me of Moe Howard, (the Three Stooges/Curley, Larry and Moe)

(courtesy Bloomberg)




SEC to Move Past Financial Crisis Cases Under New Chairman White

Andrew Harrer/Bloomberg
Mary Jo White, chairman of the U.S. Securities and Exchange Commission.
Mary Jo White, the first former prosecutor to serve as chairman of the U.S. Securities and Exchange Commission, has pledged to run a “bold and unrelenting” enforcement program at the agency charged with regulating Wall Street.
With financial crisis cases mostly done and some of the biggest insider-trading cases in history closed, White will have to chart a course into new areas to keep that pledge.
White, who was sworn in last week, has already provided a few signals about what that might be. During her Senate confirmation hearing, she said she intends to focus on high- frequency and automated trading. She has also raised questions about a drop in the number of accounting fraud cases the agency has brought in recent years.
One of her first steps, said four people familiar with her plans, will be to put the mission in the hands of a trusted lieutenant, long-time protégé Andrew Ceresney.
“There isn’t the same obvious focus like we had following the financial crisis,” said Thomas Sporkin, a former SEC enforcement lawyer who is now a partner at law firm BuckleySandler LLP. “It will be a challenge for him to define his legacy.”
Ceresney, who was a prosecutor under White when she served as U.S. Attorney for the Southern District of New York, will inherit an enforcement division that has spent the past four years largely focused on misconduct linked to the collapse of housing prices and ensuing financial market turmoil of 2008.

Bank Settlements

The period included nine-figure settlements with Goldman Sachs Group Inc., JPMorgan Chase & Co (JPM)., Bank of America Corp., and Citigroup Inc. The agency also brought historic insider trading cases against Raj Rajaratnam and units of Steven A. Cohen’s SAC Capital Advisors LP.
To be sure, the SEC hasn’t completely finished its probe of misconduct tied to the financial crisis. Investigators have signed so-called tolling agreements with executives and banks to extend the five-year statute of limitations on those cases. Also, the SEC has said its investigation into insider trading at hedge funds is continuing.
All the same, the number of such cases still in the pipeline has dwindled, and in recent months, the enforcement staff has formed teams to reevaluate how they are organized and what kinds of misconduct are most ripe for investigation. One consideration is whether to dismantle or reorient some of the specialized units that were formed three years ago by Robert Khuzami, who stepped down as enforcement director this year, the people said.

Accounting Fraud

George Canellos, acting head of the division, said in February that investigators are looking into new ways of detecting accounting fraud, an area that has seen fewer enforcement actions in recent years. James Cox, a securities law professor at Duke University, said scrutiny of auditors and accountants is overdue.
“We have only seen the SEC be active against accountants with the Chinese reverse merger cases,” said Cox, referring to a string of cases involving China-based companies that bought public shell companies in the U.S. and reported false financial results. Inspections of auditors “repeatedly show an amazing lack of professional skepticism by accountants who repeatedly defer to very questionable applications” of the industry’s accepted accounting principles, he said.
The SEC has also struggled in recent years to show it has a grasp on increasingly fragmented markets dominated by electronic trading. While the agency has an investigative unit devoted to market abuse that recently brought novel cases involving exchanges and trading platforms, the area is still relatively unexplored, Sporkin said.

Future Focus

“Market structure is the clear future focus of the agency,” he said. “The investigations and resolutions of market structure issues today, such as high-frequency trading, the effect of dark pools on price discovery, and data latency, will help guide the new commission in formulating policies and writing rules.”
Ceresney, 41, graduated from Columbia University in 1993 and also completed a law degree in 1996 at Yale Law School, where he was essays editor of the Yale Law Journal. He was a law clerk for Michael Mukasey at the U.S. District Court for the Southern District of New York from 1997 to 1998 and then for Dennis Jacobs at the U.S. Court of Appeals for the Second Circuit the following year.
He served as a member of the securities and commodity fraud task force and major crimes unit in the Southern District of New York when White was U.S. Attorney, and then followed her in 2003 to Debevoise & Plimpton LLP (1169L), where she was a partner.

Possible Recusals

After taking office, Ceresney and White will both be expected to recuse themselves in cases involving many of Wall Street’s biggest players, since those firms were often clients at Debevoise. To address this, Ceresney may share the enforcement director role with acting chief Canellos for as long as a year, the people familiar with the matter said.
“It’s hard to decide when you start your tenure in a job like that, how to set your priorities, because it’s not easy to predict what’s going to come your way,” said David Kornblau, a former SEC enforcement attorney who is now a partner at law firm Covington & Burling LLP. Enforcement, he said, is “fundamentally reactive.”
When Khuzami joined the agency in 2009, the SEC was being pilloried for failing to stem practices that contributed to the financial crisis and for missing Bernard Madoff’s multibillion dollar fraud. Within a year, he eliminated a layer of management, created specialized units and set up a system to triage and vet the scores of tips coming into the agency.

Record Actions

Since then, the agency has touted record numbers of enforcement actions as evidence that Khuzami’s overhaul made division more efficient and productive.
Those gains, however, came mainly from a jump in routine administrative proceedings against people who had already been found guilty of fraud and delisting of delinquent companies -- actions that require minimal investigation compared to original cases. Excluding those cases, the number of new actions in 2011 and 2012 trailed output in 2009, the year before the division was restructured.
Ceresney faces the challenge of appearing aggressive even as the pipeline of cases slows. For the first half of this fiscal year, the number of cases is about 23 percent lower than last year.
“When Khuzami took over, the SEC was in a different place,” said Steve Crimmins, a former SEC attorney who is now a partner at K&L Gates in Washington. “It’s a challenging period, but it’s not the crisis.”
To contact the reporter on this story: Joshua Gallu in Washington at jgallu@bloomberg.net
end.



Another big miss with the Philly Manufacturing index falling from 2.0 down to 1.3

(courtesy zero hedge)


Philly Fed Is Latest Economic Miss: Number of Employees Dumps, Inventories Plunge

Tyler Durden's picture




Hardly anyone will be surprised to learn that moments ago we just got the latest disappointing economic indicator for an economy that is clearly accelerating in its deterioration. As expected, the April Philly Fed was the latest economic indicator miss, printing at 1.3, down from last month's 2.0, and below expectations of am increase to 3.0. And while the key New Orders reverted back into negative territory after one brief month positive, it was the other components of the Index that a far more pronounced deterioration, namely the Number of Employees which dumped from 2.7 to -6.8, the biggest drop since May 2012, boding ill for the upcoming April NFP number, as well as the Inventories which plunged from 0.0 to -22.2, which means downward Q1 GDP revisions will be forthcoming from every side momentarily as the Wall Street lemmings are forced to resume trimming their exuberance once more just like in 2012... and 2011... and 2010.
From the report:
The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, was 1.3, just slightly lower than the reading of 2.0 in March (see Chart). The number of firms reporting increased activity this month (22 percent) edged out those reporting decreased activity (21 percent). The demand for manufactured goods remained weak, with the current new orders index declining from 0.5 to -1.0. The shipments index showed continued improvement, however: The index remained positive and edged six points higher, to 9.1, its highest reading in four months. Nearly 28 percent of the firms reported an increase in shipments; 19 percent reported a decrease.

Firms reported a notable decrease in inventories this month: The current inventories index fell from zero to -22.2. Labor market conditions showed continued signs of weakness, with indexes suggesting lower employment overall. The employment index decreased from 2.7 in March to -6.8 this month, its first negative reading in three months. The percentage of firms reporting employment decreases (17 percent) exceeded the percentage reporting increases (10 percent). The workweek index remained negative for the fourth consecutive month.
And the components:

end.



Initial claims higher than expected:

(courtesy zero hedge) 


Initial Claims Snoozer, Just Higher Than Expected

Tyler Durden's picture




In perhaps the most boring initial claims release in a long time, the DOL revealed that in the week ending April 13, there were 352,000 new unemployment insurance claims, an increase of 4,000 from the prior week (naturally revised higher from 346K to 348K), and a slight miss of expectations of 350K. So far in 2013, there have been 8 misses and 7 beats of the expected claims number. The DOL also added that two states' claims were estimated in the past week: of course, if these were California and Illinois, one would imagine reality to be quite different than what is reported but who really cares about reality any more.
Continuing claims were slightly better than expected, at 3068K, vs 3075K expected, a drop from the upward revised 3103K (from 3079K). Also boring. The only ongoing curiosity remains the epic weekly volatility in the Emergency/Extended Claims number, which in the past week plunged by 55K, and whose chart continues to look like a harmonic oscilator, i.e., yoyo.
Finally, normalizing for the now traditional revision of the past week's number, here is what a continuous series of claims would look like courtesy of John Lohman, if using the as reported weekly number versus its subsequent weekly downward revision.


end

Well that about does it for the week.

I will see you Saturday morning

Harvey

2 comments:

Phil50 said...

Watched "The Secret World of Gold" on CBC TV tonight. It was OK. I think it hit some of the highlights of what we in the "community" already know, but it might spark some interest and serious commentary from others in the mainstream media. That is all I was looking for and hope that is what happens.
Overall it was interesting and did highlight the misdeeds of JPM and HSBC. The inclusion of Andrew Maguire was excellent. Some of the history of gold during WWII was enlightening. The documentary was worth watching.
I would be interested in reading what some other Harvey readers have to say about the program.

disqus_Rbfqk4GGqp said...

Tomorrow I will provide the tape for all to see


Harvey

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