http://www.zerohedge.com/fullrss2.xml/James en Global Markets Stunned By Biggest Japan Crash Since 2013; All Eyes On Deutsche Bank http://www.zerohedge.com/news/2016-02-09/global-markets-stunned-biggest-japan-crash-2013-all-eyes-deutsche-bank <p>With China offline for the rest of the week, global markets have found a new Asian bogeyman in the face of Japan which as reported last night saw its markets crash, and the Yen soar, showing that less than 2 weeks after the BOJ unveiled NIRP, <strong><a href="http://www.zerohedge.com/news/2016-02-08/what-central-bank-failure-looks">yet another central bank has lost control</a>. </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap2.jpg"><strong><img src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap2_0.jpg" width="507" height="494" /></strong></a></p> <p>&nbsp;</p> <p>The Nikkei crashed 5.4%, the biggest drop since June 2013, dropping over 900 points to August 24 lows driven by crashing banks, while the Yen soared to 114.50 overnight before the BOJ desperately tried to push the Yen lower, with London dealers reported the BoJ checking rates and levels to prompt short covering through 115.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/09/Japan%20Crash.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/09/Japan%20Crash_0.jpg" width="503" height="335" /></a></p> <p>But while the BOJ failed to push up equities, it certain managed to launch a panic buying spree in JGBs, which as also reported finally slid into negative yield territory, thus boosting the global number of bonds with a negative yield to just shy 30% of total or roughly $7 trillion! </p> <p>Aside from Japan, everyone is looking at the bank which we first asked if it was "the next Lehman" last June, namely Germany's Deutsche Bank, to see if yesterday'd desperate scramble to publicly confirm it has sufficient liquidity will sufficient will stop the price from dropping and its CDS drom blowing out. For now, the stock is indeed up modestly, even if the CDS has refused to tighten suggesting that whatever management did, it is not enough and it is only a matter of time before the selling returns.</p> <p>As a result of this temporary stabilization in financials, the Europe 600 Index was little changed after closing Monday at its lowest level since 2014, and U.S. equity-index futures were also steady. European indexes of credit-default swaps on corporate debt fell for the first time in more than a week, Germany’s 10-year bund yield climbed the most this year and crude in New York rose above $30 a barrel. Equities in Tokyo slumped earlier by the most since August and the yield on 10-year Japanese government bonds turned negative for the first time.</p> <p>"Volatility is getting very high,” Guillermo Hernandez Sampere, head of trading at MPPM EK in Eppstein, Germany told BLoomberg. “Investors need to increase their cash and be careful in case they see any buying opportunities. A technical rally may easily get sold again, we won’t come back to calm waters soon.”</p> <p>While oil took on secondary importance during yesterday's financial-led rout, expect algos and even human traders to pay more attention to crude today after the latest IEA monthly reported predicted supply will exceed demand by an avg of 1.75m b/d in 1H, compared w/ fcast of 1.5m last month.&nbsp; “With the market already awash in oil, it is very hard to see how oil prices can rise significantly in the short term. <strong>In these conditions the short term risk to the downside has increased,” </strong>IEA says. It added that the global oil demand fcast for 2016 100k b/d lower than previous mos. report at 95.6m b/d. Elsewhere, Goldman once again warned that oil may drop into the teens as land storage capacity is exhausted.</p> <p>Looking at today's calendar, it’s another fairly quiet session for data in Europe this morning with the only releases of note being the December trade numbers out of the UK and Germany along with the latest industrial production data in the latter. Over in the US the early release is the NFIB small business optimism survey for January, followed by the December JOLTS job openings and wholesale trade sales and inventories data. As a reminder, JOLTS data is released with a one-month lag so the data will be reflecting what was a bumper month for hiring (payrolls +262k) in December and not reflective of the recent softer payrolls number. Earnings wise we’ve got 18 S&amp;P 500 companies set to report including Walt Disney and Coca-Cola.</p> <p><strong>Market Wrap</strong></p> <ul> <li>S&amp;P 500 futures down 0.4% to 1844</li> <li>Stoxx 600 down 0.6% to 312</li> <li>DAX down 0.5% to 8926</li> <li>German 10Yr yield up 5bps to 0.27%</li> <li>Italian 10Yr yield up 1bp to 1.69%</li> <li>Spanish 10Yr yield up less than 1bp to 1.76%</li> <li>MSCI Asia Pacific down 2.9% to 118</li> <li>Nikkei 225 down 5.4% to 16085</li> <li>S&amp;P/ASX 200 down 2.9% to 4832</li> <li>US 10-yr yield up 1bps to 1.76%</li> <li>Dollar Index down 0.06% to 96.52</li> <li>WTI Crude futures up 2.0% to $30.29</li> <li>Brent Futures up 2% to $33.54</li> <li>Gold spot down 0.1% to $1,188</li> <li>Silver spot up less than 0.1% to $15.32</li> </ul> <p><strong>Top Global News</strong></p> <ul> <li>Michael Bloomberg Tells FT He’s Considering Run for President: tells FT he’s “looking at all the options”</li> <li>IEA Raises Estimate of Surplus Oil Supply on Higher OPEC Output: Excess seen at 1.75m barrels a day in 1H</li> <li>Japan Joins German Bond Wonderland as Yields Below Zero the Norm: Lower borrowing costs come at expense of resurgent yen</li> <li>Renzi Is Betting on Cameron, Sees Anti-‘Brexit’ Deal Soon: Italian premier says proposed changes ‘a good compromise’</li> <li>Google, Apple Face Kremlin Tax Fire for ‘Milking’ Russia: Google’s reach considered national security threat to Russia</li> <li>Deutsche Bank Says It Can Pay Coupons in Sign Jitters Mount: Lender is due to pay about EU350m in April</li> <li>AIG Said to Plan Exit From at Least Half of Hedge Fund Positions: Insurer said to limit to 50 funds or fewer, from more than 100</li> <li>Japan Fund Said to Pitch Sharp on Plan for Smart Appliance Giant: INCJ sets aside 100b yen as acquisition war chest</li> </ul> <p>A quick look at regional markets, we start in Asia where stocks picked up where global equities left off as the newly added woes triggered by Deutsche Bank has seen the financial sector deflate the Asia-Pac region. In turn, the Nikkei 225 (-5.4%) bared the brunt of the risk-off sentiment, with banks in the region feeling the squeeze, whilst a firmer JPY saw the bourse fall over 900 points. Elsewhere, ASX 200 (-2.9%) could not escape the reach of the downbeat tone as the index was also pressured by financials, which accounts for nearly half of the total composition of the bourse. JGBs were bolstered by the dampened sentiment sparking flight-to-quality trade, with yields across the curve yet again falling to record lows, additionally Japanese 10yr yields are now the first among the G7 nations to go negative.</p> <p><em>Asian Top News</em></p> <ul> <li>Yen Jumps to 2014 High as Japan 10-Year Yield Drops Below Zero: Yen rose against all 31 major peers as Topix tumbled 5.5%, 10 yr yield fell unprecedented decline below zero</li> <li>Credit Risk Soars From Japan to Australia on Global Bank Anxiety: Credit-default swap costs in Japan, AU soared amid markets across much of Asia Pacific closed for Lunar New Year</li> <li>Beefing Up Down Under: Aussies Find New Boom in China Demand: Aussie beef sales to China surged six-fold in 3 yrs to a record A$917m in 2015; export boom signals AU is successfully transitioning away from mining</li> <li>India State Firms’ Valuation Discount May Trigger Rebound: Chart; Shrs of India’s state-run cos are cheapest in more than two yrs relative to stocks on nation’s benchmark index</li> </ul> <p>Fears over the European banking sector linger in markets this morning and European equity markets have seen choppy price action since the open. Initially led lower by the Nikkei 225 closing lower by over 5%, equities have since trended higher after in vogue Deutsche Bank stated that that their 2016 payment capacity is enough to finance their AT1 payment. As a result, the German heavyweight provided some reprieve for Europe, with the iTraxx Sub Financial index, an index tracking the value of CDS's, moving in sympathy with Deutsche and tightening by 19bps. The same cannot be said for Credit Suisse (-3.7%) however, the Swiss bank is continuing to suffer from its poor earnings reported last week and questions surrounding the banks' ability to a large fine.</p> <p><em>European Top News</em></p> <ul> <li>Primonial-Led Group Buys Gecina Health Assets for $1.51b: Deal to be completed mid-2016</li> <li>Swedbank CEO Ousted by Board as Permanent Replacement Sought: Michael Wolf, 52, will be replaced by Birgitte Bonnesen as acting CEO</li> <li>TUI Turkish Bookings Plunge as Vacationers Seek Safer Spain: Turkey summer reservations tumble 40% after January attack</li> <li>Vestas Wind Raises Dividend Predicting Record Sales After Boom: sees EU9b of sales in 2016, 11% margin</li> <li>Vestas CEO Says He Has ‘No Intention’ of Bidding for Gamesa</li> <li>Pound Seen Tumbling Whether U.K. Stays in EU or Seeks ‘Brexit’: Biggest bears’ forecasts aren’t contingent on U.K. quitting</li> <li>Sanofi Says Profit Won’t Grow as Bestseller Lantus Fades: Lantus sales drop amid biosimilar competition in Europe</li> <li>Tesco Sales Drop Eases as U.K. Grocery Leader Begins Turnaround: Kantar data suggests customers may be returning</li> <li>Pandora Forecasts Slower Sales Growth on Trimmed Expansion Plans: Sales this year will rise at least 14% to 19b kroner in 2016, vs growth rate of 40% last year</li> <li>Securitas 4Q EPS Misses Ests.; Dividend Raised: 4Q EPS SEK1.83 vs est. SEK1.98</li> <li>Handelsbanken Profit Rose Less Than Estimated in Fourth Quarter: Loan losses greater than expected, increased costs</li> </ul> <p>In FX, Once again it was an early London session left to provide some stability in the markets, and in FX improved liquidity levels naturally help. USD/JPY lows in Asia bottomed out at 114.22, but dealers reported the BoJ checking rates and levels to prompt short covering through 115.00, though 115.50 has proved an obstacle since. EUR/USD continues to trade in the opposite direction, but it is a little too early to suggest the 1.1236 highs are the top of the move. The commodity currencies take a back seat as Oil stabilises and Gold now a safe haven. USD/CAD is still holding off 1.4000, while AUD is propped up ahead of .7000. GBP posted fresh 1 year lows against the EUR ahead of .7800, but has retraced in line with EUR/USD. Cable pivoting on 1.4400 for now. EUR/CHF now just under 1.1000 as CHF naturally benefitting in current climate.</p> <p>Looking at commodities, oil took a back seat in yesterday's trade, however has quietly ticked higher in Europe, with WTI Mar'16 futures comfortably holding the USD 30.00 handle and as such the energy sector is one of the better performers in Europe. However a note from Goldman Sachs saying that oil could oil prices 'go into the teens', may cause oil bulls some anxiety. </p> <p>As North American participants come to their desks the yellow metal has dipped below the USD 1900/oz level, finding a tight range following yesterday's stock-market rout inspired gains. Of note, Goldman Sachs have said they are not buying into the recent rally, as they still foresee three fed hikes this year, driving the price of gold down to around USD 1000/oz by year end</p> <p><strong>Bulletin Headline Summary From RanSquawk and Bloomberg</strong></p> <ul> <li>In a choppy session, Deutsche Bank (+1.3%) trades higher in Europe after stating stated that that their 2016 payment capacity is enough to finance their AT1 payment</li> <li>Once again it was an early London session left to provide some stability in the markets, and in FX improved liquidity levels naturally help</li> <li>Today's highlights include: US JOLTS job openings and Wholesale inventories, as well as comments from ECB's Linde</li> <li>Treasuries lower in overnight trading before week’s note auctions begin with $24b 3Y notes, WI 0.845% vs 1.174% in Jan., was first 3Y to stop through by more than 1bp since Aug. 2011. </li> <li>Deutsche Bank, under pressure over its ability to pay coupons on the riskiest debt, reassured investors that it has sufficient funds after the shares plunged the most in almost seven years, eroding almost €2 billion ($2.2 billion) in market value</li> <li>European banks have “ample liquidity,” with deposits flowing in and higher capital buffers, reducing the risk of repeating the financial crisis, according to Goldman Sachs</li> <li>Central banks’ ultra-loose monetary policy is putting the world economy at risk, said William White, a senior adviser to the Organization for Economic Cooperation and Development</li> <li>The yield on Japan’s benchmark 10Y bond fell below zero for the first time, an unprecedented level for a G7 economy, as global financial turmoil and the Bank of Japan’s adoption of negative interest rates drive demand for the notes</li> <li>The Federal Reserve may not have the legal authority to set negative interest rates in the U.S., according to a 2010 staff memo that was posted late last month on the central bank’s website</li> <li>Oil could drop below $20 a barrel as the search for a level that brings supply and demand back into balance makes prices even more volatile, Goldman Sachs predicted</li> <li>The global oil surplus will be bigger than previously estimated in the first half, increasing the risk of further price losses, as OPEC members Iran and Iraq bolster production while demand growth slows, according to the IEA</li> <li>German industrial production unexpectedly fell for a second month in December, a sign that a slowdown in major export markets is holding back factory activity despite strong domestic demand</li> <li>President Obama will send a fiscal 2017 budget of ~$4 trillion to the Republican-controlled Congress on Tuesday representing his aspirations for the future of the U.S. Little of it, as the Obama administration acknowledges, will become law anytime soon</li> <li>No IG corporates (YTD volume $181.575b) and no HY (YTD volume $9.015b) priced Friday</li> <li>BofAML Corporate Master Index OAS 4bp higher yesterday at +213 (highest since July 2012), +11bp MTD, +40bp YTD; T1Y range 213/129</li> <li>BofAML High Yield Master II OAS 41bp higher yesterday at +851 (highest since Oct. 2011), +74bp MTD, +156bp YTD; T1Y range 851/438</li> <li>Sovereign 10Y bond yields mixed with Greece +27bp, Portugal +13bp. European stocks mixed, Asian stocks lower (China closed for holiday); U.S. equity-index futures drop. Crude oil rises, copper, gold fall</li> </ul> <p><strong>US Event Calendar</strong></p> <ul> <li>6:00am: NFIB Small Business Optimism, Jan., est. 94.5 (prior 95.2)</li> <li>10:00am: JOLTS Job Openings, Dec., est. 5.413m (prior 5.431m)</li> <li>10:00am: Wholesale Inventories, m/m, Dec., est. -0.2% (prior -0.3%)</li> <li>Wholesale Trade Sales, m/m, Dec., est. -0.4% (prior -1%)</li> <li>11:30am: U.S. to sell $55b 4W bills</li> <li>1:00pm: U.S. to sell $24b 3Y notes</li> </ul> <p><strong>DB's Jim Reid concludes the overnight wrap</strong></p> <p>Onto the latest in Asia this morning now where bourses in Japan and Australia are extending much of yesterday’s turmoil. It’s the moves in Japan which have been more eye-catching with the Topix and Nikkei currently -5.71% and - 5.58% and moving lower as we go to print. In Australia the ASX is -2.88%. Credit markets have taken a big hit in the region with iTraxx Japan and Australia indices both +10bps wider. Meanwhile 10y JGB’s have crossed into negative territory this morning and plummeted to fresh record lows. The benchmark maturity is down over 3bps in early trading and currently sitting at -0.022%. That’s despite another strong performance for the Yen, currently up over 1% and in the process reaching a 15-month high and extending the incredible run since the BoJ cut rates to negative. Oil is hovering around the $30/bbl mark while US equity futures are down around 1% as we refresh our screens.</p> <p>Moving on. The latest DB TheHouseView titled “Still deep in the woods” came out overnight. The team notes that in addition to the initial concerns about China and energy, two new issues are further weighing on risk sentiment: the slowdown in US growth momentum and the tightening of financial conditions especially in European financial credit. Their macro outlook for 2016 is broadly unchanged so far, uninspiring but not a disaster, but they note that downside risks have risen both in the US and in Europe. Until US growth, European financial conditions, China and oil concerns are put aside, markets will remain volatile and a sustained change in risk appetite is difficult.</p> <p>In truth yesterday was dominated by the moves for European financials with very little newsflow or data elsewhere to drive markets. The latter was largely secondary in nature. In Europe we saw the Sentix investor confidence reading for the Euro area decline 3.6pts this month to 6.0 (vs. 7.4 expected). Meanwhile in the US the labour market conditions index was softer than expected last month at 0.4 (vs. 2.0 expected), a fall of 1.9pts relative to December.</p> <p>Unsurprisingly safe-havens dominated the few asset classes which actually saw gains yesterday. Of particular note was the move for Gold which finished up +1.35% for its fourth consecutive daily gain of at least 1%, with the metal at one stage trading up through $1200/oz for the first time since June last year. Meanwhile core sovereign bond yields marched lower. 10y Bunds finished just shy of 8bps lower at 0.216% and the lowest since April last year when the yield closed at a record low 7.4bps at one stage. Other core European bond markets saw similar moves while the peripherals sold off with Italy, Spain and Portugal +12.3bps, +10.7bps and +25.3bps wider respectively. 10y Treasury yields (-8.7bps) closed at the lowest in 12-months meanwhile at 1.749% (and have marched lower this morning, testing 1.7% to the downside) while the probability of the one Fed rate hike this year has quickly plummeted back towards 30%.</p> <p>Before we move onto today’s calendar, one interesting highlight from the ECB’s Coeure yesterday was the reference to potential coordination on emerging market currencies. In an interview with French press, Coeure suggested that a further depreciation for EM currencies is possible and that ‘that’s an issue for global coordination’ which will be discussed at the G20 finance ministers meeting in Shanghai in 10 days time.</p> <p>Looking at the day ahead now, it’s another fairly quiet session for data in Europe this morning with the only releases of note being the December trade numbers out of the UK and Germany along with the latest industrial production data in the latter. Over in the US the early release is the NFIB small business optimism survey for January, followed by the December JOLTS job openings and wholesale trade sales and inventories data. As a reminder, JOLTS data is released with a one-month lag so the data will be reflecting what was a bumper month for hiring (payrolls +262k) in December and not reflective of the recent softer payrolls number. Earnings wise we’ve got 18 S&amp;P 500 companies set to report including Walt Disney and Coca-Cola.</p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="959" height="639" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Japan%20Crash.jpg?1455019269" /> </div> </div> </div> http://www.zerohedge.com/news/2016-02-09/global-markets-stunned-biggest-japan-crash-2013-all-eyes-deutsche-bank#comments Across the Curve Apple Aussie Australia B+ Bond Borrowing Costs CDS China Copper Credit Suisse Credit-Default Swaps Crude Crude Oil Deutsche Bank Equity Markets Federal Reserve Germany goldman sachs Goldman Sachs Greece High Yield Iran Iraq Italy Japan Jim Reid Lehman Market Conditions Monetary Policy national security NFIB Nikkei Obama Administration OPEC Portugal Price Action RANSquawk Turkey Volatility Wholesale Inventories Yen Tue, 09 Feb 2016 12:01:52 +0000 Tyler Durden 523141 at http://www.zerohedge.com What Is The Gold Standard? http://www.zerohedge.com/news/2016-02-08/what-gold-standard <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p>&nbsp;</p> <p class="MsoNormal"><span style="text-decoration: underline;"><em><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">What Is The Gold Standard?</span></strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">&nbsp;</span></em></span></p> <p class="MsoNormal"><span style="text-decoration: underline;"><em>Written by Jeff Nielson (CLICK HERE FOR FULL WHITE PAPER)</em></span></p> <p class="MsoNormal">&nbsp;</p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">What is “the gold standard?” Many readers would consider this a simple question and perhaps even an obsolete one. It is for precisely this reason that a mere definition is inadequate as an answer. A definition conveys no <em>understanding</em> and thus does nothing to eliminate the many misconceptions surrounding this concept.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">In order to provide sufficient context so that the definition provides meaning to readers, it is necessary to explore several, tangential subjects. As such, this discussion will contain:</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">&nbsp;</span><span style="color: #404040; font-family: Arial, sans-serif; text-indent: -0.25in; font-size: 1em; line-height: 1.3em;">1) A brief review of the abolition of our gold standard.</span></p> <p class="MsoNormal"><span style="color: #404040; font-family: Arial, sans-serif; text-indent: -0.25in; font-size: 1em; line-height: 1.3em;">&nbsp;</span><span style="font-family: &quot;Arial&quot;,sans-serif; mso-fareast-font-family: Arial; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">2)<span style="font-stretch: normal; font-size: 7pt; line-height: normal; font-family: 'Times New Roman';">&nbsp;&nbsp;&nbsp; </span></span><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">An examination (and assessment) of the criticisms of the gold standard, past and present.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">&nbsp;</span><span style="font-family: &quot;Arial&quot;,sans-serif; mso-fareast-font-family: Arial; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">3)<span style="font-stretch: normal; font-size: 7pt; line-height: normal; font-family: 'Times New Roman';">&nbsp;&nbsp;&nbsp; </span></span><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">An examination of the monetary system that resulted from the abolition of the gold standard.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">&nbsp;</span><span style="font-family: &quot;Arial&quot;,sans-serif; mso-fareast-font-family: Arial; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">4)<span style="font-stretch: normal; font-size: 7pt; line-height: normal; font-family: 'Times New Roman';">&nbsp;&nbsp;&nbsp; </span></span><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">An examination of the financial system that resulted from the abolition of the gold standard.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">&nbsp;</span><span style="font-family: &quot;Arial&quot;,sans-serif; mso-fareast-font-family: Arial; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">5)<span style="font-stretch: normal; font-size: 7pt; line-height: normal; font-family: 'Times New Roman';">&nbsp;&nbsp;&nbsp; </span></span><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">A chronicling and explanation of the extreme price suppression of the gold market, a situation which has persisted for most of the post-gold standard era.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA"><br /></span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">In its simple definition, a gold standard a monetary system based upon the “hard” backing of our currencies – that is, backing them with gold. It is a “standard” in that the price of gold is fixed, and thus all currencies, and (by implication) all goods are valued in relation to that fixed price.</span></p> <p class="MsoNormal"><a href="https://www.sprottmoney.com/white-papers"><img src="http://www.zerohedge.com/sites/default/files/images/user196978/imageroot/2016/02/08/WITGS-1.png" width="742" height="221" longdesc="EVENING AND WEEKEND AVAILABILITY (installation, handyman, wardrobe, bed, dresser) * I am a professional 10 yr experienced assembler &amp; installer who provides quality and quick services to put together/assemble your new items. * VERY competitive pricing. Do not pay the overhead from a large company. * Any brand can be done. Most cabinet, TV mounting, curtains and blinds as well. * Full ID presented and am open to providing any other info/documents to help you feel more comfortable in the process. FOR BEST SERVICE ACCURATE QUOTES PLEASE SIMPLY: --- 1) Call or Text or Email --- 2) Product names AND/OR model numbers OR a copy of store receipt --- 3) Your address or intersection. 416-985-1447 ------ 123assembly@gmail.com" /></a></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">&nbsp;</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">The “gold standard” in its modern form was a monetary system that existed for roughly a century. While many nations (and empires) have based their monetary systems upon precious metals, this was most often done directly, via the usage of gold and/or silver money.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Real </span><span lang="EN-CA"><a href="http://www.sprottmoney.com/news/what-is-money-jeff-nielson"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;">“money”</span></a></span><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA"> is distinct from currency because, among other reasons, money preserves the wealth of the holder, while currency does not. Thus, we get our first inkling of why any nation would want to use a gold standard as their monetary system: to preserve and protect the wealth of the citizens of that nation, and thus the nation itself.</span></p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">&nbsp;</span></strong></p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">The End of an Era</span></strong></p> <p class="MsoNormal"><a href="https://www.sprottmoney.com/white-papers"><img src="http://www.zerohedge.com/sites/default/files/images/user196978/imageroot/2016/02/08/WITGS-2.png" width="665" height="320" /></a></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">On August 15<sup>th</sup>, 1971, the Nixon administration “closed the gold window,” which effectively put an end to the last vestige of our gold standard. Further elaboration is necessary. In the final decades of our “gold standard,” we no longer had a full gold standard, but rather only “partial convertibility” in our monetary system. What does that mean?</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">With a true, hard gold standard, where official currency is fully and directly backed by gold, these (paper) currencies can be fully converted into gold at the option of the currency-holder. However, in the Bretton Woods Agreement of 1944, the global monetary system was officially altered.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">It became a system of <em>partial</em> convertibility, with the U.S. dollar as “reserve currency,” meaning that only one currency – the U.S. dollar – was still convertible to gold. Thus the only mechanism to convert paper to gold was for nations to exchange their U.S. dollars with the U.S. government in exchange for some of its gold reserves. Therefore, when the U.S. government “closed the gold window” in 1971, it defaulted on its gold obligations to the rest of the world, and the requirement that it convert U.S. dollars to gold at the option of the currency-holder. What caused this system to implode?</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Here it is essential for readers to grasp that, in a monetary system of perfect integrity, there would have been zero incentive for other nations to redeem or convert their U.S. dollars into gold; each would be equally valuable. Only one possible factor could have provided nations with an incentive to engage in such conversion: the fear (and knowledge) that the system had lost its integrity.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">In order to finance the war in Vietnam, the U.S. government had been printing too many U.S. dollars for several years. This meant it was expanding the supply of money beyond the corresponding size of its gold reserves.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">U.S. dollars were officially convertible to gold, but because of this deliberate over-supply they were no longer fully “backed” by gold. The currency was being debauched, so the gold was worth significantly more than the actual value of the U.S. dollar. It was effectively monetary fraud. As the fraud became larger and more apparent, the drain on the U.S.’s gold reserves relentlessly grew.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">This left only two options for the U.S. government: re-impose monetary discipline (on itself) and thus restore the integrity of the U.S. dollar, or default on its international obligations. The U.S. government chose the latter.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA"><br /></span></p> <p><a href="https://www.sprottmoney.com/white-papers"><img src="http://www.zerohedge.com/sites/default/files/images/user196978/imageroot/2016/02/08/WITGS-3.png" width="553" height="281" /></a></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">It is important to note that former Federal Reserve Chairman Paul Volcker has since stepped forward to claim </span><span lang="EN-CA"><a href="http://www.drschoon.com/members/commentary/ThePriceOfGoldArtOfWarPart1.pdf"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;">personal credit</span></a></span><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA"> for abolishing the gold standard. It is here where readers are introduced to the love/hate relationship between central bankers and gold.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">&nbsp;</span></p> <p><a href="https://www.sprottmoney.com/white-papers"><img src="http://www.zerohedge.com/sites/default/files/images/user196978/imageroot/2016/02/08/WITGS-4.png" width="1075" height="222" /></a></p> <p class="MsoNormal" style="text-align: justify;"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">This was one of history’s most emphatic (and prophetic) warnings against monetary crime. But what, precisely, does it mean?</span></p> <p>&nbsp;</p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Here readers must first forget everything they think they know about the word “inflation.” “Inflation” (verb: <em>to inflate</em>) means to expand, or inflate, the supply of money. This is the correct, economic definition of that term.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA"><br /><a href="https://www.sprottmoney.com/white-papers"><img src="http://www.zerohedge.com/sites/default/files/images/user196978/imageroot/2016/02/08/WITGS-5.png" width="314" height="300" /></a></span></p> <p class="MsoNormal">&nbsp;</p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">What most people think of as “inflation,” the increase in the price of goods, is simply the <strong>inevitable consequence</strong> of inflating the supply of money. It is very important that readers never forget this crucial distinction. As an academic, Alan Greenspan was fully cognizant of the correct definition of inflation, and was using it in that context.</span></p> <p class="MsoNormal"><em><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">There is no way to protect the confiscation of savings</span></em><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA"> (theft of wealth) <em>via an increase in the supply of money</em>. Why? As more, new currency is printed, all existing currency is worth less, effectively confiscating some of the wealth of those existing currency-holders. This is nothing more than the concept of dilution.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">If you add water to lemonade, you dilute all the lemonade, and each unit of lemonade is worth less. If a company prints more shares, it dilutes its share structure, and each share is worth less, and some of the wealth of existing shareholders has been “confiscated.” More importantly, it is the company that prints these new shares that has confiscated that shareholder wealth. This is why the (corporate) concept of “dilution” is utterly despised by shareholders.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">If a government (i.e., central bank) prints new currency, thus diluting the money supply, each existing unit of currency is worth less. The principle is identical. Each time our central banks print more “money” (i.e., our paper), they dilute the value of all existing currency and confiscate some of the wealth of existing currency-holders.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">When we go to the supermarket and pay $2 or $3 more for a dozen eggs, it’s still the same dozen eggs. The eggs haven’t changed. It’s the paper currency in our wallets that has lost half of its value due to “inflation” – the inflation of the supply of money, and the dilution (in value) that must accompany it.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Where does this confiscated wealth go? How and why is this confiscation of our wealth (via inflating the supply of money) an act of theft? It’s very simple. When our central banks print new currency, they <em>don’t</em> distribute it evenly amongst the entire population. They hand every single unit of that new currency (virtually for free) to the Big Bank syndicate.</span></p> <p class="MsoNormal" style="margin-left: .25in;"><em><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Give me control of a nation’s money supply, and I care not who makes the laws.</span></em></p> <p class="MsoListParagraph" style="margin-left: .75in; mso-add-space: auto; text-indent: -.25in; mso-list: l0 level1 lfo1;"> <!--[if !supportLists]--><!--[if !supportLists]--></p><p><span style="mso-ascii-font-family: Calibri; mso-fareast-font-family: Calibri; mso-hansi-font-family: Calibri; mso-bidi-font-family: Calibri; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">-<span style="font-stretch: normal; font-size: 7pt; line-height: normal; font-family: 'Times New Roman';">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </span></span></p> <!--[endif]--><!--[endif]--><p><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Mayer Amschel Rothschild, banker&nbsp; (1744 – 1812)</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Our monetary system has been criminalized. Instead of a tool of commerce, our monetary system is now a weapon used to systemically plunder the wealth of our populations (as per Greenspan’s warning). This weapon is then placed into the hands of the recipients of all this new, central bank funny money: the Big Banks.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">When new currency is printed, it reduces the value of all existing currency. All of this new currency is handed to the Big Banks (by the central banks). These Big Banks then “lend” roughly <strong>30 times that amount of currency</strong> to us (via “fractional-reserve banking”) at </span><span lang="EN-CA"><a href="https://www.sprottmoney.com/blog/usury-0-interest-rates-and-worthless-currencies-jeff-nielson-sprott-money-news.html"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;">usurious rates</span></a></span><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA"> of interest, which dilutes and <em>reduces the value</em> of all existing currency even further (thus increasing the rate of theft).</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">This is but the tip of the iceberg when it comes to the financial crime that has been unleashed upon us as a direct result of the abolition of the gold standard. How could we have sacrificed our only “protection” from such systemic, monetary crime?</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">Thank the critics of the gold standard. It is their attacks (which are relentlessly repeated by the corporate media oligopoly) on the one possible form of Honest Money that made possible first the abolition of the gold standard, and then the collective refusal (by corrupted governments) to reinstitute the only legitimate form of monetary system.</span></p> <p class="MsoNormal"><span style="font-family: &quot;Arial&quot;,sans-serif; color: #404040; mso-themecolor: text1; mso-themetint: 191;" lang="EN-CA">&nbsp;</span></p> <p>Future Chapters:</p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">Criticisms of the Gold Standard</span></strong></p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">Fiat Currency Ponzi Scheme</span></strong></p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; color: #282561; mso-ansi-language: EN-CA; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-CA">Crime in Banking</span></strong></p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">Post-Gold Standard Price Suppression</span></strong></p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA">Conclusion</span></strong></p> <p class="MsoNormal"><strong><span style="font-size: 22.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; color: #282561;" lang="EN-CA"><br /></span></strong></p> <p class="MsoNormal"><span style="font-size: 11.0pt; line-height: 107%; font-family: &quot;Arial&quot;,sans-serif; mso-fareast-font-family: Calibri; mso-fareast-theme-font: minor-latin; color: #404040; mso-themecolor: text1; mso-themetint: 191; mso-ansi-language: EN-CA; mso-fareast-language: EN-US; mso-bidi-language: AR-SA;" lang="EN-CA">&nbsp;</span></p> <p>&nbsp;</p> <h1 style="padding: 0px; margin-top: 0px; margin-bottom: 0.25em; line-height: 1.15; font-size: 24px; font-weight: normal; font-family: Roboto, sans-serif; max-width: 90%;"><span style="line-height: 27.6px;">This whitepaper is 23 pages and over 8,300 words long. Please <em><strong><span style="text-decoration: underline;"><a href="https://www.sprottmoney.com/white-papers">CLICK HERE</a></span></strong></em> to read the rest and find the entire file.</span></h1> <p>&nbsp;</p> <h1 style="padding: 0px; margin-top: 0px; margin-bottom: 0.25em; line-height: 1.15; font-size: 24px; font-weight: normal; font-family: Roboto, sans-serif; max-width: 90%;"><span style="line-height: 27.6px;">For questions on this article or precious metals, please contact&nbsp;<span style="text-decoration: underline;"><strong><a href="mailto:bgreen@sprottmoney.com?subject=From%20Zero%20Hedge%20Who%20Really%20Needs%20A%20Gold%20Standard?%20Article">HERE</a></strong></span></span></h1> http://www.zerohedge.com/news/2016-02-08/what-gold-standard#comments Alan Greenspan Central Banks default Federal Reserve fixed Money Supply Paul Volcker Precious Metals Tue, 09 Feb 2016 11:30:45 +0000 Sprott Money 523075 at http://www.zerohedge.com Gold Up 12%, Silver Up 11% YTD As Stocks Crash ... Again http://www.zerohedge.com/news/2016-02-09/gold-12-silver-11-ytd-stocks-crash-again <p><strong><a href="http://www.goldcore.com">Gold Up 12%, Silver Up 11% YTD As Stocks Crash ... Again</a></strong></p> <p style="margin: 0px 0px 18px; padding: 0px;">Gold jumped 2 percent to a 7-1/2-month high yesterday, briefly touching the psychological level of $1,200 an ounce. Falling bank shares and stock markets and worries over global economic growth and a new financial crisis prompted investors to seek the safety of gold.</p> <p><span style="color: #000000; font-family: Verdana, Arial, Helvetica, sans-serif; line-height: 1.3em; font-size: 1em;">After surging over 5% last week, gold and silver continue to move higher as concerns about the U.S. and global economy saw more sharp stock market falls and reduced expectations of the Fed increasing interest rates.</span></p> <p><a href="http://www.GoldCore.com "><img src="http://didafpq4qto6w.cloudfront.net/ie/wp-content/uploads/sites/19/2016/02/gold_USD_1year.jpg?eee114" alt="gold_USD_1year" width="568" height="337" class="alignnone wp-image-4884 size-full" /></a></p> <p>Gold finished the week at $1,173.40 an ounce and has built on those gains today rising another 0.4% to $1,178.10 an ounce – taking its year-to-date gain to 11 per cent.</p> <p>Stocks had another torrid week with the S&amp;P 500 falling 3.1% and the Nasdaq down 5.4% while gold&nbsp;rose by 5.04% and silver by 5.4%. Gold had its best week since July 2013.</p> <p>Technically, gold is looking better and better and the gains last week were the third consecutive week of gains. The weekly higher close above the 200 day moving average ($1,129/oz) is leading to increasing conviction that gold prices have bottomed and we are in the early stages of&nbsp;a new bull market.</p> <p>Momentum buyers and trend following funds are again making the “trend their friend.” This is seen in the increase in gold ETF holdings which have increased now for 15 consecutive days as retail and institutional investors diversify into gold to protect from increasing market volatility and concerns of new bear markets in stocks.</p> <p>Gold has seen similar gains in euro and larger gains in sterling terms (+13% year to date) again showing gold’s currency hedging properties.</p> <p><strong><br /> LBMA Gold&nbsp;Prices</strong></p> <p>8 Feb: USD 1,173.40, EUR 1,050.16 and GBP 810.44 per ounce<br /> 5 Feb: USD 1,158.50, EUR 1,035.58 and GBP 797.40 per ounce<br /> 4 Feb: USD 1,146.25, EUR 1,027.29 and GBP 782.16 per ounce<br /> 3 Feb: USD 1,130.00, EUR 1,034.04 and GBP 781.25 per ounce<br /> 2 Feb: USD 1,123.60, EUR 1,029.65 and GBP 780.01 per ounce</p> <p><strong>Gold and Silver News and Commentary –&nbsp;</strong><strong>Click <a href="http://news.goldcore.com/">here</a></strong></p> <p><strong><br /></strong></p> <p><strong><a href="https://twitter.com/MarkTOByrne">by Mark O'Byrne</a></strong></p> <p><strong><br /></strong></p> <p><strong><a href="Gold jumped 2 percent to a 7-1/2-month high yesterday, briefly touching the psychological level of $1,200 an ounce. Falling bank shares and stock markets and worries over global economic growth and a new financial crisis prompted investors to seek the safety of gold.">www.GoldCore.com&nbsp;</a></strong></p> http://www.zerohedge.com/news/2016-02-09/gold-12-silver-11-ytd-stocks-crash-again#comments Global Economy Institutional Investors NASDAQ Volatility Tue, 09 Feb 2016 09:49:05 +0000 GoldCore 523135 at http://www.zerohedge.com They Broke the Silver Fix http://www.zerohedge.com/news/2016-02-09/they-broke-silver-fix <p>Last Thursday, January 28, there was a <em>flash crash</em> on the price chart for silver. Here is a graph of the price action.</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user121073/imageroot/2016/02/08/Silver%20Fix%20Price.png" alt="silver" title="silver" width="907" height="390" /><br /> &nbsp;&nbsp; The Price of Silver, Jan 28 (All times GMT)</p> <p>If you read more about it, you will see that there was an irregularity around the silver fix. At the time, the spot price was around $14.40. The fix was set at $13.58. This is a major deviation.</p> <p>Many silver bugs are up in arms about how unfair the new silver fix is. That’s nothing new. They were up in arms about the old one. The old one was supposedly manipulated </p> <p>One thing is for sure, tactical manipulations can occur. A gold trader in London was <a href="http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/10851259/Barclays-fined-26m-over-gold-price-failings.html">found to have pushed the price down</a> in the gold fixing by a few pennies. He had sold a multimillion dollar option, and he wanted it to expire worthless to avoid having to pay. Right after the fix, he bought back the gold he sold, pushing the price back up to where it was. He took a loss on the round trip of the gold, of course, but saved millions on the option which he did not have to pay.</p> <p>This is not the long-sought proof that nefarious forces are keeping gold from attaining $20,000.</p> <p>Anyways, because the silver and gold fixes were deemed to be <em>benchmarks</em> by regulatory changes post the LIBOR manipulations, a new process for the gold and silver fixes was implemented. Before we look at what changed, let’s consider why there is a fix price. Couldn’t they just take the price at 12:00 noon?</p> <p>No, it wouldn’t work because in a live market there is not just one price. There are always two prices: bid and offer. Which would you use as the benchmark? Either price could misrepresent the current state of the market. What’s more, those prices are just quotes, not executed trades.</p> <p>To be useful as a benchmark—a price that third party contracts and derivatives can be based on—there has to be a single price based on real executed trades. So they need to get buyers and sellers together, and find the price at which the most metal clears. If there is a better way than that, it hasn’t been discovered yet.</p> <p>This leads to a question. How do two prices that are supposed to track each other actually, you know, stay matched? This occurs in Exchange Traded Funds that move with an index of stocks (such as SPX or GLD). It occurs in gold futures and spot.</p> <p>It should also occur between the fixing process and the spot market. What use is a silver fix at $13.58 while the spot price was $14.40? We’ll get back to market action on that day, in a bit. First, we need to look at the force that keeps two prices close to each other.</p> <p>It is <em>arbitrage</em>. Let’s use GLD as an example. Each share represents a known quantity of gold. Suppose the price of the share rises relative to the price of gold metal in the spot market, and the metal in a share of GLD is $1 per ounce higher. The arbitrageur buys gold metal, creates shares of GLD, and sells them. This tends to pull up the price of gold metal, and mostly pushes down the price of GLD.</p> <p>Note that the arbitrageur takes <strong>no price risk</strong>. He is simply acting to profit from a spread (usually a very small one). Arbitrageurs will keep doing this trade, until GLD and gold metal get close enough that the small remaining profit is not worth the effort.</p> <p>The arbitrageur is motivated, of course, by profit. He is as greedy as the next guy (admit it, if you could demand a 300% raise from your boss, you would). However, his activity is self-limiting. The more he puts on his trade, the more he compresses the spread. In our example, the arbitrageur buys some gold metal and sells some GLD shares, to make $1. That is the initial profit. However, he compresses that spread, perhaps to 50 cents. He can have another go, but then the spread narrows to 25 cents. Soon enough, he walks away (these are illustrative numbers only for this example).</p> <p>It's a textbook case of the Invisible Hand described by Adam Smith. The arbitrageur, seeking his own profit, ends up serving other market participants. He keeps two different prices locked tightly together. Everyone else can take for granted that GLD works as it’s supposed to.</p> <p>For example, suppose you run a small gold coin store. You need to hedge your inventory just as a large dealer does. However, you sell gold one ounce at a time. Big dealers might use 100-ounce gold futures, but you use GLD. You can thank the actions of this arbitrageur.</p> <p>Now let’s get back to the fix. The old process was conducted by the major market makers in each metal. They got together in one room, and each had major clients on various phone lines. The chairman would put out a price, and the market makers would talk to their clients to determine who wanted to sell at that price and who wanted to buy. Then they add up all selling and buying, and see if there’s a close match. They would keep moving the price until selling matched buying within tolerance. That was the fix price.</p> <p>There was just one problem, at least so far as the gold bugs were concerned: the <em>market maker</em>. Since the first market maker walked into a coffee house in London where shares were being traded, most people have misunderstood the market maker. Back in the coffee house days, all potential sellers would line up on one side of the room, in order from lowest offer price to highest. On the other side, buyers would line up, from highest bid to lowest.</p> <p>If one had to sell, that meant taking the best bid presented in the room. Likewise, if one wanted to buy right now, one paid the best offer price. As you would imagine, the bid-ask spread could get pretty wide, and perhaps worse yet, it was unpredictable.</p> <p>Until the market maker walked in. Unlike all the others, he was both a potential buyer and a potential seller. He had an inventory of both shares and cash. He published a better price if you wanted to buy or sell and as it turns out, he was the only one who could consistently buy at the bid price and sell at the ask price.</p> <p>Of course, the guy with the best bid price—or what had been the best price until the market maker strolled into the room—was upset. Who is this dodgy bloke? Why is he allowed to mess about like this? Surely it’s unethical, immoral, and maybe even illegal?</p> <p>In fact, he is serving all market participants (except the few who hoped to sell and make a buyer pay a premium and the equally small few who hoped to buy from someone desperate to raise cash). The market maker is motivated by profit, sure, but in making money he is narrowing the bid-ask spread whilst also reducing its volatility.</p> <p>Today, the market maker is aka <em>High Frequency Trader</em>, and he uses technology that the coffee house fellows could not have imagined. Nevertheless, he too encounters the same exact suspicion, if not resentment, if not envy and anger.</p> <p>Now let’s tie this to the silver fix. In the old fixing process, bullion bank dealers could place orders in the spot market during the fix. For example, if the fix price looked like it might settle at $14.30, but the spot price was $14.34, the dealers would buy the fix and sell spot, happy to make four cents.</p> <p>Many objected to this because it looked like information was <em>leaking</em> into the market. They claimed it’s so <em>unfair</em>, perhaps even a <em>gateway drug</em> to insider trading? If other market participants can’t have this privilege, the bullion banks shouldn’t have it either. And besides, they’re supposed to be just brokers and not trading their own proprietary positions. The truth was that there was nothing stopping other market participants from also trading in the spot market during the fixing process, it was just that the bullion banks’ dealers were more efficient at being market maker.</p> <p>Well, in part due to the agitation of the gold and silver bugs, government regulators came down on the market makers. They fixed it so that market makers were no longer allowed to arbitrage the fix to the spot and futures markets.</p> <p>Before you think “yeah, this is what we want,” let’s revisit one of our favorite and recurrent themes, namely: <strong>be careful what you wish for</strong>.</p> <p>As it stands today, if the fix price is starting to deviate from the market price, the market makers’ hands are tied. Ross Norman, CEO of bullion dealer Sharps Pixley in London, <a href="http://news.sharpspixley.com/article/silver-fix-not-fit-for-purpose-r-i-p-/244715/">expressed his frustration</a> with this. “The real problem as we see it is that banks are increasingly unwilling or unable to place corresponding orders where they perceive a mis-pricing because of fears of being accused of abusing a situation and facing the wrath of the regulator or their compliance departments.”</p> <p>The big clients who participate in the fixing process may be freer to trade. However, they don’t have the same information. Market making is hard because you’re playing for pennies or fractions of a penny, but if you screw up you can lose dollars. The clients may know how many rounds into the fixing process they are, and the order imbalance of each round. But they can’t react as quickly as the bullion banks who are making markets in the spot, futures, and ETF markets, and they don’t know as much about market conditions either. They can’t arbitrage a few pennies. They need a much bigger spread.</p> <div> <p>A wider spread, much less an unpredictable spread, is to no one’s benefit. For example, the mining companies often sell at the fix price, rather than try to time it (or be accused of breach of fiduciary duty by their shareholders if they mis-time it). How much deviation of the fix price will it take before miners are forced to embrace the next-best solution? </p> <p>“The large discrepancy between the spot price and the fix is very alarming to us especially that it happened twice in a row,” <a href="http://www.bulliondesk.com/silver-news/focus-kghm-hits-out-at-last-weeks-silver-benchmarking-controversy-108272/">KGHM head of market risk Grzegorz Laskowski told FastMarkets</a>.</p> <p>The next best solution, by definition, is less advantageous than the best.</p> <p>&nbsp;</p> <p><em>Read on in <a href="https://monetary-metals.com/they-broke-the-silver-fix/">Part II</a> (free registration required) for a damning graph plus our analysis drilling down into what happened last Thursday just after high noon in London.</em></p> <p><em>&nbsp;</em></p> </div> <p>© 2016 <a href="https://monetary-metals.com/membership-account/membership-levels/">Monetary Metals</a></p> http://www.zerohedge.com/news/2016-02-09/they-broke-silver-fix#comments fixed Gold Bugs Insider Trading LIBOR Market Conditions Price Action Volatility Tue, 09 Feb 2016 07:05:42 +0000 Monetary Metals 523130 at http://www.zerohedge.com "The Market Knows It's Over" Jim Rogers Warns "We're All Going To Suffer" http://www.zerohedge.com/news/2016-02-08/market-knows-its-over-jim-rogers-warns-were-all-going-suffer <p><a href="http://www.shtfplan.com/headline-news/legendary-investor-jim-rogers-warns-most-people-are-going-to-suffer-the-next-time-around_02072016"><em>Submitted by Mac Slavo via SHTFPlan.com,</em></a></p> <p>Back in the 1970&rsquo;s as recession gripped the world for a decade, stocks stagnated and commodities crashed, investor Jim Rogers made a fortune. His understanding of markets, capital flows and timing is legendary.</p> <p><strong>As crisis struck in late 2008, he did it again, </strong>often recommending gold and silver to those looking for wealth preservation strategies &ndash; move that would have paid of multi-fold when precious metals hit all time highs in 2011. He warned that the crash would lead to massive job losses, dependence on government bailouts, and unprecedented central bank printing on a global scale.</p> <p><strong>Now, Rogers says that investors around the world are realizing that the jig is up.</strong> Stocks are over bloated and central banks will have little choice but to take action again. But this time, says Rogers in his latest interview with <a href="http://www.crushthestreet.com/" target="_blank">CrushTheStreet.com</a>, there will be no stopping it and people all over the world are going to feel the pain, including in China and the United States.</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>We&rsquo;re all going to suffer&hellip; I can think of very few places that won&rsquo;t suffer. But most people are going to suffer the next time around.</strong></p> <p>&nbsp;</p> <p><iframe allowfullscreen="" frameborder="0" height="315" src="https://www.youtube.com/embed/K8sW5CHfwfQ" width="560"></iframe></p> <p>&nbsp;</p> <p><strong>Central banks will panic.</strong> They will do whatever they can to save the markets.</p> <p>&nbsp;</p> <p>It&rsquo;s artificial&hellip; it won&rsquo;t work&hellip; there comes a time when&nbsp;no matter how much money you have, the market has more money.</p> <p>&nbsp;</p> <p>&hellip;</p> <p>&nbsp;</p> <p>I don&rsquo;t know if they&rsquo;ll even call it QE (Quantitative Easing) in the future&hellip;&nbsp;who knows what they&rsquo;ll call it to disguise it&hellip; they&rsquo;re going to try whatever they can&hellip; printing more money&nbsp;or&nbsp;lowering&nbsp;interest rates or buying more assets&hellip; but unfortunately, no matter how much P.R. or whitewashing they use, <strong>the market knows this is over and we&rsquo;re&nbsp;not going to play this game anymore.</strong></p> </blockquote> <p>The entire world is about to get hammered and the average person on the street is the one who will pay the price, as is usually the case.</p> <p><u><em><strong>We can expect more losses in markets, more losses in jobs and more losses to freedom as governments and central banks point the finger at everyone but themselves.</strong></em></u></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="212" height="160" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160208_rogers.jpg?1454969615" /> </div> </div> </div> http://www.zerohedge.com/news/2016-02-08/market-knows-its-over-jim-rogers-warns-were-all-going-suffer#comments Central Banks China Jim Rogers Precious Metals Quantitative Easing Recession Tue, 09 Feb 2016 04:45:00 +0000 Tyler Durden 523105 at http://www.zerohedge.com After Crashing, Deutsche Bank Is Forced To Issue Statement Defending Its Liquidity http://www.zerohedge.com/news/2016-02-08/after-crashing-deutsche-bank-forced-issue-statement-defending-its-liquidity <p>The echoes of both Bear and Lehman are growing louder with every passing day.</p> <p> Just hours after Deutsche Bank stock crashed by 10% to levels not seen since the financial crisis, the German behemoth with over $50 trillion in gross notional derivative found itself in the very <em>deja vu</em>ish, not to mention unpleasant, situation of having to defend its liquidity and specifically assuring investors that it has enough cash (about €1 billion in 2016 payment capacity), to pay the €350 million in maturing Tier 1 coupons due in April, which among many other reasons have seen billions in value wiped out from both DB's stock price and its contingent convertible bonds which are looking increasingly more like equity with every passing day. </p> <p>DB did not stop there, but also laid out that for 2017 it was about €4.3BN in payment capacity, however before the impact of 2016 results, which if recent record loss history is any indication, will severely reduce the full cash capacity of the German bank. </p> <p>From the just issued <a href="https://www.db.com/ir/en/content/ir_releases_2016_5184.htm">press release</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>Ad-hoc: Deutsche Bank publishes updated information about AT1 payment capacity </strong></p> <p>&nbsp;</p> <p>Frankfurt am Main, 8 February 2016 – Today Deutsche Bank published updated information related to its 2016 and 2017 payment capacity for Additional Tier 1 (AT1) coupons based on preliminary and unaudited figures.&nbsp;&nbsp; </p> <p>&nbsp;</p> <p>The 2016 payment capacity is estimated to be approximately EUR 1 billion, sufficient to pay AT1 coupons of approximately EUR 0.35 billion on 30 April 2016. </p> <p>&nbsp;</p> <p>The estimated pro-forma 2017 payment capacity is approximately EUR 4.3 billion before impact from 2016 operating results. This is driven in part by an expected positive impact of approximately EUR 1.6 billion from the completion of the sale of 19.99% stake in Hua Xia Bank and further HGB 340e/g reserves of approximately EUR 1.9 billion available to offset future losses. </p> <p>&nbsp;</p> <p>The final AT1 payment capacity will depend on 2016 operating results under German GAAP (HGB) and movements in other reserves.</p> </blockquote> <p>The updated information in question:</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/03/DB%20liquidity%20update.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/03/DB%20liquidity%20update_0.jpg" width="600" height="442" /></a></p> <p>As a reminder, the last time serious "developed market" banks had to publicly defend their liquidity, the result was a multi-trillion taxpayer bailout.</p> <p>However, there is probably some time before that happens: first German regulator Bafin will likely ban short selling in Deutsche Bank shares. That always is the first step in the endgame.</p> <p>For now, however, the market is no longer asking questions but merely selling: Deutsche CDS has entered the dreaded "viagra" formation at 245 bps and going vertical.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/03/DB%20CDS%20c.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/03/DB%20CDS%20c_0.jpg" width="600" height="395" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="769" height="400" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/DB%20liquidity%20summary%202.jpg?1454960962" /> </div> </div> </div> http://www.zerohedge.com/news/2016-02-08/after-crashing-deutsche-bank-forced-issue-statement-defending-its-liquidity#comments CDS Deutsche Bank GAAP Lehman Tue, 09 Feb 2016 03:33:29 +0000 Tyler Durden 523086 at http://www.zerohedge.com Japan In Turmoil: Stocks, USDJPY, Bond Yields Collapse http://www.zerohedge.com/news/2016-02-08/japanese-10y-yield-hits-zero-first-time-ever-yen-strongest-2014-stocks-crash <p>The total and utter failure of The BoJ continues to accelerate...</p> <p><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap7.jpg" style="width: 599px; height: 430px;" /></p> <ul> <li><strong>*JAPAN 10-YEAR GOVERNMENT BOND YIELD FALLS BELOW ZERO FIRST TIME</strong></li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap8.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap8_0.jpg" style="width: 600px; height: 316px;" /></a></p> <p>&nbsp;</p> <p><strong>Stocks have crashed the most since Black Monday erasing all QQE2 gains..</strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap6.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap6_0.jpg" style="width: 600px; height: 301px;" /></a></p> <p>&nbsp;</p> <p>With Japanese Bank stocks&nbsp; leading the way, now down 25% since NIRP was unleashed (and 32% since the start of the year)...</p> <ul> <li><strong>*NOMURA EXTENDS DECLINE, FALLS AS MUCH AS 12%</strong></li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap4.jpg"><img height="320" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap4_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p>And USDJPY is in freefall...</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap9.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap9_0.jpg" style="width: 600px; height: 297px;" /></a></p> <p>*&nbsp; *&nbsp; *</p> <p>As we detailed earlier..</p> <p>Following earlier comments from yet another Japanese talking head that deflation will be fixed any day now, the Japanese bond curve continues to collapse with yields hitting record lows across the entire spectrum. Most notably, <strong>10Y JGBs - which were trading 24bps before BoJ NIRP - just traded with a 0bp handle for the first time ever</strong>, ready to join Switzerland as the only nations with negative&nbsp; rates at 10Y. As bonds rally, and <strong>JPY surges to strongest since 2014</strong>, so Japanese stocks are crashing (<strong>NKY down 1000 points from intraday highs</strong>).</p> <p>Bond yields are plunging...</p> <ul> <li><strong>*JAPAN 10-YEAR GOVERNMENT BOND YIELD FALLS TO ZERO FOR 1ST TIME</strong></li> <li><strong>*JAPAN&#39;S 5-YEAR YIELD FALLS TO RECORD -0.205%</strong></li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap3.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap3_0.jpg" style="width: 600px; height: 322px;" /></a></p> <p>And stocks are crashing as USDJPY tumbles...</p> <ul> <li><strong>*YEN CLIMBS PAST 115 PER DOLLAR TO STRONGEST SINCE 2014</strong></li> </ul> <p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap.jpg"><img height="313" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2016/02/08/20160208_jap_0.jpg" width="600" /></a></p> <p>&nbsp;</p> <p><em><strong>Jose Canseco will not be happy.</strong></em></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="775" height="556" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160208_jap7.jpg?1454989475" /> </div> </div> </div> http://www.zerohedge.com/news/2016-02-08/japanese-10y-yield-hits-zero-first-time-ever-yen-strongest-2014-stocks-crash#comments Bond fixed Japan Nomura Switzerland Yen Tue, 09 Feb 2016 03:21:41 +0000 Tyler Durden 523118 at http://www.zerohedge.com Dangerous Speech: Would The Founders Be Considered Domestic Extremists Today? http://www.zerohedge.com/news/2016-02-08/dangerous-speech-would-founders-be-considered-domestic-extremists-today <p><a href="http://rutherford.org/publications_resources/john_whiteheads_commentary/dangerous_speech_would_the_founders_be_considered_domestic_extremists_"><em>Submitted by John Whitehead via The Rutherford Institute,</em></a></p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;If you can&rsquo;t say &lsquo;Fuck&rsquo; you can&rsquo;t say, &lsquo;Fuck the government.&rsquo;&rdquo; ? Lenny Bruce</p> </blockquote> <p>Not only has free speech become a four-letter word - profane, obscene, uncouth, not to be uttered in so-called public places - but in more and more cases, the government deems free speech to be downright dangerous and in some instances illegal.</p> <p><strong>The U.S. government has become particularly intolerant of speech that challenges the government&rsquo;s power,</strong> reveals the government&rsquo;s corruption, exposes the government&rsquo;s lies, and encourages the citizenry to push back against the government&rsquo;s many injustices.</p> <p><strong>Indeed, there is a long and growing list of the kinds of speech that the government considers dangerous enough to red flag</strong> and subject to censorship, surveillance, investigation and prosecution: hate speech, bullying speech, intolerant speech, conspiratorial speech, treasonous speech, threatening speech, incendiary speech, inflammatory speech, radical speech, anti-government speech, right-wing speech, extremist speech, etc.</p> <p>Yet by allowing the government to whittle away at cherished First Amendment freedoms - which form the backbone of the Bill of Rights - <strong>we have evolved into a society that would not only be abhorrent to the founders of this country</strong> but would be hostile to the words <em>they</em> used to birth this nation.</p> <p><u><strong>Don&rsquo;t believe me?</strong></u></p> <p>Conduct your own experiment into the government&rsquo;s tolerance of speech that challenges its authority, and see for yourself.</p> <p><em><strong>Stand on a street corner&mdash;or in a courtroom, at a city council meeting or on a university campus&mdash;and recite some of the rhetoric used by the likes of Thomas Jefferson, Patrick Henry, John Adams and Thomas Paine without referencing them as the authors.</strong></em></p> <p>For that matter, just try reciting the <a href="http://www.archives.gov/exhibits/charters/declaration_transcript.html">Declaration of Independence</a>, which rejects tyranny, establishes Americans as sovereign beings, recognizes God as a Supreme power, portrays the government as evil, and provides a detailed laundry list of abuses that are as relevant today as they were 240 years ago.</p> <p>My guess is that you won&rsquo;t last long before you get thrown out, shut up, threatened with arrest or at the very least accused of being a radical, a troublemaker, a sovereign citizen, a conspiratorialist or an extremist.</p> <p><strong>Try suggesting, as Thomas Jefferson and Benjamin Franklin did, that Americans should not only take up arms but be prepared to shed blood in order to protect their liberties, </strong>and you might find yourself placed on a terrorist watch list and vulnerable to being rounded up by government agents.</p> <p>&ldquo;What country can preserve its liberties if their rulers are not warned from time to time that their people preserve the spirit of resistance. Let them take arms,&rdquo; declared Jefferson. He also concluded that<em><strong> &ldquo;the tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.&rdquo;</strong></em> Observed Franklin: &ldquo;Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!&rdquo;</p> <p>Better yet, try suggesting as Thomas Paine, Marquis De Lafayette, John Adams and Patrick Henry did that Americans should, if necessary, defend themselves against the government if it violates their rights, and you will be<strong> labeled a domestic extremist.</strong></p> <p>&ldquo;It is the duty of the patriot to protect his country from its government,&rdquo; insisted Paine.<strong><em> &ldquo;When the government violates the people&rsquo;s rights,&rdquo; Lafayette warned, &ldquo;insurrection is, for the people and for each portion of the people, the most sacred of the rights and the most indispensable of duties.&rdquo;</em></strong> Adams cautioned, &ldquo;A settled plan to deprive the people of all the benefits, blessings and ends of the contract, to subvert the fundamentals of the constitution, to deprive them of all share in making and executing laws, will justify a revolution.&rdquo; And who could forget Patrick Henry with his ultimatum: &ldquo;Give me liberty or give me death!&rdquo;</p> <p>Then again, perhaps you don&rsquo;t need to test the limits of free speech for yourself. <strong>One such test is playing out before our very eyes in Portland, Oregon, where radio &ldquo;shock jock&rdquo; Pete Santilli, </strong>a new media journalist who broadcasts his news reports over YouTube and streaming internet radio, is sitting in jail.</p> <p>Santilli, notorious for his controversial topics, vocal outrage over government abuses, and inflammatory rhetoric, is not what anyone would consider an objective reporter. His radio show, aptly titled &ldquo;Telling You the Truth...Whether You Like It or Not,&rdquo; makes it clear that Santilli has a viewpoint (namely, that the government has overstepped its bounds), and he has no qualms about sharing it with his listeners.</p> <p><strong>It was that viewpoint that landed Santilli in jail.</strong></p> <p>In early January 2016, a group of armed activists, reportedly protesting the federal government&rsquo;s management of federal lands and its prosecution of two local ranchers convicted of arson, staged <a href="http://www.opb.org/news/series/burns-oregon-standoff-bundy-militia-news-updates/">an act of civil disobedience</a> by occupying the Malheur National Wildlife Refuge in Burns, Oregon. Santilli, who has covered such protests in the past, including the April 2014 standoff in Nevada between the Bundy ranching family and the federal government over grazing rights, reported on the occupation in Burns as an embedded journalist, albeit one who was sympathetic to the complaints (although not the tactics) of the occupiers.</p> <p><strong><em>When asked to clarify his role in relation to the occupation, Santilli declared, &ldquo;My role is the same here that it was at the Bundy ranch. To talk about the constitutional implications of what is going on here. The <a href="http://rutherford.org/files_images/general/02-02-2016_Santilli_Redacted_Criminal_Complaint.pdf">Constitution cannot be negotiated</a>.&rdquo;</em></strong></p> <p>Well, it turns out that the Constitution <em>can </em>be negotiated, at least when the government gets involved.</p> <p>Long a thorn in the side of the FBI, <a href="http://www.cincinnati.com/story/news/2016/01/27/cincinnatian-peter-santilli-arrested-oregon-standoff/79386528/">Santilli was arrested</a> by the FBI following its ambush and arrest of key leaders of the movement. He was charged, along with the armed resistors, with conspiracy to impede federal officers from discharging their duties by use of force, intimidation, or threats&mdash;the same charge being levied against those who occupied the refuge&mdash;which <a href="http://www.huffingtonpost.com/entry/pete-santilli-oregon-occupation-fbi_us_56b2469ce4b04f9b57d8173f">carries a maximum sentence of six years in prison</a>.</p> <p>Notably, Santilli is the <a href="http://www.huffingtonpost.com/entry/pete-santilli-oregon-occupation-fbi_us_56b2469ce4b04f9b57d8173f">only journalist among those covering the occupation to be charged with conspiracy</a>, despite the fact that he did not participate in the takeover of the refuge, nor did he ever spend a night on the grounds of the refuge, nor did he ever represent himself as anything but a journalist covering the occupation.</p> <p>Of course, the <a href="http://rutherford.org/files_images/general/02-02-2016_Santilli_Redacted_Criminal_Complaint.pdf">government doesn&rsquo;t actually believe</a> that 50-year-old Santilli is an accomplice to any criminal activity.</p> <p><strong>Read between the lines and you&rsquo;ll find that what the government is really accusing Santilli of is employing dangerous speech. </strong>As court documents <a href="http://rutherford.org/files_images/general/02-02-2016_Santilli_Redacted_Criminal_Complaint.pdf">indicate</a>, the government is prosecuting Santilli solely as a reporter of information. In other words, they&rsquo;re making an example of him, which is consistent with the government&rsquo;s ongoing efforts to intimidate members of the media who portray the government in a less than favorable light.</p> <p><u><strong>This is not a new tactic.</strong></u></p> <p>During the protests in Ferguson, Missouri, and Baltimore, Maryland,<strong> <a href="http://www.cnn.com/2014/08/19/us/ferguson-journalists-arrested">numerous journalists were arrested</a> while covering the regions&rsquo; civil unrest and the conditions that spawned that unrest. T</strong>hese attempts to muzzle the press were clearly concerted, top-down efforts to restrict the fundamental First Amendment rights of the public and the press.</p> <p>As <em>The Huffington Post</em> <a href="http://www.huffingtonpost.com/entry/pete-santilli-oregon-occupation-fbi_us_56b2469ce4b04f9b57d8173f">reports</a>:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>The Obama administration&#39;s treatment of reporters has caused controversy before. In 2009, the Department of Justice&nbsp;<a href="http://www.huffingtonpost.com/2013/05/20/james-rosen-justice-department-co-conspirator-obama_n_3305857.html">targeted&nbsp;</a><a href="http://www.huffingtonpost.com/2013/05/20/james-rosen-justice-department-co-conspirator-obama_n_3305857.html">a Fox News reporter</a>&nbsp;in an investigation. Three years later, DOJ&nbsp;<a href="http://www.huffingtonpost.com/2013/07/12/justice-department-media-guidelines_n_3587819.html">seized Associated Press reporters&rsquo; phone records</a>. After that, former Attorney General Eric Holder&nbsp;<a href="http://www.huffingtonpost.com/2013/07/12/justice-department-media-guidelines_n_3587819.html">ordered a review</a>&nbsp;of the Justice Department&#39;s news media policies. DOJ employees must&nbsp;<a href="http://www.huffingtonpost.com/2015/01/14/doj-media-guidelines_n_6471944.html">consult</a>&nbsp;with a unit within the Criminal Division before they arrest someone when there is a &ldquo;question regarding whether an individual or entity is a &lsquo;member of the news media,&rsquo;&rdquo; according to a January 2015&nbsp;<a href="http://www.justice.gov/file/317831/download">memo</a>&nbsp;from Holder to DOJ employees.&rdquo;</p> </blockquote> <p>That the government is choosing to target Santilli for prosecution, despite the fact that they <a href="https://www.emptywheel.net/2013/07/12/in-bid-to-placate-legacy-media-doj-moves-closer-to-instituting-official-press/">do not recognize new media journalists as members of the mainstream media</a>, signals a broadening of the government&rsquo;s efforts to suppress what it considers dangerous speech and stamp out negative coverage.</p> <p>The message is clear:<strong><em> whether a journalist is acting alone or is affiliated with an established news source, the government has no qualms about subjecting them to harassment, arrest, jail time and trumped up charges if doing so will discourage others from openly opposing or exposing the government.</em></strong></p> <p>You see, the powers-that-be understand that if the government can control speech, it controls thought and, in turn, it can control the minds of the citizenry.</p> <p>Where the government has gone wrong is in hinging its case against Santilli based solely on his incendiary rhetoric, which is protected by the First Amendment and which bears a striking resemblance to disgruntled patriots throughout American history.</p> <p>Here&rsquo;s what Santilli said: <strong><em>&ldquo;What we need, most importantly, is one hundred thousand unarmed men and women to stand together. It is the <a href="http://rutherford.org/files_images/general/02-02-2016_Santilli_Redacted_Criminal_Complaint.pdf">most powerful weapon in our arsenal</a>.&rdquo;</em></strong></p> <p>Now compare that with the call to action from Joseph Warren, a <a href="http://www.history.com/news/10-things-you-should-know-about-joseph-warren">leader of the Sons of Liberty</a> and a principal figure within the American Revolution: &ldquo;Stain not the glory of your worthy ancestors, but like them resolve never to part with your birthright; be wise in your deliberations, and determined in your exertions for the preservation of your liberties. Follow not the dictates of passion, but enlist yourselves under the sacred banner of reason; use every method in your power to secure your rights.&rdquo;</p> <p>Indeed, Santilli comes across as relatively docile compared to some of our nation&rsquo;s more outspoken firebrands.</p> <p>&nbsp;Santilli: <em><strong>&ldquo;<a href="http://rutherford.org/files_images/general/02-02-2016_Santilli_Redacted_Criminal_Complaint.pdf">I&rsquo;m not armed</a>. I am armed with my mouth. I&rsquo;m armed with my live stream. I&rsquo;m armed with a coalition of like-minded individuals who sit at home and on YouTube watch this.&rdquo;</strong></em></p> <p>Now compare that to what George Washington had to say: &ldquo;Unhappy it is, though, to reflect that a brother&#39;s sword has been sheathed in a brother&#39;s breast and that the once-happy plains of America are either to be drenched with blood or inhabited by slaves. Sad alternative! But can a virtuous man hesitate in his choice?&rdquo;</p> <p>And then there was Andrew Jackson, a hothead if ever there was one. He came of age in the early days of the republic, served as the seventh president of the United States, and was not opposed to shedding blood when necessary: <strong><em>&ldquo;Peace, above all things, is to be desired, but blood must sometimes be spilled to obtain it on equable and lasting terms.&rdquo;</em></strong></p> <p><u><strong>This is how freedom rises or falls.</strong></u></p> <p>There have always been those willing to speak their minds despite the consequences. Where freedom hangs in the balance is when &ldquo;we the people&rdquo; are called on to stand with or against individuals who actually exercise their rights and, in the process, push the envelope far enough to get called out on the carpet for it.</p> <p>Do we negotiate the Constitution, or do we embrace it, no matter how uncomfortable it makes us feel, no matter how hateful or ugly it gets, and no matter how much we may dislike its flag-bearers?</p> <p><strong>Comedian Lenny Bruce laid the groundwork for the George Carlins that would follow in his wake: foul-mouthed, insightful, irreverent, incredibly funny, and one of the First Amendment&rsquo;s greatest champions who dared to &ldquo;<a href="http://www.npr.org/templates/story/story.php?storyId=920569">speak the unspeakable</a>&rdquo; about race, religion, sexuality and politics.</strong> As <em>Village Voice </em>writer Nat Hentoff attests, Bruce was &ldquo;not only a paladin of free speech but also a still-penetrating, woundingly hilarious <a href="http://gadflyonline.com/home/index.php/lenny-bruce-the-crucifixion-of-a-true-believer/">speaker of truth to the powerful and the complacent</a>.&rdquo;</p> <p>Bruce died in 1966, but not before being convicted of alleged obscenity for challenging his audience&rsquo;s covert prejudices by brandishing unmentionable words that, if uttered today, would not only get you ostracized but could get you arrested and charged with a hate crime. Hentoff, who testified in Bruce&rsquo;s defense at his trial, recounts that Lenny used to say, &ldquo;What I wanted people to dig is the lie. <a href="http://gadflyonline.com/home/index.php/lenny-bruce-the-crucifixion-of-a-true-believer/">Certain words were suppressed to keep the lie going.</a> But if you <em>do</em> them, you should be able to say the words.&rdquo;</p> <p><strong>Not much has changed in the 50 years since Bruce died. In fact, it&rsquo;s gotten worse.</strong></p> <p>What we&rsquo;re dealing with today is a government that wants to suppress dangerous words&mdash;words about its warring empire, words about its land grabs, words about its militarized police, words about its killing, its poisoning and its corruption&mdash;in order to keep its lies going.</p> <p>As I document in my book <a href="http://www.amazon.com/Battlefield-America-War-American-People/dp/1590793099"><em>Battlefield America: The War on the American People</em></a>, what <strong><em>we are witnessing is a nation undergoing a nervous breakdown over this growing tension between our increasingly untenable reality and the lies being perpetrated by a government that has grown too power-hungry, egotistical, militaristic and disconnected from its revolutionary birthright.</em></strong></p> <p><u><strong>The only therapy is the truth and nothing but the truth.</strong></u></p> <p><strong><em>Otherwise, there will be no more First Amendment. There will be no more Bill of Rights. And there will be no more freedom in America as we have known it.</em></strong></p> <p>As the insightful and brash comedian George Carlin observed:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong><em>&ldquo;Rights aren&rsquo;t rights if someone can take them away. They&rsquo;re privileges. That&rsquo;s all we&rsquo;ve ever had in this country, is a bill of temporary privileges. And if you read the news even badly, you know that every year the list gets shorter and shorter. Sooner or later, the people in this country are gonna realize the government does not give a fuck about them! The government doesn&rsquo;t care about you, or your children, or your rights, or your welfare or your safety. It simply does not give a fuck about you! It&rsquo;s interested in its own power. That&rsquo;s the only thing. Keeping it and expanding it wherever possible.&rdquo;</em></strong></p> </blockquote> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="150" height="150" alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/20160208_hate.jpg?1454976130" /> </div> </div> </div> http://www.zerohedge.com/news/2016-02-08/dangerous-speech-would-founders-be-considered-domestic-extremists-today#comments Corruption Department of Justice ETC FBI First Amendment Fox News Obama Administration Reality Tue, 09 Feb 2016 03:20:00 +0000 Tyler Durden 523115 at http://www.zerohedge.com "People In The Market For Many, Many Years Have Been Replaced By An Algorithm" http://www.zerohedge.com/news/2016-02-08/people-market-many-many-years-have-been-replaced-algorithm <p>Two years ago, just before Michael Lewis released Flash Boys starting a sharp if brief revulsion against parasitic, predatory High Frequency Trading frontrunners, which delayed Virtu's IPO by one year, <a href="http://www.zerohedge.com/news/2014-03-11/one-financial-product-now-targeted-hft-swarm">we broke down Virtu's 2013 net trading income by product line</a>. We were not surprised to find that of the $45 million in total growth, the largest income category, US stocks growth was a tiny 5% of all, rising by $2.3 million in 2013. In fact, between EMEA, APAC and US Equities, there was very limited growth in 2013, while commodities posted an outright trading income decline. It appeared to be the case that growth in conventional products has indeed plateaued, as more and more HFT competitors rush in. And yet, one product stood out. It is highlighted on the chart below: <strong>FX</strong>.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/03/VRTU%20Net%20Trading.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/03/VRTU%20Net%20Trading_0.jpg" width="600" height="414" /></a></p> <p>This is how we summarized this observations almost exactly two years ago:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>With increasingly more homo sapiens-type banker FX traders being laid off left and right for pervasive and ubiquitous manipulation of currencies </strong>(who can forget the infamous "Cartel" chat room, JPM's head of spot trading presiding), <strong>what this means is that more and more algos will rush into this product to fill the voids left by carbon-based traders.</strong></p> </blockquote> <p>Two years later, <a href="http://www.bloomberg.com/news/articles/2016-02-08/a-dying-breed-currency-traders-are-left-out-of-new-wall-street">Bloomberg caught </a>up to the fate of what it calls Wall Street's "<strong>dying breed</strong>", the once proud FX traders who over the past two years have become an endangered species between losing their jobs to Virtu's algos, and to countless FX rigging scandals which revealed that the world's biggest market was nothing but one grand conspiracy in which a handful of banks schemed illegally in so-called chat rooms. </p> <p>First the numbers: there were 2,300 people working in currency-market front-office jobs at the world’s biggest banks in 2014, a 23 percent drop from four years earlier, according to Coalition Development Ltd., an analytics firm.</p> <p>Bloomberg also discovers Virtu: "Humans are up against formidable<br /> opponents across the industry. Take Virtu Financial Inc. Deploying<br /> sophisticated technology in the business, the company’s computers can<br /> trade more than 11,000 securities and other products on more than 225<br /> trading platforms in 35 countries. Because automation is so deeply<br /> ingrained in its business, it had only about 150 employees last year --<br /> generating more than $5 million per worker."</p> <p>And here are some of the people <a href="http://www.bloomberg.com/news/articles/2016-02-08/a-dying-breed-currency-traders-are-left-out-of-new-wall-street">behind the numbers:</a></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Charlie Stenger, a currency-broker-turned-recruiter, has seen it all. One fired trader wept in his office. Another admitted he hadn’t told his wife he was unemployed, and left the house every day in a suit to sneak off to a coffee shop. Then there are the delusional guys, who carefully explain how they’re not interested in jobs that don’t pay as well as those they just lost.</p> <p>Stenger, who was laid off from ICAP Plc in 2013 and now works for Sheffield Haworth Ltd., tells the men and women he counsels: Take the pay cut. Oh, and don’t wait for the phone to ring.</p> <p>“This is crunch time -- it’s not looking good,” Stenger said. “This is a shrinking pond.”</p> </blockquote> <p>It is, and not just for the people: the size of the overall FX market itself is collapsing.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/09/FX%20volume.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/09/FX%20volume_0.png" width="600" height="317" /></a></p> <p>&nbsp;</p> <p>The death of the FX market has not been greatly exaggerated: the layoffs have continued and are unlikely to stop in the $5.3 trillion-a-day market. Revenue from from foreign-exchange divisions hasn’t bounced back after falling to $6.5 billion in 2014, down almost 45 percent from 2009, Coalition data show. Currency trading in the U.K. and North America shrank by more than 20 percent in October from a year earlier, according to central banks in those regions. London is the biggest center for foreign-exchange trading.</p> <p>For some being replaced by an algo was not how they had envisioned the conclusion to their Wall Street careers:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“The business has to be downsized,” said Keith Underwood, a foreign-exchange consultant who ended a 25-year trading career, including at Lloyds Banking Group Plc, in 2014. But it’s not easy “<strong>for people who have been in a market for many, many years to see that they’ve been replaced by an algorithm</strong>.”</p> </blockquote> <p>Others who have not been fired yet, and are just counting the days to that closed doors conference room meeting:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Some ex-traders have moved to smaller houses or pulled kids out of private school. Those waiting for the ax to fall hoard paychecks. Stenger was out of regular work for a year after he lost his job; he was told about the lay-off four days after he learned his wife was pregnant with their first child. “There were periods where I wouldn’t make money for 90 days at a time,” he said, “and the insurance bill was still due every month, and the rent and the car payments.”</p> </blockquote> <p>For many, however, the feeling of escaping Wall Street's clutches is an unexpected one: liberation.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Underwood, the consultant, said he left the market because regulators were cracking down on his niche by implementing stricter derivatives rules after the financial crisis. “My style of trading went out of vogue,” he said. So the former head of foreign exchange trading for the Americas at Lloyds, who also led teams at Credit Agricole SA and Lehman Brothers in London and New York, reinvented himself.</p> <p>&nbsp;</p> <p>“<strong>I couldn’t be more happy</strong>,” said Underwood, who described the hourly rates he charges as comparable to those of a senior lawyer. “There is more empowerment, with control of my future.”</p> <p>&nbsp;</p> <p>Many traders have discovered they have transferable skills. Some have landed work as salespeople or executives at financial technology companies, payment providers or trading platforms and exchanges. Others are using their knowledge to bolster banks’ risk-management operations. Franz Gutwenger, a recruiter in New York, said one of his financial-institution clients has expanded its regulatory-compliance staffing by a factor of five.<strong>&nbsp;</strong></p> <p>&nbsp;</p> <p><strong>“I don’t think there’s a whole lot from my generation that are still in the industry,”</strong> said Guy Piserchia, who during a three-decade career led North-American foreign-exchange trading at Bank of America Corp. and Paribas, a precursor to BNP Paribas SA, in Asia. He left Wall Street in 2012 to become mayor of the 8,700-person township of Long Hill, New Jersey. Now he’s deputy mayor, but said he wants to get back into the business in a role that combines his financial and government experience.</p> </blockquote> <p>What happens next:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>“With automation and electronic dealing, I think there are going to be fewer people” on foreign-exchange desks, Piserchia said. “<strong>The ones that have evolved and survived may be some of the better ones -- or, as in life, may be some of the lucky ones</strong>.”</p> </blockquote> <p>As the realization that there is a life away from finance, more will leave the confines of Wall Street for ever. Who will remain: just the central bankers who pretend the market is the economy, and pretend there is such as thing as a "market" in the first place, and the algos which however without humans to frontrun, will soon be extinct soon as well.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/09/server-farm.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2016/02/09/server-farm_0.jpg" width="600" height="293" /></a></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="647" height="316" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/server-farm.jpg?1454985423" /> </div> </div> </div> http://www.zerohedge.com/news/2016-02-08/people-market-many-many-years-have-been-replaced-algorithm#comments Bank of America Bank of America Central Banks HFT High Frequency Trading High Frequency Trading Lehman Lehman Brothers Lloyds Michael Lewis Tue, 09 Feb 2016 02:52:08 +0000 Tyler Durden 523122 at http://www.zerohedge.com "I Was Far Too Bullish": Jeremy Siegel Admits Things Are Really, Really Bad Out There http://www.zerohedge.com/news/2016-02-08/i-was-far-too-bullish-jeremy-siegel-admits-things-are-really-really-bad-out-there <p dir="ltr">Well, no one ever accused Jeremy Siegel of being bearish, but now he is at least <em>less bullish</em> after witnessing one of the worst Januarys for stocks in history.</p> <p dir="ltr">"<strong>I was far too bullish last December</strong>," Siegel told CNBC on Monday, on the way to asking if central banks had the firepower to “counteract all of the deflationary forces.”</p> <p dir="ltr">“That’s clearly spooking the markets right now,” the vaunted Wharton school professor said of the deflationary boogeyman the world just can’t seem to shake despite trillions in global QE.</p> <p dir="ltr">To be sure, Siegel didn’t say anything new. It’s all about the yuan and plunging commodity prices. </p> <p dir="ltr">Oh, and the fact that the entire US O&amp;G sector is about to go belly up and banks aren’t even close to being adequately provisioned. </p> <p dir="ltr">“<strong>Those deflationary forces ... from China, from commodities are really, in the presence of debt that so many of these energy and other companies have, ... causing the market turmoil right now,</strong>” he says.</p> <p dir="ltr">And while Siegel admits that he may have been foolish to predict that “valuations can stay on the high side” in the near-term, he’s sticking with the idea that equities are where you want to be over the long haul. “In the long-run, you're going to be rewarded [in stocks]," he concludes.</p> <p dir="ltr">To borrow a phrase from Bill Gross, we’d ask Siegel this with regard to his infamous Dow 20,000 call: “<a href="http://www.zerohedge.com/news/2016-02-03/bill-gross-trolls-addled-impotent-central-bankers-asks-hows-it-workin-ya">Hows that workin’ out for ya?</a>”</p> <p><iframe src="http://player.cnbc.com/p/gZWlPC/cnbc_global?playertype=synd&amp;byGuid=3000492347&amp;size=530_298" width="530" height="298"></iframe></p> <div class="field field-type-filefield field-field-image-teaser"> <div class="field-items"> <div class="field-item odd"> <img class="imagefield imagefield-field_image_teaser" width="822" height="471" alt="" src="http://www.zerohedge.com/sites/default/files/images/user92183/imageroot/Siegel_0.png?1454974189" /> </div> </div> </div> http://www.zerohedge.com/news/2016-02-08/i-was-far-too-bullish-jeremy-siegel-admits-things-are-really-really-bad-out-there#comments Bill Gross Central Banks China Yuan Tue, 09 Feb 2016 02:30:21 +0000 Tyler Durden 523112 at http://www.zerohedge.com