JPM Eligible Gold Plunges To New Record Low, And Why It Could Have Been Much Worse

Back on April 25, in the aftermath of the latest epic precious metals takedown, we reported that something odd had happened: overnight, total Eligible gold held in the vaults of JPM dropped by 65%, or 260.8k ounces in one day, to a record low of only 141.6K ounces. Contrast that with the 2 million Eligible ounces the JPM vault at the basement of 1 CMP held when it reopened. Since that moment, many were curious if this may not be the start of the proverbial "run on the vault", and whether JPM's COMEX holdings could actually run out, and if so what happens then. And finally: is the dramatic plunge in gold related to any of this (and certainly to the Bundesbank's repatriation of NY Fed gold for the next five years)?  In the ensuing days, JPM's Eligible gold fluctuated in a tight range, until today, when another 22,780 oz were withdrawn from Blythe Masters' metals cellar, bringing JPM's eligible gold to a fresh record low of only 137,377 troy ounces.

But it gets worse...

2013 - The Year Of The Non-G7 Rate Cut

Israel's 25bp cut in its policy rate earlier in the week was the 514th reduction worldwide since June 2007 (and Serbia this morning the 515th). As Bloomberg's Niraj Shah notes, Eastern European countries have made the biggest cuts this year as their economies struggle to grow. With the ECB's cut taking its 'real' rate to -0.7%, Belarus has cut borrowing costs by an impressive 500bps in 2013 (more than any other central bank) followed by Poland and Hungary. As we noted last week, it seems the Einsteinian repetition of failed actions is not a fool's errand, instead it appears the domain of the smartest people in the room - or simply fighting the hot money flow drivers with their own weapon (but as Bernanke told us - its not competitive devaluation if we all do it).

18 Out Of 18

Just another "Tepper" Tuesday...

Guest Post: Technocratic Folly: Why Men Will Never Become Gods

When we look at the entire summation of elitist efforts to remake the world, all we see is a naïve reorganizing of a much greater work of art.  Life is not perfect, at least, not by our definition, but life is also not a science; it is an emotional creation, with an emotional and spiritual brand of “logic”.  In reality, they believe in engineering future trends.  The elites want godlike power, but the greatest power of god is to create from nothingness.  Technocrats do not create.  Instead, they violently scoop up what already exists and fumble with it wildly, stupidly, fancying themselves omnipotent, like children lording over the ocean while pretending it’s a fish tank. They do not comprehend the substance of what they meddle in, and this is their greatest downfall.  You cannot improve on something you do not understand. Fundamental unknowns derail the pursuit of full knowledge, and thus, full control.  The universe has its own checks and balances in place to counter the ambitious, striking down thirsty faux gods who reach too high for what they do not respect, and will never deserve.

Late Ramp Pushes S&P To Close At Now Standard All Time High

Thanks to POMO (and the simple explanation of what everyone already knows from David Tepper), the 18th Tuesday in a row has closed with a bright green shade across the screen. Trannies gained 2% but the 25 point gain off overnight lows for the S&P 500 is the most impressive... with gains sustained by more short covering. As predicted first thing today, when we said the S&P 500 EPS multiple will increase by at least 0.15x on the back of POMO, we were not surprised to see the closing print result in precisely this amount of multiple expansion:

Today's POMO: $2.75 - $3.50 billion. Should be enough to expand S&P multiples by 0.15-25x

— zerohedge (@zerohedge) May 14, 2013

A QE-unwind theme was modestly evident in other asset-classes: Treasuries (snapping higher after EU Close); Oil, gold, and silver all down; and credit spreads notably rolled over. But of course, equities don't care; why would they?

IRS To Conservatives: "Provide Details Regarding All Of Your Facebook Or Twitter Activity"

It has become difficult to keep track of all the different "-gates" the Obama administration has suddenly found itself embroiled in: perhaps an appropriate name would be Gate-r-gate? And with the just concluded farce in which Jay Carney passed off all AP-related questions to Eric Holder, who in turn recused himself and told the media to please crucify the Deputy AG instead, it is unlikely that any material new information will be disclosed any time soon. However, courtesy of The Hill, we at least have some insight into the first gross offense by the administration revealed last week: the targeting of one political group over another by the supposedly impartial IRS. Specifically, attached below is the full 7 page questionnaire sent by the IRS to the Liberty Township Tea Party containing a list of 35 questions.

Argentina Peso Gap Between Official And Black Market Rate Hits To 100%, BMWs Become Inflation Hedge

Despite efforts by the government to quell the black-market (or blue-dollar) for Argentina's foreign exchange, the unofficial rate surged yesterday to 10.45 Pesos per USD. This is now double the official rate of 5.22 Pesos per USD. This implicit 50% devaluation comes amid the growing realization that there is no savings option to maintain the purchasing power of the peso in the context of sustained high inflation (no matter what the officials say) and negative real interest rates. The government is not amused, suggesting the devaluation won't happen (just as Mexico did right up until the day before they devalued), "those who seek to make money at the expense of devaluations must wait for another government." Perhaps the government should be careful with their threats? And of course, this could never happen in the US or Japan, right?