While we have covered the aberration that is a negative gold GOFO rate previously and in extensive detail in this post, an abridged version of what negative GOFO means comes courtesy of Deutsche Bank's recent discussion on what a successful Swiss gold referendum. To wit: "It is interesting to note that benchmark gold-dollar swap rates have recently traded negative, meaning investors are paying to borrow gold. This is unusual as gold is traditionally used as a source of collateral for cash financing.... [A] number of factors may play a role, such as excess dollar liquidity or an increased demand for collateral on the back of the global regulatory developments." In short a gold shortage at the institutional, read commercial and central bank, level. And not just a shortage but the biggest shortage in history, judging by today's latest plunge in the 1 Month GOFO which just dropped to -0.5% and , worse, 1 Year GOFO that just hit its lowest print in the 21st century, and is also about to go negative: something that has never happened before further suggesting the gold shortage could go on for a long, long time!
We find that, unsurprisingly, AAPL has regained its top spot as the global hedge fund hotel's most beloved stock. In fact, 4 of the 5 most widely held names are all tech names, with GOOG, MSFT and FB rounding out the top 4, and only Citigroup as the outlier in the top 5. Perhaps more notable is that the former hedge fund darlings AIG and GM, have been abandoned by the HF crowd, and were in 9th and 16th place, respectively.
- Grand jury expected to resume Ferguson police shooting deliberations (Reuters)
- PBOC Bounce Seen Short Lived as History Defies Bulls (BBG)
- Home prices dropped in September for the first time since January (HousingWire)
- UPS Teaches Holiday Recruits to Fend Off Dogs, Dodge NYC Taxis (BBG)
- US oil imports from Opec at 30-year low (FT)
- Hedge Funds Bet on Coal-Mining Failures (WSJ)
- Putin Woos Pakistan as Cold War Friend India Buys U.S. Arms (BBG)
- How the EU Plans to Turn $26 Billion Into $390 Billion (BBG)
- The $31 Billion Bet Against Brazil’s New Finance Minister (BBG)
“A Luxembourg structure is a way of stripping income from whatever country it comes from,’’ said Stephen E. Shay, a professor of international taxation at Harvard Law School and a former tax official in the U.S. Treasury Department. The Grand Duchy, he said, “combines enormous flexibility to set up tax reduction schemes, along with binding tax rulings that are unique. It’s like a magical fairyland.”
As noted over the past week there has been a massive shortage of precious metals - most notably silver which as of this moment is indefinitely unavailable at the US Mint - as a result of the tumble in the paper price, and following 8 days of sliding and negative 1 month GOFO rates, today the physical metal shortage surged, as can be seen by not only the first negative 6 month GOFO rate since last summer's much publicized gold shortage when China was gobbling up every piece of shiny yellow rock available for sale, but a 1 month GOFO of -0.1850%: the most negative it has been since 2001!
- Republicans expect gains, but many races close on election day (Reuters)
- Ahead of tough election, White House blames dismay with Washington (Reuters)
- On Election Day, a Tale of the Young and the Old (WSJ)
- Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG)
- Ukraine's rebel leader is sworn in, crisis deepens (Reuters)
- Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG)
- More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG)
- Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ)
- Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG)
- To salvage his presidency, Obama faces pressure to reboot - but will he? (Reuters)
- Pro-Russian separatist Zakharchenko wins Ukraine rebel vote (Reuters)
- Russia's Recognition of Ukrainian Separatist Election Is 'Incomprehensible,' Germany Says (Moscow Times)
- Man Running World’s Biggest Wealth Fund Tackles China Riddle (BBG)
- Russian Supply Underpins Global Oil Glut (WSJ)
- Argentina accuses Procter & Gamble of tax fraud, says suspends operations (Reuters)
- ECB Skips Fireworks for Day One of New Role as Supervisor (BBG)
- HSBC Hit by $1.7 Billion of Provisions (WSJ)
- Stick to tapering and rates pledge, says Boston Fed chief (FT)
- Turkey to let Iraqi Kurds reinforce Kobani as U.S. drops arms to defenders (Reuters)
- Obama makes rare campaign trail appearance, some leave early (Reuters)
- Japan GPIF to Boost Share Allocation to About 25%, Nikkei Says (BBG)... or three months of POMO
- Japan Stocks Surge on Report GPIF to Boost Local Shares (BBG)
- China Growth Seen Slowing Sharply Over Decade (WSJ)
- Russia, Ukraine Edge Closer to Natural-Gas Deal (WSJ)
- Leveraged Money Spurs Selloff as Record Treasuries Trade (BBG)
- After clashes, Hong Kong students, government stand their ground before talks (Reuters)
The last time the stock market reached a fevered peak and began to wobble unexpectedly was August 2007. Markets were most definitely not in the classic “price discovery” business. Instead, the stock market had discovered the “goldilocks economy." But what is profoundly different this time is that the Fed is out of dry powder. Its can’t slash the discount rate as Bernanke did in August 2007 or continuously reduce it federal funds target on a trip from 6% all the way down to zero. Nor can it resort to massive balance sheet expansion. That card has been played and a replay would only spook the market even more. So this time is different. The gamblers are scampering around the casino fixing to buy the dip as soon as white smoke wafts from the Eccles Building. But none is coming. For the first time in 25- years, the Wall Street gamblers are home alone.
Long-Time Zero Hedge Readers Have Known This Forever ... But Those Who Get Their News from the MSM Would Be Shocked, Shocked I Say ...
AAL, ABB, ABX, ACI, ADI, AES, AG, AGCO, AIG, ALGT, ALK, ALU, AMID, ANR, ANV, ANV, AON, APA, APC, ARMH, ARP, ATEN, ATH CN, ATVI, AUY, AVP, BBEP, BHI, BHP, BMS, BTE, BTE CN, CAJ, CAM, CAT, CCE, CFX, CHK, CLF, CLR, CMC, CMRE, CNQ, CNQ CN, CNW, CNX, COG, COP, COS CN, COSWF, CPG, CPG CN, CR, CTCM, CVE, CVE CN, CVX, CX, CXO, CYOU, DAL, DDS, DE, DOV, DRQ, DVN, EC, ECA, EMES, EOG, EPE, ERF, ERF CN, ESL, ESV, EVEP, F, FLR, FLS, FM CN, FMC, FR CN, FST, FTI, FWM, GG, GM, GOLD, GSK, GSS, GT, GWR, HAL, HAYN, HBM, HCLP, HES, HP, HSE CN, HSIC, HUN, IAG, IGM CN , IMG CN, INT, ITT, JCP, KEX, KGC, LGCY, LIF, LLTC, LOPE, LPI, LPX, LRE, MAN, MCEP, MDCO, MG, MGA, MMLP, MON, MT, NBR, NE, NEM, NGD, NGD CN, NLSN, NOV, NWSA, OAS, OXY, PAAS, PBCT, PCLN, PD CN, PGF CN, PGH, PPG, PTEN, PWE, PXD, QRE, RDS/A, ROK, ROSE, RPM, RPT, RTI, SAP, SAVE, SCCO, SCHN, SDRL, SLB, SLCA, SLW, SSW, STO, SU, SU CN, TAL, TCK, TCK/B CN, TCS, TEN, TGI, TLM CN, TLP, TMK, TOO, TXT, UBS, UNM, URI, UTX, VET, VET CN, VIP, VNO, VNR, VSH, WDR, WFT, WLK, WLL, WLT, WMMVY and ZNGA.
First a secret "Doomsday book", and now this?
- Five U.S. airports to screen for fever (Reuters)
- Danger, central banks trading with each other: Bipolar U.S. Stocks See Biggest Mood Swing in Three Years (BBG)
- Draghi Policies Blunted in Berlin as German Protests Grow (BBG)
- White policeman kills black teen in St Louis, triggering fresh protests (Reuters)
- Au Revoir to France’s Welfare Model as Socialists Cut Spending (BBG)
- Here comes Roberto Cavalski (Reuters)
- There are 49 U.S. venture-capital-backed companies with a valuation of $1 billion or more—the highest number on record (WSJ)
- Pressure mounts on Hong Kong leader over payout amid crisis (Reuters)
If anyone's bucket list includes hearing, and seeing, the unholy trinity of Bernanke, Paulson and Geithner whose actions have pretty much doomed America, today is your lucky day, because as part of the lawsuit brought on by former AIG CEO Hank Greenberg, the three legendary statists will field questions from prominent, and very flamboyant, lawyer David Boies. As has been reported previously, Maurice “Hank” Greenberg is challenging the terms of the 2008 bailout for the company he built into a global financial-services powerhouse before being pushed out in 2005. He is not challenging the bailout which prevented AIG from liquidating as a result of selling billions of default protection on worthless companies, and which avoided the all out, and much needed, purge of trillions in bad debt and just as worthless equity.
- How you know it is all a lie: Pelosi Presses Obama to Talk Up Stronger U.S. Economy (BBG)
- Secret Goldman Sachs Tapes Put Pressure on New York Fed (NYT), Uh, no they don't
- Clashes Break Out at Hong Kong Protest Site (WSJ)
- N.Y. Fed Lawyer Says AIG Got Billions Without Paperwork (BBG)
- Ebola’s Disease Detectives Race to Track Others Exposed (BBG)
- UPS, FedEx Want Retailers to Get Real on Holiday Shipping (WSJ)
- No more mailman at the door under U.S. Postal Service plan (Reuters)