Gold World News Flash |
- CFTC's Evasion After 3 Years Investigating Silver is Answer Enough
- CME Goes To Collateral DefCon 1: Makes Maintenance Margin Equal To Initial For… Everything!?
- The Chinese and the Eurozone
- Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week
- CME Group hiking margins across the Board
- By the Numbers for the Week Ending November 4
- 9/11 Cover-up Exposed! Re-live the Horror of that Day on Video and Learn What Really Happened
- CFTC's evasion after 3 years investigating silver is answer enough
- CME Goes To Collateral DefCon 1: Makes Maintenance Margin Equal To Initial For... Everything!?
- Gold Price Close At 1,755.30 Up 0.5% For The Week
- Greece's Extortion Racket Jumps To The Next Level
- Greece's Extortion Racket Jumps To The Next Level
- Extreme Poverty Is Now At Record Levels – 19 Statistics About The Poor That Will Absolutely Astound You
- Grandich Client Sunridge Gold
- Silver smashdown predictions impressed him, CFTC's Chilton tells King World News
- You Call This “Progress”?
- Vikas Ranjan: Junior Gold Equities to Watch
- The True Value Of Money (Literally)
- Credit Unconvinced As Stocks Close Near Highs Of Day
- Gold Daily and Silver Weekly Charts - Liberty Without Virtue
- Euro Shorts Cover Modestly Following Max Pain; Dollar Bullish Bets Tumble
- Fall Of The House Of Money: Artemis Capital On How €entral Banking Took Over Capital Markets... And The World
- COT Gold, Silver and US Dollar Index Report - November 4, 2011
- China
- CFTC Update on the Investigation Into Manipulation of the Silver Market In Progress Since 2008
- Gold Still Respecting Channel
- Could MF Global Be The Lehman/AIG Event Trigger?
- Gold Prices: Too Volatile for a "Safe Haven"?
- Gold Prices: Too Volatile for a "Safe Haven"?
- The Daily Market Report
| CFTC's Evasion After 3 Years Investigating Silver is Answer Enough Posted: 04 Nov 2011 05:02 PM PDT by Chris Powell, GATA: Dear Friend of GATA and Gold (and Silver): Under renewed pressure by Commissioner Bart Chilton to account for itself, the U.S. Commodity Futures Trading Commission today issued a statement about its 3-year-old investigation of manipulation of the silver market, asserting only that the investigation continues. Those who have been taking the CFTC investigation seriously may wax indignant over the delay in resolution. But the delay speaks for itself, and eloquently: Thanks to the complaint about market rigging by London silver trader Andrew Maguire and GATA's publicizing it at the CFTC's March 25, 2010, hearing and agitating about it afterward, the CFTC has probably realized that the rigging of the silver market is, like the rigging of the gold market, a U.S. Government operation conducted through intermediaries, primary dealers in U.S. Government securities, and thus can't be examined in public without crashing the operation and impugning the whole government of which the CFTC is a part.
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| CME Goes To Collateral DefCon 1: Makes Maintenance Margin Equal To Initial For… Everything!? Posted: 04 Nov 2011 04:48 PM PDT from ZeroHedge:
The most important news announcement of the day was not anything to came out of Cannes (as nothing did), nor from Greece (the merry go round farce there continues unabated). No, it was a brief paragraph distributed by the CME long after everyone had gone home, and was already on their 3rd drink. It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it confirms one of our biggest concerns: systemic liquidity is non-existanet. We confirmed interbank liquidity in Europe was at an all time low earlier today, and can only assume the same is true for US banks. But what is very disturbing is that this is just as true at the exchange level, where it appears the aftermath of the MF collapse is just now being felt. What exactly was the announcement. Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything.
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| Posted: 04 Nov 2011 04:39 PM PDT by Alasdair Macleod, GoldMoney.com:
This problem for some of them has become so acute that they cannot now fund their deficits. What is less obvious is that these highly-indebted states also have to roll over existing debt as it matures. Traditionally this debt has been absorbed on a replacement-basis in the markets, but that only works as long as the markets are fundamentally confident, which they are no longer: the inability of the political classes to resolve their difficulties has seen to that. Therefore, as bonds mature, investors and banks are unlikely to re-invest, preferring cash. Even if the weaker states are able to fund redemptions, from an expanded European Financial Stability Facility (EFSF) for example, this will be used to reduce euro-denominated bank credit and improve capital ratios.
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| Gold Seeker Weekly Wrap-Up: Gold and Silver End Mixed on the Week Posted: 04 Nov 2011 04:00 PM PDT Gold fell $14.65 to $1749.25 by about 11AM EST before it bounced back higher into the close, but it still ended with a loss of 0.47%. Silver dropped down to $33.793 before it also bounced back higher into the close, but it still ended with a loss of 1.13%.
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| CME Group hiking margins across the Board Posted: 04 Nov 2011 03:11 PM PDT [url]http://www.traderdannorcini.blogspot.com/[/url] [url]http://www.fortwealth.com/[/url] If I am reading the communique from the exchange correctly, the margin requirements for ALL CME products is being raised by hiking the MAINTENANCE MARGIN requirements to the SAME LEVEL as INITIAL MARGIN requirements, effective as of the opening of trading Sunday evening/Monday morning, November7. The changes were implemented as of the close of trading Friday, November 4th. If this is correct, and I think I am reading it correctly, this is the first time that I can recall seeing something like this occuring. It will also precipitate some very volatile trading conditions. I suspect this is tied directly to the fallout from the MF Global debacle. Apparently CME group and its clearinghouse want to make sure there is sufficient liquidity present to cover all its obligations. This might throw my previous assessment of silver and gold technical action out of the window. Stay tuned as this is going ...
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| By the Numbers for the Week Ending November 4 Posted: 04 Nov 2011 03:05 PM PDT HOUSTON -- Just below is this week's closing table, with brief commentary this time, followed by the CFTC disaggregated commitments of traders (DCOT) recap table for the week ending October 28, 2011.
Comments: Choppy week for metals and equities markets. Uncertainty jacked up by Greece with the on-off referendum, enough to keep traders guessing and hugging the sidelines. Capital flight evident, flowing into in USD and gold in Euros. Gold slightly stronger in USD, up 3.2% in Euro, but silver cannot answer with so much troubling news. Slightly positive money flow for metals ETFs (neutral). Note the small change in price Tues/Tues for both gold and silver on COT reporting day. COMEX commercials add to net shorts in gold, but not in silver, a "tell" we think. Commercials seem to want no part of the silver short side at the moment. Mining shares tread water, but interestingly refused to sell off on the largest down day for the metals (Tuesday). USD up big, nearly two "big figures" and ICE commercial traders covered a big 12,161 lots or nearly one-third of their greenback net shorts. Gold/Silver ratio back over 50, not a bullish sign very short term. Ted spread too high for comfort, but we wonder if it will fall early next week with the Greek no-confidence vote over. Contraction in the hi-lo spreads for gold and silver suggests indecision by traders in a consolidating environment. Look for hi-lo spreads to widen measurably in the days ahead – we think. Finally, note the reduction in the Thurs/Thurs open interest for silver, which suggests short covering on the modest dip – a bullish sign.
Vultures, (Got Gold Report Subscribers) please note that updates to our linked technical charts, including our comments about the COT reports and the week's technical changes, should be completed by the usual time on Sunday (18:00 ET). In the DCOT table below a net short position shows as a negative figure in red. A net long position shows in black. In the Change column, a negative number indicates either an increase to an existing net short position or a reduction of a net long position. A black figure in the Change column indicates an increase to an existing long position or a reduction of an existing net short position. The way to think of it is that black figures in the Change column are traders getting "longer" and red figures are traders getting less long or shorter. All of the trader's positions are calculated net of spreading contracts as of the Tuesday disaggregated COT report. (DCOT Table from Friday, November 4, for data as of the close on November 1. Source CFTC for COT data, Cash Market for gold and silver. We shall devote a goodly amount of time to the COT report in this weekend's full Got Gold Report, as we believe it is attempting to show us an important "tell.") That is all for now, but there is much more to come... Edit: 23:56 to correct the DCOT table Swap Dealer position.
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| 9/11 Cover-up Exposed! Re-live the Horror of that Day on Video and Learn What Really Happened Posted: 04 Nov 2011 02:56 PM PDT These*2 videos are worth every minute/second of your time.*They convincingly convey that the 3 buildings of the World Trade Center collapsed as a result of what could only have been a controlled demolition with the use of a military-issue combination of nano thermite and sulphur explosives. Take a look and listen to the evidence. It is irrefutable.* Posted by Lorimer Wilson, editor of www.FinancialArticleSummariesToday.com (A $ite for sore eyes and inquisitive mind$) and www.munKNEE.com (Your Key to Making Money!). None of the videos focus on some sort of conspiracy theory but rather on the fact that the NIST findings of the catastrophe*were*vague and misleading (a cover-up of sorts)*in their conclusion that there were no explosions involved in the destruction of the 3 buildings – and particularly WTC Building #7. What is presented* is ample scientific evidence that indicates the cause of the collapse of the three buildings was*more akin to controlled demolitions and, as such, ...
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| CFTC's evasion after 3 years investigating silver is answer enough Posted: 04 Nov 2011 01:36 PM PDT 9:50p ET Friday, November 4, 2011 Dear Friend of GATA and Gold (and Silver): Under renewed pressure by Commissioner Bart Chilton to account for itself, the U.S. Commodity Futures Trading Commission today issued a statement about its 3-year-old investigation of manipulation of the silver market, asserting only that the investigation continues. Those who have been taking the CFTC investigation seriously may wax indignant over the delay in resolution. But the delay speaks for itself, and eloquently: Thanks to the complaint about market rigging by London silver trader Andrew Maguire and GATA's publicizing it at the CFTC's March 25, 2010, hearing and agitating about it afterward, the CFTC has probably realized that the rigging of the silver market is, like the rigging of the gold market, a U.S. Government operation conducted through intermediaries, primary dealers in U.S. Government securities, and thus can't be examined in public without crashing the operation and impugning the whole government of which the CFTC is a part. ... Dispatch continues below ... ADVERTISEMENT The United States Once Again Can Establish a Stable Dollar Worth Its Weight in Gold Lewis E. Lehrman, chairman of the Lehrman Institute, sponsor of The Gold Standard Now project, has released a plan to restore economic growth through a stable dollar. The plan, titled "The True Gold Standard: A Monetary Reform Plan Without Official Reserve Currencies," responds to the recurrent economic crises of the last century and outlines a detailed proposal for America's leadership on "how we get from here to there." That is, how we get from the present unstable paper dollar to a stable dollar as good as gold. James Grant, author and editor of Grant's Interest Rate Observer, says of the Lehrman plan: "If you have ever wondered how the world can get from here to there -- from the chaos of depreciating paper to a convertible currency worthy of our children and our grandchildren -- wonder no more. The answer, brilliantly expounded, is between these covers. America has long needed a modern Alexander Hamilton. In Lewis E. Lehrman the country has finally found him." To learn more and to sign up for The Gold Standard Now's free, noncommercial, weekly report, "Prosperity through Gold," please visit: http://www.thegoldstandardnow.org/gata The CFTC well may expect that the silver business can be resolved by a confidential settlement of the class-action lawsuit brought against the main silver market manipulator, JPMorganChase, in U.S. District Court for the Southern District of New York. (See the lawsuit's consolidated complaint here: http://www.gata.org/node/10448.) If the lawsuit survives a summary judgment dismissal motion by JPMorganChase, which seems likely, insofar as such a motion must presume that everything alleged in the complaint is true, the lawsuit may be worth a few hundred million dollars to the investment bank just to prevent any hostile law firms from inspecting its books and interrogating its traders and managers in court-ordered discovery and deposition. Such a settlement will make the plaintiffs' lawyers very rich and let the CFTC off the hook even as it leaves the public with no formal finding of what actually happened. Will it end the manipulation of the silver market, or will that manipulation be ended by whatever futures market position limits the CFTC eventually decides to enforce? Maybe -- or maybe JPMorganChase will find intermediaries through which it can continue to enter the market in disproportionate size and thus continue to control it. In any case silver investors probably should be thankful enough that the CFTC held that hearing a year ago in March and thankful particularly to Commissioner Chilton for insuring that GATA Chairman Bill Murphy and GATA Board of Directors member Adrian Douglas were allowed to speak and introduce Maguire's complaint in detail. On the day of the hearing silver was hovering around $15 per ounce and had been going nowhere in particular. By the end of the year it had doubled and this week it closed above $34, and there are many signs of its physical shortage as the paper hangers of the fractional-reserve precious metal banking system thrash around desperately to regain control of the market. Anything beyond this would require one agency of the U.S. Government to execute other agencies of the government, agencies much bigger and more sinister. Most likely the CFTC would be executed first. Indeed, GATA often worries for Chilton's safety and is sometimes surprised that he hasn't already been found in circumstances making it appear that he had been struck by lightning, a meteorite, or a freight train. So thanks, CFTC, but we don't need your silver investigation anymore. You've already told us all we need to know. The CFTC's statement is appended. Additional comments made by Chilton today to King World News, regarding the collapse of the trading firm MF Global, can be found here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/5_Ba... CHRIS POWELL, Secretary/Treasurer * * * CFTC Statement Regarding Enforcement Investigation of the Silver Markets Press Release http://www.cftc.gov/PressRoom/PressReleases/silvermarketstatement WASHINGTON -- The Commodity Futures Trading Commission today issued the following statement: In September 2008 the commission announced the existence of an enforcement investigation into the possibility of unlawful acts in silver markets. Since that time, the staff has analyzed over 100,000 documents and interviewed dozens of witnesses and obtained expert advice. It has been a long, detailed, and thorough investigation, and it continues in an appropriate and considered manner." 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| CME Goes To Collateral DefCon 1: Makes Maintenance Margin Equal To Initial For... Everything!? Posted: 04 Nov 2011 01:20 PM PDT The most important news announcement of the day was not anything to came out of Cannes (as nothing did), nor from Greece (the merry go round farce there continues unabated). No, it was a brief paragraph distributed by the CME long after everyone had gone home, and was already on their 3rd drink. It is critical, because not only is this announcement a direct consequence of what happened with MF Global several days ago, but because also it confirms one of our biggest concerns: systemic liquidity is non-existanet. We confirmed interbank liquidity in Europe was at an all time low earlier today, and can only assume the same is true for US banks. But what is very disturbing is that this is just as true at the exchange level, where it appears the aftermath of the MF collapse is just now being felt. What exactly was the announcement. Unless we are completely reading it incorrectly, it is nothing short of a margin call for tens if not hundreds of billions worth of product. Because as of close of business on November 4, today, the CME just made the maintenance margin, traditionally about 26% lower than the initial margin for specs, equal. For everything. Which means that by close of business Monday, millions of options and futures holders will be forced to deposit billions in additional capital to the CME just so they are not found to be margin deficient, and thus receive a margin call. Naturally, since it is very unlikely that this incremental amount of liquidity can be easily procured in one business day, we anticipate the issuance of hundreds of thousands of margin calls Monday, followed by forced liquidations of margin accounts across America... and the world. Just like when Lehman blew up, it took 5 days for Money Markets to break. Is this unprecedented elimination in the distinction between initial and maintenance margin the post-MF equivalent of the first domino to fall this time around? From the CME (source):
And for those asking, here is a complete breakdown of all CME products and associated margins:
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| Gold Price Close At 1,755.30 Up 0.5% For The Week Posted: 04 Nov 2011 01:03 PM PDT Gold Price Close Today : 1,755.30 Gold Price Close 28-Oct : 1,746.20 Change : 9.10 or 0.5% Silver Price Close Today : 3407.00 Silver Price Close 28-Oct : 3527.00 Change : -120.00 or -3.5% Platinum Price Close Today : 1,626.80 Platinum Price Close 28-Oct : 1,641.80 Change : -15.00 or -0.9% Palladium Price Close Today : 655.20 Palladium Price Close 28-Oct : 668.25 Change : -13.05 or -2.0% Gold Silver Ratio Today : 51.52 Gold Silver Ratio 28-Oct : 49.51 Change : 2.01 or 1.04% Dow Industrial : 12,044.47 Dow Industrial 28-Oct: 12,208.55 Change : -164.08 or -1.4% US Dollar Index : 76.71 US Dollar Index 28-Oct : 74.93 Change : 1.78 or 2.3% Franklin Sanders has not published any commentary today, he will be away until 9th November. 
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| Greece's Extortion Racket Jumps To The Next Level Posted: 04 Nov 2011 12:31 PM PDT By Wolf Richter www.testosteronepit.com At the beginning of the week, participants in the G-20 meeting in Cannes were still thinking that their sojourn in the ritzy town on the Côte d'Azur would be a relaxed affair of photo ops, handshakes (air kisses between Merkel and Sarkozy), and fancy dinners, interrupted by rubber stamping the previously negotiated Grand Plan of bailing out Greece, bondholders, and banks. And in between, they'd put Italy back on some kind of unspecified track. Then, on Wednesday, Giorgios Papandreou, prime minister of Greece, who isn't even in the G-20, fired his bazooka: with a sentence about a referendum at home, he single-handedly knocked the world's financial markets down by vertigo inducing percentages. "I want more," he said in between the lines, "and if I don't get more, just watch what will happen to the financial markets and even to the world economy, including China and the US, if I say a whole paragraph." Partiers were stunned. Their beautifully constructed Grand Plan was scattered in little shards on the Greek marble floor. The Euro plummeted. Stocks tanked. Italian and French yields spiked. Things got ugly. Suddenly, it seemed that Cannes would go down in history as the place where the Euro came unglued. And a new word was coined: papandemonium. Whatever chaos this caused in the Greek political scene, it did accomplish exactly what Papandreou wanted: total worldwide attention refocused on him. To get him to back off, German chancellor, Angela Merkel, and French President, Nicolas Sarkozy summoned Papandreou to ... a finely crafted multi-course French dinner. Afterwards, a dour-faced Merkel and a grimacing Sarkozy stepped up to the podium and officially gave Greece a Bushian choice: either you're with us, or you're against us. Well, being Europeans, they were more nuanced. Merkel, by now the unquestioned boss in the house of Europe, was the first to speak. The referendum has reintroduced fear into the markets, she said, but we're steeled against any contagion, and our defenses are in place. "We want Greece to stay in the eurozone, but"—the word elicited gasps—"there is this one-sided decision by Greece, and that has changed the situation." She went on to dictate the questions Greece should put on the referendum—stay in or exit the Eurozone—and the timing—have it wrapped up by early December. Of course, the sixth bailout installment would be put on hold until Greece accepts all previously negotiated provisions. Period. Then Sarkozy spoke, and his love-us-or-leave-us speech mirrored Merkel's. Not a cent of the agreed upon sixth installment would be made unless Greece fully accepts the conditions of the bailout package. "Now the Greeks have to decide if they want to continue in this adventure with us or not." Unlike Merkel, he didn't say that France was "steeled" against Greece's exit from the Eurozone, given the state of France's tottering mega-banks and its shaky triple-A rating. Six months before an election that is getting increasingly difficult for him, he fretted that an unraveling of Greece would trigger a downdraft in the French economy, an uptick in unemployment, and a further collapse of the French stock market—the CAC 40 is already down 53% from its March 2000 high and hovers at levels first seen in July 1997. And thus, they'd responded to Papandreou's shot from the bazooka with a barrage from their howitzers. And the officially unspeakable idea of Greece's exit from the Eurozone had coagulated into French and German words. Papandreou's party rebelled. Parliamentary chaos ensued. He backed off the referendum. A caretaker government is being discussed. Greece, which for a decade rode the euro-debt gravy train to wealth and sent huge profits north to German exporters, has been tearing itself apart over the social costs of returning to a life within its means. Its political system is a corrupt vote-buying machine. The tax system encourages fraud. The state-dominated economy isn't competitive. And whenever there's a problem, there's a strike. What they absolutely must have to solve all these problems is more money. "€80 billion by the end of February," announced the Greek finance minister Evangelos Venizelos in a statement yesterday. Turns out, before the dust has even settled on the papandemonium, the Greeks are back in Brussels negotiating with the Eurozone (Figaro, article in French). Based on the framework agreed upon on 27 October in Brussels, the amount includes the guarantees made to Greek banks in exchange for their accepting a 50% haircut on their holdings of Greek public debt and the amounts needed to recapitalize them. It would "save the Greek economy," the ministerial statement said. Greece would "offer the necessary political guarantees" during the meeting of the Eurogroup in Brussels on Monday "for the timely transfer of the sixth installment of €8 billion." The very installment that Merkel and Sarkozy vowed not to pay a cent of. Alas, if Greece doesn't receive this money by 15 December, it will go bankrupt, Venizelos explained, thus pushing the extortion racket up to the next level. "Tax fraud is a national plague," said Venizelos after he found that Greeks owed $50 billion in back taxes. But it's complicated.... Greece's Extortion Game. Wolf Richter www.testosteronepit.com
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| Greece's Extortion Racket Jumps To The Next Level Posted: 04 Nov 2011 12:31 PM PDT
By Wolf Richter www.testosteronepit.com At the beginning of the week, participants in the G-20 meeting in Cannes were still thinking that their sojourn in the ritzy town on the Côte d'Azur would be a relaxed affair of photo ops, handshakes (air kisses between Merkel and Sarkozy), and fancy dinners, interrupted by rubber stamping the previously negotiated Grand Plan of bailing out Greece, bondholders, and banks. And in between, they'd put Italy back on some kind of unspecified track. Then, on Wednesday, Giorgios Papandreou, prime minister of Greece, who isn't even in the G-20, fired his bazooka: with a sentence about a referendum at home, he single-handedly knocked the world's financial markets down by vertigo inducing percentages. "I want more," he said in between the lines, "and if I don't get more, just watch what will happen to the financial markets and even to the world economy, including China and the US, if I say a whole paragraph." Partiers were stunned. Their beautifully constructed Grand Plan was scattered in little shards on the Greek marble floor. The Euro plummeted. Stocks tanked. Italian and French yields spiked. Things got ugly. Suddenly, it seemed that Cannes would go down in history as the place where the Euro came unglued. And a new word was coined: papandemonium. Whatever chaos this caused in the Greek political scene, it did accomplish exactly what Papandreou wanted: total worldwide attention refocused on him. To get him to back off, German chancellor, Angela Merkel, and French President, Nicolas Sarkozy summoned Papandreou to ... a finely crafted multi-course French dinner. Afterwards, a dour-faced Merkel and a grimacing Sarkozy stepped up to the podium and officially gave Greece a Bushian choice: either you're with us, or you're against us. Well, being Europeans, they were more nuanced. Merkel, by now the unquestioned boss in the house of Europe, was the first to speak. The referendum has reintroduced fear into the markets, she said, but we're steeled against any contagion, and our defenses are in place. "We want Greece to stay in the eurozone, but"—the word elicited gasps—"there is this one-sided decision by Greece, and that has changed the situation." She went on to dictate the questions Greece should put on the referendum—stay in or exit the Eurozone—and the timing—have it wrapped up by early December. Of course, the sixth bailout installment would be put on hold until Greece accepts all previously negotiated provisions. Period. Then Sarkozy spoke, and his love-us-or-leave-us speech mirrored Merkel's. Not a cent of the agreed upon sixth installment would be made unless Greece fully accepts the conditions of the bailout package. "Now the Greeks have to decide if they want to continue in this adventure with us or not." Unlike Merkel, he didn't say that France was "steeled" against Greece's exit from the Eurozone, given the state of France's tottering mega-banks and its shaky triple-A rating. Six months before an election that is getting increasingly difficult for him, he fretted that an unraveling of Greece would trigger a downdraft in the French economy, an uptick in unemployment, and a further collapse of the French stock market—the CAC 40 is already down 53% from its March 2000 high and hovers at levels first seen in July 1997. And thus, they'd responded to Papandreou's shot from the bazooka with a barrage from their howitzers. And the officially unspeakable idea of Greece's exit from the Eurozone had coagulated into French and German words. Papandreou's party rebelled. Parliamentary chaos ensued. He backed off the referendum. A caretaker government is being discussed. Greece, which for a decade rode the euro-debt gravy train to wealth and sent huge profits north to German exporters, has been tearing itself apart over the social costs of returning to a life within its means. Its political system is a corrupt vote-buying machine. The tax system encourages fraud. The state-dominated economy isn't competitive. And whenever there's a problem, there's a strike. What they absolutely must have to solve all these problems is more money. "€80 billion by the end of February," announced the Greek finance minister Evangelos Venizelos in a statement yesterday. Turns out, before the dust has even settled on the papandemonium, the Greeks are back in Brussels negotiating with the Eurozone (Figaro, article in French). Based on the framework agreed upon on 27 October in Brussels, the amount includes the guarantees made to Greek banks in exchange for their accepting a 50% haircut on their holdings of Greek public debt and the amounts needed to recapitalize them. It would "save the Greek economy," the ministerial statement said. Greece would "offer the necessary political guarantees" during the meeting of the Eurogroup in Brussels on Monday "for the timely transfer of the sixth installment of €8 billion." The very installment that Merkel and Sarkozy vowed not to pay a cent of. Alas, if Greece doesn't receive this money by 15 December, it will go bankrupt, Venizelos explained, thus pushing the extortion racket up to the next level. "Tax fraud is a national plague," said Venizelos after he found that Greeks owed $50 billion in back taxes. But it's complicated.... Greece's Extortion Game. Wolf Richter www.testosteronepit.com
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| Posted: 04 Nov 2011 11:59 AM PDT from The Economic Collapse Blog:
Read More @ TheEconomicCollapseBlog.com
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| Posted: 04 Nov 2011 11:02 AM PDT The following is automatically syndicated from Grandich's blog. You can view the original post here. Stay up to date on his model portfolio! November 04, 2011 01:01 PM Read [url]http://www.grandich.com/[/url] grandich.com...
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| Silver smashdown predictions impressed him, CFTC's Chilton tells King World News Posted: 04 Nov 2011 09:46 AM PDT 5:45p ET Friday, November 4, 2011 Dear Friend of GATA and Gold (and Silver): U.S. Commodity Futures Trading Commissioner member Bart Chilton today tells King World News that he has been impressed by silver market observers who have accurately predicted smashdowns in the price. Chilton adds that the public is entitled to an accounting of the commission's seemingly interminable investigation of the silver market, which he believes has been criminally manipulated. An excerpt from the interview has been posted at the King World News blog here: http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2011/11/4_Ba... Audio of the full interview should be posted there shortly. CHRIS POWELL, Secretary/Treasurer ADVERTISEMENT Prophecy Platinum Drills 120.9 Meters Company Press Release VANCOUVER, British Columbia, Canada -- Prophecy Platinum Corp. (TSX-V: NKL, OTC-QX: PNIKF, Frankfurt: P94P) has announced the drill results received from its 2011 drilling Wellgreen platinum group elements, nickel, and copper project in the Yukon Territory. Borehole WS11-188 encountered 457 meters of mineralization grading 0.47% nickel equivalent (including 0.72 grams per ton platinum, paladium, and gold) from surface to the footwall contact. Within this larger swath of mineralization, the hole encountered a high-grade section of 17.8 meters of 3.14 grams per ton platinum, palladium, and gold, 1.03% nickel, and 0.74% copper (1.77% nickel equivalent). The hole was drilled completely outside of current resource boundaries, between the East Zone resource and the West Zone resource that was reported in the company's press release no July 14, 2011. The high-grade intercept located between the two resources not only demonstrates that the East and West Zone resource form a single, geologically contiguous body but also indicates that the higher-grade material in the East Zone continues to the west and at depth at Wellgreen. For drill result tables and maps, please see the company's full press release here: http://www.prophecyplat.com/news_2011_sep26_prophecy_platinum_wellgreen_... Support GATA by purchasing gold and silver commemorative coins: https://www.amsterdamgold.eu/gata/index.asp?BiD=12 Or by purchasing a colorful GATA T-shirt: Or a colorful poster of GATA's full-page ad in The Wall Street Journal on January 31, 2009: http://gata.org/node/wallstreetjournal Or a video disc of GATA's 2005 Gold Rush 21 conference in the Yukon: Help keep GATA going GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at: To contribute to GATA, please visit: ADVERTISEMENT Sona Drills 85.4g Gold/Ton Over 4 Metres at Elizabeth Gold Deposit, Company Press Release, October 27, 2010 VANCOUVER, British Columbia -- Sona Resources Corp. reports on five drillling holes in the third round of assay results from the recently completed drill program at its 100 percent-owned Elizabeth Gold Deposit Property in the Lillooet Mining District of southern British Columbia. Highlights from the diamond drilling include: -- Hole E10-66 intersected 17.4g gold/ton over 1.54 metres. -- Hole E10-67 intersected 96.4g gold/ton over 2.5 metres, including one assay interval of 383g of gold/ton over 0.5 metres. -- Hole E10-69 intersected 85.4g gold/ton over 4.03 metres, including one assay interval of 230g gold/ton over 1 metre. Four drill holes, E10-66 to E10-69, targeted the southwestern end of the Southwest Vein, and three of the holes have expanded the mineralized zone in that direction. The Southwest Vein gold mineralization has now been intersected over a strike length of 325 metres, with the deepest hole drilled less than 200 metres from surface. "The assay results from the Southwest Zone quartz vein continue to be extremely positive," says John P. Thompson, Sona's president and CEO. "We are expanding the Southwest Vein, and this high-grade gold mineralization remains wide open down dip and along strike to the southwest." For the company's full press release, please visit: http://sonaresources.com/_resources/news/SONA_NR19_2010.pdf
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| Posted: 04 Nov 2011 09:03 AM PDT Addison Wiggin – November 4, 2011
After a week of meetings, writing about and flying to and from recording sessions for our new Project X we can't think of any other way to make this sovereign debt crisis interesting to you than by, well, showing you photos: 
"We've made important progress," declared President Obama a short time ago at the conclusion of the gathering. "Europe has the capacity to meet this challenge." Translation: They didn't accomplish squat. "World leaders failed to agree on increasing the resources of the International Monetary Fund," Bloomberg reports by way of explaining what went wrong. "Governments are awaiting further details of Europe's week-old rescue package before they commit cash, German Chancellor Angela Merkel said…" In other words, everyone agreed long ago to solve a debt problem by taking on more debt. But they're so deep in hock they can't agree on where to scare up even a token amount of collateral for the new debt. Presumably some of the leaders' minions are staying behind to work through the weekend, crafting yet another announcement to placate everyone before Asian markets open Sunday night. Unless they decide it's a lost cause and hit the bars.
After rifling through the sock drawer and looking between the couch cushions, the statisticians could scrounge only 80,000 new jobs last month.
However, the infamous "birth-death model" — which guesses at jobs created by startup business owners too busy to respond to BLS surveys — added 103,000 purely hypothetical jobs. Without those, October would have been in the red. Meanwhile…
Finally the two numbers the statisticians can't fudge…
Both numbers are up, barely, from 27-year lows reached over the summer. Whoopee.  Bottom line: There still aren't enough new jobs to keep up with the growth of the population, but the labor market appears to be stabilizing — barring any shocks to the system. So as long as the euro holds together… and Congress musters enough smoke and mirrors to prevent another downgrade of U.S. government debt… and the banks can continue to paper over their insolvency… then the job market should continue to bump along at its present feeble pace indefinitely.
Silver is down about 1%, but heroically holding the line at $34.
"Experts think that a new record could be in the cards soon," writes columnist Paul La Monica, "if the debt melodrama in Europe (As George Papandreou Turns?) continues." "The incessant chatter and gossip — will there be a referendum or not? — is only serving to make already jittery investors even more skittish," he goes on. "That's a perfect recipe for a rally in gold, which is the quintessential safe haven because it's something with tangible value … as opposed to a stock or paper currency." Nothing you don't already know, but we perk up when we see "mainstream" stories like this: They confirm that we're approaching the start of the inevitable blowoff mania that accompanies any secular asset rally. But not yet. We're still late in what Doug Casey calls the "wall of worry" stage.
"People got shaken out when gold went below $1,600," he tells King World News. "The price of gold has come right back up and it's left all of those investors as sold-out bulls, so it's great action." Gold's decisive move above $1,720 this week delivered 65% gains to readers of Strategic Currency Trader. Don't feel bad if you missed out: Most of Abe's recommendations play out in four days or less. And he'll have a new batch on Monday. You can get started right here.
"Despite that fact, the analytic commentary is unbelievably neutral. There is no enthusiasm." "These companies are making a huge amount of money and the stocks are going up and the analysts are saying, 'Big deal'…" "I was at a meeting the other day where there was a commentary on Newmont Mining and the assumptions that had to be made to support the stock here. I won't mention the name of the firm, but the analysis was based on a drop in the gold price to $1,000 in five years." "That left the analyst with a target price on Newmont of $56, and I believe the stock is $68 today. If that analyst were to use the same methodology and assume a $1,700 price in five years, that same methodology would get Newmont to $200." "So these analysts are totally behind the curve." [Ed. Note: Through a connection we've only just reopened last week, we just secured a supply of unique gold and silver bullion coins... and combined them with a "one-of-a-kind" storage solution. It's not, how shall we say, for everyone... but if the phone calls we've had regarding the subject are any indication, the appeal will be great for some. Supply is limited. Only 99 left. Call John Wilkinson for a short description. Or take a look here.]
"Portions of Bangkok are already flooded. Sandbag defenses surround most buildings, including my hotel. Which is mostly empty, by the way. When I arrived, they greeted me by name. I must've been the only nut coming into town. People are using the freeway as a parking lot to get their cars to higher ground." Indeed, they are. It's even visible from satellites…  "Many people have already left the city," he continues. "Bottled water is getting harder to find. Gasoline lines are forming, because the floods are affecting supply and shut down all the gas stations to the north. The hospitals are worried about medical supplies (particularly blood banks) if the waters break." But commerce still goes on. More from Chris next week… Including details on a meeting he had this morning with one company chief. "I can barely believe this opportunity exists," he writes. "A 20-year track record that is, frankly, astonishing. Vested insiders. All of things I look for. And practically unknown. It's hard to fathom that the guy behind this is not famous." And that's the most he'd tell us about it. Seriously. We're going to have to wait for the next issue of Mayer's Special Situations, just like you. (If you want to be on board, membership is available right now at a handsome discount.)
"So I went to work instead, $1,200 per year. It was a hard struggle, but I made it with a supportive wife and family. Ten years banking as my education, started businesses, some successful, some not. It was a wild ride, but we didn't go to the government and didn't go into personal debt. "We knew it was up to us as it is now up to you. So quit whining and go to work even if you have to start a business. Do what it takes."
"One of the bigger loans was at daily rate of 8%. I find this hard to believe, but he reiterated it to me. What kind of screw job is that? He got a call from one of the lenders who asked him to pick up the pace and double his payments, since one of his loans was 10 years old. They recalculated the numbers — and they were wrong. He had to call this to the lender's attention. Fortunately, he is working lots(!!!!!!) of hours and able to make payments. "This is a better gig than taxation. I think the scam goes further, to the universities, where they don't tell students what grants or gifts they get till a week before school starts. At that point, they are stuck with borrowing the shortage of funds. Further, I believe there is little or no clarification of terms of the loan. "Where's truth in lending here?" The 5: Everybody loves banks on the way up… cuz that's where the free money is. But when the jig is up and the bubble pops, "bankstas" become public enemies (warning: foul language):  A little background: The term "bankster" entered common usage in the late 19th century, according to the Oxford American Dictionary. A rap group called the Geto Boys recorded a semi-famous song in 1992 called "Damn It Feels Good to Be a Gangsta." The video is a mashup between the two. Too bad. If these guys weren't such dorks, the video might actually be funny.
"I am going to go to my job at Starbucks because the government won't pay me to upgrade my skills so I can find a better job, and if I just keep working here, I don't have to rewrite my resume and actually hand it out and stuff. I plan to do the minimum I can while not getting fired, because not getting fired is good enough… and then go shopping like TV advertisers told me to do." "Keep up the good work at The 5. I appreciate you telling me how I should think about world financial issues, since thinking on my own takes WAY too much effort." The 5: Hmmn. Could it be we're taking this informal sarcasm bit a little too far? Thank you, by the way, if you registered to learn more about the project we've dubbed Project X, which we assume this reader was responding to also, but chose not to join. We'll be in touch on Monday. Until then, have a good weekend, Addison Wiggin P.S. We have room for at least one more couple down at the Rancho Santana Dec. 14-18, 2011.  If you're a Reserve member and interested in joining me and Chris Mayer for a "Chill Weekend" on the Pacific Frontier, c'mon down. It's fun. And… we promise to get you back in plenty of time for the holidays. (Personally, we're considering Christmas in the nearby colonial town of Granada, just to soak up some of the local Latin flavor during the festivities there.) If you're at all interested, send a quick note to our man on the scene, surfer-in-residence Marc Brown. He'll get back to you promptly with pertinent details: transportation, lodging, meals, cocktails, a guided tour of the property, the good company of fellow Reserve members… and a chance to check out what we're building down at the Ranch. (Hint: the new clubhouse will be open!) No obligation if you contact Marc. He's a nice guy. (And we're told he'll pick up part of the cost of your trip if you ask nicely… tell him Addison told you to. Heh.)
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| Vikas Ranjan: Junior Gold Equities to Watch Posted: 04 Nov 2011 08:56 AM PDT The Gold Report: Vikas, given the recent agreement to shore up banks in the Eurozone with a $1 trillion eurofund, do you still believe the world is on a path to a soft recession? Vikas Ranjan: I think recent developments tell us that the risks are lower than a couple of weeks ago. The current economic problems, particularly in the Western countries, are more about policy than economics. The Greece debt bailout announcement could mitigate the potential of a hard run on other European countries, and it will have an impact on banks and the financial system in general. TGR: Gold went up on the news. How do you explain that? VR: That is a bit of a conundrum. Historically, gold goes up on uncertainty and other things go down. Over the last three to five months, we have seen more harmony; every asset class going up or going down together. The exception is U.S. Treasuries, which seems to be the only asset class people swarm to when things really are murky. To some extent, gold has bec...
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| The True Value Of Money (Literally) Posted: 04 Nov 2011 08:52 AM PDT
As a follow up bonus from the Artemis presentation earlier, we present this chart which answers the age old question: what is the true value of money? It does so in quite a literal fashion, and explains why Kyle Bass is such a fan of nickels...
As a reminder, from Michael Lewis' book on Kyle Bass: On nickels:
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| Credit Unconvinced As Stocks Close Near Highs Of Day Posted: 04 Nov 2011 08:50 AM PDT
Credit markets were far less sanguine into the close than equity markets as ES managed to get back to day session highs (and beyond). IG and HY credit markets closed much nearer their lows of the day and while broad-based risk assets rallied off the morning lows, the late day surge in stocks was entirely idiosyncratic!. HYG outperformed HY while HY secondary bonds were much more balanced (net buying to selling) today than in recent days. It certainly appeared credit market participants were much less comfortable holding into the Greek vote and uncertainty of the weekend than equity players. The USD was noisy all day but rallied into the close (as the EUR drifted back under 1.38) and Gold trod water as oil managed a modest rally while silver and copper lost more ground on the week. TSYs rallied only modestly today with the belly outperforming as we saw major duration reduction in corporate bond trading on the day as the long-end was net sold. VIX rose modestly into the close, disconnecting from stocks - like every other asset class.
Having tracked remarkably well all day long - as is relatively typical on lower volume days - the worlds of credit and equity disengaged into the close. Was it the Cyprus downgrade top 1 notch above junk? Missing MF money? Chatter out of Greece on Venizelos taking over? Who knows but the point is that the professional-only credit market did not agree with the flurry of excitement that took stocks to their highs of the day-session.
Interestingly HYG outperformed HY into the close. We have been prevaricating on the behavior of HYG relative to HY corporate bond buying, fund flows, and HY spread performance. In a nutshell we suspect that professionals are using the HYG ETF creation unit to 'force' the managers to buy in the illiquid HY secondary market enabling them to offload their illiquid large inventories of HY bonds - that would otherwise by very difficult. The chart below shows that the HY bond advance-decline level is at extreme levels and while fund flows have indeed been positive, the rise in shares outstanding for HYG in the last six months has been unprecedented (as we sold off no less) further reinforcing the idea that professionals are helping to pass risk off to retail via the ETF. This is of course a theory - but we do not hear many screaming buyers of HY debt and furthermore, primary markets appear shut still (despite impressive equity rallies and IG issuance) - risk appetite remains subdued.
Away from pure credit and equity markets, we saw equity hopefulness was very evident by its richness relative to CONTEXT (the broad basket of risk-based assets can be tracked here) as we entered the NFP print zone this morning. As the disappointing reality hit, it was somewhat amazing how ES converged down to where broad risk markets were suggesting value was. For the rest of the day, we tracked rather well as rumor/news moved markets together - ES overshooting modestly to the downside at the lows. It is, however, confirming of the credit-equity dislocation above that ES pulled away from CONTEXT into the close - again perhaps a little more enthusiastic than the rest of the market as to the weekend's activities.
The FX market was relatively calm in the majors for most of the week - compared to Sunday/Monday's craziness and it seems the quasi-peg that the MoF has instigated is holding for now as JPY's movements flat-lined.
And while the USD managed to gain around 2.5% on the week, oil and gold also improved on the week - while copper and silver slid commensurately.
And while Treasuries saw yields tumble dramatically (by around 25-30bps across the curve from 5Y out), we ended well off the week's lowest yield levels as 30Y managed a drop of over 40bps this week at its best. The seeming reality that BTPs are not well contained, that the EFSF strategy seems woefully unfunded and severely lacking in details, and the increasing sense of chaos arising from Europe (and its recession-prone self) should be wearing on investors. As macro data this week in the US was also hardly positive (and mostly disappointing), the fact that credit markets continue to trade much more negatively than stocks should at worst temper enthusiasm and at best see flows to IG credit (ex FINs) as vol remains elevated.
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| Gold Daily and Silver Weekly Charts - Liberty Without Virtue Posted: 04 Nov 2011 08:36 AM PDT |
| Euro Shorts Cover Modestly Following Max Pain; Dollar Bullish Bets Tumble Posted: 04 Nov 2011 08:00 AM PDT
As expected, following the maximum pain rip in the EURUSD late last week, which took the pair from 1.38 to just under 1.4250, all the weak hand shorts took their losses and run. And indeed, as the CFTC has just reported, bearish bets tightened substantially from -76,512 in non-commercial net contracts, to -60,060. At this point it is safe to say that if the ridiculous move higher in the EURUSD did not force the covering of these hands, then they surely have the balance sheet to withstand such epic rips and then some. We no longer expect major short covering in the EURUSD to take the market higher, as the residual shorts not only have the conviction, but the marginable capital to see the EUR, and with it the stock market, much lower. And while of lesser significance, USD net long contracts declined by 25% from 32,110 to 23,823, simply meaning that when the scramble in a risk off moment returns, there will be quite a few incremental buyers of the USD, and thus shorters of that other currency: the EUR, now that both the JPY and the CHF are effectively pegged courtesy of their central banks decisions.
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| Posted: 04 Nov 2011 07:36 AM PDT
One of the long-term recurring themes both here and in other more objective media, has been the encroaching domination of the central planning regime, or monetary authorities, read central banks, in the domain of capital markets and overall broad sovereignty, to the point where there is neither technical nor fundamental analysis left, but merely the question of where is the next batch of excess liquidity going to come from. Welcome to the death throes of the fiat system. Artemis Capital has released an extended must read presentation that summarizes just how global changes in trade, currency exchange, global monetary excess liquidity in recent decades, and especially in the coming future, will increasingly determine and define risk, and more troubling, the centuries old anarchism of state sovereignty. Anarchism, because as Europe has demonstrated so very well, in the current world the only real actors are the central banks. And with each passing day they become ever more powerful players in the global capital markets arena, as confirmed by correlations that rise every higher, approaching 1.000 across all asset classes. Anyone wondering why the only fulcrum variable for the future of risk will be FX exchange rates, and why any and all wars in the future will be primarily in binary "currency" format, we urge a careful reading of the attached slideshow by Artemis Capital titled "Fall of the House Of Money: Changes in Global Trade and Currency Exchange." None of this will come as a surprise to regular readers, but some of the concepts bear repeating. Artemis' Chris Cole starts with the premise of "World War €urrency" Countries are artificially devaluing their currencies to generate competitive trade advantages or to finance deficits United States
Japan
China
Switzerland
Brazil
At its core, the primary source of tension, volatility and margina price influence is the relationship between the developed (debtor) and emerging (Creditor) nation.
What this underlying dynamic results in is a world in which asset prices are driven not by economic fundamentals but by the "Carry Trade" - i.e. who has the most and cheapest capital/liquidity.
The liquidity generated by the debtor nations, and which drives the above Risk ___ dynamics, has had another ominous side-effect: sending all correlations to all time record highs.
Doubt the carry trade is the stock market? Don't.
Naturally, the next point of debat is an observation of the biggest transgressor of all: the United States, and its central bank, whose sole purpose for its existence, has been to slowly devalue the dollar thus creating stealth inflation, and inflating the debt which not only in America, but across the entire developed world is now at an all time high. Alas, with ZIRP in place, and negative rates impossible, the only other option is to print ever more. Nothing new there. Yet the question remains: can currency devaluation be the basis of economic growth? The answer: it can create the illusion of economic growth... and that's it.
Even more stark is the following chart: it shows the S&P adjusted for the dollar's value destruction: seen this way the S&P is comparable to levels seen back in 1997! But because nobody considers the fact that all stock profits are paid out in dollars, and the dollar has lost so much purchasing power ever since the great moderation, instead gauging everything in nominal values, it is obvious that the Fed's plan continues to work.
So what is the conclusion:
And some advice from Artemis:
Full presentation:
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| COT Gold, Silver and US Dollar Index Report - November 4, 2011 Posted: 04 Nov 2011 07:32 AM PDT COT Gold, Silver and US Dollar Index Report - November 4, 2011
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| Posted: 04 Nov 2011 07:25 AM PDT Silver Trading Cy
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| CFTC Update on the Investigation Into Manipulation of the Silver Market In Progress Since 2008 Posted: 04 Nov 2011 07:05 AM PDT |
| Posted: 04 Nov 2011 07:01 AM PDT courtesy of DailyFX.com November 04, 2011 08:04 AM 300 Minute Bars Prepared by Jamie Saettele, CMT I maintain that the rally from the September low is corrective and will be retraced. Gold has reversed from channel resistance which is defended by the 100% extension of the rally from the low at1750. I am cautiously bearish against 1752.45. Trading above there would negate the bearish bias and require a reassessment of the situation. Latest Video Other TA Articles...
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| Could MF Global Be The Lehman/AIG Event Trigger? Posted: 04 Nov 2011 06:26 AM PDT Segregated reserve bank accounts under SEC Rule 15c3-3: The SEC Act of 1934 requires broker dealers to maintain "special reserve bank accounts" strictly for customers which are separated from the broker dealer's own accounts.First off, I just want to say that if Jon Corzine does not see jail time over this then our system is seriously corrupt and fraudulent and we're all a bunch of lifeless serfs if we don't join the Occupy movement to protest the raping and pillaging our country by a select few. That's the bottom line. The brokerage accounts of MF are being moved to several different brokers who are presumably on sound financial footing. Here's the problem: it looks like there must be some missing collateral associated with those customer accounts to the tune of about $1 billion: Call it the mother of all margin calls: Up to 50,000 former customers of bankrupt broker MF Global must post some $1 billion in additional collateral to new brokers almost overnight, or be forced out of their trades.In other words, a large portion of the collateral that should be attached to each and every one of those accounts is not accounted for and the customer will have to pony up the funds to cover the margin requirements or have their accounts liquidated. Here's the story: LINK Tragically, if the markets for the various commodities and metals associated with those accounts experience some downside volatility during the transfer process, the account could be wiped out. I know of at least one fund that is closing down because of this. The ONLY failure on this guy's part is that he trusted the firm being run by Jon Corzine, former Goldman CEO and former Governor of New Jersey. I guess if you lie down with dogs you wake up with fleas. In this case, if you lie down with someone who is BOTH a Wall Street executive AND a politician, you wake up with a combination of late-stage pancreas cancer and hep-C. The bigger problem, at least for the rest of us, is what the hell happened to the collateral. The missing collateral should be cash - readily liquid - and futures contracts and securities - mostly liquid. Where is it? Why are these customer accounts not being transferred intact? According to the SEC Act of 1934, these funds and securities should have been in a separate account - not one penny of money should be unaccounted for. I have said a few times that when one big financial firm starts doing something and gets away with it, they all start doing it. Remember the repo game Lehman was doing to dress up its quarterly balance sheet for regulators and investors? It turns out every big Wall Street firm does this, everyone knows it now and the regulators are doing nothing about it. Well it turns out that MF was doing this too, among other things. But they were also likely illegally rehypothecating the customer collateral and misappropriating the funds obtained by rehypothecating customer collateral. Now the collateral and the funds are gone. Once people understand what hypothecation/rehypothecation is - if they care about their money they will, that is - the MF situation could lead to a confidence crisis in the brokerage industry. Almost everyone who opens a margineable brokerage account, from little guys to sophisticated hedge funds, knowingly or typically unknowingly also signs a hypothecation agreement, which enables the brokerage firm to take the securities in your margin account and re-pledge them as collateral to obtain bank financing for your margin account. It looks like MF was taking this collateral and obtaining financing but using that money for other purposes - like investing in short term Greek sovereign paper paying 50% now that pays 100%, which means MF's investment was wiped out and now the bank that provided the funds for those investments has the customer securities as collateral for the MF trade and the customer is screwed. Please note, I don't know for sure that is exactly what happened, but I'm 90% certain that is generically what was going at MF and why at least $700 million in customer cash and $1 billion in collateral is missing and possibly more. You know, if we were on a gold standard and did not have an extreme fractional banking system, this couldn't happen. But I digress. I will say that based on the most recent news flowing out of Jeffries securities, if you have an account there I would move it. Jeffries was downgraded by Egan-Jones recently to BBB-. S&P has not budged. Usually the ratings agencies are way behind the curve in downgrading financial firms. Moodys usually keeps a high rating intact until the day before a firm goes under. Egan-Jones is typically a bit more ethical and forthright with putting out the truth. The fact that questions are being raised about Jeffries should raise the hair on the back of your neck if you have an account there. Jeffries has an unsavory history and culture. The current CEO originally worked as a junk bond trader directly for Michael Milken at Drexel Burnham. Remember that saga? A lot of ex-Drexel guys who didn't get thrown in jail ended up at Jeffries. If you keep your brokerage account there just remember that "when you lie down with dogs..." 
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| Gold Prices: Too Volatile for a "Safe Haven"? Posted: 04 Nov 2011 05:52 AM PDT Volatility means gold may have lost its "safe haven" tag – but Gold Prices could still have some upside left...
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| Gold Prices: Too Volatile for a "Safe Haven"? Posted: 04 Nov 2011 05:52 AM PDT Volatility means gold may have lost its "safe haven" tag – but Gold Prices could still have some upside left...
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| Posted: 04 Nov 2011 05:33 AM PDT Europe's Bailout "Bazooka" Fires Blanks
From that point the craziness really began: It would be a referendum on the bailout. No, it would be a referendum on Greece's continued membership in the EU. Papandreou would resign. Papandreou would not resign. The referendum would proceed. The referendum will not be necessary of Papandreou can form a unity government… Papandreou will apparently be subject to a confidence vote tonight. If he survives it will probably come with the loss of some power. If he doesn't survive, maybe the new government will accept the latest bailout deal proffered, but maybe they wont… One thing is certain, any sense that Europe has a handle on their issues has been dashed and interest rates in the periphery are reflecting the marked rise in uncertainty. Italy in particular is now under intense scrutiny, and is scrambling to reassure markets before their yields reach a critical tipping point. The G20 says Italy will be required to endure IMF scrutiny of its progress toward a balanced budget. PM Silvio Berlusconi was indignant, pointing out that Italy is in better financial shape than France or the UK. That may be true Silvio, but pointing that out isn't going to make you any friends within the union. German Chancellor Merkel and French President Sarkozy are already 'cheesed' beyond belief at Papandreou for queering the recently announced bailout deal. Given the tenuous position Italy finds itself in, I'm pretty sure you don't want to incur their wrath as well. France is already fighting desperately to hang on to their triple-A rating, they certainly don't need the leader of Europe's third largest economy adding to their woes in an effort to save face. US advice to Europe was essentially 'go big, or go home.' That may in fact be sound advice, but they also must be aware that more big borrowing — to paper over the big borrowing of the past — is not really a solution, but merely a kick of the can down the road. Also, Germany is keenly aware that it is they that must ultimately pay that tab; and quite franky, German taxpayers remain broadly disinclined to bailout those they perceived to be profligates, such as Greece and Italy. If last week's bailout plan was the "bazooka," then clearly the next plan will have to be the 'howitzer.' If Europe is unable to prevent contagion from Greece to a larger economy like Spain or Italy (or perhaps even France), then even a howitzer will prove to lack sufficient firepower. The escalation from there may ultimately lead to weapons of mass financial destruction; in other words, printing with abandon to finance central bank and government asset purchases. Such risks provide the incentive to bolster your protection against the further devaluation of fiat currency. Protection that is provided by gold.
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The basic market problem is there is too much sovereign borrowing for the money available, which would normally drive interest rates sharply higher. Some countries have got round this by printing money while pretending they are issuing bonds. A few countries are unable to do this, because they lack their own printable currencies. And that is the root of the problem faced by the weaker eurozone members.
According to the U.S. Census Bureau, a higher percentage of Americans is living in extreme poverty than they have ever measured before. In 2010, we were told that the economy was recovering, but the truth is that the number of the "very poor" soared to heights never seen previously. Back in 1993 and back in 2009, the rate of extreme poverty was just over 6 percent, and that represented the worst numbers on record. But in 2010, the rate of extreme poverty hit a whopping 6.7 percent. That means that one out of every 15 Americans is now considered to be "very poor". For many people, this is all very confusing because their guts are telling them that things are getting worse and yet the mainstream media keeps telling them that everything is just fine. Hopefully this article will help people realize that the plight of the poorest of the poor continues to deteriorate all across the United States. In addition, hopefully this article will inspire many of you to lend a hand to those that are truly in need.
This is no way to start a weekend. Traders are throwing a snit because the Durable Solution to the euro crisis is proving as phony as… Kim Kardashian's marriage.
For weeks, the G-20 summit in Cannes yesterday was billed as the site where matters would get settled once and for all. All the preliminary meetings, phone calls, the "Merkozy" tete-a-tetes… all laying the groundwork for… what?
In the meantime, the Dow has surrendered more than three-quarters of yesterday's gains. All the major U.S. indexes are down at least 1%.
In fairness, the euro-leaders failure to kick the Cannes isn't the only factor in play. There was also an underwhelming nonfarm payrolls report from the Bureau of Labor Statistics.
Gold has taken everything in stride today. It's in line to end the week slightly above $1,750 — something that hasn't happened since mid-September.
"Gold: The Hedge Against Political Stupidity," reads the headline of a story that's turned up at CNN Money.
"It's great," says Tocqueville Gold Fund manager John Hathaway of gold's recent price action.
"I'm actually really pleased," Mr. Hathaway goes on, "with how the [gold] stocks are behaving, because now we've seen some very good earnings…"
"The city is on edge here," writes our wayward managing editor Chris Mayer from the flooding city of Bangkok, Thailand.
"When I reached the age to be able to go to college," writes a reader after yesterday's examination of the higher education bubble, "we didn't have the money. No loans available, scholarships at a minimum and very few jobs."
"You'll love this," writes another. "One of my kids had loans from his BS. Then he got his MS with more loans. Total $100,000. Three loans he's working on paying off."
"I really enjoy reading The 5 each day," writes our final correspondent, "mostly because I am far too lazy to search through all the news sources on my own to get what is important. The reason I am taking time away from playing solitaire, watching Jersey Shore and eating Doritos is that I don't think I am alone in my laziness."
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