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Tuesday, February 19, 2013

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Junior gold explorers face body blow as metal price falls further

Posted: 19 Feb 2013 06:33 PM PST

While the junior gold exploration market may not yet be at extinction point, it could be for many unless there is a rapid and sharp gold price turnaround.

2013 Gold price competition - the final tally

Posted: 19 Feb 2013 05:36 PM PST

Mineweb readers on the whole, were rather more cautious in their predictions for the yellow metal for 2013

What you need to know before buying silver today

Posted: 19 Feb 2013 01:23 PM PST

From Jeff Clark, Senior Precious Metals Analyst, Casey Research:
 
Most precious-metals investors know silver is more volatile than gold. But do they know just how big that difference really is?
 
We thought it would be interesting to measure how much greater silver's daily moves are – both in gains and declines – than gold.
 
We documented the daily price movements for both metals, and then calculated the difference using absolute values. To interpret the charts below, you need to know that:
 
•   Values above zero represent days when silver had a greater percentage move than gold, as depicted in gray.
•   Values below zero are days when gold moved more than silver, as depicted in orange.
•   The values don't tell us the direction of price movements, only how much they differed between each other on any given day.
•   The darker horizontal lines represent the moving average of the price differences for each metal.
 
With that in mind, here are the differences...
 
 
Crux Note: If you're bullish on silver, you may be interested in a new opportunity that could return 100% more than ordinary silver over the next few years. In fact, it has the potential to generate huge gains even if the price of silver doesn't go up another penny. Click here for the details.
 
More on silver:
 
 
 

Why hundreds of tiny resource stocks could disappear this year

Posted: 19 Feb 2013 01:23 PM PST

From The Gold Report:
 
Is the end near for the TSX Venture Exchange, the victim of "algo traders," low volume and lack of institutional investors? If newsletter writer John Kaiser is right, as many as 500 of the 1,484 resource companies listed on the Venture Exchange will go under this year due to lack of money in the bank. In this Gold Report interview, Kaiser suggests that a crowdsourced valuation system may give the investors the information they need to invest with confidence and fend off the proprietary traders.
 
The Gold Report: John, at the Cambridge Conference in Vancouver, you spoke about visualizing an alternative to "zombie land," the zombies being the 1,000-plus companies in the resource sector trading at less than $0.20 per share, which include a good number of the more than 600 companies with less than $200,000 in the bank. You predicted at least 500 would go out of business in the next year. Is this a more dire scenario than before or are there just more companies?
 
John Kaiser: In the junior sector, 1998-2002 was a very difficult period. Metal prices, especially gold, were weak. The Bre-X Minerals betrayal in 1997 had shattered investor confidence in the exploration acumen of the resource juniors. New and interesting exploration plays were few and far between. Area plays were dead on arrival. And the siren song of the dotcom bubble sucked away whatever risk capital remained in the hands of retail investors.
 
That five-year bear market was a very dark time for the industry, but it survived to experience a phenomenal bull market during which TSX Venture (TSX V) juniors raised $57 billion and over 200 Canadian resource juniors disappeared in takeover bids worth $115 billion.
 
TGR: So with only two years into the current bear market, why the fuss?
 
 
More on junior resource stocks:
 
 
 

Long-term chart shows how far gold could fall

Posted: 19 Feb 2013 01:23 PM PST

From Kimble Charting Solutions:
 
Gold finds itself at a very important test of support at (1) at the top of its falling channel. A break of this support line could bring in a new round of selling pressure for Gold and other precious metals!
 
The Power of the Pattern suggested to get off the "Crowded Gold Train" at $1,900 per ounce.
 
Multiple support points come into play at...
 
 
More on gold:
 
 
 

Trader alert: This is how the pullback in stocks could begin

Posted: 19 Feb 2013 01:23 PM PST

From The Reformed Broker:
 
... One factor we contribute to the S&P 500's 13% rally from its November low is a positive feedback loop.
 
Specifically, the initial price surge off of the mid-November low, catalyzed by a belief that a year-end budget agreement would occur, turned a mixed sentiment setting increasingly optimistic and roused additional gains as new longs entered the market. These additional gains subsequently incited more optimism and yet another round of new longs; repeat process.
 
This loop establishes a basis for why momentum exists and why trends form. The assumption is that the loop will continue until bullish positioning is stretched and sentiment is consequently at an extreme.
 
When fewer longs are left to propel stocks higher, the market's rate of ascent subsequently declines and price will generally level off. Then as supply and demand come into balance, a small disturbance can be intensified by a negative feedback loop and initiate this circuit in the opposite direction.
 
The tendency for these sentiment shifts to be gradual rather than abrupt is why...
 
 
More trading ideas:
 
 
 

A major gold "disinformation campaign" could be starting now

Posted: 19 Feb 2013 01:23 PM PST

From Economic Policy Journal:
 
An audit of the gold held at the New York Federal Reserve has been completed and the disinformation campaign has started. Notice how [the L.A. Times] reports the story:
 
The U.S. government's gold in New York is safe in a vault underneath Manhattan, and some of the precious metal there is purer than previously thought.
 
The problem with this is that the gold held at the New York Federal Reserve is not "The U.S. government's gold." It is gold held, for the most part, by the Federal Reserve for foreign countries.
 
The Times goes on:
 
That's according to a first-ever audit conducted last year by the Treasury Department of U.S. gold on deposit at Federal Reserve banks in New York and elsewhere.
 
This is curious because it is the government conducting the audit. That's like having Bernie Madoff's brother auditing Bernie's customer accounts.
 
Why wasn't an independent auditing firm brought in? And since the gold is held for countries like Germany, why didn't Germany and others who have gold on account get to pick the auditor?
 
Here's more disinformation, which misdirects from the above important questions...
 
 
More on gold and the government:
 
 
 

Moody's And S&P: Lawsuits Can Be A Good Thing For The Value Investor

Posted: 19 Feb 2013 01:07 PM PST

By The Unintelligible Investor:

Stuff My Email Says

Man has created a technology of incomprehensible power, a technology at the center of a war between the forces of good and the forces of evil.

When used for good, it can transport thoughts and feelings instantaneously and bridge vast expanses of time and space. When used for evil, it can reduce multi-billion dollar companies to rubble and grown men to tears.

Of course, I am talking about email. Yes, email… so ubiquitous, so commonplace, and oh SO dangerous. Imagine if every word you've ever uttered could be replayed over loudspeakers for all the public to hear. Do you think in those thousands of hours of dialogue, you might regret at least one thing that you said? Do you think one or two of those things, if taken in isolation, might convey the COMPLETE opposite meaning of what was intended at the time?

There is no


Complete Story »

Gold mid 2012 Pivot Lows Now of Interest

Posted: 19 Feb 2013 12:33 PM PST

SRSrocco: Gold & Silver Won't Achieve Full Valuation Until the Up-Coming BLACK MARKET!

Posted: 19 Feb 2013 12:30 PM PST

By SD Contributor SRSrocco: I don't even care about the paper moves in GOLD & SILVER.  There is nothing else to put ones "SURPLUS WEALTH" into other than physical gold and silver.   You just have to be smart and save your gold and silver for the up coming BLACK MARKET.  That is where its real value [...]
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  1. THE FORCES COMING IN THE GOLD & SILVER MARKET ARE TREMENDOUS: PEAK SILVER IS AT HAND!
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Turquoise Hill Tumbles Amid Precious Metals & Mining Meltdown

Posted: 19 Feb 2013 12:28 PM PST

ByEmmet Kodesh:

Turquoise Hill Resources (TRQ), 51% owned by major miner Rio Tinto (RIO) has continued to tumble toward its secular post-crash low at $7.10 made in late December 2012. When TRQ commissioned its ore concentrator at Oyut Tolgoi in the presence of high government of Mongolia (GOM) officials, they affirmed the lease - royalty deal and praised Rio, foreign investment and their commitment to maximizing their nation's resources. The moment seemed ripe for steady production at this world class site laden with copper, gold, silver and cobalt. After all, Mongolia is expected to get about 71% of the life-of-mine cash flow and Mongolians have 88% of the jobs at the mammoth project. Issues also seemed resolved with South Gobi Resources (SGQRF.PK) which Rio controls via TRQ (58% share in South Gobi). But exhilaration was brief: about ten days after a rapid ascent of TRQ shares


Complete Story »

India mulling further efforts to curb gold imports

Posted: 19 Feb 2013 12:26 PM PST

India could take more steps in the Union Budget on February 28 to curb gold imports.

Gold Remains Under Pressure Ahead Of Fed Meeting Minutes

Posted: 19 Feb 2013 12:25 PM PST

By Emerging Money:

By Richard Rittorno

Gold prices are flat as they hover just above the six-month low created two sessions ago and August's support level of $1,591.81. This is occurring as market participants move to the sidelines ahead of tomorrow's Federal Reserve January meeting minutes release.

Last week's move lower, along with this week's continuing downward move, is creating a technically week chart in which technical traders could be readying to move to the short side of the trade, putting the bears in the driver's seat. This week's price action will be key to watch. Traders will be watching to see if the bulls can defend the $1,600 level after Friday's intraday break of the key support level.

The break of the $1,600 level trigged a flood of protective stop orders, adding pressure to the downward momentum. If the bears muster a close below the $1,600 level, the next support level comes


Complete Story »

Downgrade Rumors Weigh On Sterling

Posted: 19 Feb 2013 12:01 PM PST

By FXstreet:

The dollar trades mixed versus major competitors, but within its recent ranges, with the main exception of the pound, as the British currency weakened to fresh multi-month lows amid speculations and rumors S&P could downgrade the UK's "AAA" rating.

Even though risk appetite received a boost on positive European data and stocks trade broadly higher, the loonie remains under pressure, and is among the worst performers across the board on soft data. The euro is little changed, despite firm German data and today's well-received Spanish debt auction.

"Although today's trading is somewhat listless, European events could provide some direction later this week, including eurozone PMI and German IFO confidence data, and Italian elections at the weekend," said Nick Bennenbroek, Head of Currency Strategy at Wells Fargo Bank.

GBP/USD Falls To 7-Month Low, 1.5400 Key Support

The British pound extended losses versus the dollar on Tuesday, as


Complete Story »

Iran scolds world powers over gold sanctions ‘offer’

Posted: 19 Feb 2013 11:22 AM PST

Western officials said last week the offer to ease sanctions barring gold and other precious metals trade with Iran will be presented at upcoming talks in Kazakhstan.

Jim Sinclair: Don't Be Hoodwinked by the Demonic, Sociopathic Bankster Gold Banks

Posted: 19 Feb 2013 10:32 AM PST

 Jim Sinclair has sent subscribers another alert imploring precious metals investors to sit tight and hang on to their physical gold during the current cartel smash, and not to be hoodwinked by the demonic sociopath bankster gold banks. Sinclair states that the banksters are attempting to separate physical gold from long-term cash investors via the [...]
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Price, Value & "Buyer Beware" in Gold & Silver

Posted: 19 Feb 2013 10:03 AM PST

The price someone is willing to sell to you is not necessarily the price you'd get for selling...

read more

Kazzinc, Verny Capital buy two Kazakh gold deposits

Posted: 19 Feb 2013 09:51 AM PST

The two companies have bought two gold deposits in northern Kazakhstan with combined reserves of some 70 tonnes for about $200 million.

Silver price targeting and the will of central banks

Posted: 19 Feb 2013 09:26 AM PST

Indirectly, the price of silver has become a central banking question. Proof of direct intervention is unnecessary. The overwhelming concentration of net shorts on the Comex, whether hedged or not, constitutes the basic violation of the fair market pricing mechanism.

$3500 Gold Prediction Is Just For Starters

Posted: 19 Feb 2013 09:21 AM PST

READ THE FULL NEWSLETTER

Those who think the Goldmans or Morgans are stupid and clumsy are the ones demonstrating those traits. I see and know the same things these greatest of all time manipulators of price see and know. This is 1979 in the gold market right before the greatest price appreciation took place over the shortest period of time then. The most money over the shortest period of time in the gold bull market of the 70s was not made by the gold crowd but rather by the mega powers of Establishment Wall Street after doing the same things they are now doing.

The gold price can be pushed around like any market can be, but the purpose is to take away yours, increase theirs and then do exactly what is being done now on the upside.

In years to come you will dismiss all my efforts based on my $3500 and beyond number. The reason for this is that number will have only been a start in the gold price towards the new era of industrial expansion based on sound money and major nation's balance sheets having been balanced by gold.

- Jim Sinclair, The Greatest Business Opportunity Of The Millennium, February 17 2013

Be sure and digest Jim Sinclair's quote, above.  Note that his $3500 gold prediction is just for starters and gold will rise much higher.  No one has a clearer view of gold's fundamentals than Sinclair.

Jim Willie, one of my absolute favorite analysts has written his 90-page February Monetary Crisis Report.  Here is an excerpt.  If you like what you read here, imagine what you are missing!  His Hat Trick Letter heads my "must read" category.  You should subscribe to it.

THE USFED IS LOCKED INTO A HYPER MONETARY EASING, SINCE ITS BOND PURCHASES EXCEED THE ENTIRE USGOVT DEBT ISSUANCE IN THE FORM OF USTREASURY BONDS. THE PROGRAM EXCEEDS BASIC BOND PURCHASE IN LAST RESORT. THE CENTRAL BANK CONTINUES TO MONETIZE THE FINANCIAL SYSTEM, NOT JUST THE SOVEREIGN BOND. MANAGED FINANCE HAS GONE HAYWIRE WHILE THE MECHANISMS FOR BALANCE ARE ERODING OR GONE. TO MAKE ROOM, THE USGOVT DEBT LIMIT WAS SUSPENDED TO MAY 2013.

To put it simply, so far this calendar year 2013, the Federal Reserve has bought more USGovt debt than the USDept Treasury has issued in securitized bonds. At year-end 2012, the total USGovt debt was $16.4327 trillion. The legal limit was hit. In early February, the USCongress enacted a law to suspend the federal government debt limit until May 18, 2013. Added debt can be tacked on legally. By February 6th, the debt had grown by $47.2 billon in the new year. Consider the USFed bond account. At the close of business on January 2nd, the USFed had possession of $1.661 trillion in USTreasury securities. By the close of business on February 6th, it owned $1.7172 trillion, for an increase of $51.1 billion in the new year. Thus their purchases of USGovt debt in this calendar year have exceeded the Treasury net debt issuance by about $3.9 billion. The only USTBond buyers left on stage are the USFed press with Weimar nameplate.

The venerable ruined USFed, center for American financial crime, announced that it will continue purchasing additional longer-term USTreasury securities at a pace of $45 billion per month. All hail the Fed, broken as it is. A footnote that the US central bank purchases much more than they openly discuss, covering much mortgage bonds that have spurious value discharged by the big US banks. Quietly with little fanfare, the USFed is monetizing all that has been ruined, which means much of the entire US financial system. The bond market has gone far out of control in utter insolvency. Next they might examine wrecked big corporate bonds and a smatter of junk bonds. Why not, since money is free? See the CNS News article (CLICK HERE).

JANET YELLEN HAS GIVEN FIRM SIGNAL FOR Q.E. TO INFINITY, PRECISELY AS THE JACKASS FORECASTED. THE STIMULUS IS FOR SPECULATION AND FOR RISING COSTS, IN NO WAY ECONOMIC.

The Jackass claimed in 2009 that the USFed could not execute any Exit Strategy, or else cause a calamity for the big banks, the USGovt, and financial derivatives. So far the call has been on the mark. When the Quantitative Easing desperate lunacy began in 2010, the Jackass claimed it would have numerous follow-on QE chapters. Then my conclusion was that QE to Infinity would be justified in a forever policy. So far the call has been on the mark. In a recent speech, the weather vane Janet Yellin confirmed the Jackass forever call. She said, "The Federal Reserve may keep interest rates near zero after its bond buying ends, even after hitting its targets for unemployment or inflation, in order to maintain stimulus." Clear as a bell, not even a flinch, no surprise to the Jackass. The confirmation is of Weimar Amerika. Those who accept the monetary policy as sound and sustainable are mentally deficient, to put it bluntly. The QE to Infinity Forever is the monetary policy, as in Reich Finance. Stimulus is not reason, but rather avoiding a collapse. See the Bloomberg article (CLICK HERE).

THE CHINESE YUAN WILL SPREAD TO THE PERSIAN GULF REGION. A BIG TRADE DEAL WAS STRUCK WITH THE SAUDIS AND EMIRATES OF THE U.A.E. LAST YEAR, WHICH WAS ACCOMPANIED BY A YUAN CURRENCY SWAP FACILITY ESTABLISHED IN THE UNITED ARAB EMIRATES. THE LAST NAIL IN THE USDOLLAR COFFIN COMES WHEN THE SAUDIS PERMIT NON-USDOLLAR PAYMENT FOR CRUDE OIL. THAT DAY IS NEAR.

The Chinese have taken more control of the Intl Monetary Fund itself. In January, a plan was revealed by Zhu Min, the deputy managing director of the IMF. He made a statement where he proclaimed that the shift by China into a more self-sufficient consumer based economy had been successful. The important step would be followed up by placing the Yuan currency as a world reserve currency. The IMF has confirmed the Yuan (renminbi) is set to become a Global Reserve Currency, the acknowledgment made at an Economic Forum in Hong Kong. See the Want China Times article (CLICK HERE). The Yuan is being called a Global Reserve Currency even by China, having established the foundation for changes in a short period of time. China does not reveal their hand until everything is already said and done. The USDollar has been owner of the global reserve for decades, seemingly forever. They must next share the control, then suffer its loss in a grand comparison in grotesque embarrassment and humiliation. The USDollar will suffer the lost prestige in practice very suddenly. The Chinese leaders are crafty and patient and deliberate. They put everything in place, making preparations, and then reveal their movements and plans.

Recall that the Premier of China had gone to Saudi Arabi and Dubai a year ago. He stayed a week, conducting meetings and making agreements. China signed economic and trade agreements worth 100 billion Yuan (=US$16 bn) with Saudi Arabia and the United Arab Emirates, as Premier Wen Jiabao completed a six-day visit to the Middle East. The first currency swap agreement with Arab nations, worth 35 billion Yuan, was also signed in Abu Dhabi. The news occurred last year, when Premier Wen attended the Fourth Arab-China Business Conference in Sharjah in the UAE.

Saudi Arabi is soon to announce being the last Middle Eastern country to trade outside the so-called Petro-Dollar. If (when) Saudi Arabia initiates crude oil trade in other currencies, then the death knell is rung, as in game over for the USDollar. Not just loss of the Global Reserve Currency status, but the USDollar will face isolation, judgment, criticism, and finally severe devaluation following the shameful debt downgrades. The US might be declared a financial rogue nation, my expectation. Given how the USDollar finds strength only in the active competitive devaluation process managed by numerous foreign nations, the USDollar will next find its truly (much lower) value when it is not used in global trade. With the USFed printing the dollar non-stop, the currency wars raging fierce, the US currency is poised for a massive fall. The process stops when the USDollar is deposed and the new Gold Standard is instituted, led by its newly adopted role in trade settlement. The only countries left all to themselves with their inflating currencies will be the United States and United Kingdom and certain Western European nations. They will form the new Industrialized Third World community. The day comes soon, signaled by both the IMF and China. The Yuan will share the stage as a Global Reserve Currency. Do not be mistaken. The USDollar cannot share that stage. It will fall off it rapidly.

For some good background material on the internationalization of the Chinese Yuan, aka renminbi, see the Swift research papers (CLICK HERE and HERE). For promoting the London financial center on Yuan currency issues, see the City of London research update (CLICK HERE).

Adam Hamilton's analysis is always interesting and his charts and graphs are unequaled.  He concludes that gold's young up-leg is looking fine and it will be interesting to see what happens in the coming weeks as the gold-loving Asians return to the market.

FutureMoneyTrends presented their silver analysis yesterday. They concluded that (1) there are irregularities in the silver sector, (2) Similar irregularities have occurred in the past and (3) the long-term market (9+8 months) is more bullish than bearish.

Adding to the discussion on silver is Jason Hommel's accurate review of silver's performance over the last 10-years.  To say he is bullish on silver is a gross understatement.

Similar Posts:

Changes in the demand for gold and the dollar-gold link

Posted: 19 Feb 2013 09:11 AM PST

The World Gold Council published a report last week that raises a few important questions and quite a few eyebrows, so let's examine it.

Retail consumers drive Gold demand in India

Posted: 19 Feb 2013 08:05 AM PST

India's gold demand surged 41% in the fourth quarter of calendar year 2012. World Gold Council (WGC) data showed the countrys demand at 262 tonnes in the quarter, compared with 185.5 tonnes in the corresponding period previous year.

Gold price in pounds still positive for the year as Money Week predicts ‘The End of Britain’

Posted: 19 Feb 2013 08:00 AM PST

We encourage all our readers to check out Money Week's article titled 'The End of Britain'.  We've never seen such a negative article on the prospects of the UK economy appear in a mainstream...

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Gold faces a “supply crunch” that could help propel the price to $2,000, a leading gold investor has said.

Posted: 19 Feb 2013 07:55 AM PST

Gold faces 'global supply crunch'

Your Regularly Scheduled COMEX Open Silver Smash Sends Silver Towards $28 Handle

Posted: 19 Feb 2013 07:45 AM PST

With March options expiration next Monday in both gold and silver, Must…Keep…Silver…Under…$30…And…Gold…Under…$1600! Daily COMEX open silver raid in progress. *Update: 2nd wave in progress, cartel now gunning for $28 handle in silver! Click here for more on the latest cartel … Continue reading →

Gold: Is the bull market over?

Posted: 19 Feb 2013 07:26 AM PST

Gold's steady decline from early October to a six-month low has many analysts wondering aloud if the long bull market is over. We don't think so.

Gold "headed for sell off" despite stronger U.S. coin sales

Posted: 19 Feb 2013 07:17 AM PST

Wholesale prices for gold bullion hovered above $1,610 an ounce during Tuesday morning's London session, having ticked higher in Asian trading following losses yesterday.

John Kaiser: Can the TSX Venture Be Saved?

Posted: 19 Feb 2013 07:00 AM PST

Is the end near for the TSX Venture Exchange, the victim of "algo traders," low volume and lack of institutional investors? If newsletter writer John Kaiser is right, as many as 500 of the 1,484 resource companies listed on the Venture Exchange will go under this year due to lack of money in the bank.  [...]
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Mark Dice is back with his lucky Silver Eagle

Posted: 19 Feb 2013 06:43 AM PST

Last time we saw Mark struggle to sell his 1oz Silver Eagle for 99cents. This time he can't even give it away when it competes with a filthy $5 fiat note. Of course when you can't give something away that … Continue reading →

Sterling At Risk Of “Large-Scale Devaluation” As Currency Wars Intensify

Posted: 19 Feb 2013 05:56 AM PST

The pound took a fresh beating yesterday as concerns of currency wars and debasement of sterling led to another sell-off and experts said the currency was at risk of a "large-scale devaluation". Sterling trails only Japan's yen as the worst performer against a basket of international currencies this year as a 4.5 per cent decline [...]
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US Treasury inspects 34,021 Fed vault Gold bars

Posted: 19 Feb 2013 05:29 AM PST

In three of the 367 tests, the gold was more pure than Treasury records indicated, according to the Treasury's inspector general.

Gold fails to hold Asian gains

Posted: 19 Feb 2013 05:16 AM PST

Gold dropped 3.4% over the course of last week, including a sharp drop during Friday's US trading.

Reward: $50 Coin For $1,500 Dog

Posted: 19 Feb 2013 04:50 AM PST

When "All that glitters isn't gold" because sometimes it's silver, meets  "How much is that doggy in the window?"  Hopefully this terrier's owners are able to track him down like Sacagawea.  Not so sure the Lehman Brothers' estate will be … Continue reading →

India regulator allows Gold ETF's to invest in bank schemes

Posted: 19 Feb 2013 04:27 AM PST

Analysts said the move was in line with India's efforts to cut down gold imports and also to utilise idle assets of the precious metal for more productive purposes.

China issues 2013 Year of the Snake commemorative coins

Posted: 19 Feb 2013 04:11 AM PST

The program includes 8 gold coins, and 7 silver coins across a variety of sizes and shapes, with two primary designs.

Quelle Surprise! The Administration Wants You to Believe it is Serious About Prosecuting Banks

Posted: 19 Feb 2013 03:51 AM PST

There are times I feel sorry for the business reporters at the New York Times. As Eddie Bernays, the father of the public relations industry, pointed out in his 1926 book Propaganda, half the articles on the front page of the Grey Lady back then were what he called propaganda, as in they were covered at the instigation of business or political interests who were seeking to bring the public to accept their point of view.

Now the problem is that much of what passes for journalism these days runs afoul of the old Yankee saying, "Fool me once, shame on thee. Fool me twice, shame on me." Anyone who has been paying attention to the news will recognized that some of these stories are not just obvious plants, but they are simply not credible. That's not saying the facts are inaccurate, it's the storyline that's a howler. And it is also fair to point out that the slant an article winds up with may not be the doing of a reporter so much as his editor.

The latest illustration is an article by Ben Protess in the New York Times titled Prosecutors, Shifting Strategy, Build New Wall Street Cases. At least in the web version, this is the picture immediately under the headline:

I'm not sure whether this picture is an effort at Big Lie imagery, or whether someone in the Times's layout department is a subversive. But using Lanny Breuer at the face of a new "get tough with banks" posture at the Department of Justice alone fatally undercuts the article.

In case you managed to miss it, the Frontline documentary The Untouchables had these sections involving Breuer:

NARRATOR: FRONTLINE spoke to two former high-level Justice Department prosecutors who served in the Criminal Division under Lanny Breuer. In their opinion, Breuer was overly fearful of losing.

MARTIN SMITH: We spoke to a couple of sources from within the Criminal Division, and they reported that when it came to Wall Street, there were no investigations going on. There were no subpoenas, no document reviews, no wiretaps.

LANNY BREUER: Well, I don't know who you spoke with because we have looked hard at the very types of matters that you're talking about.

MARTIN SMITH: These sources said that at the weekly indictment approval meetings that there was no case ever mentioned that was even close to indicting Wall Street for financial crimes.

LANNY BREUER: Well, Martin, if you look at what we and the U.S. attorney community did, I think you have to take a step back. Over the last couple of years, we have convicted Raj Rajaratnam. Now, you'll say that's an insider trading case, but it's clearly going after Wall Street. We—

MARTIN SMITH: But it has nothing to do with the financial crisis, the meltdown, the packaging of bad mortgages that led to the collapse, that led to the recession.

And later:

NARRATOR: In a September 2012 speech, Lanny Breuer gave a speech explaining his reluctance to indict a major bank.

LANNY BREUER: — the kinds of considerations in white collar cases that literally keep me up at night.

MARTIN SMITH: You gave a speech before the New York Bar Association. And in that speech, you made a reference to losing sleep at night, worrying about what a lawsuit might result in at a large financial institution.

LANNY BREUER: Right.

MARTIN SMITH: Is that really the job of a prosecutor, to worry about anything other than simply pursuing justice?

LANNY BREUER: Well, I think I am pursuing justice. And I think the entire responsibility of the department is to pursue justice. But in any given case, I think I and prosecutors around the country, being responsible, should speak to regulators, should speak to experts, because if I bring a case against institution A, and as a result of bringing that case, there's some huge economic effect — if it creates a ripple effect so that suddenly, counterparties and other financial institutions or other companies that had nothing to do with this are affected badly — it's a factor we need to know and understand.

TED KAUFMAN: That was very disturbing to me, very disturbing. That was never raised at any time during any of our discussions. That is not the job of a prosecutor, to worry about the health of the banks, in my opinion. Job of the prosecutors is to prosecute criminal behavior. It's not to lie awake at night and kind of decide the future of the banks.

Breuer's performance, such as it was, led to this parody:

So having visually underminded itself, how does the article proceed? Here is its premise:

In a recent round of actions that shook the financial industry, the government pushed for guilty pleas, rather than just the usual fines and reforms. Prosecutors now aim to apply the approach broadly to financial fraud cases, according to officials involved in the investigations.

Really? Someone needs to tell bank investors how scared bank executives are. This is KBE, the ETF designed to match the Keefe Bruyette's large bank index, versus SPY, the EFT for the S&P 500, for the last three months (click to enlarge):

And in fairness, Protess does question the official position fairly high up in the story, at the start of the fourth paragraph (the usual convention in a real puff piece is to wait at least nine or ten paragraphs before a negative word is said):

But critics question whether the new strategy amounts to a symbolic reprimand rather than a sweeping rebuke. So far, the Justice Department has extracted guilty pleas only from remote subsidiaries of big foreign banks, a move that has inflicted reputational damage but little else.

The officialdom honestly seems to have persuaded themselves that indicting a foreign subsidiary and getting a guilty plea is a meaningful concession. Help me. That is what is so disheartening about dealing with an (at best) captured prosecutors. Their idea of what is reasonable is so distorted that is is painfully obvious that there is no reason to expect any change in behavior.

The real tell here is the lack of any interest on behalf of the Feds, including the Schneiderman task force, to go after Lender Processing Services. I know for a fact that people with relevant expertise presented serious ideas about how to go after LPS to Schneiderman personally, so his failure to act is not a function of ignorance. And LPS was a linchpin in establishing bad conduct across the major servicers who were its clients.

But not only could no one be bothered to go after LPS for its role in servicing abuses (more on that in future posts), they could't even be bothered to punish it seriously for past criminal conduct. As we wrote in an earlier stage in this saga:

The Department of Justice and the state of Missouri have each announced criminal plea bargains with one Lorraine Brown, former chief executive of DocX, the Lender Processing subsidiary best known for its price sheet for fabricating the mortgage documents a servicer, or frankly, anyone would need to claim they had standing to foreclose on your home. Funny how that particular DocX product was mentioned no where in the plea deals.

This admission of guilt by Brown for wire and mail fraud on the federal level and fraudulent and forged document filings in Missouri now allows the Obama Administration to claim it has sent another "executive" to jail. And the bizarre progress of this case was that the Missouri attorney general had sued both Brown and LPS, and you'd expect them to cut a deal with Brown to go after the bigger target, LPS. But it's likely Brown was not very sophisticated; she apparently went to an interview with the FBI without the advice of counsel. Rule number one is don't lie to the FBI, and the document release Tuesday show that Brown did. And her attorneys let LPS get in front of her. The firm paid $2 million in fines to Missouri and "cooperated" in going after small fry Brown (rather than the bigger fry of LPS' clients). Nicely played.

Now get this: normally we favor going after executives rather than the institution when you are dealing with major banks, because the institution has legitimate businesses that have nothing to do with the bad conduct. By contrast, LPS is a comparatively small player ($2 billionish in revenues) with a deeply problematic business model. Like the ratings agencies, it is a small pockets player that acts as a liability shield for the big boys. It's a worthy goal to take players like that out when they play fast and loose with the law.

Remember, in the extract above, the only conduct that was admitted to was robosigning over a million documents. And the public had been trained to think robosigning, which is a fraud on the court, is no biggie.

LPS settled for a mere $35 million, and that for robosigning alone. Fraud expert Lynn Szymoniak thinks 4 million documents could be at issue. Mr. Market thought that was a screaming bargain; the stock traded up over 7% the day the settlement was announced.

Notice also that no one bothered prosecuting the document fabrication at DocX. We and other sites reported on how brazen they had been:

Picture 21

Picture 22

So back to the Times' sad effort to pretend the Powers That Be are serious. If they can't be bothered to go after a second tier player where you had an executive ready to provide evidence, don't tell us that we should believe you now. And Protess noted towards the end of the piece that the authorities might be deterred by big bank huffing and puffing:

The strategy will face significant roadblocks.

For one, banking regulators are likely to sound alarms about the economy. HSBC avoided charges in a money laundering case last year after concerns arose that an indictment could put the bank out of business. In the first interest rate-rigging case, prosecutors briefly considered criminal charges against an arm of Barclays, but they hesitated given the bank's cooperation and its importance to the financial system, two people close to the case said.

The Justice Department will also face resistance from Wall Street. In meetings with authorities, banks are trying to distinguish their activities from the bad behavior at UBS and Barclays, according to the industry lawyers. One lawyer who represents Deutsche Bank acknowledged that Wall Street was girding for battle over the push for guilty pleas.

So I'm not sure who the audience for this play acting is supposed to be. The public knows this emperor has no clothes, yet he continues to prance around naked.

Russia meteor to cost $2,200 gram, 40 times more than Gold

Posted: 19 Feb 2013 03:47 AM PST

Reports said the race is on in Russia to find space rocks worth tens of thousands of pounds from the 40-ton meteor that hurtled across the Urals last week.

Gold faces 'global supply crunch'

Posted: 19 Feb 2013 03:22 AM PST

Gold faces a "supply crunch" that could help propel the price to $2,000, a leading gold investor has said.

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Gold edges up near $1615 in Asia

Posted: 19 Feb 2013 03:02 AM PST

Gold for immediate delivery was seen trading at $1614.58 an ounce at 12.00 noon Singapore time while US gold was seen at $1614.09 an ounce on the comex division of nymex.
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