JPMorgan et al Take No Prisoners

05 October 2016 — Wednesday


The gold price did very little in Far East and London trading on their Tuesday — and that state of affairs lasted until 1 p.m. BST in London, which was twenty minutes before the COMEX open.  Then JPMorgan et al went to work with their spoofing and algorithms, plus selling just enough contracts to hit the Managed Money sell stops — and the rest, as they say, was history.  The low tick came right at the COMEX close — and although it rallied about five bucks after that, even that was taken away by the 5:00 p.m. close in the thinly-traded after-hours market.

The high and low ticks were recorded by the CME Group as $1,315.40 and $1,269.00 in the December contract.

Gold was closed in New York yesterday at $1,268.40 spot, down a chunky $42.80 on the day.  Not surprisingly, net volume was over the moon at 320,000 contracts.261005gold

And here’s the 5-minute gold tick chart courtesy of Brad Robertson — and it certainly doesn’t need much embellishment from me, as we’ve seen this all before.  Of course all the volume that mattered started around 06:00 Denver time on the chart below, which was 1 p.m. BST in London — and 8:00 a.m. in New York when ‘da boyz’ really went to work.  But it should be pointed out that there was decent volume during London trading starting at 01:00 MDT — and until after 2:00 p.m. Denver time, which was 4:00 p.m. in New York.  The powers-that-be are serious now.

The vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here.261005-5-minute-gold

It was the same story in silver, so I’ll spare you the play-by-play, as you most likely know it by heart by now, although the low tick in silver came around 1:15 p.m. rather than the 1:30 p.m. EDT COMEX close like it did for gold.  Most of the subsequent gains off silver’s low tick disappeared in after-hours trading as well.

The high and low ticks in this precious metal were reported as $18.94 and $17.83 in the December contract.

Silver was closed by ‘da boyz’ at $17.775 spot, down $1.01 on the day.  Net volume was also over the moon at just under 96,500 contracts.261005silver

And here’s the 5-minute silver stick chart that I thank Brad Robertson for sending our way — and it requires no comments from me.

As with the 5-minute gold chart above, the vertical gray line is 10:00 p.m. Denver time, midnight in New York — and noon China Standard Time [CST] the following day in Shanghai—and don’t forget to add two hours for EDT.  The ‘click to enlarge‘ is a must here as well.261005-5-minute-silver

Platinum wandered around slightly below unchanged for most of the Far East and Zurich trading session — and was only down a buck at the COMEX open.  It’s $981 spot low tick came minutes after 12 o’clock noon in New York — and the HFT traders bounced it off that price on numerous occasions until the COMEX close.  At that point it gained a dollar or so in the thinly-traded after-hours market.  Platinum finished the Tuesday session at $983 spot — and down 21 bucks on the day.261005platinum

Ditto for palladium — and its low tick was set a few minutes before the COMEX close.  It was closed at $696 spot, down 15 dollars from Monday.261005palladium

The dollar index closed in New York very late on Monday afternoon at 95.76 — and that was pretty much its low tick of the day.  The 96.44 high tick came about 10:20 a.m. in New York — and it began to head lower from there, with a vicious 40 basis point down/up spike between 11:30 a.m. and noon EDT.  It fell back to 96.10 by shortly after 1 p.m. — and traded virtually ruler flat for the remainder of the Tuesday session.  The index closed at 96.14 — and up 38 basis points on the day.

Of course the dollar rally was just the fig leaf that JPMorgan hid behind as they trashed the precious metals.261005intraday-gif

And here’s the 6-month U.S. dollar index — and you can read into it whatever you wish.261005-6-month-usd

The gold stocks gapped down about 6 percent at the open — and continued selling off from there.  The gold shares were creamed, as the HUI closed down 10.09 percent.261005hui

It was an identical scenario for the silver equities, as Nick Laird’s Intraday Silver Sentiment/Silver 7 Index got hammered to the tune of 9.32 percent.  Click to enlarge if necessary.261005silver-7

The CME Daily Delivery Report showed that 1,338 gold, plus 27 silver contracts were posted for delivery within the COMEX-approved depositories on Thursday.  In gold, the only short/issuer of note was Goldman Sachs with 1,233 out of their in-house trading account — and S.G. Americas was the ‘also ran’ with 86 contracts.  There were eleven long/stoppers, with by far the largest being JPMorgan with 846 contracts…811 for clients, plus another 35 contracts for its own account.  Virtually tied for second spot was Macquarie Futures with 162 contracts — and Canada’s Scotiabank with 161 contracts — both for their respective in-house trading accounts.  The ‘also ran’ on the long/stopper side was Citigroup with 81 contracts for its client account.  In silver, the only short/issuer worth mentioning was Goldman Sachs with 25 contracts from its client account — and the long/stopper of note was Macquarie Futures with 16 contracts for their own account. The link to yesterday’s Issuers and Stoppers Report is here.

The CME Preliminary Report for the Tuesday trading session showed that gold open interest in October actually rose by an astonishing 387 contracts, leaving 1,682 still around, minus the 1,338 contracts mentioned in the previous paragraph.  Monday’s Daily Delivery Report showed that 758 gold contracts were posted for delivery today, so that means that a chunky 758+387=1,145 gold contracts were added to the October delivery month yesterday!  October silver o.i. fell by 99 contracts, leaving 97 left, minus the 27 mentioned in the previous paragraph.  Since only 1 lonely silver contract was actually posted for delivery today, that means that 99-1=98 short/issuers in silver were let off the delivery hook because they didn’t have any physical silver backing their positions — and the long/stoppers holding the other side of the trade didn’t want to push the issue.

There were no reported changes in GLD yesterday, but there was a small withdrawal from SLV, as 148,829 troy ounces were taken out.  I would suspect that this amount represented a fee payment of some kind.

There was another sales report from the U.S. Mint yesterday.  They sold another 4,500 troy ounces of gold eagles — 1,000 one-ounce 24K gold buffaloes — and 345,000 silver eagles.  This is the best start to a month since May.

There was no gold reported received over at the COMEX-approved depositories on Monday, but 30,129 troy ounces were shipped out the door.  Of that amount, 24,264 troy ounces were removed from Canada’s Scotiabank.  A link to that activity is here.

There was decent activity in silver, as 509,986 troy ounces were reported received — and 680,892 troy ounces were shipped out the door for parts unknown.  Almost all of the ‘in’ activity was at Brink’s, Inc. — and the rest of the ‘in’ activity, plus all of the ‘out’ activity was at CNT.  A link to this action is here.

There was decent activity over at the COMEX-approved gold kilobar depositories in Hong Kong on Monday.  They received 3,842 of them — but shipped out only 628.  All of the activity was at Brink’s, Inc. — and the link to that, in troy ounces, is here.

Here’s the first of two charts that Nick Laird passed around late yesterday afternoon.  The first shows the amount of earmarked gold in Foreign and International accounts at the U.S. Federal Reserve, updated with August’s data.  During that month, the Federal Reserve shipped out 25 tonnes.  Click to enlarge.261005-earmarked-gold

The second chart from Nick shows ‘Silk Road Gold Demand‘…which includes gold demand in India, Turkey, Russia and China.  It’s also updated with the latest month’s demand, which is August.  That amount totalled 195 tonnes.  Click to enlarge.261005-silver-road

I have an average number of stories for you today — and I hope you have the time to read the ones that interest you.


Manhattan Apartment Sales Plunge 20{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}

There are a lot more apartments available for purchase these days in Manhattan. And fewer people are buying.

Sales of previously owned condominiums and co-ops fell 20 percent in the third quarter from a year earlier as potential buyers grew cautious amid more choices, according to a report Tuesday from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. There were 5,290 resale apartments on the market at the end of September, 53 percent more than the number available in late 2013, the lowest point for listings.

The swelling inventory is providing an opportunity to New Yorkers shut out of a market in which construction has been dominated by ultra-luxury condos aimed at the wealthiest buyers. Resales, particularly those priced at less than $1 million, were in chronically short supply in recent years, and those that made it to the market sparked bidding wars. Now, more owners are listing apartments to profit from climbing values, and they’re finding lots of company.

Rapidly rising prices over the years have pulled more sellers into the market hoping to cash out,” Jonathan Miller, president of Miller Samuel, said in an interview. “But buyers are more wary. There isn’t the same intensity of activity to burn through the new supply.

With 27 years of residential real estate sales experience under my belt, I’m more than familiar with what a market top in real estate looks like — and what they’re talking about here shows all the hallmarks of a market that is about to go into precipitous decline.  This story put in an appearance on the Internet site at 10:01 p.m. Denver time on their Monday evening — and it comes courtesy of Swedish subscriber Patrik Ekdahl.  Another link to this article is here.

Atlantic City Risks Default After Another Missed Deadline

Atlantic City is on the verge of another missed deadline that risks pushing the troubled New Jersey resort town into default and closer to a state takeover.

The distressed gambling hub has until the end of Monday to comply with the terms of a $73 million state loan that required the city council to disband the local water utility that serves as collateral for the agreement. Instead, city officials announced their own plan last week that would have the utility buy a closed airfield from the city for about $100 million and asked state officials to wave the terms of the loan.

Moody’s Investor Service is not as optimistic. The credit-ratings company said in a report last week that Atlantic City’s “impending technical default” is credit negative, and indicates “a disconnection between the city, mayor, and state.” The political gridlock puts the city’s next bond payment at risk — $9.4 million due Nov. 4.

Even if the city were to have market access, borrowing $100 million would increase debt by a factor of seven, raising the question of how the authority would pay for this debt — assuming the plan went through, which is far from certain,” wrote Moody’s analyst Doug Goldmacher. He wasn’t immediately available for an interview Monday.

No surprises here.  This news item was posted on the Bloomberg website at 12:25 p.m. MDT on Monday afternoon — and I thank Brad Robertson for pointing it out.  Another link to it is here.

Bill Gross:  Doubling Down

My country club locker room is a fascinating 19th hole observatory where human nature and intelligence often come into conflict. Almost all of my golfing buddies are risk takers by nature and many of them are gamblers – not just in the card room but also in the casinos in Las Vegas. Having spent some time in Sin City myself in my early 20s as one of the first blackjack counters, I was, and still am, most familiar with odds and the impossibility of beating the “House” in any game other than blackjack over a long period of time. Still, this commonsensical conclusion is not so obvious to many of my friends, who first of all, claim that they usually “break even” on any particular weekend jaunt, and secondly, suggest that they can win by using various betting “systems” that somehow allow them to claw back losses or stabilize winnings. An absurd example of this would be to triple your bet if you’ve lost 3 times in a row, and if you lose that, to quadruple your bet and so on. All of these illusions are derivatives of the so-called Martingale System, which claims that it is mathematically impossible to lose, given enough money and the willingness of the casino to take the increasing bet. The latter conditions, however, are where reality meets the road. A string of 4, 5 or perhaps 30 straight losses cannot work in the long run because the size of the bets eventually reach billions of dollars.

This same mathematical logic seems to have eluded central bankers around the globe.  They are quite simply, employing a Martingale System in the conduct of monetary policy with policy rates now in negative territory for both the ECB and the BOJ – which in turn have led to over $15 trillion of negative yielding developed economy sovereign bonds. How else would one characterize the “whatever it takes” statement by Mario Draghi in 2014?  How else would one interpret BOJ’s Kuroda when just last week he upped the ante in Japan by capping 10 year JGB’s at 0{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} until inflation exceeds 2{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} per year?  How else would a rational observer describe Carney and Yellen other than “Martingale gamblers with a wallet or a purse?” Our financial markets have become a Vegas/Macau/Monte Carlo casino, wagering that an unlimited supply of credit generated by central banks can successfully reflate global economies and reinvigorate nominal GDP growth to lower but acceptable norms in today’s highly levered world.

Bill is up on soapbox here — and rightly so.  This is his monthly commentary for October — and it’s definitely worth reading.  I thank Richard Saler for bringing it to our attention.  Another link to it is here.

Bring Back The Cold War — Paul Craig Roberts

Pundits have declared a “New Cold War.” If only! The Cold War was a time when leaders focused on reducing tensions between nuclear powers. What we have today is much more dangerous: Washington’s reckless and irresponsible aggression toward the other major nuclear powers, Russia and China.

During my lifetime American presidents worked to defuse tensions with Russia. President John F. Kennedy worked with Khrushchev to defuse the Cuban Missile Crisis. President Richard Nixon negotiated SALT I and the anti-ballistic missile treaty, and Nixon opened to Communist China. President Carter negotiated SALT II. Reagan worked with Soviet leader Gorbachev and ended the Cold War. The Berlin Wall came down. Gorbachev was promised that in exchange for the Soviet Union’s agreement to the reunification of Germany, NATO would not move one inch to the East.

Peace was at hand. And then the neoconservatives, rehabilitated by the Israeli influence in the American press, went to work to destroy the peace that Reagan and Gorbachev had achieved. It was a short-lasting peace. Peace is costly to the profits of the military/security complex. Washington’s gigantic military and security interests are far more powerful than the peace lobby.

Since the advent of the criminal Clinton regime, every American president has worked overtime to raise tensions with Russia and China.

A reader sent this to me last Friday when it first showed up on Paul’s website — and for the life of me, I can’t figure out why I didn’t post it in my Saturday missive.  I didn’t, so I shall make amends now — and I thank Roy Stephens for sending me this particular copy of it on Monday evening.  Another link to it is here — and it’s a must read, even if you’re not a serious student of the New Great Game.

IMF warns of hit to U.K. economic growth

The International Monetary Fund has cut its forecast for U.K. economic growth next year as it warned that the global recovery remains “weak and precarious“.

Although the IMF raised its prediction for U.K. GDP growth this year to 1.8{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, the figure for 2017 was cut to 1.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}.

Its assumptions are based on “smooth post-Brexit negotiations and a limited increase in economic barriers“.

The IMF’s latest World Economic Outlook predicts “sub-par” global growth this year of 3.1{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, rising slightly in 2017.

This item appeared on the Internet site late on Tuesday afternoon — and I thank Patrik Ekdahl for his second offering in today’s column.  Another link to this article is here.

European Banks Cutting 20,000 Jobs as ING Joins Commerzbank

European banks are preparing a fresh round of bloodletting — with some 20,000 jobs set to go — as tougher rules and negative interest rates weigh on profits.

ING Groep NV will slash 5,800 positions over five years as it focuses on Internet and mobile banking and automates systems, the Amsterdam-based lender said Monday. Last week, Germany’s Commerzbank AG disclosed plans to cut 9,600 jobs, while Spain’s Banco Popular Espanol SA said it will eliminate as many as 3,000 posts after tapping investors for funds.

Banks are facing high regulatory costs and competition on margins and pricing due to the low-rate environment,” said Karim Bertoni, a fund manager at Bellevue Asset Management in Switzerland, which has about 6.9 billion Swiss francs ($7 billion) under management. “They are trying to reduce costs and people are one of the biggest parts of that.

This Bloomberg news item was posted on their Internet site at 5:50 a.m. Denver time on Monday morning — and subsequently updated two hours and change later.  I found it in yesterday’s edition of the King Report — and another link to it is here.

ECB Said to Build Taper Consensus as Q.E. Decision Time Nears

The European Central Bank will probably gradually wind down bond purchases before the conclusion of quantitative easing, and may do so in steps of €10 billion ($11.2 billion) a month, according to euro-zone central-bank officials.

An informal consensus has built among policy makers in the past month that asset buying will have to be tapered once a decision is taken to end the program, the officials said, asking not to be identified because their deliberations are confidential. They didn’t exclude that QE could still be extended past the current end-date of March 2017 at the full pace of €80 billion ($90 billion) a month.

The Governing Council, which is holding an interim meeting on Tuesday before members go to the International Monetary Fund in Washington, has just four policy-setting sessions left until the currently scheduled expiry of Q.E. Since Sept. 3, when officials kept their stimulus package unchanged and left the question unresolved of whether bond purchases will be extended, investors have been left guessing on when and how the program will end.

The Governing Council has not discussed these topics, as President Mario Draghi said at the last press conference and during his recent testimony at the European Parliament,” the ECB said in an e-mailed statement.

This article showed up on the Bloomberg Internet site at 9:39 a.m. Denver time on Tuesday morning — was was updated about an hour later.  I thank Patrik Ekdahl for this news item as well — and another link to it is here.

TARGET2 Shows Europe’s Banking Crisis Is Escalating Again

Problems of Deutsche Bank, Commerzbank, Monte dei Paschi and other German, Italian and Spanish banks are not the only concern of the European Banking System. Trouble is much deeper than it is thought because there is a systemic imbalance that has been increasing for almost ten years. Politicians do not want to tell us the truth, but soon we will experience the same crisis in the Monetary Union as we did in 2012.

The extent of the problems in the European Banking System is TARGET2 and its balances of the National Central Banks of the Eurosystem. These balances, or rather imbalances, reflect the direction of the capital flight. And there is only one way: from Southern Europe into Germany. After Mario Draghi’s famous words “I do whatever it takes to save the euro”, things seemed to improve; however, since January 2015 problems have been escalating again.

The excess money flow from banks in one country to banks in another country has to be compensated for. It can be done with loans or so called inter-bank lending. If there is no compensation from the inter-bank market (because banks do not trust each other any more) then country A has a liability and country B has a claim and compensation comes from the ECB. Therefore TARGET2 balances are net claims and liabilities of the euro area NCBs vis-a-vis the European Central Bank (ECB).

Even the ECB analysts do not hide the truth. As the monthly bulletin from May 2013 specifies, “the TARGET balances are a manifestation of underlying tensions in the Economic and Monetary Union (EMU), highlighting the need for macroeconomic imbalances to be addressed, trust in banking systems to be re-established, and the institutional foundations of EMU to be strengthened.” The whole system still can exist only because of the massive intervention of the ECB.

This very interesting article, along with an even more interesting chart, was posted on the Zero Hedge website at 3:30 a.m. EDT yesterday morning — and it’s worth skimming if you have the interest.  It’s another contribution from Richard Saler — and another link to it is here.

Italy’s 50-Year Bond Issue Set at €5 Billion: Nearly 4x Oversubscribed

The global search for yield continued this morning, when as reported yesterday, Italy was set to price its first ever super-long bond in the form of 50-year paper. According to Bloomberg, the issue size will be set at €5 billion, but what is more impressive is that with €18.5 billion in orders, it will be nearly 4x oversubscribed. According to the WSJ, the bonds are expected to price at a yield of around 2.85{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} but could price at a lower yield, depending on investor demand.

Once priced, Italy will become the latest nation to issue super-long bonds this year, following sovereigns including Belgium, France, Ireland and Spain in taking advantage of the historically low interest rates spurred by central bank stimulus. Italy’s Treasury announced the issuance “after a thorough market analysis,” it said in a statement on Monday, Bloomberg reported earlier.

Belgium and Spain have both sold debut 50-year bonds in public markets this year, with each raising €3 billion. France, which has sold long-dated bonds in the past, also raised €3 billion in new 50-year debt. Meanwhile, Ireland and Belgium have both sold €100 million of 100-year bonds in privately placed deals this year.

Demand for these ultralong bonds seems to be very strong at the moment,” said Jakob Christensen, chief analyst at Danske. Spain’s 2066 bonds, which were sold with a yield of 3.493{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} in May, now yield 2.55{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e}, according to Tradeweb.

Wow!  You couldn’t make this stuff up.  The Eagles had it right in their hit song ‘Hotel California‘…”You can check out any time you like, but you can never leave.”  Little did they know when they first sang those lyrics that the whole world would end up being like that.  This Zero Hedge piece was posted on the their Internet site at 8:04 a.m. on Tuesday morning EDT — and it’s the second offering in a row from Richard Saler.  Another link to this news item is here.

Elvira Nabiullina: How Russia’s central bank chief held the line

One Thursday evening in March, Elvira Nabiullina, governor of Russia’s central bank, faced down a rival in the struggle for influence inside President Vladimir Putin’s entourage.

At a meeting chaired by Putin, Economy Minister Alexei Ulyukayev sought the president’s blessing for the central bank to give 140 billion rubles ($2.2 billion) to lenders, according to a person who was briefed on the meeting by Nabiullina.

Banks would use the extra money, Ulyukayev argued as he sat before Nabiullina in a Kremlin conference room, to lend to companies suffering amid Russia’s economic downturn. Some of Putin’s friends in the business world would benefit too.

Nabiullina objected, saying that releasing money would drive up inflation and undermine her monetary policies.

Putin, sitting at the head of a hardwood table, backed the central banker.

This longish Reuters essay appeared on their website ten days ago on September 26 — and it’s definitely worth reading if you have the interest.  My thanks go out to Bill Moomau for bringing it to my attention — and now to yours.  Another link to this article is here.

U.S. seeks to enforce global dominance by unleashing war on countries who oppose it – Assad

Washington’s pursuit of hegemony has fallen short of its goal, causing havoc and collapse of states, Bashar Assad said in a new interview. Syria’s head believes that U.S. meddling in the conflict aims to “save what is left” from its fading global preeminence.

In an interview to Iranian magazine Tehran Foreign Policy Studies Quarterly on Wednesday, the Syrian president argued that the U.S. resorts to force every time it fears a challenge to its clout and ability to control the international agenda unilaterally.

Reserve Bank of India Unexpectedly Cuts Its Benchmark Rate by 25bps: 102nd Central Bank Cut of 2016

The Reserve Bank of India unexpectedly cut interest rates Tuesday, lowering its benchmark repurchase rate by 25bps from 6.50{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} to 6.25{f02ffe5e8b39fd7974c2720d01ccf381ddc9ebb4164215842085b3c57e4f642e} the lowest in more than 5 years, with just 16 of 39 economists surveyed by Bloomberg predicting a rate cut, and all 11 economists polled by the WSJ predicting rates would remain unchanged. The central bank cited a marked slowdown in global growth and a benign inflation outlook, in the first decision made by the recently-appointed committee headed by the new governor, Urjit Patel.

The RBI’s decision to cut its rate brings the number of central bank rate cuts in 2016 to a total of 102, surpassing by 1 the central bank rate cuts announced in all of 2015, which according to Reuters amounts to 101.

For the first time in the bank’s history, a six-member monetary policy committee was responsible for Tuesday’s decision. The RBI has used advisory committees in the past, but the final decision was always the governor’s. Now, Mr. Patel only casts a deciding vote if there is a deadlock. The six members of the panel include Indian Statistical Institute Professor Chetan Ghate, Indian Institute of Management Professor Ravindra Dholakia and Delhi School Economics Director Pami Dua, all appointed by the government. On the central bank’s side, Deputy Governor R. Gandhi and Executive Director Michael Patra sit on the MPC alongside Mr. Patel, the chief architect of the bank’s inflation-focused monetary policy.

While few had expected a major announcement today, many said they expected the central bank of Asia’s third-largest economy to ease its stance. All the analysts forecast one rate cut of 0.25 percentage point before the fiscal year ends on March 31, 2017. Nine of the 11 predicted the cut would happen before the end of 2016.

This Zero Hedge story showed up on their website at 5:44 a.m. on Tuesday afternoon — it’s the final contribution of the day from Richard Saler — and I thank him on your behalf.  Another link to this news item is here.

Backlash to World Economic Order Clouds Outlook at IMF Talks

Policy-making elites converge on Washington this week for meetings that epitomize a faith in globalization that’s at odds with the growing backlash against the inequities it creates.

From Britain’s vote to leave the European Union to Donald Trump’s championing of “America First,” pressures are mounting to roll back the economic integration that has been a hallmark of gatherings of the IMF and World Bank for more than 70 years.

Fed by stagnant wages and diminishing job security, the populist uprising threatens to depress a world economy that International Monetary Fund Managing Director Christine Lagarde says is already “weak and fragile.”

The calls for less integration and more trade barriers also pose risks for elevated financial markets that remain susceptible to sudden swings in investor sentiment, as underscored by recent jitters over Frankfurt-based Deutsche Bank AG’s financial health.

The backlash against globalization is manifesting itself in increased nationalistic sentiment, against the outside world and in favor of increasing isolation,” said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong and a former IMF official. “If we lose consensus on what kind of a world we want to have, the world will probably be worse off.

Excuse me??? Did he say what kind of world “we” want to have…meaning the bankers?  Are they being kind to themselves, or what?  What about what “We, The People…” want?  That doesn’t seem to interest them, does it?  This Bloomberg article put in an appearance on their website at 10:00 p.m. MDT on Monday evening — and was updated about 12 hours later.  It comes courtesy of Patrik Ekdahl — and this is his last offering in today’s column — and I thank him as well.  Another link to it is here.


Here are the other two photos that reader Ken Hahm sent our way on the weekend.  As I mentioned yesterday, he took these shots with a Motorola smart phone.  This is a western toad — and it’s not common in our area, but I’ve seen quite a few in the southern parts of western Canada.  This particular specimen is rather large — and I’ve never seen one this big.  For such a dinky camera, I’m amazed at the quality of these photos, plus the praying mantis in yesterday’s column.  The ‘click/double click to enlarge‘ feature helps on both shots.261005-2016-10-03-2



As I said in The Wrap section of yesterday’s column…”I’m presuming, as Ted is, that JPMorgan et al are still in control of precious metal prices, but if that’s the case, their activities since the Brexit vote remain an unresolved mystery up to this point.

Tuesday’s price action should leave no doubt in anyone’s mind that ‘da boyz’ are still around — and continue to do as they see fit with precious metal prices.  And as reader Brian Geisler pointed out yesterday, China is shut tight all this week, so the bullion banks in both London and New York — and they’re the same banks in both places — have had their way with the market since the open on Sunday night in New York.

They’ve put it to good use

The procedure, which Ted Butler has pointed out ad nauseam over the years, is always the same.  JPMorgan et al spin their algos, throw in some spoofing — and sell just enough contracts as it takes to trigger Managed Money sell stops, then pull their bids — and you get the standard waterfall declines that you saw today.  The Managed Money traders are Pavlovian pooches, selling longs en masse on one hand — and going short on the other.  ‘Da boyz’ are standing right there to pick up the other side of these trades…purchasing all the longs the M.M. traders are selling and covering their short positions with them.  It’s the same old, same old.

JPMorgan et al know the positions of the Managed Money traders right down to the contract, because all their accounts are through these same bullion banks, so the positions of these M.M. traders are open books for ‘da boyz’, so they know where all their sell stops are.  It’s collusive — and illegal as it gets — and the CFTC and CME Group are complicit in all of this.

And not to be forgotten is the buckets of money that JPMorgan et al are making in the process, and I’ll be very interested in what Ted may have to say about all this in his mid-week column this afternoon.

Talking about money for nothing, Ted said that the 50 cent up/down move through silver’s 50-day moving average in the space of a few hours last Friday morning, netted a handful of commercial traders somewhere between 10 and 15 million bucks for a few hours ‘work’.

Here are the 6-month charts for all four precious metals — and they ain’t pretty.  But then again, why should you be surprised, as this was not unexpected…just overdue.261005-6-month-gold


And as I type this paragraph, the London open is less than ten minutes away — and I see that the gold price crawled higher until around 1 p.m. in Tokyo on their Wednesday afternoon, which was midnight in New York — and then crept lower at the same rate — and is currently up $2.50 the ounce.  It was the same for silver, as it up about 23 cents to $18 spot by 1 p.m. in Tokyo, but is now up only 12 cents.  Platinum is up 4 dollars — and palladium, which had been up a few dollars until 2 p.m. China Standard Time on their Wednesday morning, has just spiked down hard — and is down 11 bucks from its close in New York yesterday — and I’ll find out soon enough if that was a bad data feed, or the real deal.

Net HFT gold volume is pretty heavy already at just over 34,000 contracts — and that number in silver is pretty chunky as well at a hair over 11,000 contracts.  The dollar index dropped below the 96.00 mark briefly shortly after 11 a.m. in Tokyo, but has rebounded back above that mark — and is only down 6 basis points as London opens.

Yesterday, at the close of COMEX trading, was the cut-off for this Friday’s Commitment of Traders Report.  And with volume being what it was yesterday, there’s no guarantee that it will all be in it.  We also get the monthly Bank Participation Report on Friday as well — and that will allow Ted to recalibrate JPMorgan’s short position in silver.

As Ted said on the phone yesterday, we’re now back at ‘The Count’ stage of this engineered price decline.  It’s impossible to know how much further there is to go but, as Ted always says, it’s not a matter of price so much as a matter of contracts.  How many long contracts can JPMorgan et al get the Managed Money traders to puke up — and how big a short position can they get them to put on?

Yes, there was big improvement yesterday — and I’ll be interested in seeing if Ted will put a number on it in his missive latter today…but as far as the number of contracts, we still have miles to go.  The only question that I’d like an answer to is: Will this price decline be over quickly,  or are ‘da boyz’ going to drag it out?  Death by a thousand cuts, or by one single thrust?

Beats me, but the unfortunate thing is that more ‘improvements’ in the Commercial net short position going forward from here means ever-lower prices until the bottom is in.

So we wait some more.

And as I post today’s column on the website at 4:00 a.m. EDT, I note that not much has changed in the first hour of trading now that both London and Zurich are open for business.  Gold is up $2.90 — silver is up a dime — platinum has rallied a bit — and is up 9 bucks currently.  Palladium bounced off its earlier low, but is still down 5 dollars.

Net HFT gold volume is now up to 40,500 contracts — and that number in silver is just over 14,000 contracts.  The dollar index is chopping quietly sideways just above the 96.00 mark — and is currently down 8 basis points, almost unchanged from what it was down an hour ago.

As for what may or may not happen for the rest of the Wednesday session, I haven’t a clue.  It remains to be seen if ‘da boyz’ push their advantage in New York this morning, because so far in early London/Zurich trading, they are nowhere to be seen.

That’s all I have for today — and I’ll see you here tomorrow.


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