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Wednesday, August 8, 2012

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Is Silver Wheaton Changing Direction?

Posted: 08 Aug 2012 11:47 AM PDT

By Lior Cohen:

The positive news for Silver Wheaton Corp. (SLW) is that it had acquired from HudBay Minerals Inc. (HBM) the life of mine silver production from its currently producing 777 Mine. Silver Wheaton will pay a total of $750 million for this mine. This news is likely to help rally Silver Wheaton's stock price in the near future and generate cash flow for the company. Even before this news came out, Silver Wheaton rose during the month. The company's stock rose by 4.1%; silver, by 0.6%. On the other hand, during 2012 the company's stock declined 5.7%; silver price, by 5%; iShares Silver Trust (SLV), by 5.4%. Since Silver Wheaton's stock is strongly correlated with the price of silver, if silver price recovers in the near future, Silver Wheaton's stock will follow. So what is the current status of the silver market?

Many bullion traders were disappointed from the recent FOMC


Complete Story »

Why Gold Bulls Need To Temper Their Emotions

Posted: 08 Aug 2012 11:41 AM PDT

By Mike Williams:

LOL! catalysts for a break upwards aren't there? Are you blind? The euro is falling apart. The dollar is doomed because of the USA`s addiction to debt and refusal to reign in spending. The us is warmongering again against Iran. Real inflation closer to 10% not the manipulated figure the government feeds you. The situation in Europe is dire - 25% unemployment in Spain and Greece. Just how long can the USA keep spending money it doesn't have? Digital money not worth the paper its not printed on. WAKE UP to what is REALLY happening with your bankster wrecked economy! Gold should be over $15k by now to take account of all the fake fiat money in existence. I suggest you all watch Mike Maloney - Debt collapse $20,000 gold and wake up to whats coming

- SA Commenter

This comment came in response to a recent article of mine


Complete Story »

Japan Update

Posted: 08 Aug 2012 11:38 AM PDT

By Marc Chandler:

There are three developments in Japan to note: Political compromise over the retail sales tax hike, outcome of the BOJ meeting and economic developments. Despite some press reports playing up the likelihood of official intervention, we continue to see the odds as slight. The dollar-yen exchange rate remains confined to a JPY78-JPY79 trading range.

While the euro has recovered around 4% against the yen since late July, we expect a return to the lows as the European debt crisis remains unresolved (and arguably unresolvable in the near- to intermediate term).

1. A deal was struck late in Tokyo today that secures the LDP and New Komeito parties support for the Prime Minister's retail sales tax hike in the upper house of the Diet. Elections will be called shortly after the bill passes. No specific date has been announced, but a fall election looks likely.

The LDP had helped secure Noda


Complete Story »

Government Properties Income Trust Is Not Cheap Enough

Posted: 08 Aug 2012 11:06 AM PDT

ByCamelot Portfolios, LLC:

By Jason Born, CFA

It's an old saw, but we think it still has some cutting to do. When the California gold rush was on, the wisdom that sprung from those days was that the folks who supplied picks, shovels, and blue jeans became wealthy while miners went bust for the most part. During the Internet boom of the 1990s, Cisco Systems (CSCO) provided the "picks" for the expanding data highway and grew into an enormous company. Today, with the federal government growing ever larger, we are looking to see if there is any value in Government Properties Income Trust (GOV). GOV leases office buildings to federal, state, and other governmental organizations, and since it is organized as a REIT it pays out most of its income to shareholders, making for a fat, almost irresistible dividend yield of about 7.5%. A full 93% of its revenues come from the U.S.


Complete Story »

The Moment Of Truth Has Come For Gold

Posted: 08 Aug 2012 10:33 AM PDT

By Chifbaw:

A few weeks ago, we suggested that gold was demonstrating a pattern of uncertainty, and that our expectations were for a break out to the downside. Figure 1 shows an updated chart of gold price with trendline support in orange and trendline resistance in blue. As we can see, the key moment here is that we are still within this triangle of uncertainty. However, instead of converging toward the horizontal support of $1,530, we are now converging with an oblique angle defined by even earlier support levels (bottoms in April and June 2011).

As we can also see on the last candlesticks, we broke to the upside the minor descending trendline resistance, but were stopped by the major trendline resistance. We have closed the week above $1,600 after a risk rally that resulted from positive job numbers on Friday, just in between these two resistance trendlines. The market is still


Complete Story »

The Big Picture photo spread...

Posted: 08 Aug 2012 09:41 AM PDT

..a series of pictures re gold, mostly in a sociopolitical context:

http://www.boston.com/bigpicture/201...1.html#photo34

The picture of ancient silver and gold coins shows why gold is and has been the metal of kings since day one, and will continue to be THE wealth asset to own going forward.

fyi, R.

Gold Rush in India? Government Steps in Again

Posted: 08 Aug 2012 09:10 AM PDT

from mineweb.com:

MUMBAI (MINEWEB) – The Indian government is at it again. Worried that the flow of savings is moving towards investment in gold, India's Finance Minister P Chidambaram has said there is a need to spread financial literacy to encourage people to invest in market instruments and not bullion.

This was followed by the Prime Minister, Manmohan Singh, laying down policy decisions to direct the shift of investment towards insurance and mutual fund schemes.

In the first two months of 2012, gold purchases in India jumped 35%, impacting investments in other instruments like the stock market, mutual funds and property. The government has said it would prefer savings to be invested in "more productive assets" that would help boost the growth rate.

Keep on reading @ mineweb.com

Coeur d’Alene Mines Acquires Shares in Huldra Silver Inc.

Posted: 08 Aug 2012 09:04 AM PDT

Quoting the Full Release from Couer D'Alene:

Coeur d'Alene Mines Corporation ("Coeur") (NYSE:CDE)(TSX:CDM) today announced that it has agreed to acquire 1,851,852 common shares (the "Shares") of Huldra Silver Inc. ("Huldra") (TSXV: HDA) at a purchase price of C$1.08 per Share, for total consideration of C$2 million. The Shares will be acquired pursuant to a subscription agreement as part of private placement transaction of Huldra issuing in the aggregate 2,777,777 Shares.

Prior to the acquisition of the Shares, Coeur and its affiliates and joint actors held 1,905,000 Shares and warrants to acquire an additional 1,905,000 Shares. After giving effect to the acquisition, Coeur will own and control 3,756,852 Shares, representing approximately 8.8% of the issued and outstanding Shares based on information provided to Coeur by Huldra. On a fully diluted basis, based on information provided to it, Coeur believes it will own and control 12.7% of all Shares of Huldra. The acquisition of the Shares is being made for investment purposes. Depending on the market and other conditions, Coeur may, from time to time, increase or decrease its ownership, control or direction over the Shares and/or other securities of Huldra

Russia Today’s ‘Capital Account’ Interviews GATA Secretary/Treasurer Chris Powell

Posted: 08 Aug 2012 08:59 AM PDT

from caseyresearch.com:

Yesterday in Gold and Silver

Gold didn't do much during the Far East trading session on Tuesday, but a smallish rally began shortly after 3:00 p.m. Hong Kong time around the $1,609 spot price mark. The high of the day [$1,619.50 spot] came minutes before 9:00 a.m. in New York…and from there it got sold off to its low of the day [$1,607.70 spot] at 10:00 a.m. Eastern…the time of the London afternoon gold 'fix'. From that time onwards, it didn't do much.

Once again, net volume was pretty light…around 93,000 contracts…and gold closed at $1,612.30 spot…up the magnificent sum of 70 cents.

Keep on reading @ caseyresearch.com

The Crime Against Silver

Posted: 08 Aug 2012 08:52 AM PDT

Commodity Outlook: Gold Trends & Market Forces

Posted: 08 Aug 2012 08:36 AM PDT

Gold was this week on the brink. On the brink of what? Well, on the brink of … going lower. I have drawn a red line on the chart below at $1,525 an ounce. That red line is your brink.

NYS Order on Standard Chartered’s Iran Transfers Opens Up US, UK Regulatory Pig Fight

Posted: 08 Aug 2012 08:20 AM PDT

I hope Benjamin Lawsky, the New York Superintendent of Financial Services, has balls of steel. He will need them.

In case you missed it, a major news story yesterday is the bombshell that Lawsky dropped on the British bank, Standard Chartered, in the form of an order (a regulatory determination) that set out in considerable detail how the bank, with deep involvement of senior in house counsel and compliance staff, had doctored ("repaired") wire transfers so as to disguise the fact that the customers were major Iranian banks, including its central bank. Both SCB's outside US counsel (in 2003) and the head of the US operations (in 2006) raised big red flags that the way the banks was operating was out of line with the regs. The US chief was begging to exit the Iran business. From the order:

Firstly," he wrote, "we believe [the Iranian business] needs urgent reviewing at the Group level to evaluate if its returns and strategic benefits are . . . still commensurate with the potential to cause very serious or even catastrophic reputational damage to the Group." His plea to the home office continued: "[s]econdly, there is equally importantly potential of risk of subjecting management in US and London (e.g. you and I) and elsewhere to personal reputational damages and/or serious criminal liability.

Yet these concerns were ignored. The order states that over $250 billion was transferred impermissibly from 2001 to 2010 on behalf of Iranian clients, and it is also looking into similar transfers with Libya, Sudan, and Myanmar.

The order says that the state regulator will put a monitor of its own choosing in place at the bank's expense, and it has summoned it to appear on August 15 and explain why it should not lose its New York license and its access to US dollar clearing services. As we pointed out yesterday, it is very unusual for a state regulator to act on its own in such an aggressive manner (not that I disapprove). And I can't think of a single case where a bank has been threatened in public with the loss of a major license. I presume that is what happened privately to Salomon in the wake of its Treasury bond bidding scandal, when CEO John Gutfreund and three other executives suddenly stepped down. Bankers Trust pleaded guilty in a suit by New York and other states for escheatment fraud. Guilt of a felony meant municipalities and many private companies were forbidden to conduct business with it, which lead to a brokered marriage to Deutsche Bank.

Across the pond, banks, MPs, and the media are up in arms. Part of this is a failure to understand the laws and the DFS's role; this is seen as a Washington conspiracy to kick the City when it is already down thanks to the Libor scandal (and if I were at the Bank of England or the FSA, I'd be furious at the way Geithner managed to fob off all responsibility on them, so I suspect there is a lot of pent up hostility looking for an outlet). Per the Financial Times:

"This is an attack," said one senior City figure. "If we don't stand up to it, it could be catastrophic for London's financial standing. There has to be some stage where Number 10 or the Treasury says something in defence of the banks." A second said: "Political intervention may be needed over this."

And in a separate article:

In London, John Mann, an opposition Labour party member of parliament's influential Treasury select committee, said he was concerned about an "increasing anti-British bias by US regulators and politicians", which he said could have been influenced by a desire to shift financial business from London to New York.

"This is a real power grab [by US authorities] and the stakes are very high," he said.

And of course, Standard Chartered is trying to claim that these were "small paperwork errors" (where have we heard that line before?). If you read the order, there is too much evidence in there alone to regard that as credible.

But the Treasury and Fed are also in an uproar, although they have no one to blame but themselves for their discomfort. The Treasury (supposedly the lead actor in investigating "terrorist financing" and violations of economic sanctions; the Office of Foreign Assets Control is a Treasury operation), Fed, DoJ, District Attorney of New York and the DFS were all investigating Iran transfers at various banks, including SCB, since 2010. The others has settled; SCB was still under investigation and seemed to believe it would get a clean bill of health.

The UK media is depicting Lawsky as a "rogue regulator," a lone wolf who has way overstepped his authority and is out of line in trying to enforce Federal laws relating to Iran. The facts are somewhat different.

Lawsky came into his post in 2011. A reliable and connected source says that the Fed has gone out on the broad tape claiming that Lawsky did not inform them. In fact, he met with them about three months ago, laid out his case, and the folks at the Fed said, in effect, "Go for it." Lawsky took them at their word and now everyone is gunning for him. The behavior pattern is awfully reminiscent of what another prosecutor, Neil Barofsky, found when he worked busting drug lords in Columbia: like DEA and DOJ, the Fed evidently cares far more about not being made to look like incompetent enablers rather than shutting down a massive infusion of money to Iran. Geithner has also mounted a major campaign against Lawsky.

Despite the enormous row that this action has kicked up, Lawsky may be able to ride it out. The key is whether Cuomo continues to back him. At least as of the publication of stories last night (I'm putting this up to go live a bit after I turn in), Treasury has made no formal statement, although there was a bit of a bleat issued, per Bloomberg:

The New York intermediary through which the transaction went through did not have to be notified by the British bank that it was carrying out this transaction on behalf of an Iranian entity in order to meet the requirements of this regulation, said John Sullivan, the Treasury Department spokesman responsible for terrorism and financial intelligence.

Sullivan declined to discuss any further details about the probe of Standard Chartered.

The Administration may well be hamstrung in its ability to rein in Lawsky. Given that this is an election year, and the race is close, Obama can't afford to alienate older, well heeled Jews, who are ovewhelmingly pro-Israel (the younger generation is another story). So Geithner and Obama can't afford to engage in open war. Indeed, if the Romney camp is smart, it will depict the Administration's failure to join Lawsky as proof that it is soft on Iran and terrorism generally.

Similarly Lawsky will gain considerable stature if he prevails, so it isn't likely that the Administration can offer a big enough inducement to get him to back off (and the way Schneiderman was seduced and then treated shabbily would be enough to make anyone with a operating brain cell wary of trusting them to deliver on their promises).

Separately, I'm astonished by the amount of abjectly ignorant commentary on this matter thus far. The UK press is not comporting itself well (failing to understand that dollar clearing services are ultimately backstopped by the Fed, hence something the US is within its rights to regulate, or complaining about a "Washington" regulatory grab by a New York regulator). But there are some lapses in the US coverage as well, particularly (and I suspect to see more of this) the uncritical acceptance of the argument that SCB (and now the embarrassed and upset Federal regulators) is trying to make, that Lawsky's case rests on his supposedly aggressive reading of the reporting requirements for transfers with Iranian banks. An example in the New York Times:

The agencies involved, including the Treasury Department, are debating just how expansive the suspected wrongdoing was at Standard Chartered. Benjamin M. Lawsky, a former prosecutor who now leads the state banking regulator, claimed the bank had processed $250 billion in tainted money while cloaking the identities of its Iranian clients by stripping their names from paperwork. Some federal authorities, though, believe that the amount is much smaller, perhaps in the millions. Standard Chartered, for its part, said that only $14 million did not comply with regulations.

The wide disparity stems from different interpretations of how many Standard Chartered transactions violated a federal rule that governs the way money from abroad moves through the American financial system.

It's hard to see the DFS position as some sort of regulatory overreach when the bank's own US outside counsel objected strenuously to the bank's view thåt wire stripping was OK in 2003, and the top executive in the US was later deeply concerned too. More important, if you read the order, only one of the seven violations of the law cited relies on the Federal statue involving clearing of dollar transactions with Iran, and that is formulated narrowly:

SCB engaged in transactions within the United States without complying with the requirements of 31 C.F.R. 560.516 in that SCB prevented its New York branch from determining whether the underlying transactions were permissible under by 31 C.F.R. 560.516 before effecting them.

Two of the other violations, Offering False Instrument for Filing P.L. § 175.35, and Falsifying Business Records P.L. § 175.10, depending on the severity of the violation (and these look severe) are Class E felonies. Note from the Bankers Trust example above: being found to be a felon is a death warrant for a bank.

Some readers are unhappy that this action centers on Iran, but as I keep stressing, this initiative is all about past violations, and does not escalate the conflict with Iran. And the Brits and the US media are treating this contremps as a banking story, not a Middle East story. I find the stung reaction of the British bankers a positive sign. Maybe Lawsky's charge will finally demonstrate that a race to the regulatory bottom erodes the stature and credibility of a financial center. As remarkable as it no doubt seems to Americans, we aren't at the bottom in some areas of banking, and that might come to be seen, as it was until the 1980s, as a competitive strength.


GOLD close to confirming breakout to all-time highs

Posted: 08 Aug 2012 07:24 AM PDT

GOLD close to confirming a new breakout to all-time highs

David Banister- www.markettrendforecast.com  Aug 8th 2012

Back in the fall of 2011 I was warning my subscribers and the public via articles to prepare for a large correction in the price of GOLD.  The metal had experienced a primary wave 3 rally from $681 per ounce in the fall of 2008 to the upper $1800's at the time of my warnings in the fall of 2011. A 34 Fibonacci month rally was sure to be followed by an 8-13 month consolidation period, or what I would term a Primary wave 4 correction pattern.

We have seen GOLD drop at low as the $1520's during this expected 8-13 month window, but at this time it looks to me like a break over $1630 on a closing basis will put the nail in the wave 4 coffin. I expect GOLD to rally for about 8-13 months into at least June of 2013 and our longstanding target has been in the $2300 per ounce arena in US Dollar terms. Some pundits have much higher targets in the $3,500 per ounce or higher area but I am using my low end targets for reasonable accuracy.

This 5th wave up can be difficult to project because 5th waves in stock or metals markets can be what are called "Extension" waves. This means they can have a potentially much larger percentage movement relative to the prior waves 1 and 3 of the primary bull market since 2001.  You can end up with a parabolic move at the end of wave 5, where those $3000 plus targets are possible.  I expect the 5th wave to be about 61% of the amplitude of wave 3, which ran from 681 to 1923, or about $1242 per ounce. If we were to apply that math, we come up with $767 per ounce of rally off the wave 4 lows.  $1520 plus $767 puts us at $2287 per ounce, or roughly $2300 an ounce low end target.

In summary, crowd behavior is crucial to the next coming movement in GOLD and it could be a sharp rally that catches many off guard, much like the downdraft last fall did the same to the Bulls. Be prepared to go long GOLD once over $1630 per ounce and buy dips along the way up to $2300 into the summer of 2013.

Receive our free weekly reports at www.markettrendforecast.com or sign up for a discounted subscription and get our reports daily on the SP 500 and GOLD.

Silver Market Sees ‘Anomalies’ and ‘Devious Efforts’ - CFTC’s Chilton

Posted: 08 Aug 2012 07:20 AM PDT

gold.ie

I’d Like To Be Under The Sea … Mining

Posted: 08 Aug 2012 07:01 AM PDT

Metals markets opened the midweek session on the downside as the euro's "Draghi Rally" fizzled out and the US dollar recovered to near 82.50 on the trade-weighted index. The common currency had rallied (and gold along with it) on the back of rising optimism.

Northern Tiger Resources Channel Samples 132.91 g/t Gold over 6.9 Metres Along Strike on New Sleeping Giant Zone Discovery - 3Ace Project, Yukon

Posted: 08 Aug 2012 06:03 AM PDT

August 8, 2012: Northern Tiger Resources Inc. ("Northern Tiger" or the "Company") (NTR: TSX-V) is pleased to announce that channel sampling on a newly exposed quartz vein exposure in the Sleeping Giant Zone has confirmed the high-grade nature of the gold mineralization previously reported from chip sampling (eleven continuous one metre chip samples taken along the strike of the new vein exposure returned a weighted average of 50.3 g/t gold - see new release dated July 31, 2012). Seven separate continuous channel samples totalling 32 metres now test the entire 25 metre exposed strike length of the vein, and include 132.91 g/t gold over 6.9 metres.

"We are pleased that the channel samples, a more robust sampling method, have confirmed and even improved upon the results of the initial chip sampling of this new discovery, and now look forward to receiving results from the drill testing of the zone," says Greg Hayes, President of Northern Tiger.

The new high-grade vein segment is exposed for 25 metres along strike, and is estimated to be 3 metres wide (the attitude of the vein and related topography made it impractical to trench the vein across strike). A map and photo of the vein will be posted on the Company's website at www.northern-tiger.com. Additional trenching has also been completed on other Sleeping Giant vein segments, and channel samples have been completed on these new exposures as well. The trenching has also provided additional structural information, and it was determined that drilling completed in 2010 may not have adequately tested the zone (results up to 1.5 g/t gold over 11.9 metres - see news release dated November 25, 2010). As a result, the drill rig was redirected to the Sleeping Giant Zone, and seven holes (366 metres) have been completed with assays pending.

The Sleeping Giant Zone is interpreted to be a series of overlapping (en echelon) massive quartz veins hosted in a shear zone located one kilometre east of the Main Zone where 2011 drilling returned results up to 4.6 g/t gold over 35.0 metres, including 106.2 g/t gold over 1.0 metre (see news release dated October 25, 2011). Individual vein segments, combined with halos of silicified wall rock and quartz stockwork, are up to 25 metres in width. The northeast striking veins are hosted in a north-south striking mineralized trend exposed in an area 125 metres wide by 300 metres long. The Sleeping Giant Zone appears to be structurally similar to the Main Zone, but is exposed over a larger area.

This News Release has been reviewed and approved by Dennis Ouellette, B.Sc., P.Geol., a Qualified Person as defined by NI 43-101. All rock and drill core samples were analyzed by Inspectorate America Corporation of Richmond, British Columbia using 50 gram fire assay and 50-element, 4-acid ICP analysis. When visible gold is noted in drill core samples or regular fire assay values appear abnormally high, the pulp and metallic screen assay method is used to determine the total gold content and gold contents of different size fractions. This is considered industry best practice when dealing with coarse gold mineralization where a nugget effect is suspected. This determination is accepted as the most representative value and is used in the assay database.

Sleeping Giant Zone - Trench 1 Channel Samples*
  Individual Gold Assays Continuous
Chip Length		 Weighted Average
Gold Assay
Channel #1 1.37 g/t  over 1.0m
1.13 g/t over 0.7m
6.00 g/t over 0.7m		 2.4 metres           2.57 g/t
Channel #2 1.03 g/t over 1.0m
0.73 g/t over 0.3m
 0.06 g/t over 0.4m
 0.61 g/t over 1.1m
 12.11 g/t over 1.0m
 15.05 g/t over 1.0m
 10.98 g/t over 1.0m
 159.73 g/t over 0.8m		 6.6 metres         25.58 g/t
Channel #3 137.76 g/t over 1.0m
487.89 g/t over 0.6m
106.98 g/t over 0.8m
2.23 g/t over 1.0m		 3.4 metres 156.09 g/t
Channel #4 21.73 g/t over 0.9m
334.92 g/t over 1.0m
20.29 g/t over 1.1m
1.75 g/t over 0.4m
8.91 g/t over 1.0m		 4.4 metres 92.62 g/t
Channel #5 6.68 g/t over 1.1m
22.15 g/t over 0.9m
46.34 g/t over 1.1m		 3.1 metres 25.95 g/t
Channel #6 246.19 g/t over 1.1m
1,881.79 g/t over 1.0m
112.19 g/t over 0.9m
14.33 g/t over 1.0m
19.99 g/t over 1.2m		 5.2 metres             448.92 g/t
Channel #7 29.67 g/t over 1.0m
46.41 g/t over 1.1m
7.71 g/t over 1.0m
8.97 g/t over 0.9m
611.12 g/t over 1.3m
35.00 g/t over 0.7m
1.73 g/t over 0.9m		 6.9 metres 132.91 g/t
    32.0 metres 139.13 g/t

* Channel samples were taken along the exposed strike of the quartz vein, and are unlikely to represent the averages which would be obtained from samples perpendicular to strike or from drill holes penetrating the vein.

Northern Tiger Resources Inc. (NTR: TSX-V) is a Canadian-based resource exploration company focused on gold and copper exploration in the Yukon, where it has a strong portfolio of projects. Drilling in 2011 intersected 4.6 g/t gold over 35.0 metres (including 106.2 g/t gold over 1.0 metre) at the Company's flagship 3Ace Project in southeast Yukon. The Sonora Gulch copper-gold-silver porphyry project in central Yukon also returned significant drill results in 2011, including 0.45 g/t gold and 3.0 g/t silver over 234.0 metres.

To read the entire news release follow the link below:

August 8, 2012 (Source: Northern Tiger Resources Inc)

http://www.northern-tiger.com/s/NewsReleases.asp?ReportID=540895&_Type=News-Releases&_Title=Northern-Tiger-Resources-Channel-Samples-132.91-gt-Gold-over-6.9-Metres-Alo...

Disclosure:  Northern Tiger Resources is a Vulture Bargain Candidate of Interest (VBCI) and is our fully fledged Vulture Bargain #7. Members of the GGR team are actively accumulating and hold long positions in NTR.V or NTGSF.

China Copper Backwardation May Persist as Imports Fall

Posted: 08 Aug 2012 05:52 AM PDT

Copper for immediate delivery in China has been more expensive than the metal for future delivery since May 9, and this price structure may persist as imports into the world's largest user slumped.

The so-called backwardation, signaling limited supplies in the near future, has developed on the Shanghai Futures Exchange, the country's biggest metals bourse, said Kennedy Zhou, manager at Shanghai Hedge International Trading Co. China's refined copper imports in June dropped to the lowest level in 10 months as demand for the metal shrank.

"Supply has become tight as importers are sitting on the sidelines now," Zhou said by phone from Shanghai today. "Given the fact that Chinese copper prices are cheaper than those in the overseas market, importers lose 2-3 percent of the value of every ton of copper they bring in."

Backwardation occurs when investors who hold short positions, or bets on lower prices, are forced to pay higher prices for metal to cover delivery obligations or renew their bearish bets if less metal is available.

China has cut interest rates twice since early June and lowered the reserve requirement ratio three times since November to bolster growth, which has slowed to a three-year low of 7.6 percent in the second quarter. Copper for August-delivery in Shanghai closed at 55,080 yuan ($8,650) a metric ton today, while the most-actively traded copper for November delivery closed at 54,680 yuan a ton.

Inbound shipments were 250,097 tons in June, compared with 301,990 in May, according to the General Administration of Customs. Exports tumbled to 35,477 tons from 102,375 tons in May, the highest since at least 2008, according to data compiled by Bloomberg.

"The backwardation might persist for a while, until the short-term supply is no longer tight," said Wu Feng, Shanghai Rising Industry Co.

To contact Bloomberg News staff for this story: Feiwen Rong in Beijing at frong2@bloomberg.net

August 8, 2012 (Source: Bloomberg News)

http://www.bloomberg.com/news/2012-08-07/china-copper-market-backwardation-may-persist-as-imports-decline.html

Silver Market 'Anomalies' & 'Devious Efforts' – Chilton

Posted: 08 Aug 2012 05:48 AM PDT

Gold edged down on Wednesday on profit taking after sustaining three days of gains which saw gold creep slowly above the $1,600/oz. level again. Recent dollar strength and a lack of clarity may be partly to blame for gold's lack of gains recently.

London Market 'Lacking Momentum' during Olympics

Posted: 08 Aug 2012 05:18 AM PDT

The US dollar gold price hovered just below $1,610 an ounce for most of Wednesday morning's trading in London – in line with last Friday's close – while stocks and commodities ticked lower and US Treasuries gained.

China and Gold

Posted: 08 Aug 2012 05:08 AM PDT

On this weeks show:
-Observations from Hong Kong
-Bangles & Bullion for China
-Steven Roach's take on China

from mcalvanyfinancial:

~TVR

Can Fear Refuel the Investment Demand for Gold?

Posted: 08 Aug 2012 04:45 AM PDT

After falling 0.7% last week, the US gold futures inched up $3.6 this week to end at $1,610.7 on Tuesday. The S&P 500 rose 0.74%, oil rebounded 2.48%, while the Stoxx 50 climbed 2.85% this week, after surging 3.1% last week.

Apolitical money, where art thou?

Posted: 08 Aug 2012 04:15 AM PDT

Gold appears to be slowly but surely stabilising above the $1,600/oz mark. Likewise, the bleeding in silver that saw it come close to $26/oz mark recently appears to have been stemmed. Precious metals ...

Russia Today's 'Capital Account' Interviews GATA Secretary/Treasurer Chris Powell

Posted: 08 Aug 2012 03:13 AM PDT

¤ Yesterday in Gold and Silver

Gold didn't do much during the Far East trading session on Tuesday, but a smallish rally began shortly after 3:00 p.m. Hong Kong time around the $1,609 spot price mark.  The high of the day [$1,619.50 spot] came minutes before 9:00 a.m. in New York...and from there it got sold off to its low of the day [$1,607.70 spot] at 10:00 a.m. Eastern...the time of the London afternoon gold 'fix'.  From that time onwards, it didn't do much.

Once again, net volume was pretty light...around 93,000 contracts...and gold closed at $1,612.30 spot...up the magnificent sum of 70 cents.

Silver began to rally at the same moment as gold...and really took off to the upside about 1:00 p.m. in London...about twenty minutes before the Comex open.  Silver's high point of the day, like gold, came about 8:50 a.m...and that price was $28.34 spot  Silver got sold off about two bits going into the 5:15 p.m close of electronic trading.

Silver finished the Tuesday session at $28.10 spot...up 22 cents on the day.  Gross volume was pretty chunky, but once the roll-overs out of the September contract were removed, the net volume was very light...around 19,000 contracts.

The dollar index didn't do much at the Far East open...but rallied a bit going into the Hong Kong afternoon.  The high tick [82.38] came shortly after 3:00 p.m. Hong Kong time...and the low tick [82.07] came about 8:30 a.m. in New York.  From that low, the index rallied back and closed at 82.35...virtually unchanged from Monday.

The rallies in both gold and silver coincided perfectly with the moves in the dollar index yesterday.

The gold stocks opened up...and stayed up...and this time there was no last half-hour sell-off going into the close.  The HUI finished up 1.38% on the day.

After Monday's big price-run up, the silver shares had another decent day yesterday...and Nick Laird's Silver Sentiment Index closed up another 1.56%.

(Click on image to enlarge)

The CME's Daily Delivery Report showed that 76 gold and 4 silver contracts were posted for delivery on Thursday within the Comex-approved depositories.

There were no reported changes in either GLD or SLV...and no sales report from the U.S. Mint, either.

There was a huge amount of activity in silver for the second day in a row over at the Comex-approved depositories.  On Monday they reported receiving 225,034 troy ounces of silver...and they shipped  2,523,686 troy ounces out the door.

On Friday and Monday combined, these five depositories received 3.31 million ounces of silver...and shipped 4.30 million ounces out the door.  This is almost two days of world silver production coming in the door...and more than two days of world silver production going out the door.  One has to wonder the reason behind this frantic in-out activity that's occurring on a weekly basis.  Ted Butler says that in a 'normal' week, it's only about 2 million ounces in and out.  So with the week still very young, it will be interesting to see if this level activity continues.

The link to Monday's activity is here...and it's worth a quick look.

It's been a busy week for stories...and today's column is no exception.  I hope you have time to skim them all.

Could JPMorgan et al engineer a price decline at this juncture. Sure. They can do it anytime they want.
Gold "Popular Again" Despite Worries Over Indian Monsoon. Indian siblings celebrate festival with gold. Gold rush in India? Government steps in again. Big movements in Comex silver stocks in the last two days.

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Record Penalties for Fraud, Few Charges for Executives

Pharmaceutical companies, military contractors, banks and other corporations are on track to pay as much as $8 billion this year to resolve charges of defrauding the government, analysts say — a record sum and more than twice the amount assessed last year by the Justice Department.

But while the collections are a boon to the government and taxpayers, they are resurrecting questions about the relative lack of charges against executives at the companies that are getting the stiffest penalties.

"A lot of people on the street, they're wondering how a company can commit serious violations of securities laws and yet no individuals seem to be involved and no individual responsibility was assessed," Senator Jack Reed, Democrat of Rhode Island and chairman of a subcommittee that oversees securities regulation, said at a recent hearing.

This story appeared in The New York Times yesterday, but now bears the title "Corporate Fraud Cases Often Spare Individuals".  I thank Phil Barlett for sending it...and the link is here.

View full GSD edition

In the Financial Industry, a Less Scrupulous Class of Lawbreaker

A bailiff calls out names and charges: disorderly conduct, possession of marijuana, violating a park curfew. Men and women shuffle forward, heads hung low, and listen as a prosecutor offers more or less the same deal — whatever time they have already served in a sweaty lockup and a fine.

The judge poses a final question to each defendant: Do you acknowledge guilt?

Do you?

An hour passes, and I hanker for a more ambitious, not to mention less repentant, class of wrongdoer. Enough with the teenage mother who smoked a joint, the jewelry salesman who loitered past midnight in a park or the multiply pierced young woman who stole a ham to pay for a heroin fix.

I board the No. 4 train and ride north to a gorgeous Beaux-Arts building with a mansard roof on the corner of 40th Street and Fifth Avenue. This is the American headquarters for HSBC.

The rest of the story shows that there are two kinds of justice...one for the rich, powerful and 'too big to fail'...and then there's the justice for the rest of us.  This story was posted in The New York Times on Monday...and it's Phil Barlett's second offering in a row on this issue.  The link is here.

View full GSD edition

Labour MP John Mann attacks anti-British bias by US regulators in call for money laundering inquiry

Mr. Mann, who is a member of the Treasury Select Committee, said he was concerned about the scale of money laundering, and also about an increasing anti-British bias by US regulators and politicians, which he said was shifting financial markets from London to New York.

In a statement on Tuesday, he said: "I have no truck whatsoever with British banks profiteering from Iran and Burma, nor with US banks profiteering from drug and illegal arms money or the private accounts of world dictators."

"The British Parliament should instigate an unbiased and far reaching investigation into money laundering in Britain, involving British banks and endangering the well-being of British interests and the British people."

Standard Chartered has rejected US claims that it "schemed" with Iran to conduct secret transactions worth $250bn (£160bn), insisting that "99.9pc of the transactions" complied with regulations.

This story showed up early yesterday afternoon BST on the telegraph.co.uk Internet site...and I thank Roy Stephens for his first offering in today's column.  The link is here.

View full GSD edition

Americans Chip Away at Credit Card Debt

U.S. consumer credit posted its weakest growth in eight months in June as Americans reduced credit card debt, a potentially negative sign for an economy that has struggled to create jobs.

Consumer credit grew by $6.46 billion in June, the Federal Reserve said on Tuesday. That was well below the $11 billion advance Wall Street economists had forecast in a Reuters poll.

The Fed also said credit climbed slightly less during May than originally thought.

Credit has been expanding since late 2010 as the country recovered from the 2007-2009 recession. The expansion in June, however, was the smallest since October 2011.

This Reuters piece was posted on the CNBC Internet site yesterday afternoon...and I thank West Virginia reader Elliot Simon for sharing it with us.  The link is here.

View full GSD edition

Bank of England to cut growth forecast to zero

The Bank of England will slash its growth forecasts close to zero [today] as the double-dip recession deepens and the eurozone storm closes in on UK shores.

Governor Sir Mervyn King is expected to indicate no growth for 2012 in the Bank's quarterly inflation report, compared with 0.8 per cent predicted three months ago and 2 per cent a year ago.

As the sluggish economy weighs on prices, inflation forecasts are likely to be cut as well, with the consumer price index dipping below the Government's 2 per cent target by the end of the year.

This story showed up on the independent.co.uk website yesterday...and I thank U.K. reader Tariq Khan for bringing it to our attention.  The link is here.

View full GSD edition

Siena's Financial Fiasco: Downfall of a Tuscan Paradise

Monte dei Paschi di Siena, the world's oldest bank, took five centuries to accumulate its wealth -- and three years to gamble it away. Its fall from grace is a disaster for its home city of Siena, which relied on distributed profits from the bank. Now the picturesque Tuscan city is trying to come to terms with the new reality.

The bank's fall from grace can be dated to 2007. It was a time of mergers, and it was widely believed that small banks no longer stood a chance on the global financial markets -- not even a bank like MPS, which has been in business since 1472 and was lending money when Columbus was still learning how to sail.

This 2-page essay was posted on the German Internet site spiegel.de yesterday...and is a very interesting read.  I thank Donald Sinclair for being the first person through the door with this story...and the link is here.

View full GSD edition

Italy sinks deeper into recession as Monti's problems swell

Italy's economy contracted by 0.7 per cent in the second quarter, data showed on Tuesday, compounding the difficulties for Mario Monti's technocrat government as it grapples with a debt crisis that threatens the whole euro zone.

The 0.7 per cent fall in gross domestic product was the fourth consecutive drop for an economy mired in recession since the middle of last year, with the rate of contraction easing only marginally from a 0.8 per cent decline in the first quarter. 

Official statistics agency ISTAT reported that GDP was down 2.5 per cent year-on-year after a fall of 1.4 per cent in the first quarter, posting the steepest fall since the end of 2009.

Italy has been the euro zone's most sluggish economy for more than a decade, fuelling investor concerns about its ability to bring down public debt of around 123 per cent of output.

This Reuters story showed up on the globeandmail.com Internet site yesterday...and I thank Donald Sinclair for finding it.  The link is here.

View full GSD edition

'Les Riches' in France Vow to Leave if 75% Tax Rate is Passed

The call to Vincent Grandil's Paris law firm began like many others that have rolled in recently. On the line was the well-paid chief executive of one of France's most profitable companies, and he was feeling nervous.

President François Hollande is vowing to impose a 75 percent tax on the portion of anyone's income above a million euros ($1.24 million) a year. "Should I be preparing to leave the country?" the executive asked Mr. Grandil.

The lawyer's counsel: Wait and see. For now, at least.

"We're getting a lot of calls from high earners who are asking whether they should get out of France," said Mr. Grandil, a partner at Altexis, which specializes in tax matters for corporations and the wealthy. "Even young, dynamic people pulling in 200,000 euros are wondering whether to remain in a country where making money is not considered a good thing."

This story was posted on The New York Times website yesterday...and also sports a new headline that reads "Indigestion for 'les Riches' in a Plan for Higher Taxes".  This is another story courtesy of reader Phil Barlett...and the link is here.

View full GSD edition

Venetian cunning of Draghi-Monti master plan may save euro for now

So we enter the treacherous market month of August with Europe in limbo. The actors wait upon each other. World fina

August 8, 1893 : The Repeal of the Silver Act

Posted: 08 Aug 2012 03:00 AM PDT

Euro to Beat Dollar? On Draghi’s Genius

Posted: 08 Aug 2012 01:55 AM PDT

Investors have not woken up to it, but last week may have been a game changer. European Central Bank (ECB) President Draghi took tail risks out of the euro zone, while at the same time forcing closer fiscal integration.

Project S.H.A.M.E.: The Recovered History of Adam Davidson

Posted: 08 Aug 2012 12:40 AM PDT

We are delighted to post the latest offering of Project S.H.A.M.E, a media transparency initiative led by Yasha Levine and Mark Ames.

Adam Davidson

Host of NPR's Planet Money & New York Times Magazine Columnist

Adam Davidson graduated from the University of Chicago with a BA in religion, and began his public radio career selling airtime and doing sponsor outreach. He then became an on-air radio personality, filing pro-Iraq War dispatches as Marketplace's Middle East correspondent, and recently transformed himself into an effective propagandist for the banking industry. Over the years, Davidson has whitewashed the occupation of Iraq, praised sweatshop labor, attacked the idea of regulating Wall Street and argued for "squeezing the middle class"–all while taking undisclosed money from banking interests. No wonder Davidson shamelessly credited Wall Street for providing "just about anything that makes you happy."

The Recovered History of Adam Davidson

  • Davidson began working in public radio in 1992, doing "underwriting sales" for Chicago Public Radio, a position described by one public radio station as "equivalent to that of a sales manager at private stations. This person must go out into the community and establish rapport with local businesses in order to sell airtime to them. The underwriting representative is then responsible for developing a direct . . . and informational message to put on the air for the client."
  • Adam Davidson spent the early 2000s as Middle East correspondent for Public Radio International's Marketplace. In the lead up to the Iraq War, Davidson filed a number of pieces promoting the invasion of Iraq; after the invasion, Davidson moved to Baghdad and filed numerous radio items whitewashing the occupation catastrophe.
  • In December 2002, Davidson positively profiled an Israeli right-wing conspiracy theory site Debka.com in order to promote the invasion of Iraq. Despite the fact that Debka.com was long ago discredited in Israel, where "not a single Israeli official…sees the site as a reliable source"–and despite Debka.com's ties to rightwing conspiracy theory site WorldNet Daily, nevertheless Davidson presented Debka's claims that Saddam had stockpiled weapons of mass destruction–including chemical, biological and nuclear–as credible. Davidson staked his own credibility defending Debka, telling NPR listeners: "There's really no way to confirm what they're reporting right now, but I've been reading the site for years, and it's common to think they're nuts, then to wait a few weeks and see the same information in The New York Times." As it turned out, Saddam did not possess weapons of mass destructions of any kind. In 2007, Davidson's beloved Debka.com created a panic in New York City after publishing false rumors of an impending Al Qaeda dirty bomb attack.
  • In February 2003, just a few weeks before the U.S. invaded Iraq, Davidson found a couple of Iraqi merchants living in Jordan who were in favor of the coming invasion, telling Davidson's listeners that the invasion would do wonders for Iraq's economy. "Mohammed," one of the merchants, told Davidson: "I'm very optimistic about the economy of Iraq." The war decimated Iraq's economy, destroyed its infrastructure and was responsible for hundreds of thousands of deaths.
  • Davidson then moved to Baghdad and went to work whitewashing the brutality and violence of the war and occupation. In a 2004 Los Angeles Times op-ed, Adam Davison claimed that American military violence played no part in Iraqi anger at the occupation, and suggested that Americans hadn't committed serious violence of any sort. Instead, Davidson argued that the reason the U.S. wasn't winning the Hearts and Minds of the Iraqi people was because America had not successfully rooted out Saddam-era corruption. "It's common to hear Iraqis say the U.S. regime is just like Hussein's. At first, I found this bizarre. The U.S. is not hacking the ears off of innocent people. The U.S. isn't massacring entire villages. But I learned that when Iraqis make the Hussein comparison, they're talking, in large part, about corruption." By focusing on Saddam-era corruption, Davidson made it seem as though the problem in Iraq was that Iraq wasn't Americanized enough, rather than the violence of the American invasion and occupation.
  • After living in Baghdad for a year, Davidson had to suddenly flee the country in 2004, fearing for his life after being accused of working for the CIA. Later, Davidson admitted that he had a tight and undisclosed relationship with occupation officials, who regularly visited his Baghdad home and revealed to Davidson that the situation was much worse than was being reported. Rather than telling his listeners as a journalist should, Davidson protected the occupation authorities: "The ones I liked I'd invite over to the house. I mean, I genuinely liked them, but also we'd get them a little drunk on wine. We'd tell them, hey, tonight everything's off the record. And we'd get real information...we'd get these people over to our house, they'd have some wine, and they'd be like, 'oh, it's so much worse than you know.'"
  • In 2006, now working at NPR as a business reporter, Davidson criticized the Sarbanes-Oxley Act, legislation passed in the wake of Enron to tighten corporate financial accountability and make top executives criminally liable for fraud happening under their watch. "The U.S. has a bunch of crazy rules that came out of a time of hysteria in the U.S. They don't make any sense," Davidson told listeners. This was part of a larger push by Wall Street and corporate interests to gut Sarbanes-Oxley. Among those pushing the same PR line against Sarbanes-Oxley as Davidson were Americans for Prosperity, Heritage Foundation and even Charles Koch himself. [ 1 ]
  • In 2007, Davidson boosted for the Honduran sweatshop industry, and promoted sweatshop labor in general, which he said was a great opportunity offering women upward mobility. Making socks in a sweatshop is "the only way she can improve her life," Davidson said of one Honduran young woman he profiled for NPR's "All Things Considered." He did not mention that Honduran sweatshop workers routinely develop incapacitating back and spinal injuries working 12-hour shifts with little or no breaks, face workplace abuse and intimidation, and earn about 65 cents per hour. Meanwhile the CEO of Gildan, a Canadian garment company doing business in Honduras that Davidson praised in his program, took home $11 million in compensation in 2009.
  • In 2012, Davidson promoted an even more extreme version of the Honduran sweatshop: special extra-judicial sweatshop zones legally beyond Honduran constitutional and labor laws, where multinationals could tap cheap labor, and use their own police force and judicial systems. The extra-judicial business zones, the brainchild of University of Chicago-trained economist Paul Romer, have been denounced as "neo-colonial" and have attracted the interest of Milton Friedman's libertarian grandson, Patri Friedman, along with other libertarians hostile to labor rights. Davidson dismissed critics of the Honduras extra-judicial sweatshop zones: "It's easy to criticize experimenting with the livelihoods of the poor," Davidson wrote. "We have to try some new things, probably many new things. And we have to accept that some of them won't work."
  • In 2008, Davidson helped produce an episode of This American Life about the implosion of subprime lending that let Wall Street off the hook for its role in rampant mortgage fraud and predatory lending. "This was a crisis that was caused by willing participation of every single person. Nobody was coerced," said Davidson's co-producer Alex Blumberg. "And there was fraud. But that was not what caused the crisis. What caused the crisis was something bigger and more systemic that required the involvement of everybody at every step." This evasion-by-exaggerating-the-complexity strategy is one that Davidson and Planet Money have deployed often to whitewash and deflect the role of criminality in the housing crisis. Among the show's fans was Treasury Secretary and former New York Federal Reserve Bank chief Timothy Geithner: "Yeah, they did a good job."
  • In September 2008, Davidson falsely claimed that the repeal of the Glass-Steagall Act played no role whatsoever in the financial collapse: "Every economist I've spoken with says, simply, that it was a bad law but that it and its repeal are not really to blame for what is happening now." Many key figures involved in Glass-Steagall's repeal, including former Citigroup chief Sandy Weill, have contradicted Davidson's false claim.
  • In early 2009, NPR announced that Planet Money secured Ally Bank as the show's exclusive sponsor. It was an unusual set up for NPR, as it meant that a financial institution was the sole funder of a news program about finance. At the time, Planet Money was the only NPR program underwritten by a single exclusive sponsor. Even Ad Age, the advertising industry's trade publication, was surprised by the sponsorship arrangement and the "close alignment of message and news program." (At the time of this writing, Ally is still Planet Money's exclusive sponsor.)
  • Ally Bank is a subsidiary of Ally Financial, formerly known as GMAC. The bank is one of the biggest mortgage servicers in the country, and has been one of the very worst offenders in foreclosure fraud and subprime fraud. It received more than $17 billion taxpayer bailout funds and has been investigated across the country for foreclosure fraud, robo-signing and student loan fraud. As of August 1, 2012, 74% of Ally Financial was still owned by the U.S. Government. [ 2 ]
  • Planet Money's relationship with Ally is a textbook example of "conflict of interest." The bank had a clear and demonstrable interest in Planet Money's coverage of the financial industry, especially issues that affected the bank's bottom line. As Planet Money's sole sponsor at a time when NPR funds were falling, Ally obviously wielded considerable power. Following months of complaints from readers pointing to the conflict-of-interest and the way Planet Money's segments dovetailed with the banking lobby's own propaganda, NPR's Ombudsman was forced to look into the Ally-Planet Money relationship. The NPR Ombudsman ultimately dismissed listeners' concerns as "cynical" and implied they did not know what they were talking about. Despite Davidson's experience in public radio underwriting, he claimed ignorance about the nature of Planet Money's arrangement with its sole sponsor, Ally Bank: "I have nothing to do with the underwriting stuff. We don't pay any attention to the fact that they are a sponsor. We wouldn't for a second give them any special treatment — positive or negative."
  • In 2009, while Ally Financial (then still known as GMAC) was spending hundreds of thousands of dollars lobbying against the Financial Consumer Protection Agency Act of 2009, Davidson aired a number of segments critical of the legislation. He questioned the need to regulate consumer financial products like mortgages and credit cards in order to protect people against bank fraud. "Will it work at all?" he wondered on air, and asked: "is this just one more layer of regulation in a regulatory system that fundamentally broke down?" [ 3 ]
  • In May 2009, Davidson launched a bizarre personal attack while interviewing Elizabeth Warren, the chief architect of the financial consumer protection bill. Davidson surprised Warren and his own listeners with uncharacteristic personal smears, trying to portray her as a clueless, power-hungry ideologue: "The view that the American family, that you hold very powerfully, is fully under assault . . . that is not accepted broad wisdom. . . . I literally don't know who else I can talk to support that view. I literally don't know anyone other than you who has that view, and you are the person [snicker] who went to Congress to oversee it and you are presenting a very, very narrow view to the American people." The Columbia Journalism Review described the interview as a "disaster" and "really cringeworthy stuff from Davidson," who was so rude and unprofessional that NPR's Ombudsman had to step in and apologize for his behavior. Davidson's excuse: he had been traveling for a NPR fundraiser and was "very, very tired." [ 4 ] [ 5 ]
  • Adam Davidson does not disclose that he does paid speaking gigs at events funded by banks and financial companies, including J.P. Morgan, Well Fargo, Bank of America and Goldman Sachs–the same companies he covers as a journalist. Davidson is frequently the only journalist/reporter booked to speak at these events; other speakers are usually work in finance. (See top of left sidebar for detailed info on Davidson's recent speaking engagements.)
  • In 2011, Davidson expanded his media presence with a weekly financial column in the New York Times Magazine. His first column argued that government can't create jobs, and so politicians shouldn't try to come up with "job plans"–a demonstrably false position that also happens to be shared by Koch-funded libertarian Cato Institute. In his second column, Davidson pushed for harsh austerity measures against the majority of Americans in order to benefit the financial sector: "It really stinks, but the only way to fix the economy is to squeeze the middle class."
  • In 2012, Davidson argued that everyone should grovel before Wall Street, without which, he argued, America would be much poorer. Davidson's pro-Wall Street propaganda was so crude that even fellow neoliberal Matthew Yglesias stepped in to criticize Davidson: "I'm generally an Adam Davidson fan, but his recent New York Times Magazine article in defense of Wall Street is pretty unconvincing. The big problem is right up there in the lede where he says 'Perhaps the best way to really appreciate what Wall Street does is to imagine life without it.'"
  • On May 1 2012, Davidson published a flattering profile of Edward Conard, Mitt Romney's former business partner at Bain Capital, as a way of promoting more worship of the rich: "Conard . . . has laid out tightly argued case for just how much consumers actually benefit from the wealthy," Davidson wrote, as he uncritically reported Conard's claim that inequality "is a sign that our economy is working. And if we had a little more of it, then everyone, particularly the 99 percent, would be better off." Yves Smith, of Naked Capitalism, described the article as "chock full of blatant falsehoods" among which were Davidson's claim that penicillin was made possible by investment capital from hedge fund managers like Conard. In fact penicillin research was funded by the British and U.S. governments.
  • Two weeks later, on May 16, Davidson spoke at 27th Annual Conference for the Treasury & Finance Professional. Bank of America, BlackRock, BNY Mellon, Bloomberg, Citibank, Fidelity Investments, Goldman Sachs, J.P. Morgan, Morgan Stanley, Well Fargo and about a dozen of the most powerful financial companies in the world sponsored the event.

Undisclosed Income

Adam Davidson's career is currently being funded by bailed out banks. On top of Ally Bank's exclusive sponsorship of Planet Money, Davidson receives lucrative speaking fees for appearing at events funded by the same banks and financial companies he covers as a journalist. Davidson has yet to disclose his corporate clients and how much they pay him, but here is a partial list of Davidson's gigs from the last two years compiled from various publicly available sources:

  • In April 2011, Davidson was the headlining speaker at the 9th Annual "Women's World Banking" Microfinance and the Capital Markets Conference. The conference was hosted by J.P. Morgan, but the organization itself is funded by the world's biggest banks and corporations, including BP, Morgan Stanley, Pfizer, Barclays Capital, VISA, ExxonMobil–just to name a few.
  • In 2011, Davidson spoke at another microfinance conference, this once was also funded by Morgan Stanley, Citi, Bank of America, Deutsche Bank and CapitalOne.
  • In 2012, Davidson spoke at the 27th Annual Conference for the Treasury & Finance Professional. Sponsors of the event included Bank of America, BlackRock, BNY Mellon, Bloomberg, Citibank, Findelity Investments, Goldman Sachs, J.P. Morgan, Morgan Stanley, Well Fargo and about a dozen of the most powerful financial the largest financial companies in the world.

Chicago Public Media, which co-owns "Planet Money" through its ownership of "This American Life", explicitly bars conflicts-of-interest: "WBEZ journalists must uphold the trust of the public by not overlapping individual interests with professional responsibilities. WBEZ journalists may not accept any form of compensation from the individuals, institutions or organizations they cover."

Note: Both NPR and This American Life have not responded S.H.A.M.E.'s requests for comment about Davidson's conflicts of interest.

Planet Money's Ally Problem

Ally Bank has been Planet Money's exclusive sponsor since 2009, a relationship that provides a textbook example of conflict of interest. Below are two screenshots of Ally Bank advertisements running on Planet Money's website:

Davidson's Shame Quotes

I feel like the voice of business journalism is sort of, it's an authoritative voice of God.

–Davidson in a 2009 interview with Nieman Journalism Lab

The last time I interacted with University of Chicago faculty in an extended way, they were my professors. Sitting on a stage as their 'peer,' I felt like a kid who had borrowed his dad's suit.

–Davidson describes his reaction to being invited to talk about the "unintended consequences" of financial regulation at Chicago University's 58th Annual Management Conference in April 2010

Raising [corporate taxes], or even maintaining them, might satisfy the anti-corporate angst of protesters and populists, but it won't come anywhere near paying off our debt. Most people who study the issue agree that the top federal corporate tax rate (35 percent of profits) is simply too high. The cardinal rule of taxation is that whatever you put a levy on, you'll inevitably get less of.

–Davidson's "It's Not Just About the Millionaires"; New York Times Magazine; November 2011

Davidson's PR Strategies

Every economist I've spoken with says, simply, that it was a bad law but that it and its repeal are not really to blame for what is happening now.

–Davidson's NPR segment "Can We Blame Or Praise Glass-Steagall?"

Most people who study the issue agree that the top federal corporate tax rate (35 percent of profits) is simply too high.

–Davidson on why U.S. should lower corporate taxes

I talk to a lot a lot a lot of left, right, center, neutral economists [and] you are the only person I've talked to in a year of covering this crisis who has a view that we have two equally acute crises: a financial crisis and a household debt crisis that is equally acute in the same kind of way.

–Davidson during his attack on Elizabeth Warren

Notes:

  1. Malcolm Gladwell made a similar claim in a 2007 New Yorker article that defended Enron. Read Gladwell's S.H.A.M.E. Report for more info. [↩]
  2. See Naked Capitalism's coverage of GMAC/Ally's mortgage fraud. [↩]
  3. GMAC's total lobbying on finance-related bills in 2009 added up to $1.2 mil. See GMAC's page on OpenSecrets.org for more information. [↩]
  4. NPR did not respond to S.H.A.M.E.'s requests for comment about Davidson's conflicts of interest. [↩]
  5. Read Corrente's transcript of Davidson's Elizabeth Warren interview. [↩]


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