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"Nothing is as real as
a dream. The world can change around you, but your dream will not. Responsibilities
need not erase it. Duties need not obscure it. Because the dream is within
you, no one can take it away" … Tom Clancy
GO GATA!!!
As veteran
Café members know, it is my opinion the financial market press, who
follow and comment on gold, rate at best mental midget status, as exhibited
by this gold recap headline yesterday afternoon…
Gold Falls Most in Seven Weeks as Equities Rally; Silver Drops - Bloomberg, Mar 3
2009 3:18PM
***
HUH? The DOW closed
at its lowest level since 1997.
A few of The Muppets
on CNBC have been pointed to the copper and oil charts as potential
indicators that the economy might be about to show some life and that the
market may be ready for a rally … from extremely oversold conditions. In
particular, they are referring to their rounding bottom formations, which
were followed today by breakouts, especially copper…
April crude oil,
$45.78 per barrel, up $3.73
http://futures.tradingcharts.com/chart/CO/49May copper, $1.6940,
up 8.95 cents.
http://futures.tradingcharts.com/chart/QC/59So, gold is
supposedly liquidated for "margin call" reasons, in a deteriorating
economic scene all over the world, yet oil and copper are not. Makes a lot of
sense.
Then, this morning
the DOW, S&P and the DOG were all called a fair amount higher on this
news…
Stocks Rise Around
the World; Commodities Gain, Treasuries Fall
March 4 (Bloomberg)
-- Stocks rose around the world, commodity prices rallied and
Treasuries fell on speculation China will broaden efforts to boost growth in
the world’s third-largest economy. The Shanghai Composite Index jumped the most in four months.
BHP Billiton Ltd. and Alcoa Inc. added more than
2 percent as copper and aluminum climbed on optimism metals consumption in China will increase. Aluminum Corp. of China Ltd. surged 9 percent as a former statistics
chief said China’s Premier Wen Jiabao will announce a new stimulus package tomorrow. Volkswagen AG, the biggest overseas carmaker in China, gained 3.9 percent.
The MSCI World Index added 0.3 percent to 707.74 at
1:23 p.m. in London. The deepening global recession, a third government
rescue for Citigroup Inc. and dividend cuts at companies from General Electric Co. to JPMorgan Chase & Co. have sent
the of 23 developed countries to a 23 percent drop this year, the worst start
since the gauge was created in 1970.
"The Chinese are
about to come up with another huge fiscal push," said Philip Manduca, who oversees $1 billion as head of investments
at ECU Group in London. "They are going to pump an enormous amount of
money in. This will help in the long term," he said in a Bloomberg
Television interview….
-END-
Perhaps coming
Chinese economic stimulation is MORE than necessary as the true state of
Chinese and Asian economic activity is not properly understood. The latest
from my friend since 1980, Frank Veneroso…
Global Economy
Asian Black Hole Again
The Economic Collapse In Asia Points To A Deep Contraction In China
March 3, 2009
Executive Summary
1. The industrial
collapse on a global scale has almost no precedent. Why has it happened?
2. The history of
economic cycles tells us that industrial collapses like this one tend to be
associated with two industrial excesses: massively excessive accumulations of
inventories and manias in fixed investments.
3. We have just gone
through the biggest inflation adjusted commodity bubble in recorded world
history both in terms of amplitude and duration. History tells us there was
probably global goods hoarding; in other words, there may have been an
inventory cycle of immense amplitude, much of it unrecorded, which is now
being unwound violently.
4. If excessive
inventory building and excessive fixed investment has been partly responsible
for the amazing speed of decline in global industrial production, where in
the world were these excesses concentrated?
5. China has embarked on a massive increase in its distribution chain. There was an associated massive
inventory build in stores that remain void of shoppers. There may also have
been a speculative accumulation of inventories.
6. China is also the economy where the world’s greatest fixed investment excess occurred. The
ratio of fixed investment to GDP has been well above 40% for a half decade. No
such investment excess ever occurred in any major economy since the onset of
the industrial revolution.
7. We are now hearing
stories about immense overcapacity in construction of all kinds.
8. Exports to China from China’s trading partners is all important, since it gives us some insight into the
Chinese economy which the Chinese garbage statistics prevent us from seeing
clearly.
9. Year over year
exports for Japan have now fallen an amazing 46% in January. Exports to China fell at the same rate as overall exports, suggesting a contracting Chinese economy.
10. Japanese exports
of capital goods to China have collapsed. German and Korean exports of
capital goods to China have done the same. All this points to a sharp
contraction in unsustainably high Chinese private fixed investment.
11. Taiwanese GDP
fell an 8.36% rate in the fourth quarter non-annualized. I have never heard
of an industrial contraction at such a devastating rate.
12. Exports were a
cause. Taiwan’s exports fell at a 42.7% rate year over year in January.
Exports to mainland China and Hong Kong fell at an even faster rate.
13. The odds are that
Taiwanese firms operating in China have drastically curtailed their fixed
investment on the mainland – another indication of a bust in
unsustainable private business fixed investment in China.
***
Neither commentary is
mutually exclusive. If the Chinese go all out here because they are in such a
mess, they will need a lot of oil and copper, etc. Better their people have
shovels than guns.
This is a roundabout
way to get into covering my field, gold and silver. Gold was bombed for 7
days in a row … from top to bottom $100+. Two weeks ago the world was
falling apart and it was THE safe haven play. By yesterday the price drop had
many of its advocates stumbling and the press was quickly ready to pan it as
a GO TO investment.
This really is silly
people stuff. Twenty to Thirty years from today people won’t believe
the garbage reasons offered for gold doing what it does … emanating
from the press and The Muppets. In a bigger picture sense it is equivalent to
those who thought the world was flat some 500 years ago.
Gold is more a safe
haven play than ever and the price is going to the moon, along with silver. The
only reason we have seen and endured a stunning 10% drop in the price of gold
in 7 days is because the US Government/Gold Cartel ordered the price down. Once
they set the fall in motion, it led to normal technical selling by funds, as
most follow money management/stop loss principles. The Gold Cartel has been
feeding on these folks and the likes of momentum trader Dennis Gartman for
the 10½ years The Café has been open.
Gold is now in its
9th year of making new highs; and still, many pundits and Muppets are
questioning it as an investment because it has no yield. Another huh? Yep,
and it has no counterparty risk either, nor has it lost 50% of its value like
the DOW over the past 12 years.
There are so many
dingbats out there who relate back to the 1980 gold high and say it has gone
nowhere, or little to nowhere, which is more silly people stuff. Tell that to
those who bought the DOW over the past 12 years, who are at best even, with
most EVERYONE losing money, while gold has soared.
Silly, silly, silly.
On that note, veteran
Café members will remember Neal Ryan (had not heard from him in 6
months or more) who spearheaded the Blanchard & Co. lawsuit against
Barrick and JP Morgan. He just checked in with CP and me this morning. Forget
the mental midget, Muppet gold commentary. This is the real deal and the main
reason for gold’s $100+ price drop…
Gents,
hope all is well on your end. I must profess that I haven't kept track of
things in the metals markets much recently, but did some quick work for a
friend who was looking to invest and asked about bank selling. Just an FYI
since I was trying to explain to him why when central bank activity ramps up
it's the time to buy....Euro CB's have dumped over 220 tonnes of gold on the
market in the last 3 weeks...ie. they've met nearly half their yearly selling
quota in 3 weeks. Hadn't seen anybody mentioned anything like that in any
news lately, though hadn't been looking either. It's always the interesting
stuff that no one in the mainstream media seems to notice.
keep up the good fight!
Neal
Neal, who is so well
connected and really knows his stuff, what? ... the press getting to the gold
truth? Explaining it to the bewildered public?
Oh well what fun!!! From
MIDAS yesterday (referring to JB’s ECB selling numbers)…
"But the key
point of the note is that this 38 tonnes of selling is dwarfed over a two
month period by the 249 tonnes GLD has supposedly bought over the same period
of time (see Adrian below). Hmmm."
Which if Neal’s
info is correct, means The Gold Cartel dumped 211 tonnes SURREPTITIOUSLY as
part of their gold price suppression scheme and was THE real reason gold fell
like it did. It all fits.
Oh, so many of the
mainstream gold world folks is a bunch of shallow nincompoops!
CNBC’s Jim
Cramer was jumping up and down about silver last night. It was quite a
lengthy segment on silver. However, as bullish as he was, he said that gold
and silver were going DOWN first, so buyers should scale in at intervals on
the downside. Silver popped early to $13.17 but gradually fell apart, while
gold was smothered for no apparent reason again, except for The Gold
Cartel’s reasons. Gold roared early up to $922.30, then was nailed by
the bums to $905 before stabilizing. We have witnessed this pattern (the
cabal slams gold after an early burst) over and during the past (now) 8 days
of successive losses. Perhaps we have a double bottom above $900. With so
many buyers lurking out there between $880 and $900, that would not be a
surprise. Then again, there is a horrendous US jobs report coming on Friday
and gold is always nailed around that report. Perhaps that was part of what
this takedown was all about and the major damage has been done already.
Silver was aided in
the morning by the VERY firm copper and oil prices. The hoopla over the
Chinese stimulus comments didn’t hurt either.
The gold open
interest only fell 2,071 contracts to 365,271 (not much liquidation there),
while the silver OI went up a slight 15 contracts to 93,051.
The yield on the 10 yr T note is
3%. The dollar fell .73 to 88.57. The dollar/gold relationship has taken on
an entirely new dimension for the time being.
The CRB came back
from the dead, gaining 7.78 to 211.45.
AM gold goodies from
John Brimelow…
Indian ex-duty
premiums: AM (S15.63) PM ($8.79) with world gold at $913.58 and $911.80. Basis
Delhi – well below legal import point. After a soft start, the rupee
managed a rally at last, closing at $1 = R51.35 (Tuesday R51.95). This had a
notable effect on the PM premium situation. The stock market also managed an up
day. Closing 0.23% above Tuesday.
A rally in the rupee
could have an important influence on world gold at this point.
In a somewhat
confusing development, The Gartman Letter today speaks of cutting
another unit of gold from its model portfolio, by my reckoning eliminating
its position. But the portfolio summary reflects neither today’s nor
yesterday’s action.
Nevertheless, the
attitude towards gold now held by this well-informed and influential
commentary is clearly unenthusiastic.
Of interest is that
MarketVane’s Bullish Consensus for the S&P, which is normally very
sticky, slipped a point last night to 32%.. In the past couple of years it
has been lower only 3 days, October 8-10 last year, when it bottomed at 29%
(and then saw a 10 point rally. On some reckonings (Hays), that remains the
"internal low" of the market.
Since very recently
selling in gold appears to have been linked to stock market weakness, this
could be important to gold’s friends.
***
MIDAS note: there will be JB
evening input (more gold goodies) between 5 and 7 Eastern Standard Time
unless otherwise notified.
And here it is...
Tuesday’s deep
$34 intraday Comex sell-off and down $26.40 loss (2.8%) saw only a minor fall
in open interest. Only 2,071 lots were shed (0.6%). In the first instance
this implies there continues to be a substantial short interest in the
market, and that the widely reported long-liquidation is exaggerated, at
least as far as Comex is concerned.
Today a promising
early Comex rally was reversed on heavy volume – by 10am 62% of the
day’s estimated volume had traded and gold was $10 off its high. Gold
then drifted down to a floor close loss of $6.90. Only 99,266 lots were
estimated to have traded – switch effect 8,734.
A great deal of
attention is now being paid to the slack Asian demand/scrap reflux situation
with wider discounts on kilo bar being reported, especially in the Far East
(50c HK, 75c Tokyo). See
http://in.reuters.com/article/businessNews/idINIndia-38330720090304?pageNumber=2&virtualBrandChannel=0
On the other hand, a
survey of US coin and bullion dealer sites this afternoon suggests that US
premiums have widened slightly, and remain very high.
MarketVane’s
Bullish Consensus for gold slipped a point to 74%.
The GLD ETF achieved
a fifth day running with reported gold holdings static at 1,029.29 tonnes.
While this is the 8th
down day in a row for Comex gold, the bears cannot be said to have really
pressed their advantage, with volume fading away once the early rally attempt
was blocked. Neither the HUI (down 0.94%) nor the XAU (up 0 02%) lost their
curious gains of yesterday. Some will see the apparent exit of The Gartman
Letter as a positive sign.
The market remains
interesting.
***
CARTEL CAPITULATION
WATCH
The DOW was firm all day and
closed up 150 to 6876 and the DOG leaped 33 to 1354.
Yet, to me, it was a
HIDEOUS performanceby the DOW as it closed a hefty 120 off its high. More on
that, but first, Bix...
Hi Bill
I don't think it was a coincidence that President Obama said to "buy
stocks" yesterday and the market skyrockets today.
The decision must have been made by the PPT to squeeze the shorts and Obama
was giving everyone a heads up.
There are no more free markets...if there EVER were!
Bix
Not much attention was paid all
day to Palm who disappointed on it revenue guidance after the close last
night; and to Google whose CEO, Eric Schmidt, came out with some shaky
comments about his firm’s future earnings.
Meanwhile,
Blockbuster and Reader's Digest are filing for bankruptcy.
BUT THE BIGGIE BIGGIE
was the HORRENDOUS price action of both JPM and GE.
*Finally the DOW
moves up, yet JPM loses $1.71 per share, putting in a $18.80. If the DOW had
closed lower, JPM would have tanked BADLY. Word to me today is the nightmare
scenario brought your way about JPM these past many months is THE WAY IT IS
and kicking into high gear. Their derivatives book is blowing up and the Fed
is in a panic ... TOO BIG TO BAIL is the problem!
What is occuring at JPM, and in
all the major financial institutions, is disintermedation (according
to my plugged-in savvy sources who clued us in to the JPM mess debacle way
back when). Counterparties are pulling out of MANY bank/financial firm deals
because they have have no faith they will get there money on those deals. And
who has the MOST counterparties of all with their hundreds of trillions of
derivatives? JP Morgan Chase! Their disintermediation problem is mounting.
Result:
It is called PANIC!
and then there is
*GE, a small fry compared
to JPM, but a mega American name and an increasing embarrassment to The
Muppets and CNBC. They are in the hunt in the race to zero for former elite
American firms. Their share price sank another 32 cents to $6.69, after
making a $5.72 low. It is the same case here as JPM. Had the DOW not charged
higher, GE was dead meat today. Both might be tomorrow! No wonder President
Obama was out beating the drums.
Both JPM and GE are
are loaded with toxic derivatives. Meanwhile, the ridiculous AIG coninues to lead
the way to zero, finishing the day flat at a pitiful 43 cents. To view these
stinko charts…
http://www.stockwatch.com/utilit/utilit_snapsh_result.aspxDave from Denver with the scoop…
GE credit defaulty
swap is 17% bid 19% offered
Good morning Jack
Welch!
http://acrossthecurve.com/?p=3577This bond trader
heard that CDS buyers want 20% up front, but as he points out, he has not
seen a trade like that actually "print." Let's look at the quoted
"bid" side of 17%. That essentially means the market is saying that
GE debt should be rated triple-C. It also implies a very high probability of
bankruptcy. GE is so complex and has so much off-balance-sheet crapola, that
we might not get so see until GE is in receivership, that I would just as
soon stay away from GE as an investment altogether. There's probably some
value left to shorting the stock… more later…
re: the 20% cost to
insure GE debt against default
In my experience as a
bond trader, and especially junk bonds, I found the bond market to be much
more efficient at pricing in risk and forecasting future problems with a
company. Bond investors tend to do a lot more thorough investigation of a
company's "credit" quality, something the ratings agencies have
been failing miserably on. The bond investors also often get a peek at the
information bank debt investors have access to (even though technically they
should not - my bond desk was right next to the bank trading desk). If GE
credit default protection costs 20% up front now, a GE restructuring of some
sort is coming soon to a theatre near you. Certainly today's stock price
action in GE is starting to discount these facts. Be nice if burned investors
start filing lawsuits against GE and CNBC….
GE on the hook for $8
billion in credit default payments
if they get
downgraded:
http://zerohedge.blogspot.com/2009/03/ges-8-
billion-downgrade-time-bomb.htmlGiven the players
involved behind the scenes at GE - e.g. Warren Buffet, Wall St, etc - I would
imagine a lot of pressure is being put on the rating agencies to maintain
GE's ratings. The credit ratings system is thus a total fraud.
***
The GE handoff goes
to Garic…
This morning Bill
Gross got on CNBC to say GE credit default spreads were soaring for technical
reasons. The technicality was that Sovereign Wealth Funds were selling GE
debt before it gets downgraded. To me this is more than a technicality; it is
another sign that Sovereign Wealth Funds are diversifying out of the $U.S.
Meanwhile, the bubble
perception on Wall Street and in Washington is we can print and borrow
whatever we want to because the ROW is in worse shape than we are. Our
Federal Reserve is going down a path that no currency has ever recovered
from. Our administration enthusiastically proposed a budget that finances a
welfare state with debt. They have proposed a debt to GDP of over 12%; no
currency has ever maintained its purchasing power at those levels. 25% of
homeowners are under water on their mortgages and in no position to lead the
world out of this mess. Our Banking System is bankrupt 10 times over. No
other currency has this many problems. Crude Oil and Copper appear to be
bottoming as China adds both to their strategic reserves. There are $6.6T in
foreign central bank reserves; they are beginning to buy real things to
protect themselves against further $ debt losses. It is lunacy to continue to
print unlimited amounts of dollars and issue unlimited amounts of debt when
the World is screaming at us they have enough. The Economist and Business
Week both featured the Euro’s problems on their covers. The top of this
bear market rally in the dollar is now officially imminent. The Treasury and
Dollar Bubbles are close to popping.
***
Chuck checked in last night with
some of his usual superb insight...
Bill:
Take a look at the Dow here and tell me that everything is not in synch. It
is obvious from everything that it is straight down here. At least, in though
it has been incredibly frustrating for these years, we are on record and we
will survive.
Here is the quote of
the day. Speaking at a press conference on Tuesday, President Barack Obama
said “buying stocks is a potentially good deal if you’ve got a
long-term perspective on it…” What an amazing statement! They
can't figure out what is coming the next minute.
I think I am losing
what is left of my mind. And they think we are batty. Chuck
U.S. economic news:
*I loathe putting out
disinformation. The input in MIDAS yesterday about a Treasury auction this
week was premature. Bloomberg:
The U.S. will
probably announce tomorrow that it will sell $33 billion of three-year notes
on March 10, $17 billion of 10- year debt the following day and $10 billion
of 30-year bonds on March 12, according to Wrightson ICAP LLC, a research
unit of the world’s largest inter-dealer broker. The auctions follow
$94 billion of note sales last week….
-END-
08:15 Feb ADP
Employment reports payrolls (697K) vs. consensus (630K)
* * * * *
U.S. planned layoffs
in February fall from 7-year peak
NEW YORK (Reuters) - Planned layoffs at U.S. firms fell 23 percent in
February from January's seven-year peak, but remained well above long term
averages as the protracted U.S. recession took a heavy toll on employment, a
report showed on Wednesday.
Employers announced plans to cut 186,350 jobs in February, led by the auto
industry, down from 241,749 in January, amid an economic slump that is on
track to be the most protracted since World War Two, outplacement company
Challenger, Gray & Christmas said on Wednesday in its monthly report.
"The decline in job cuts last month offers some hope that January was
the peak and we will now see layoffs begin to fall or at least
stabilize," said John A. Challenger, chief executive officer of
Challenger, Gray & Christmas, in a statement.
But he said monthly job cuts may remain above 100,000 in the first half of the year and possibly for the rest of 2009.
Job cuts could continue to be particularly heavy in the automotive,
manufacturing and financial sectors, he added.
February layoffs were led by the automotive sector, which announced 61,288
planned cuts, or about one-third of the monthly total. The next biggest
sectors were industrial goods industries with 19,462, retail with 18,759, and
financial with 13,550.
The Challenger data comes ahead of the government's closely watched non-farm
payrolls report on Friday, which is expected to show 648,000 jobs were lost
in February, according to the median of forecasts in a Reuters poll.
-END-
07:30 Challenger
reports job cuts in Feb (23%) to 186.35K
* * * * *
07:00 MBA mortgage
purchase applications index (5.6%) in 27-Feb week; total market index (12.6%)
Compares to (2.6%) and (15.1%), respectively, in prior week. The refi index
was (15.3%) vs. (19.1%) in the prior week. The 30-year fixed rate + 7bp to
5.14%; 15-yr. fixed rate +2bp to 4.73%.
* * * * * 14:06 Fed says US economy
deteriorated further in February -- Beige Book
The report says nat'l economic conditions deteriorated further during the
period of Jan through late Feb. 10 of 12 districts reported weaker conditions
or declines in economic activity, with the deterioration broad based. Consumer
spending remained sluggish and reports on manufacturing suggested deep
declines in activity in some sectors and pronounced declines overall. Lending
activity fell further overall, while the availability of credit remained
generally tight. The Dow is modestly higher, though the markets have pretty
much dismissed the news, as a dismal report had been expected: Dow +2.12% to
6868.27.
* * * * *
More Than 8.3 Million
U.S. Mortgages Underwater as Values Sink
March 4 (Bloomberg)
-- More than 8.3 million U.S. mortgage holders owed more on their loans in
the fourth quarter than their property was worth as the recession cut home
values by $2.4 trillion last year, First American CoreLogic said.
An additional 2.2
million borrowers will be underwater if home prices decline another 5
percent, First American, a Santa Ana, California-based seller of mortgage and
economic data, said in a report today. Households with negative equity or
near it account for a quarter of all mortgage holders.
"We have way too
much supply and not enough demand," Sam Khater, senior economist for First American, said in an
interview. "People aren’t going to purchase a home as long as
prices keep falling, and someone who is worried about their job isn’t
going to purchase a home either."
Prices in 20 U.S. cities fell 18.5 percent in December from a year
earlier, the fastest drop on record, according to the S&P/Case-Shiller
index. Sales of previously owned homes, which account for about 90 percent of the market, fell
in January to the lowest since 1997, and new-home purchases plunged to the
lowest since records began in 1963, the National Association of Realtors and
Commerce Department said.
U.S. foreclosure filings exceeded 250,000 for the 10th straight
month in January, RealtyTrac Inc. reported, and payrolls plunged by 598,000,
pushing the unemployment rate to the highest since 1992,
according to the Labor Department…
-END-
10:00 Feb ISM
Non-Manufacturing 41.6 vs. consensus 41.0
Jan reading was 42.9.
* * * * *
U.S. service sector
contracts again in February
NEW YORK (Reuters) - The U.S. service sector shrank further in February but
by less than expected, according to a report released on Wednesday.
The Institute for Supply Management said its nonmanufacturing index came in
at 41.6 in February versus 42.9 in January.
The level of 50 separates expansion from contraction in the index, which
dates back to July 1997.
Economists had expected a reading of 41.0, according to the median of 69
forecasts in a Reuters poll ranging from 37.0 to 44.0.
The service sector represents about 80 percent of U.S. economic activity,
including businesses such as banks, airlines, hotels and restaurants.
-END-
FDIC’s Bair
Says Insurance Fund Could Be Insolvent This Year
March 4 (Bloomberg)
-- Federal
Deposit Insurance Corp. Chairman Sheila Bair said the deposit insurance fund could dry up
amid a surge in bank failures, as she responded to an industry outcry against
new fees approved by the agency.
"Without these
assessments, the deposit insurance fund could become insolvent this
year," Bair wrote in a March 2 letter to the industry. U.S. community banks plan to flood the FDIC with about 5,000 letters in protest of the
fees, according to a trade group…
-END-
U.S. Bancorp Cuts Dividend to 5c a
Share From 42.5c a Share
March 4 (Bloomberg)
-- U.S. Bancorp cut its quarterly dividend to 5 cents a share from 42.5 cents
a share. The information was released in a Business Wire statement.
-END-
Costco Profit Falls on
Discounting, Overseas Sales
March 4 (Bloomberg) --
Costco Wholesale Corp., the biggest U.S. warehouse-club chain, reported its first profit decline in seven quarters as
discounting hurt margins and the strength of the dollar eroded international
revenue.
Net income fell to
$239.7 million, or 55 cents a share, in the quarter ended Feb. 15, from
$327.9 million, or 74 cents, a year earlier, the Issaquah, Washington-based
company said today in a statement. Profit missed the 59-cent median estimate
of 18 analysts surveyed by Bloomberg. International outlets open at least a
year declined 11 percent in the three-month period…
-END-
16:31 API reports
crude inventories (463K) vs. prior +341K
Gasoline inventories (642K), Distillate inventories +1.6M.
* * * *
10:30 DOE reports
crude oil inventories (757K) barrels vs. consensus +1.00M barrels
Gasoline inventories reported +168K barrels vs. consensus (800K) barrels. Distillate
inventories reported +1.66M barrels vs. consensus (1.0M) barrels.
* * * * *
Saudi hikes April
crude prices to all buyers
DUBAI, March 4 (Reuters) - Saudi Arabia raised its official selling prices
to all its customers for its crude in April, state oil firm Saudi Aramco said
on Wednesday.
The kingdom raised the price of Arab Light to U.S. customers by 90 cents to
West Texas Intermediate (WTI) plus $1.90 a barrel.
It raised the Arab Light price for customers in the Far East by 65 cents to
the Oman/Dubai average plus 90 cents a barrel.
-END-
Various from the MidEast…
Good Morning Bill
(from Dubai)
I don’t have much time these days to watch too much Bloomberg. Dubai is ET + 9 hours so it would have been during the morning sessions of the Budget
Hearings on Tuesday that a member of Congress aggressively asked Bernanke the
right type of hard question. "Who are the counter parties on the other
side of the AIG contracts that render AIG too big to fail? The American
people are expected to pour trillions into these bail outs of underwater
derivatives but we are not being told who the beneficiaries are". Bernanke
squirmed and ducked and dived and exhibited some really uncomfortable body
language but obfuscated his answer with some general comments about his rage
over some of the AIG issues. An irrelevant non answer but the problem was
averted for the time being. I’ve read no reporting of this particular
line of questioning in the mainstream media today.
It is amazing how
these congressional inquisitors can exhibit so much moral outrage, posturing
from the moral high ground of their own self righteousness. Not one of them
(maybe Ron Paul is an exception) has yet dared to ask publically a hard
question on USA gold holdings. There are 600 plus of these sitting
congressional members. When the truth is out what are the excuses going to
be. "Yes I read the WSJ-must just have missed the edition of 31st
Jan 2008" or "my policy is never to read the adverts" or the
politician’s special "concerning the GATA advertisement, I have no
recollection".
If there are any
naked gold shorts reading in, remember the recent spike in the Volkswagen
share price (was it a five fold increase in one day?). Remember 22nd
Sept 08 when the futures oil contracts for settlement in October spiked by
$25 intraday. The $5billion profit earned by JP Morgan on its derivative book
was widely published yesterday. For how long can the full statement be
suppressed from public view-the full statement should read-JP Morgan managed
to turn a $5 billion profit on its $500 trillion derivative book less any
losses not publically disseminated under a John Negroponte reporting exemption.
The Madoff and Stanford scandals broke overnight after festering for years. The
pressure on the gold price suppression scheme is becoming intolerable. I know
what a living hell it is for the "lucky" few who have survived and
retained their jobs in the London financial markets.
Presumably the same
applies in New York. Somebody who knows something which is beyond credible
deniability will crack or break ranks-there must be just too many tragic
souls on the edge of a precipice.
Regards
Nicholas
TOCOM
Ladies and Gentlemen:
During the March 3rd TOCOM sessions the seven historically largest
paper gold shorts increased their net short position by 528 contracts to
8,013 contracts. STDJ increased theirs by 29 contracts to 10,270 contracts.
http://www.tocom.or.jp/souba/gold/torikumi.htmlIn silver they
increased their net long position by 23 contracts to 119.50 contracts (60kg
deliverable equivalent).
http://www.tocom.or.jp/souba/silver/torikumi.htmlAll the best,
Scott
Bill,
In the March 3 session on the TOCOM Goldman Sachs made no change to their
position. It remains at zero.
Cheers
Adrian
Hey Guys,
Remember Truman?
Didn't you have a run in with him Bill?
Cheers for GR21,
Jeff Dahl...
http://news.bbc.co.uk/2/hi/business/7922089.stm
........Ted Truman,
formerly a senior official at the Federal Reserve and US Treasury, is pushing
for a huge - $250bn - allocation of SDRs to respond to the crisis.
He says that about
$17bn would flow to the poorest economies, and $80bn to other developing
countries.
A traditional
argument against such allocations is that the money would be unconditional -
you couldn't stop countries wasting the funds.
But Mr Truman thinks
that's a plus in a world where many countries need to act to stimulate their
economies but don't have the cash.
The other main
objection is that it is inflationary: after all, it is the global equivalent
to a central bank deciding to print money.
However, it would
significantly increase developing countries' access to international
resources.
It would be cheap.
And it wouldn't
require the approval of the US Congress.
The same cannot be
said of many of the other proposals floating around the G20. .........
Yes Jeff (this blast
from the past is especially appropriate as I am listening to Gold Cartel
sycophant Gordon Brown speak to Congress in the background)…
May 16, 2000 - Spot
Gold $275.30 down 20 cents - Spot Silver $5.11 up 9 cents
Midas Special
Another blast from
the past: (January 2000) - "We believe that the incredibly high
liquidity of the gold market suggest that a net short position is the natural
market equilibrium for the time being. The reason is that gold can
consistently be borrowed much cheaper than money. For example, it is
currently possible to borrow gold for one year at a lease rate of 1.8% while
a one-year bond is yielding 6.6%. Borrowing gold, selling it, and investing
the proceeds at the risk-free rate is an attractive trade. "Essentially,
the price of gold could rise 4.8%, or about $13 per ounce and a bearish
speculator would still break even on a short position established today. Clearly,
certeris paribus, the risk/return profile of the gold market favors the short
side. We expect this to continue for the foreseeable future." End...
Lehman Brothers
It is hard to know
whether Lehman is part of the gold cabal or not, but it would appear that
they know the drill.
GATA put out a press
release this morning about the Roll Call open letter and our trip to Washington, noting that we met with Congressman Spencer Backus of Alabama. Congressman
Backus is Chairman of the House Banking Sub Committee on Domestic and
International Monetary Policy. This committee has oversight of the gold and
silver markets and is the right place to go about our gold market concerns.
We are keeping the
names of the other politicians that we met with under wraps for the time
being.
One of the reasons
that we decided to mention Congressman Backus was to let GATA supporters know
that we really have access to the highest levels of the United States
Government and are feeding them with everything we know about the gold market
manipulation and the potential banking crisis.
Frank Veneroso and
Reg Howe are working up a storm with follow up material for the committee.
It is clear to all of
us that the United States government is instrumental in holding down the gold
price. That being the case, it is easy to understand why a Lehman Brothers
can come out with such audacious commentary presented earlier in the Midas. The
reasoning behind our more developed understanding about US government gold involvement will be divulged at the appropriate time.
The stakes are huge.
What we have
presented Congress could effect: the make up of the next Congress and the
legislation for the years to come; the Presidential election; President
Clinton, who could be burdened with another administration scandal; Prime
Minister Blair and his Labor government as the National Accounting Office in England is already investigating the Bank of England gold sale. Among other things, the NAO
wants to know on who's advice did the Bank decide to sell more than half of
the country's gold reserves?
I think it is
appropriate to review some material about the Bank of England sale that was
in the document I sent last July to Senate Banking Committee Chairman,
Senator Phil Gramm:
"….The
next morning I awoke to the Bank of England announcement. Since then the
price of gold has collapsed over $36 or almost 15% per cent, and the sale has
ignited a furor all over the world, fostering talk of conspiracies, etc. Before,
I get into the ramifications of the sale, I thought the following utterances
by some of England's most notable officials might raise an eyebrow or two:
Wire service
commentary July 14, 1999 (my comments in parentheses):
"Asked in
parliament if it was right to sell off part of Britain's reserves, Prime
Minister, Tony Blair, replied, "The gold price has been falling for two
years, so in fact if it carried on falling and we didn't sell we would lose
money".
He then declined to
say if he would meet with the South African Gold Industry delegation, but
said the sale was justified saying, "We did this on technical advice
from the Bank of England". (??? - Haruko Fukuda, CEO of the World Gold
Council was told that the decision was a political one and made by the
British Treasury, not the bank.)
Prime Minister Blair
then went on to say, "It is only the Conservative Party's utter
obsession with the euro in some bizarre way. Given that Argentina and Switzerland are also selling gold, what it has to do with the euro I do not know. It
is only that which is making them raise this issue. It was done, as I say, on
technical advice. It was carried through perfectly sensibly and we actually
got the best deal for the country". End
How wrong can you
get? The best deal the Bank of England could have made would have been $30 to
$40 more per ounce by carrying out the sale quietly as all the other major
countries have done for 20 years.
But the story now
gets confounding. On Sunday July 11, The Chancellor of the Exchequer, Gordon
Brown, said in the London Times, "The proposal to sell the reserves was
put to ministers by officials, and, say TREASURY INSIDERS, agreed to it with
LITTLE DISCUSSION".
According to the
London Times article, the Chancellor is said to have been surprised and
mortified by the reaction from Thabo Mbeki, the South African president, who
said last week that the decision would have a "potentially disastrous
effect" on South Africa.
Ok, so what gives
here? Blair said it was a Bank of England decision. The Bank of England says
it was a Treasury decision. The Treasury says it was only a Treasury decision
of sorts and agreed to with little discussion.
Good grief? A
decision that may have disastrous effects on South Africa, a democracy the
West is committed to encourage, was made with little discussion and no one
will take responsibility for it. Yet, it is such an important decision that
Tony Blair will not reconsider it, even though it appears he does not know
who made the decision in the first place. Meanwhile, the mortified (but
confused) Chancellor of the Exchequer, Gordon Brown, (just prior to the trip
to England by the African delegation) was all over the wire services talking
about the righteousness of his gold decision while continuing to extol the
virtues of the proposed IMF gold sale. The headline on the Reuters dispatch
read: U.K.'s Brown Sees Wide Support for IMF Gold Sales.
However, a Bloomberg
audio report reveals that when The Bank of England's Eddie George was asked
whether the Bank of England's gold sale was 1) his decision 2) whether he was
involved in it 3) whether he was consulted, his response was that he was
consulted (which is a euphemism for being told). When asked who made the
asset allocation decisions on the "bank reserves", he answered,
"the government" --that is, the politicians."
So, what do we have
here? The English now say their decision to sell gold was planned for some
time and made the announcement, coincidentally, as the price the price of
gold was about to take off. They became the first central bank in over 20 years
to make an announcement of this sort in advance. They knew this announcement
would devastate the market from a psychological perspective and send gold
prices crashing- and, of course, it did - the gold price went straight down
more than $36 per ounce. This assured English citizens the worst price
possible and cost the country hundreds of millions of pounds.. Now, no one in
the English government will own up to making this mysterious decision which
is devastating poor African countries, among others.
Meanwhile, as my May
6 commentary indicated, somehow the bullion dealers knew what was coming and
told their clients as much." End.
Alan Greenspan and
Treasury Department officials have denied direct involvement of the Fed and
Treasury in the US gold market. But, we don't know about the ESF and we don't
know if they might be using secret off shore accounts to hold down the gold
price. It is even possible that they are going through the Bank of England
with their trading!
Many Senators and
Congressman have been told that the US is not "manipulating" the
gold market by the Fed and US Treasury. If, in fact, some faction of the US government really is holding down the price of gold, Alan Greenspan, Secretary Summers
and President Clinton are going to have some serious explaining to do.
It would make their
support for the IMF gold sales last year look to be very politically
motivated - to put it kindly. Thirty six out of 41 poor gold producing
countries voted against the IMF gold sales. The reason they voted against the
gold sale is because the gold price was already badly hurting the economies
of their countries. What will the Black Caucus, who went against the Clinton administration, on the IMF gold sale idea, say if they find out the Democrats were
responsible for creating such misery all over the world?
Something stinks to
high heaven about the $38 billion amount of notional off-balance-sheet gold
derivative contracts on the books of JP Morgan at the end of 1999. It took
aggressive bullion banker, Chase Bank, 14 years to build up its book to $22
billion according to Frank Veneroso. Morgan goes from $18 to $38 billion in 6
months. Give me a break! More on this to come later.
Allow me to let you
in on some of the inside scoop going on here. Over the past year, the name
Ted Truman has popped up in our circles as a CIA snoop. That is also the word
around certain politicos in Washington. Rumor mind you, but smoke all over
the place on this one. He used to work for the Federal Reserve, but he had a
falling out with Alan Greenspan. Al Gore picked him to go work at the
Treasury which is where he is employed at the moment. After one of our
meetings in Washington, we met with one of GATA's support contacts and told
him the names of who we met with. Immediately, he told us to be careful with
one of them because he has a direct line to Ted Truman.
That sets the scene.
Yesterday, I almost
fell off my chair when GATA Treasurer/Secretary Chris Powell faxed me of a
copy of a letter he just received from none other than Ted Truman! It was
dated May 10, the day of our meetings in Washington. We did not get out of
our meeting that day until 3 o'clock. Chris Powell had written letters to the
Treasury many months ago as had others in his behalf. I just looked in our
files and found the following correspondence:
A letter that was
sent to Senator McConnell of Kentucky from Jeffrey Rush Jr., Inspector
General of The Treasury.
A letter to Dale
Schnitzler and Congressman Sherrod Brown of Ohio from Marti Thomas, Acting
Assistant Secretary of The Treasury.
A letter to
Congressman Charles T. Canady from Linda L. Robertson, Assistant Secretary of
the Treasury.
A letter to Senator
Christopher Dodd (with "concerning questions from Mr. Chris
Powell." written in the letter) from Michelle A. Smith, Deputy Assistant
Secretary of the Treasury.
Two letters to
Treasury Secretary Lawrence Summers from Senator Joe Lieberman of Connecticut.
A letter to Senator
Lieberman from Alan Greenspan in response to GATA's Roll Call questions.
All this, but no letter
from Secretary Summers to anyone, not even to Senator Lieberman. Secretary
Summers had everyone else put their name down. But, NOT HIS.
At the same time,
there was plenty of correspondence to Chris Powell over these past many
months by other Treasury officials in response to his request for answers to
the questions that GATA posed in the Roll Call open letter.
It is very odd then
that this supposed CIA snoop (with the proper name of Edward M. Truman) with
the Treasury writes to Chris Powell after obviously being immediately
informed about we said at one of our presentations in Washington. The letter
itself was a form one that most others received except for one difference. It
started out, "Secretary Summers has asked me to respond on his
behalf." I cannot help but think that Secretary Summers is the
ringleader of the US gold trading operation, having taken over from former
Treasury Secretary Rubin. The evidence is starting to mount. If that is the
case, and Congress finds this out, it could open up a can of worms and who
knows what else Congress will find?
The Gold Anti-Trust
Action Committee and our supporters in the GATA delegation could be the
Democrats worst nightmare, maybe Tony Blair's too.
Midas
May 16, 2000 Goldgate:
GATA, The CIA, Secretary Summers and Tony Blair
WAR! Clinton Administration Launches Counter Offensive Against GATA
As a result of
"The Enveloping Horn" battle tactic employed by the Gold Anti-Trust
Committee, all heck is starting to break loose.
To begin with, I
received this email early this morning from a Café member:
"Bill,
apparently this article was in the news, then it was "PULLED" !!!
Date: Wed May 17 2000
06:46
SlangKing (FT: GATA exposes Gold price manipulation to Congress) ID#293152: End.
I don't know if this
is true, so if anyone has specific information on this, please let me know.
Speaking of up one
moment, down the next. John Hathaway's superb commentary, "JP Morgan to
The Rescue" is back up with no, or almost no, changes. At least, that is
what I have been told. How many Café members out there think JP
Morgan, who was informed about their derivative position being made public
the day Tocqueville took down the Hathaway essay, made a phone call? What I
suspect happened it that by taking this wonderful commentary down, it only
increased the attention on JP Morgan. So the piece had to go back up. Only a
guess on my part. Well, an educated guess as there are other reasons for my
saying so and that will come out in time.
What is really fascinating
is that the discussion and focus on the issue of the manipulation of the gold
market is really picking up steam.
Received an email
from a Café member this afternoon about his efforts to make Senator
Warner of Virginia aware of the GATA's issues. This is what the Café
member sent me:
"Got a call from
the Senator's office, was briefly advised a meeting took place yesterday with
Congressman Backus and etc. something to the effect that Greenspan denies any
involvement and Summers is looking into it ??? but denies it.
"They are still
working on it." End.
I have asked for
clarification about Summers comment. How can you deny something before it is
looked into?
I am happy to see
that former Defense Secretary Senator Warner is involved in some way. In
January 1988, my wife at the time, another couple and I went out to the
Senator's sprawling ranch in the Virginia countryside to watch the Super
Bowl. The Redskins were playing in that game and I remember him telling me
how owner Jack Kent Cooke was a friend of his. The Senator had just split up
with Elizabeth Taylor.
I will have to
contact him personally - and do so soon. If Senator Warner has already met
Senator Backus, who is Chairman of the Sub Committee on Domestic and
International Monetary Policy, and who listened to the GATA delegation a week
ago, then things are "cookin" over in Washington. The Enveloping
Horn is advancing at the highest levels of the U.S government
In last night's
Goldgate serving I said the following:
"Allow me to let
you in on some of the inside scoop going on here. Over the past year, the
name Ted Truman has popped up in our circles as a CIA snoop. That is also the
word around certain politicos in Washington. Rumor mind you, but smoke all
over the place on this one. He used to work for the Federal Reserve, but he
had a falling out with Alan Greenspan. Al Gore picked him to go work at the
Treasury which is where he is employed at the moment. After one of our
meetings in Washington, we met with one of GATA's support contacts and told
him the names of who we met with. Immediately, he told us to be careful with
one of them because he has a direct line to Ted Truman."
What I didn't tell
you was that I set up this staffer with the direct line to the CIA snoop, Ted
Truman, to find out if he would be fair with us or report information to the
enemy camp; ie, the US Treasury and his CIA snoop contact, Ted Truman.
I fed him information
Sunday night, only part of which I can reveal. I figured that if he was in
the Treasury/CIA camp, I would receive some sort of feedback soon. Little did
I know then that Chris Powell would actually receive a letter from Ted
Turman. This is part of what I sent him:
"It could not be
more clear that we have hit a hot button.
"Regarding the
gold industry. Unfortunately, many of them are clueless about what is really
going on…………
"The more the
industry actually listens to what we have to say and takes the time to
evaluate the material we left you, the more support we receive from them.
"The problem
with gaining U.S. support is that the big gold producers are afraid of U.S. government retaliation and antagonizing their own bullion bankers." End.
It was my thought
that if this "staffer" was one of them, he would take "the
bait" and my comments right to the US Treasury and CIA snoop. The
companies would then be contacted and subtly informed that there are
environmentalist groups around, certain judges with jurisdictions in some of
the mining states, etc. Just your average subtle, sledgehammer conversation
items.
Sure enough, that is
what came back to me today. Word is also going out that we are a bunch of
crazies! In the future, this will all be laid out in specific, written detail
to Café members; it is all on paper in SEVERAL files.
It is like an
interview of a juror. As far as I am concerned, this staffer has disqualified
himself from further participation in the investigation of the gold market. He
has no credibility with me anymore. The written evidence of what occurred is
going off to Washington next week. Hopefully, it should eliminate someone
that appears to wish to kill the gold market investigation just as it is
roaring ahead.
It is clear that the
players manipulating the gold market are going on a full court press to try
and discredit what the Gold Anti-Trust Action Committee and the GATA
delegation has to say. That has been the Clinton administration SOP from day
one and they are utilizing that tactic once again. They will lose this time.
The truth is too obvious and they are going to run out of gold.
***
And here GATA is
still on the case NINE years later with so much proved out, and still the
silly mainstream gold world won’t go there, or are too brain dead. When
it comes to gold, the US Congress is brain dead also.
Superb input from the Bixter...
Hi Bill
I just read the CME Group (NYMEX) response to the Ted Butler allegations of
manipulation. The interview is with Tom LaSala who is a managing Director at
CME Group or the NYMEX.
http://www.investegate.co.uk/invarticle.aspx?id=66752
I am AMAZED at his admissions! Here's what he is confessing to:
1) The NYMEX justifies the massive bank short concentration because it is
backed by physical metal (the obvious metal is the SLV inventory controlled
by JP Morgan. This means the ETF inventories have multiple potential
ownership issues and conflicts)
2) The NYMEX does not inspect, assay or validate silver inventories but instead
"asks" the inventory holders if they have sufficient metal to
deliver against their short positions (JP Morgan is the monster short and
they are justifying that position by telling the NYMEX and CFTC that they can
deliver the SLV inventory on COMEX delivery requests. JPM is the
"Custodian" of the SLV silver but also not required to inspect,
assay or validate inventories as per the prospectus. JPM also changed the
prospectus requirements of holding "Silver Bullion" to now only
holding "Silver". The word "Bullion" was removed because
it implies a certain quality of silver that is NOT in their inventories)
3) The NYMEX states that there is no logic in banks wanting to suppress the
price of monetary metals so there is no motive for manipulation (Do they think
we are all idiots?) Gold and silver are the barometers of the fiat money
system. Rising gold and silver prices means monetary restraint is failing and
faith in the fiat money system is in question. Control of the monetary metals
is an essential component of Western Monetary Policy makers.)
4) The NYMEX has not, and will not, analyze the current concentrated short
position manipulation even though the single bank concentration level facts
are NEW to the market. The JPM short equates to 25% of annual production....this
is a NEW concentrated manipulation fact. Tom LaSala
I see this response to Ted Butler as more supporting evidence that silver
market manipulation is PROTECTED by officials at the NYMEX as well as the
COMEX.
Bix
Thanks to Tom for the
book "YOUNG AGAIN" by John Thomas and a 10,000,000 RESERVE BANK OF
ZIMBABWE note. I went to my bank today to cash it and, for some reason, I got
nowhere.
Published:
04-Mar-2009
Demand for gold soared in 2008
Demand for gold
increased by 64% in 2008, with most investors preferring physical gold such
as bars or coins, according to the World Gold Council (WGC).
A report released by
Lipper Fund Market Information (FMI) says that European investors sought to
diversify assets away from the collapsing financials sector and hedge against
the threat of inflation, which may return because of quantitative
easing….
http://www.fundstrategy.co.uk/cgi-bin/item.cgi?id=182023
-END-
London calling, late
yesterday afternoon…
Good afternoon Bill,
I thought it was an excellent Midas last night. When you add up the news on
AIG, on banks in general and Warren Buffett's blunt assessment of the outlook
for inflation, it is hard to envisage a more pro-gold set of stories. The
terrorist attack today in Pakistan only adds to the case.
I am not sure if you
are aware of the gold page which is now a permanent feature in the on-line
version of the Telegraph. I have put in a link to it below.
This is another sign
of growing mainstream interest in gold and is particularly interesting here,
as gold has not been that well followed by the UK press. It occurs to me that
you could ask them for an opportunity to write a piece on the manipulation of
gold.
The behaviour of the
gold price so far today seems remarkably subdued given the terrorist attack
in Lahore on the Sri Lankan cricket team's bus. Cricket is followed closely
throughout the Indian sub-continent and the nature of the attack will only
re-inforce the tensions between India and Pakistan, even though the Indian
team was not involved. I would also imagine that the attack will intensify
the stresses within Pakistan itself. I find it hard to believe that international
cricket teams will visit Pakistan for some time now, which will be a blow to
the country's pride.
http://www.telegraph.co.uk/finance/person
alfinance/investing/gold/Best wishes,
Bob
Am still waiting to
hear from CNBC. No matter, now is the time for GATA’s Enveloping Horn
to strike. If you have some time, please contact the Telegraph re what GATA
has to say and let us find out if they are afraid to put our slant on gold
out there. Thanks much. I am on that case, as well as carrying the GATA spear
on other fronts.
And THANKS SO MUCH to
so many of you who have contributed financially to our efforts these past
weeks. It is going to make a huge difference in what we can do.
Not much action in the
gold/silver shares. The HUI lost 2.58 to 113.47 and the XAU was flat at
113.47.
The unthinkable, as
mentioned in this column over and over, is at hand ... UNFORTUNATELY.
All of us are going
to wake up one day with gold and silver prices up so much in that given day
that you will think your computer or TV is broken. REMEMBER...
GATA BE IN IT TO WIN
IT!
MIDAS
Bill Murphy
Editor
Lemetropolecafe.com
Chairman
Gold Anti-Trust Action Committee
Le Metropole Café is a
Membership site. Visit and Experience a 2 week Free Trial !
Bill
Murphy is chairman of the Gold Anti-Trust Action Committee and proprietor of www.LeMetropoleCafe.com, an Internet site devoted to
financial commentary with emphasis on the precious metals. You can become a
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