Deutsche Bank, which most recently has been in the spotlight for hightailing it out of the silver and gold fix (because it is clearly innocent of any precious metals manipulation as an "independent, impartial and extensive" inquiry by the Bank of England will surely prove), has a message for its traders: stop bloody swearing.
We went down the 'golden' rabbit hole and we were stunned by some of the things we found...
Q. What will happen after 14 August 2014? Will the Silver Fixing cease to exist?
A. With effect from the close of business on 14 August 2014, the Company will cease to administer a Silver Fixing, and a daily Silver Fixing Price will no longer be published by the Company.
East Ukraine may be independent in a result which the Kremlin said it "respects" and hopes for a "civilized implementation" of the referendum results, and which assures further military escalation in the proxy war of east versus west, but stocks are happy to ignore it all again. The reason: a positive close over in Asia (ex-Japan) after China’s State Council pledged to reform markets buoyed demand for risk, although it really is just a follow through to the furious VIX slam in the last hour of US Friday trading, which said otherwise, means buying of US equities was the reason to buy US equities. More importantly and adding to the early spoo euphoria were comments by ECB's Nowotny who said that interest rate cut alone would likely be too little to combat low inflation - suggesting a European QE is coming - also acted as a catalyst for the latest uptick in stocks: when trapped like the ECB and when "guiding" to future activity, if unable to actually execute it, may as well go all the way. End result, Spoos up nearly 0.5% because, well, others are buying spoos.
Remember all of those credit card and loan offers you used to receive in the mail? Bad credit? No credit? No problem. 0% APR for the first six months. Free balance transfers. No money down. And my personal favorite– no credit check. These were all classic signs that the mother of all liquidity bubbles was upon us. Looking at the expansion of credit across the West, though, it’s happening again. Fool me twice, shame on me. But this is a worldwide phenomenon now.
Despite popular belief, very few things in our world are exactly what they seem. That which is painted as righteous is often evil. That which is painted as kind is often malicious. That which is painted as simple is often complex. That which is painted as complex often ends up being disturbingly two dimensional. Regardless, if a person is willing to look only at the immediate surface of a thing, he will never understand the content of the thing. This fact is nowhere more evident than in the growing “tensions” between the elites of the West and the elites of the East over the crisis in Ukraine. The centralization of power is best achieved during moments of bewildering calamity. The conjuring of crises is one of the oldest methods of elitist dominance. Not only can they confuse and frighten the masses into malleability, but they can also ride to the public’s rescue as heroes and saviors later on. The Hegelian dialectic is the mainstay of tyrants.
The "middle class" has atrophied into the 10% of households just below the top 10%. The truth is painfully obvious: a middle class lifestyle is unaffordable to all but the top 20%. This reality is destabilizing to the current arrangement, i.e. debt-based consumerism a.k.a. neofeudal state-cartel capitalism, so it is actively suppressed by the officially sanctioned narrative: that middle class status is attainable by almost every household with two earners (a mere $50,000 annual household income makes one middle class) and middle class wealth is increasing.
- Fed’s Fisher Says Economy Strengthening as Payrolls Rise (BBG)
- Russia Knows Europe Sanctions Ineffective With Tax Havens (BBG)
- EU Cuts Euro-Area Growth Outlook as Inflation Seen Slower (BBG)
- U.S. Firms With Irish Addresses Get Tax Breaks Derided as ‘Blarney’ (BBG)
- Portugal exits bailout without safety net of credit line (Euronews)
- Puzzled Malaysian Air Searchers Ponder What to Try Now (BBG)
- Barclays, Credit Suisse Battle Banker Exodus, Legal Woes (BBG)
- Germany says euro level not an issue for politicians (Reuters)
- Alibaba-Sized Hole Blown in Nasdaq 100 Amid New Stock (BBG)
- Obamacare to save large corporations hundreds of billions (The Hill)
When one thinks of Switzerland, banking comes to mind easily but gold doesn’t as much. But, "it is said that the Swiss only love money... this is not true. They also love gold." A full two-thirds of the world’s gold goes through Switzerland and, in an average year, it refines grossly 70% of the world’s gold. Six of the gold refiners on the LBMA Good Delivery list make for 90% of global volume, and four of those are in Switzerland. Up until 1992, the Swiss franc’s 40% backing by gold was written in the country’s Constitution. When Switzerland became a member of the IMF it had to abandon this backing by gold. Today, Swiss citizens have asked for a referendum to be called in order to get back to that backing. As Gilles Labarthe wrote, "Switzerland is for gold what Bordeaux is to wine."
Stocks just could not figure it out - good jobs data, bad jobs data, WWWIII? But Treasuries and gold did. 30Y yields tumbled to fresh 11 month lows (lot of desk chatter of GPIF buy orders ahead of their holiday), 10Y to 2014 lows, but the short-end sold off as 5s30s flattened to 5 year lows (under 170bps). Despite some smackdowns this week, precious metals bounced back notably today with gold's best day in a month, back over $1300 and unch on the week. Despite yields tumbling, Utility stocks were the week's losers (-1.2%) while homebuilders were best (oh yeah because lower mortgage rates is all that is holding back pent-up demand for homes!!). On the week, Trannies outperformed but Russell 2000 was worst of the major indices (the opposite of today's action). The USD pumped and dumped around the jobs data, but ended the day unch (down 0.25% on the week). Credit markets closed at their wides of the day, notably divergent from stocks on the week. A massive VIX-selling effort began late in the day (because with 38 dead in Odessa who would need to hedge?) - but stocks ignored it.
Italy’s central bank, the Banca d’Italia, has recently published an important document detailing the storage locations and composition of the country’s gold reserves. The document confirms that Italy’s gold is held across four vault locations, three of which are outside Italy. This is a significant announcement given that the Banca d’Italia is the world’s third largest official holder of gold after the U.S. and Germany. Italy officially holds 2,451.8 tonnes of gold, worth more than €72 billion (US$ 100 billion) at current market prices. In the detailed three page report focusing exclusively on its gold reserves (and only published in Italian), the Banca d’Italia reveals that 1,199.4 tonnes, or nearly half the total, is held in the Bank’s own vaults under its Palazzo Koch headquarters on Via Nazionale in Rome, while most of the other half is stored in the Federal Reserve Bank gold vault in New York. The report also states that smaller amounts are stored at the Bank of England in London, and at the vaults of the Swiss National Bank in Bern, Switzerland.
Everyone has seen them: those "inexplicable" bouts of furious selling in gold and silver, coming out of nowhere with no news or catalyst. In fact, look no further than what happened first thing this morning, when an unknown seller, smashed all stops in one big sale, and took silver to its lowest price for 2014. This was a premeditated and deliberate selling of silver with one simple purpose: push and reprice silver lower. But this is nothing new: precious metal traders, especially those who are on the other side of the table of the BIS' Mikael Charoze or Benoit Gilson, and countless other commercial banks, are all too aware of this behavior and they take it for granted. No, the real surprise is that suddenly none other than the CME is getting worred that manipulation this blatant is finally chasing regular retail traders away who are tired of being fleeced on a daily basis, leaving central banks and a few "fixing" banks to trade only with each other, which is not acceptable - after all it is the muppets' money that is fair game, not that of other cartel members.
Three months ago, we discussed the increasingly close eye that regulators were keeping on Deutsche Bank (and in fact many other precious metal fix providers) as manipulation concerns shifted from conspiracy theory to conspiracy fact. At the time, Deutsche - among other banks - had suggested it would relinquish its role on the London Fixing committee and was actively marketing its seat to other LBMA members - it failed to find a willing buyer; the WSJ now confirms...
DEUTSCHE BANK SAID TO BE UNABLE TO FIND BUYER FOR GOLD SEAT
DEUTSCHE BANK RESIGNS SEAT ON GOLD, SILVER FIX, GIVES TWO WEEKS NOTICE - SOURCE
This is hardly surprising given previous comments that possible manipulation of precious metals "is worse than the Libor-rigging scandal." but it does leave us wondering who is left to do the manipulating? It seems no one wants to be part of the fixing process (critical for so many derivatives contracts) unless they are allowed to manipulate it to their own needs.
Conflict with Russia may have a “massively bullish impact on gold prices.” The concept of MAD or mutually assured destruction was what prevented war between the superpowers during the Cold War. Today, there appears to be a lack of awareness regarding the risk of mutually assured economic destruction.
The almost ubiquitous overnight levitation (thanks to JPY - bouncing off 102.00 overnight; and more Pharma M&A exuberance) gave way very quickly to more of the same from Friday as the high-growth, high-hope, high-hype, high-beta stocks get slammed. The dump of US equity indices at the open was then met with a "well, it's Tuesday tomorrow... oh and FOMC" mad panic buying scramble... Then the 'great' news that pendong home sales dropped YoY for the 6th month in a row confirmed the momo spike and sent bond yields spiking and gold prices tumbling because one data point MoM is all that we need to spark the algos into action... If you want to know why this idiocy is happening - look no further than USDJPY...