http://www.zerohedge.com/fullrss2.xml en Like Dripping Silver Icicles http://www.zerohedge.com/news/2014-07-28/dripping-silver-icicles <p>by Keith Weiner</p> <p>I don’t typically emphasize price charts in analyzing the market, however something unusual has been happening in the spot (physical) silver market. It did not happen in the silver futures market, nor in the gold market. I have been bearish on silver because of its <a href="http://monetary-metals.com/basisletter/" target="_blank">supply and demand</a> fundamentals, and the price action shown below adds a new dimension.</p> <p>Let’s take a look at a candlestick chart. Candlestick charts show the open, close, and price range during a particular period. The region between the open and close prices is shaded. Green means that the price rose during the period and red indicates it fell.</p> <p>In this chart, each candlestick corresponds to one hour. The numbers at the bottom are dates. The chart shows from July 17 to July 25, 2014. As with all charts in this article, times and dates are Arizona USA time (PDT).</p> <p>Silver Hourly Candlestick Chart<br /><img src="http://www.zerohedge.com/sites/default/files/images/user121073/imageroot/2014/07/letter%20jul%2027%20silver%20candles.png" alt="Silver Hourly Candlestick Chart" title="Silver Hourly Candlestick Chart" width="755" height="335" />&nbsp;</p> <p>Notice the “icicles” (chartists often call them hammers or hanging men) dripping all over the place? They occur at different times of the day, including normal market hours in New York, Europe, and Asia, and they aren’t mere artifacts of market open or close, or illiquidity. I have not noticed them with such frequency before in silver. What are they?</p> <p>Each one is a brief but dramatic price drop. If both the drop and the recovery occur within the period of the candle, then the drop will not appear shaded.</p> <p>If you zoom in to one of them, using one-minute candles, they still look the same.</p> <p>Silver One-Minute Candlestick Chart<br /><img src="http://www.zerohedge.com/sites/default/files/images/user121073/imageroot/2014/07/letter%20jul%2027%20silver%20minute%20candles.png" alt="Silver One-Minute Candlestick Chart" title="Silver One-Minute Candlestick Chart" />&nbsp;</p> <p>This one had a 1.3% price drop. The biggest this week was over 1.6%.</p> <p>Let’s zoom in further. In this next chart, each tick mark is a price quote. There can be multiple prices in one second, or several seconds may elapse between.</p> <p>Silver Price Tick Chart<br /><img src="http://www.zerohedge.com/sites/default/files/images/user121073/imageroot/2014/07/letter%20jul%2027%20silver%20ticks.png" alt="Silver Price Tick Chart" title="Silver Price Tick Chart" />&nbsp;</p> <p>The whole cascade down occurs from 20:34:09 to 20:34:19, or 10 seconds. Note that there are no quotes after that until 20:34:22, or 3 seconds later, when the price is back to its prior level.</p> <p><em>Unfortunately, I don’t have bid and ask data for this period. If you have this data, please email me or contact me with the form on the Monetary Metals site.</em></p> <p>It looks like a few orders to sell at the market—i.e. on the bid—punched through the thin bid stack and found what existed below. Air. Sellers stopped entering orders for a while. Finally, the first buyer entered a buy at the market order—i.e. at the ask—and the price jumped back up to its prior level.</p> <p>Let’s take a brief look at how the bid and ask work. In a live market, there is no such thing as a monolithic price. There are always two prices. If you want to sell now, you get paid the bid price. If you want to buy, you pay the ask price.</p> <p>The bid price is not exactly synonymous with “buyers”. The typical buyer wants the goods now, and pays the ask price. However, a particular kind of buyer puts in a bid, that is a price to buy, which is below the current ask price. This buyer is equally content getting filled, or going home with his cash instead of the goods.</p> <p>He is typically an arbitrager. He is profiting from a spread between two prices. He buys in one market and sells in another. In the Monetary Metals <a href="http://monetary-metals.com/basisletter/" target="_blank">Supply and Demand Report</a>, we frequently discuss the warehouseman. The warehouseman buys physical metal and sells a futures contract. He is not speculating on a rising metal price, but earning the spread—called the <em>basis</em>—between spot and futures prices. There are other arbitrages, such as buying in London and selling in Asia.</p> <p>The key point is that the arbitrager is straddling a small spread. He is sensitive to price. If he can buy for X, then it’s worth his while. But at X+1, it’s no longer profitable (or profitable enough).</p> <p>We should keep this context in mind as we consider these mini-crashes. It looks like the bid disappeared. It seems premature to generalize, and say that the silver bid is disappearing. But it’s more than can be explained by glitches or coincidences. The question is what has happened to the silver arbitragers?</p> <p>It could be that their source of funding has dried up. If you can’t borrow money to finance the trade, then you can’t buy silver to store it while you wait to deliver it. This explanation is not so convincing, as I don’t think that credit market is so tight right now.</p> <p>Perhaps it’s not tight credit in general, but credit is withdrawing from commodity arbitrage trades. This is possible, as there have been several big banks closing their commodity finance operations. Recent uncertainty with the Silver Fix, the withdrawal of Deutsche Bank, and a fresh wave of manipulation lawsuits may all have helped pushed big participants out of the market.</p> <p>Another possible explanation is that arbitragers are less willing to use credit, or use balance sheet capacity, for silver trades. Silver may simply look less attractive than other opportunities.</p> <p>One thing is for sure. There is currently an attractive opportunity to carry silver. If you buy silver and sell a December future, you can earn over 0.8% annualized. This is a graph of the December silver basis.</p> <p>December Silver Basis<br /><img src="http://www.zerohedge.com/sites/default/files/images/user121073/imageroot/2014/07/letter%20jul%2027%20silver%20dec%20basis.png" alt="December Silver Basis" title="December Silver Basis" />&nbsp;</p> <p>Silver is normally a liquid market, but these icicles are showing us a picture of an illiquid market. They are also suggesting that there are no good opportunities for buying silver metal.</p> <p>That’s what the arbitragers are doing: buying metal to exploit opportunities. If they are not bidding, it may be because they don’t have good opportunities. If so, then all that’s left is speculating on its price.</p> <p>The bid price of silver for the December silver contract is now about 7 cents above the ask price of spot. Speculators use leverage. That’s the whole point of using futures compared to any other instrument or the metal itself. Leveraged speculators are pushing the price up, and the arbitragers are not able to keep up. The net result is the gap between physical and paper has been widening for a long time—with paper going up relative to physical. This spread hit a multiyear record on July 11.</p> <p>What happens when faith in the “silver to da moon?” story dies out? Sooner or later, speculators will give up on waiting for $200 or even $50. A few orders to sell at the market could push the bid down to a whole different level. There is one risk factor to precipitate this, lurking right now.</p> <p>Here is a graph of silver volatility. It has been declining for a long time. A spike in volatility will cause increased margin requirements for speculating on futures, and forced selling as a consequence.</p> <p>Silver Volatility<br /><img src="http://www.zerohedge.com/sites/default/files/images/user121073/imageroot/2014/07/letter%20jul%2027%20silver%20volatility.png" alt="Silver Volatility" title="Silver Volatility" width="605" height="336" />&nbsp;</p> <p>In general, volatility is inversely correlated with steady or rising prices. For example, everyone looks at the VIX for the stock market. That chart does not look too dissimilar to this one. It’s something to consider. If silver trades at $20.70 with low volatility, what could happen to the price when volatility quadruples?</p> <p>Whatever the cause of the silver “icicles”, demand for silver metal is not robust. The icicles look <em>crashy</em> to me.</p> <p>&nbsp;</p> <p>© 2014 Monetary Metals</p> http://www.zerohedge.com/news/2014-07-28/dripping-silver-icicles#comments Deutsche Bank Futures market Price Action recovery Volatility Mon, 28 Jul 2014 06:38:32 +0000 Monetary Metals 491869 at http://www.zerohedge.com Apocalypse Preview: Chinese River Turns Blood-Red http://www.zerohedge.com/news/2014-07-27/apocalypse-preview-chinese-river-turns-blood-red <p>Things in China are getting downright biblical. </p> <p>First it was the floating animal apocalypse: who can forget the <a href="http://www.foxnews.com/world/2013/03/22/number-dead-pigs-mysteriously-found-in-shanghai-rivers-rises-to-over-16000/">16,000 </a><a href="http://www.zerohedge.com/news/2013-03-12/chinas-hogwash-getting-worse-floating-dead-pigs-rise-3300-pig-virus-found">floating pigs</a>, followed by a <a href="http://www.bbc.co.uk/news/world-asia-china-21921145">thousand dead ducks</a>, culminating with 5 dead <a href="http://www.zerohedge.com/news/2013-03-28/dead-pigs-ducks-and-now-black-swans-chinas-animal-apocalypse-crosses-twilight-zone">black swans</a>. <strong>But nothing quite beats the dramatic impact of the inner river of Wenzhou flowing blood red.</strong></p> <p>According to <a href="http://english.cri.cn/12394/2014/07/24/3241s837537.htm">China Radio International</a>, this is precisely what happened:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>An inner city waterway in the eastern city of Wenzhou was found to have been inundated by an influx of blood-red water this morning.</p> <p>&nbsp;</p> <p><strong>Local residents say the river was running normally at 4am, but it started to redden at around 6am, and in no time turned as crimson as blood.</strong></p> <p>&nbsp;</p> <p>One villager who has lived his whole life by the river side said this has never happened before. The villager recalled that there wasn't a chemical plant along the upper stream.</p> <p>&nbsp;</p> <p>Inspectors from the Wenzhou Environmental Protection Bureau said they have not found the cause of the incident, although water samples seem to indicate the suspicious color was a result of illegal dumping in the river. </p> </blockquote> <p>And whatever the real cause, one can be certain the Chinese EPA will never disclose it. </p> <p>Then again, we already know that <a href="http://www.zerohedge.com/news/2014-04-23/60-chinas-water-too-polluted-drink">60% Of China's Water "Too Polluted To Drink</a>. Who knows, perhaps potable blood flowing through the rivers would be an improvement? <a href="https://gma.yahoo.com/river-china-mysteriously-turns-bloody-red-overnight-182207097--abc-news-topstories.html">Well, maybe not</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>&nbsp;“The really weird thing is that we have been able to catch fish because the water is normally so clear,” one local villager commented on China’s microblogging site Weibo.</p> <p>&nbsp;</p> <p>Residents in Zhejiang province said the river looked normal at 5 a.m. Beijing time on Thursday morning. Within an hour, the entire river turned crimson. Residents also said a strange smell wafted through the air. </p> </blockquote> <p>This is what the Apocalypse may or may not look like one day, but one thing is certain: on that day spoos will be halted, limit up.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/5e9c7f8098ce44c8b978d8a5c5f1cbcc.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/5e9c7f8098ce44c8b978d8a5c5f1cbcc_0.jpg" width="600" height="400" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/99c89885a7b94028bcf0c67323eb9953.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/99c89885a7b94028bcf0c67323eb9953_0.jpg" width="600" height="400" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/fa8745ae7b314aae91bf06adc8835bef.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/fa8745ae7b314aae91bf06adc8835bef_0.jpg" width="600" height="400" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/a7ccc772f1e748b0b65c2d6ff5299e2f.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/a7ccc772f1e748b0b65c2d6ff5299e2f_0.jpg" width="600" height="400" /></a></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/5b67626fe7bc419bb193d92c91a59484.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/5b67626fe7bc419bb193d92c91a59484_0.jpg" width="600" height="400" /></a></p> <p>&nbsp;</p> <p>Finally, reverse engineered "True Blood":</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/60ed80daf2f84dc4856e0abc45ba46fd.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/60ed80daf2f84dc4856e0abc45ba46fd_0.jpg" width="600" height="400" /></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="900" height="600" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/5e9c7f8098ce44c8b978d8a5c5f1cbcc.jpg?1406514963" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-27/apocalypse-preview-chinese-river-turns-blood-red#comments Black Swans China Crimson Mon, 28 Jul 2014 02:37:57 +0000 Tyler Durden 491859 at http://www.zerohedge.com The Chinese vs Japanese Navy Head To Head: An Infographic http://www.zerohedge.com/news/2014-07-27/chinese-vs-japanese-navy-head-head-infographic <p>Tomorrow is the 100th anniversary of the start of World War I. Perhaps just as importantly, this weekend is also the 120th anniversary of the first Sino-Japanese war: a war between China's Qing dynasty and Meiji Japan. A war which China lost, and which has been a chip on China's shoulder ever since. </p> <p>As Hong Kong's <a href="http://www.scmp.com/news/china/article/1560065/chinas-navy-no-longer-so-inferior-japans-experts-say">SCMP reports </a>"China's loss of the first Sino-Japanese war has been attributed to a disorganised navy. Although the northern fleet equalled, some say exceeded, the Meiji navy in terms of firepower, it was annihilated because it lacked coordination among its military units." </p> <p>In the context of constant recent flare ups over various contested East China Sea islands, one can see why the anniversary of the war coupled with a sudden spike in nationalistic ambitions of Japan's PM Abe, would be a sensitive issue to China. However, as we can see below, China no longer has an inferiority complex when it comes to its navy compared to that of Japan.</p> <p>While Japan's navy may still have a qualitative advantage over China's, the People's Liberation Army is catching up, analysts say. In sheer manpower, China has the upper hand, with Beijing putting the PLA Navy's strength at 235,000, or more than five times the number in the Japan Maritime Self-Defence Force.</p> <p>According <a href="http://www.scmp.com/news/china/article/1560065/chinas-navy-no-longer-so-inferior-japans-experts-say">to SCMP</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>"PLA units are still exploring new ways to operate jointly, which could lead to merging their different weapon systems together," Wong said. Toshi Yoshihara, an associate professor at the US Naval War College, said that although the Japanese navy was still superior in technological sophistication and experience, China was catching up quickly.</p> <p>&nbsp;</p> <p><strong>"China is out-building Japan virtually across the board," </strong>Yoshihara said. He said the PLA Navy was deploying modern destroyers, frigates, fast-attack craft and submarines. "Japan is already having trouble keeping pace with this level of Chinese output."</p> </blockquote> <p>Sounds kinda, sorta like the US, Russia nuclear arms race. However, unlike the use of nuclear ICBMs, launching a naval war has far less dire consequences if it goes wrong, and thus a lower hurdle to enactment. One which both China and Japan seem eager to jump over based on their behavior in recent months. The key variable remains US involvement.</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>As so many Chinese warships had entered production, adding mass and balance on the fleet, Japan could no longer rely on its qualitative advantage, Yoshihara said. <strong>But a deciding factor would be the support of the US Navy. "The US-Japanese alliance is essential to weighing the overall naval balance," </strong>he said.</p> <p>&nbsp;</p> <p>China might even have the edge now, according to Dr Lyle Goldstein, an associate professor at the China Maritime Studies Institute under the US Naval War College.</p> <p>&nbsp;</p> <p><strong>"In my opinion, the forces are quite evenly matched now, but China may even have pulled ahead in recent years,</strong>" Goldstein said. He added that this was not the official assessment of the US Navy.</p> </blockquote> <p>Which is the worst possible situation as neither side has a massive advantage and thus serves a powerful deterrent. </p> <p>So where are the two navies currently:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Japan last year formally unveiled the biggest warship in its fleet since the second world war - the Izumo-class helicopter destroyer.</p> <p>&nbsp;</p> <p>The 248-metre ship, due to enter service next year, is designed to carry 14 helicopters, and complements Japan's two serving Hyuga-class helicopter destroyers, which are 197 metres long and can accommodate 11 helicopters.</p> <p>&nbsp;</p> <p>Shanghai-based military expert Ni Lexiong said the helicopter destroyers could function as aircraft carriers for US planes, while China had only one aircraft carrier, the Liaoning, although observers say more are in the works.</p> <p>&nbsp;</p> <p>China required nearly 10 years to convert the 67,500-ton Soviet-built Varyag into the Liaoning. It was formally delivered to the PLA in September 2012, and so far has been used for training.</p> <p>&nbsp;</p> <p>"But Japan's helicopter carriers have been battle-ready for more than three decades with the help of the United States," Ni said. "Every one of its carriers is able to operate independently in combat."</p> <p>&nbsp;</p> <p>Japan also enjoys an advantage in submarines, according to Wong. The PLA's existing submarines, many of which are old models, have been criticised by Western forces as "too noisy and too easily detected", while Japan has some of the most technologically advanced diesel-electric submarines in the world</p> </blockquote> <p>And visually, just in case one of these days the infamous Gulf of Tonkin incident takes place again, only this time it happens to involve a Chinese and Japanese warship.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/china%20japan%20navies.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/china%20japan%20navies_0.jpg" width="600" height="496" /></a></p> <p>&nbsp;</p> <p>So what happens next? For the answer we go <a href="http://www.scmp.com/news/china/article/1560066/beijing-scores-points-it-marks-120th-anniversary-defeat-japan">to SCMP again</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>On Friday, the North Sea Fleet held a commemoration off Weihai in Shandong , where the Beiyang Fleet was based. The Beiyang was the pride of the Chinese navy at the time, but suffered heavy losses against Japanese forces.</p> <p>&nbsp;</p> <p>When the war ended on April 17, 1895, little of the fleet remained and Taiwan was ceded to Japan. <strong>&nbsp;</strong></p> <p>&nbsp;</p> <p><strong>Xinhua quoted a naval political commissar as saying the ceremony should stir soldiers' patriotism by reminding them of past humiliations. </strong>Chinese media have also pointed to remarks President Xi Jinping previously made about the anniversary. Xi said in February China should remember the painful lesson of losing Taiwan to Japan, and then in June noted the special meaning the anniversary carried in the traditional Chinese calendar.</p> <p>&nbsp;</p> <p>Under its 60-year cycle, 1894 was a jiawu (wood horse) year, as is 2014. <span style="text-decoration: underline;"><strong>The occurrence has led some hawks to argue that the humiliation of a weak China then should be avenged by a strong China now.</strong></span></p> <p>&nbsp;</p> <p>Beijing has increasingly been referring to a string of historical events to highlight old grievances. The central government held an unusually high-profile commemoration on July 7 marking the 77th anniversary of the start of China's second war with Japan.</p> <p>&nbsp;</p> <p>Giving prominence to such anniversaries is part of a broader domestic agenda, analysts say.</p> <p>&nbsp;</p> <p><strong>"An important aspect and end goal of achieving the Chinese dream is to rid China of past humiliations inflicted by foreign powers, and Japan perhaps did more than its share," </strong>said Yuan Jingdong, a professor at the University of Sydney Centre for International Security Studies.</p> </blockquote> <p>That sounds like warmongering, and incidentally, a war may just be the thing Princeton's Keynesianomics (not to be confused with Clownianomics) department ordered to send the Nikkei225 to fresh cycle highs now that it appears to have stalled and is still down YTD. Because how else will the wealth effect trickle down to the 0.01%, which is really all the New Normal has been about.</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="1024" height="847" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/china%20japan%20navies.jpg?1406508755" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-27/chinese-vs-japanese-navy-head-head-infographic#comments China Japan New Normal Yuan Mon, 28 Jul 2014 00:52:36 +0000 Tyler Durden 491858 at http://www.zerohedge.com John Hussman: "Make No Mistake - This Is An Equity Bubble, And A Highly Advanced One" http://www.zerohedge.com/news/2014-07-27/john-hussman-make-no-mistake-equity-bubble-and-highly-advanced-one <p>In case someone needs a beyond idiotic op-ed on the state of the market, we urge them to read the following stunner from USA Today (which is simply a <a href="http://www.usatoday.com/story/money/markets/2014/07/27/is-the-fed-fueling-a-giant-stock-market-bubble/13172261/">syndicated piece </a>from the Motley Fool, complete with Batman style graphics). Beyond idiotic because in addition to quoting the perpetually amusing Stony Brook assistant professor, Noah Smith, who has never held a job outside of academia and is thus a credible source on all things markety (to wit: "The value of a financial asset is the discounted present value of its future payoffs, and when the discount rate -- of which the Fed interest rate is a component -- goes down, the true fundamental value of risky assets goes up mechanically and automatically. That's rational price appreciation, not a bubble." And by that logic under NIRP the value of an asset is... what? +??) it says this: "Stock prices correct all the time. But what's important to remember is that a correction isn't a bubble." Yes, a correction is not a bubble: it is the result of one, and usually transforms into something far worse once the bubble pops. </p> <p>Entertaining propaganda aside, for some actually astute observations on the state of the market bubble we go to John Hussman, someone whose opinion on such issues does matter.</p> <p><em>Selected excerpts from: <span style="text-decoration: underline;"><a href="http://www.hussmanfunds.com/wmc/wmc140728.htm"><strong>Yes, This Is An Equity Bubble </strong></a></span></em></p> <p class="largeText"><strong>Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme</strong>. The main difference between the current episode and that of 2000 is that the 2000 bubble was strikingly obvious in technology, <strong>whereas the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000</strong>. The median price/revenue ratio of S&amp;P 500 components is already far above the 2000 level, and the average across S&amp;P 500 components is nearly the same as in 2000. The extent of this bubble is also partially obscured by record high profit margins that make P/E ratios on single-year measures seem less extreme (though the forward operating P/E of the S&amp;P 500 is already beyond its 2007 peak even without accounting for margins).</p> <p>Recall also that the ratio of nonfinancial market capitalization to GDP is presently about 1.35, versus a pre-bubble historical norm of about 0.55 and an extreme at the 2000 peak of 1.54. This measure is better correlated with actual subsequent market returns than nearly any alternative, as Warren Buffett also observed in a 2001 Fortune interview. So if one wishes to use the 2000 bubble peak as an objective, we suggest that it would take another 15% market advance to match that highest valuation extreme in history – a point that was predictably followed by a decade of negative returns for the S&amp;P 500, averaging a nominal total return, including dividends, of just 3.7% annually in the more than 14 years since that peak, and even then only because valuations have again approached those previous bubble extremes. The blue line on the chart below shows market cap / GDP on an inverted left (log) scale, the red line shows the actual subsequent 10-year annual nominal total return of the S&amp;P 500. </p> <p class="largeText"><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/wmc140728a.png"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/wmc140728a_0.png" width="600" height="549" /></a></p> <p class="largeText"><strong>All of that said, the simple fact is that the<br /> primary driver of the market here is not valuation, or even<br /> fundamentals, but perception. The perception is that somehow the<br /> Federal Reserve has the power to keep the stock market in suspended and<br /> even diagonally advancing animation, and that zero interest rates<br /> offer “no choice” but to hold equities</strong>. Be careful here. What’s<br /> actually true is that the Fed has now created $4 trillion of idle<br /> currency and bank reserves that must be held by someone, and because<br /> investors <em>perceive</em> risky assets as having no risk, they have<br /> been willing to hold them in search of any near-term return greater<br /> than zero. What is actually true is that even an additional <em>year</em><br /> of zero interest rates beyond present expectations would only be worth<br /> a roughly 4% bump to market valuations. Given the current perceptions<br /> of investors, the Federal Reserve can certainly postpone the collapse<br /> of this bubble, <strong>but <em>only</em> by making the eventual outcome that much worse. </strong></p> <p class="largeText">Remember how these things unwound after 1929 (even<br /> before the add-on policy mistakes that created the Depression), 1972,<br /> 1987, 2000 and 2007 – all market peaks that uniquely shared the same<br /> extreme overvalued, overbought, overbullish syndromes that have been<br /> sustained even longer in the present half-cycle. <span style="text-decoration: underline;"><strong>These speculative<br /> episodes don’t unwind slowly once risk perceptions change</strong></span>. The shift in<br /> risk perceptions is often accompanied by deteriorating market<br /> internals and widening credit spreads slightly before the major indices<br /> are in full retreat, but not always. Sometimes the shift comes in<br /> response to an unexpected shock, and other times for no apparent reason<br /> at all. Ultimately though, investors treat risky assets as risky<br /> assets. At that point, investors become increasingly eager to hold<br /> truly risk-free securities regardless of their yield. That’s when the<br /> music stops. At that point, there is suddenly no bidder left for risky<br /> and overvalued securities anywhere near prevailing levels. </p> <p class="largeText">History suggests that when that moment comes, the<br /> first losses come quickly. Many trend-followers who promised themselves<br /> to sell on the “break” suddenly can’t imagine selling the market<br /> 10-20% below its high, especially after a long bull market where every<br /> dip was a buying opportunity. This is why many investors who think they<br /> can get out actually don’t get out. Still, some do sell, and when<br /> those trend-following sell signals occur at widely-followed threshholds<br /> (as they did in 1987), the follow-through can be swift. </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="665" height="608" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/wmc140728a.png?1406498770" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-27/john-hussman-make-no-mistake-equity-bubble-and-highly-advanced-one#comments Federal Reserve John Hussman SWIFT Warren Buffett Sun, 27 Jul 2014 23:20:46 +0000 Tyler Durden 491845 at http://www.zerohedge.com THe DoNeTSK OPeN... http://www.zerohedge.com/news/2014-07-27/donetsk-open <p style="text-align: center;"><iframe src="https://www.flickr.com/photos/expd/14747808444/player/" width="576" height="1024" frameborder="0"></iframe></p> http://www.zerohedge.com/news/2014-07-27/donetsk-open#comments Sun, 27 Jul 2014 22:33:32 +0000 williambanzai7 491847 at http://www.zerohedge.com Multiple Reports: Ukrainian Fighter Jets Were with Malaysian Flight 17 When It Was Shot Down http://www.zerohedge.com/news/2014-07-27/multiple-reports-ukrainian-fighter-jets-were-malaysian-flight-17-when-it-was-shot-do <p>Preface: Use your browser&#39;s zoom function to make the videos bigger or smaller for easy viewing. If you can&#39;t see them, feel free to <a href="http://www.washingtonsblog.com/2014/07/multiple-reports-ukrainian-fighter-jets-hid-behind-passenger-plane-pulled-away-dropped-bombs-hid-behind-plane.html">watch them here</a>.</p> <p>Senior U.S. officials now admit that the Malaysian airlines passenger plane was likely <a href="http://www.washingtonsblog.com/2014/07/senior-u-s-intelligence-official-likely-explanation-plane-shot-mistake.html"><em>accidentally</em> shot down</a>.</p> <p>The Russian government <a href="http://www.zerohedge.com/news/2014-07-21/russia-says-has-photos-ukraine-deploying-buk-missiles-east-rader-proof-warplanes-mh1">claims</a> Ukrainian fighter jets were flying very close to Malaysian Flight 17 when it was shot down.</p> <p>Eyewitness interviews by BBC Russia lend weight to these allegations:</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Eyewitness #1: &hellip; And there was another aircraft, a military one, beside it. Everybody saw it.</p> <p>&nbsp;</p> <p>Eyewitness #2: Yes, yes. It was flying under it, because it could be seen. It was proceeding underneath, below the civilian one.</p> <p>&nbsp;</p> <p>Eyewitness #3: There were sounds of an explosion. But they were in the sky. They came from the sky. Then this plane made a sharp turn-around like this. It changed its trajectory and headed in that direction [indicating the direction with her hands].</p> <p>&nbsp;</p> </blockquote> <p><iframe allowfullscreen="" frameborder="0" height="444" src="//www.youtube.com/embed/zUvK5m2vxro?start=0&amp;end=56" width="790"></iframe></p> <!-- br--><!-- br--> <p>A local pro-Russian commander says that Ukrainian fighter jets routinely hid behind civilian airplanes, and then dropped bombs on the Russian separatists (also via BBC):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>They use these civilian aircraft to hide behind them. It is only now that they stopped flying over us &ndash; but, usually, civilian aircraft would always fly above us. And they hide [behind them]. [The experience in] Slavyansk had demonstrated that they would fly out from behind a civilian aircraft, bomb away, and then hide, once again, behind the civilian aircraft and fly away.</p> </blockquote> <p><iframe allowfullscreen="" frameborder="0" height="444" src="//www.youtube.com/embed/zUvK5m2vxro?start=190&amp;end=210" width="790"></iframe></p> <!-- br--><!-- br--> <p>He made the statement after Malaysian Airlines Flight 17 was shot down.</p> <p>However, a Youtube video made a month <em>before</em> Malaysia Airlines Flight 17 was shot down also <a href="https://www.youtube.com/watch?v=aKKoKmUtQXE&amp;html5=1&amp;hd=1#t=67&amp;&amp;cc_load_policy=1" rel="nofollow">alleges</a> that Ukranian fighter jets were hiding behind passenger planes, pulling away temporarily, dropping bombs on Ukrainian separatists, and then hiding again behind the plane (minor corrections of spelling and punctuation):</p> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>Terrible things are happening. For example, an incident that happened recently: <strong>passenger plane was flying by, and Ukrainian attack aircraft hid behind it. Then he lowered his altitude a bit and dropped bombs on residential sector of Semenovka town. Then he regained the altitude and hid behind the passenger plane again.</strong> Then he left.</p></blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>They wanted to provoke the militia to shoot at the passenger plane. There would be a global catastrophe. Civilians would have died.</strong></p></blockquote> <blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>Then they would say that terrorists here did it.</strong> There are no terrorists here. There are regular people here that came out in defense of their own city.</p></blockquote> <p><iframe frameborder="0" height="444" src="//www.youtube.com/embed/aKKoKmUtQXE?start=67&amp;end=113" width="790"></iframe></p> <!-- br--><!-- br--> <p>Further investigation is needed ...</p> <p>Bonus:</p> <h2 class="entry-title"><a href="http://www.washingtonsblog.com/2014/07/whats-missing-u-s-evidence-russia-shooting-artillery-ukraine-dog-didnt-bark.html" rel="bookmark" title="Permalink to Admitted Liar Claims Russia Is Shooting Artillery Into Ukraine">Admitted Liar Claims Russia Is Shooting Artillery Into Ukraine</a></h2> http://www.zerohedge.com/news/2014-07-27/multiple-reports-ukrainian-fighter-jets-were-malaysian-flight-17-when-it-was-shot-do#comments Ukraine Sun, 27 Jul 2014 22:13:48 +0000 George Washington 491846 at http://www.zerohedge.com The Italian Government Owes Over $100 Billion To Private Suppliers http://www.zerohedge.com/news/2014-07-27/italian-government-owes-over-100-billion-private-suppliers <p>Much has been said in the popular press about Italy's surprising economic recovery (which based on recent data is starting to lose steam), as well as its much improved fiscal picture (even if the country's public debt hits record highs quarter after quarter and the bad debt within its banking system just rose by <a href="http://www.ansa.it/english/news/2014/07/22/bad-loans-up-24-in-may-italian-banking-association-says_ab64fd5a-43bd-42c2-be79-e00e4d6e25bd.html">24% from the prior year</a>, to €169 billion the highest since 1998). Little has been said about just how Italy managed to pull this economic miracle off. The answer: robbing private suppliers to pay Paul, or rather, the public sector. </p> <p><a href="http://mobile.reuters.com/article/idUSKBN0FB0EB20140706?irpc=932">According to Reuters</a>, <strong>the Italian state owes some 75 billion euros ($102 billion)to private suppliers, as reported by the Bank of Italy. The unpaid bills have starved companies of cash and triggered layoffs, factory closures and bankruptcies.</strong></p> <p>Italy will settle the debt arrears it owes to private sector suppliers by the end of this year, Economy Minister Pier Carlo Padoan said in a newspaper interview on Sunday, pushing back previous commitments. "<strong>We will ensure that the arrears are paid off by the end of the year</strong>," Padoan told Corriere della Sera daily.</p> <p>That's funny, because back in March, PM Renzi promised all debt would be paid back by, well, right now. One week later, he said September. We look forward to September to learn that not only will the debt not be paid back by the end of the year, but the total amount of money due to the private sector from the government has in fact, growtn.</p> <p>Remember when they said Italy is undergoing an unprecedented economic recovery? They lied:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>The government is finding it hard to tackle the problem because of public finance constraints, inefficiency, uncertainty over exactly how much is owed and a reluctance on the part of some public bodies to acknowledge their debts.</p> <p>&nbsp;</p> <p>In June, the European Commission opened a formal infringement procedure against Italy because of its failure to comply with the Late Payments Directive, which orders governments to reduce payment delays to no more than 60 days.</p> </blockquote> <p>Well, yes: if one starves the private sector to pretend that the public one is doing ok, that works. For a few months. Then everyone remembers that aside from the Europe's epic ECB-sponsored Ponzi scheme where bond yields no longer reflect anything at all, a properly functioning economy starts always and only from the private sector. Sadly, in this case it is the cancer that is Italy's corrupt government that will certainly be the reason for what is already shaping up as a triple dip recession. We give it 6-9 months.</p> http://www.zerohedge.com/news/2014-07-27/italian-government-owes-over-100-billion-private-suppliers#comments Bond Italy Newspaper Recession recovery Reuters Sun, 27 Jul 2014 22:12:13 +0000 Tyler Durden 491843 at http://www.zerohedge.com "London Fix" Gold Rigging By Bullion Bank Exposed In Class Action Lawsuit: The Complete Charts http://www.zerohedge.com/news/2014-07-26/london-fix-gold-rigging-bullion-bank-exposed-class-action-lawsuit-complete-charts <p>Some interesting news crossed the tape late afternoon yesterday <a href="http://www.reuters.com/article/2014/07/25/us-silver-fix-lawsuit-idUSKBN0FU29920140725">when it was reported </a>that the silver bullion banks (Deutsche Bank, Bank of Nova Scotia and HSBC) were sued for manipulating the silver fix in a class-action lawsuit. However, a closer look reveals that the plaintff in the lawsuit, <span id="articleText">J. Scott Nicholson, has a recurring bone to pick with the banks as this is certainly not his first lawsuit alleging precious metals rigging, and as such we are convinced it will be tossed out shortly, along with every other lawsuit alleging a manipulated precious metals market since discovery could lead to some very unpleasant revelations about the primary source of gold and silver rigging: the central banks themselves, alongside the BIS.</span></p> <p><span>Instead, we uncovered something that was missed several few weeks earlier: a far more informative and detailed class action lawsuit filed by Edward Derksen on July 9, 2014 against the London gold fix member banks: Bank of Nova Scotia, Barclays, Deutsche, HSBC and SocGen (profiled here in <a href="http://www.zerohedge.com/news/2014-05-14/rothschild-koch-industries-meet-people-who-fix-price-gold">From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold</a>). </span></p> <p><span>Recall from "<a href="http://www.zerohedge.com/news/2013-11-25/how-gold-price-manipulated-during-london-fix">How Gold Price Is Manipulated During The "London Fix</a>"" that this was one of the first conspiracy theories about gold manipulation to end with a bank, and following the official revelation (as opposed to merely on the pages of fringe blogs) that over 100 years the price of gold was consistently manipulated during the London fix (and during every other period as well but that is a revelation for a different time) the very process of the Gold and Silver Fix itself was finally ended (only to be replaced with a comparable process <a href="http://www.zerohedge.com/news/2014-07-07/stunner-todays-round-table-debate-fix-london-gold-fix">run by the very same people who manipulated gold and silver </a>from Rothschild's London office on St. Swithin’s Lane for decades.</span></p> <p><span>The short and sweet summary of the lawsuit: </span></p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p><strong>"Plaintiff alleges that from approximately January 1, 2004 to the present, Defendants manipulate the prices of gold and gold derivatives contracts on their own and combined, conspired, and agreed with one another and unnamed co-conspirators to manipulate the prices of gold and gold derivatives contracts. This agreement was intended to permit each Defendant individually and all Defendants collectively to reap profits from their foreknowledge of price movements in the gold market."</strong></p> </blockquote> <p><span>Nothing new there, but while the allegations in the lawsuit are well-known to frequent (and all other) readers of Zero Hedge, we recommend reading the full filing as it explains in clear English just what the fixing process worked.</span></p> <p><span>Perhaps what is more interesting are the abnormalities in the price of gold as highlighted by Derksen, which clearly show the critical role the daily fix has in the manipulation of the price of gold, both in a downward and upward direction: whichever suits the London Fix member banks.</span></p> <p><em>Here are some of the highlights:</em></p> <p>The following chart of average intraday gold price shows the same strong relationship between the physical gold and the COMEX gold futures markets.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%201.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%201_0.jpg" width="600" height="356" /></a></p> <p>Anomalous price movements during the fixing window that are highly suggestive of manipulation - like those on June 28, 2012 - can be witnessed on numerous days, where prices near the 3 p.m. London Fix spike, either upward or downward, and then retreat in the opposite direction as the price is “fixed”. Five trading days are analyzed below as illustrative of the overall trend during the Class Period. On February 1, 2013, there was a dramatic drop in price from nearly $1678 to below $1665, contemporaneous with the beginning of the London Fix. The price began recovering during the London Fix and continued&nbsp; afterwards. This movement around the fixing window is highly anomalous and suggestive of manipulation because it tends to show that the market ultimately discounted to some degree the pricing information that occurred during the London Fix.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%202.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%202_0.jpg" width="600" height="340" /></a></p> <p>On January 4, 2012, there was anomalous price movement before the beginning of the PM Fix call, this time in an upward direction. The gold price rose from below $1599 to more than $1614 within the half hour before the beginning of the call, only to surrender most of these gains within the half hour following the call. This movement around the fixing window (steep rise just before the call, with a clear reversal that begins at the very beginning of the call) is highly anomalous and suggestive of manipulation because it tends to show that the market ultimately discounted to some degree the pricing information that occurred during the London Fix.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%203.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%203_0.jpg" width="600" height="444" /></a></p> <p>On May 21, 2013, the gold price declined significantly in the 25 minutes prior to the call only to recovery briskly once the call ended. This movement around the fixing window is highly anomalous and suggestive of manipulation because it tends to show that the market ultimately discounted to some degree the pricing information that occurred during the Fix</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%204.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%204_0.jpg" width="600" height="333" /></a></p> <p><strong>The punchline:</strong></p> <p>If the five previous examples of anomalous volatility around the London Fix mere statistical outliers and not evidence of manipulation, then it would be expected that this volatility would disappear when looking at an average of all the trading days during the class period. To the contrary, the price manipulation actually becomes clearer when viewed over the past fifteen years. <strong>The chart below shows the change in physical gold prices if each trading day for the period from 1998 through 2013 were averaged together. The dramatic changes in price followed by swift reversals at the time of the AM and PM London Fix in this chart demonstrate that the phenomenon is not coincidental statistical noise occurring on only a few cherry-picked dates, but rather is a clear trend that cannot be explained by chance</strong>. </p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%205.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%205_0.jpg" width="600" height="294" /></a></p> <p>And the logical continuation:</p> <p>The table below illustrates that price moves of statistically anomalous size during the London Fix occurred with great frequency. If these London Fix price moves were the result of natural market forces, it would be expected that those price moves would be either maintained or reversed with the same statistical regularity as any other price move observed during the trading day. If it were manipulation that caused the London Fix price moves, these moves would<br />be reversed with greater frequency than expected because the manipulators must reverse their trade in order to book a profit and because legitimate market factors would ultimately cause some degree of discounting of the pricing information from the London Fix. Sure enough, statistically anomalous price reversals after the London Fix, of the price changes during the London Fix, occurred with enough regularity to indicate manipulative activity.</p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%206.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%206_0.jpg" width="600" height="254" /></a></p> <p>&nbsp;</p> <p>The chart below demonstrates from 1998-2013 the rate of “forecast error” – a square of the difference between predicted market moves based on econometrics and the market’s actual moves. These forecast errors hit a massive peak during the brief period that is encompassed by the 3 p.m. London Fix. Appendix B contains charts of forecast errors broken down by year. <strong>This is contrary to what should occur in a market free of manipulation. </strong></p> <p><a href="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%207.jpg"><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%207_0.jpg" width="600" height="307" /></a></p> <p>Ok, gold was manipulated. But it must have been manipulated up as well as down, so in effect the two would offset each other right? </p> <p>Wrong!</p> <p>Although the London Fix was associated with both manipulative and abnormal increases and decreases in gold prices, <strong>the London Fix appears, in the aggregate, to have had a net negative effect overall on the price of gold throughout the Class Period</strong>. This can be demonstrated by examining the price of gold during the part of the trading day closest to the London Fixes. Gold is traded 24 hours a day. The trading day for gold can be broken up into three equal eight-hour periods, the “Fixing Period” from 8:00-16:00 London Time in which both the AM and PM London Fixes occur, the “Pre-Fix Period” from 0:00-8:00 and the “Post Fix Period” from 16:00-24:00 London time. If the volatility surrounding the London Fix was purely random and not the result of manipulation, there would be no significant difference over time between the period containing the London Fixes (8:00-16:00) and the Pre-Fix and Post-Fix periods.</p> <p>However, as the chart below demonstrates, gold prices during the Fixing Period (8:00-16:00) moved consistently lower over time when compared to price activity during Pre-Fix and Post-Fix portions of the trading day. This trading pattern is consistent with manipulation and cannot be explained by random variation.</p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Gold%20fix%208_0.jpg" width="600" height="367" /></p> <p>Why do it?</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>As shown above, the manipulation detailed herein both artificially inflated and artificially suppressed the price of gold, injuring both long and short holders of gold futures and options contracts. To the extent the aggregate trend has been to suppress prices,this has resulted in (as of the last available “This Month in Gold Futures Market” Report from the CFTC44) an extraordinarily positive result for Commercial Traders in gold futures contracts (who held between 352,500 and 381,200 short futures contracts, as opposed to merely 140,900 to 145,100 long futures contracts in the same period. This heavy weight toward shorting gold futures contracts means a net drop in gold prices would be extremely lucrative for commercial traders. “Commercial” Traders are entities, such as Defendants, that use futures or options for hedging purposes, as opposed to “non-commercial” entities that do not own the underlying asset or its financial equivalent and hold only derivatives contracts.</p> </blockquote> <p>Most importantly, it is no longer just some tinfoil goldbug making manipulation allegations: the very head of Germany's BaFIN regulator agrees:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Plaintiff did not discover, and could not have reasonably discovered through the exercise of reasonable diligence, the wrongdoing discussed in this complaint, until, at the very earliest, January 2014, when Defendant DB withdrew from the fixing after interviews with Bafin, Germany’s financial regulator.</p> <p>&nbsp;</p> <p>Before the DB departure was announced and Bafin’s president revealed the seriousness of the allegations, Plaintiff could not have stated facts plausibly stating the conspiracy to manipulate the price of gold and gold derivatives.</p> <p>&nbsp;</p> <p>The activity Defendants undertook was of a self-concealing nature. The London Fix teleconference is not publicly-accessible. The information Defendants received from their clients about the demand for purchases and sales of gold before and during the teleconference were not publicly-accessible. Without these pieces of information, Plaintiff would not be able to discern market dislocation or the existence of spoof trades.</p> </blockquote> <p>In summary, the lawsuit's conclusions are as follows:</p> <p>The price activity surrounding the London Fixes is indicative of manipulation and not natural market forces for the following reasons:</p> <p style="padding-left: 30px;">a. Around the period of the London Fix calls, gold prices experience anomalous volatility in price.</p> <p style="padding-left: 30px;">b. This volatility is present not on isolated trading days but manifests even more clearly when averaged across years of trade data.</p> <p style="padding-left: 30px;">c. The anomalous price changes during the call were not maintained afterwards, but in fact were in some part reversed with an unusual frequency and to an<br />anomalous degree. </p> <p style="padding-left: 30px;">d. The anomalous price moves occurred during peaks in trading volume, when the market should be at its most efficient.</p> <p style="padding-left: 30px;">e. The pricing anomalies strengthened in intensity over time, demonstrating that they are not an inevitable result of an innocent fixing process.</p> <p style="padding-left: 30px;">f. There were upward and downward manipulations over a period of years, price activity surrounding the London Fix periods had a net negative effect on gold<br />prices in comparison to other periods. This tends to indicate that artificial forces were acting on the market during those periods.</p> <p style="padding-left: 30px;">g. Trading activity during immediately after the beginning of the London Fix was highly predictive of activity during the rest of the call, and of the final London Fix price, suggesting that manipulative traders were moving the prices of gold based on information gleaned for the London Fix calls.</p> <p style="padding-left: 30px;">h. The price activity surrounding the London Fixes is not typical of the price activity one would expect to attend a regularly scheduled announcement of<br />news material to the gold market. </p> <p style="padding-left: 30px;">i. The anomalous price activity in the gold market is not mirrored by other precious metals or broader market indices, further eliminating innocent<br />explanations and supporting a conclusion that manipulation occurred. </p> <p><em>There is much more in the full lawsuit which can be read in its entirety below. The complete chart data is showin in Appendix A and B.</em></p> <p><iframe src="//www.scribd.com/embeds/235175421/content?start_page=1&amp;view_mode=scroll&amp;access_key=key-CvIahHYZJHnoqmGIkrnl&amp;show_recommendations=false" width="100%" height="600" frameborder="0" scrolling="no"></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="733" height="359" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Gold%20fix%205.jpg?1406419128" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-26/london-fix-gold-rigging-bullion-bank-exposed-class-action-lawsuit-complete-charts#comments B+ Barclays Central Banks Deutsche Bank Precious Metals recovery SocGen SWIFT Volatility Sun, 27 Jul 2014 22:00:01 +0000 Tyler Durden 491809 at http://www.zerohedge.com China’s Storm: 2016 http://www.zerohedge.com/news/2014-07-27/china%E2%80%99s-storm-2016 <p><img src="https://discuss.financialjuice.com/uploads/default/2268/bcd97c83d1a5c765.jpg" style="vertical-align: middle; max-width: 100%; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif; font-size: 14px; line-height: 20px;" /></p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;">There never seems to be a day that goes by without someone predicting that China is going to go down the Yangtze and end up some creek without a paddle. There never seems to be a day that goes by without, whatever the results from the Middle Kingdom might show, someone somewhere predicting the imminent failure ,and the West’s (read: the&nbsp;<strong>USA’s</strong>) revival and rebirth from the flames of financial catastrophe. Why is it that human nature in the West makes us want the ones over there to fail and for us to succeed? Wouldn’t it be possible to succeed because they are also doing pretty well?</p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;">It’s the&nbsp;<strong>PNC Financial Services Group</strong>&nbsp;that is now talking of a ‘prefect storm’ brewing in the midst of the<strong>Chinese</strong>&nbsp;and ready to unfurl its wrath in&nbsp;<strong>2016</strong>. Even Nostradamus would have had a harder time predicting what the financiers think they can get right, wouldn’t he? So will it be the ‘perfect storm’ or just another storm in a teacup as usual. All wind and no sails. China was predicted for decades to be ready to overrun the world. But, it didn’t quite happen the way people said. President De Gaulle of France said that China would be the only thing that united Europe. Little did he know that it would be Europe that would disunite Europe. China has now been predicted to fail dismally, to suffer from corruptive measures and to sink into the abysses of the darkest recesses of the economy because it has a housing bubble. Diverting the focus of attention from our own backyard is always good for the masses. The sheeple prefer that, don’t they? Life is so simple. We are good. The Chinese are bad and so doomed to failure.</p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;"><strong>Stuart Hoffman, Chief Economist at PNC Financial Services Group</strong>&nbsp;stated in a recent report: “<em>Several problems long on China's back burner are likely to come to a head by 2016</em>”. He said that China would be paying for the weakening of the credit market along with the slowdown in reinvestment and earnings as well as the impending housing-market correction. The prediction is a slowdown in&nbsp;<strong>Gross Domestic Product</strong>&nbsp;to just<strong>6</strong>%, which would be the lowest since 1990. But, didn’t people already predict that the Chinese wouldn’t be getting anywhere close to&nbsp;<strong>7</strong>% even for this year already? Now we read of the expansion in the second quarter of this year of the Chinese economy to&nbsp;<strong>7.5</strong>%. That was above expectations that were equally as damning a few months ago that China would only get to&nbsp;<strong>7.4</strong>% in the second quarter this year. Wrong again.</p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;">What never ceases to amaze is the scaremongering economists that predict and then when they get it all wrong they simply fade away into oblivion until they predict the next downfall of the Chinese giant.</p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;">There are others that are confident about the Chinese economy. John Zhu, China Economist at HSBC stated: “<em>A lot of economic analysis tries to extrapolate micro-level analysis to the macro-level. There are so many other variables and policy levers that could be pulled</em>”. He believes that growth will continue around the&nbsp;<strong>7</strong>%-mark and will be nowhere near&nbsp;<strong>6</strong>%.</p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;">What PNC Financial Services Group fails to take into account is that we can hardly say that the Chinese are going to fall to&nbsp;<strong>6</strong>% and at the same time say the West is going to increase in economic activity and that the recovery is really here to stay now. All of that will be linked. If the recovery is here to stay, then the Chinese will benefit from that since exports will increase due to our purchasing of them. If the housing market does fall then infrastructure investment in the private sector by the Chinese state will offset that. Admittedly falling prices in the housing sector are leading to fewer investments. New home prices in China fell by&nbsp;<strong>0.5</strong>% (<strong>70</strong>&nbsp;cities) over the past month, which is the second monthly decline in a row (<strong>May</strong>&nbsp;fell by&nbsp;<strong>0.2</strong>%).</p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;">There is also the problem of the soaring debt in China, which has now reached&nbsp;<strong>251</strong>% of Gross Domestic Product (while standing at&nbsp;<strong>147%</strong>&nbsp;at the end of&nbsp;<strong>2008</strong>). China has admittedly relied heavily on credit since&nbsp;<strong>2008</strong>more and more.&nbsp;<strong>China</strong>&nbsp;has tried to slowdown growth and the reliance on credit.</p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;"><strong>Still if the worst came to the worst, what would they do? Write off their debt like everyone else will end up doing.</strong></p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;"><strong>Originally posted:&nbsp;<a href="http://discuss.financialjuice.com/t/china-s-storm-2016/603">China’s Storm: 2016</a></strong></p> <p style="font-size: 14px; line-height: 20px; font-family: 'Helvetica Neue', Helvetica, Arial, sans-serif;"><img src="http://www.zerohedge.com/sites/default/files/images/user22400/imageroot/2013/08/ZH.png" width="300" height="150" style="max-width: 100%; height: auto; font-family: 'Lucida Grande', Verdana, sans-serif; font-size: 13px; line-height: 17.328125px;" /></p> http://www.zerohedge.com/news/2014-07-27/china%E2%80%99s-storm-2016#comments China Fail France Gross Domestic Product Housing Bubble Housing Market recovery Sun, 27 Jul 2014 21:57:30 +0000 Pivotfarm 491844 at http://www.zerohedge.com Second US Citizen Infected With Ebola In Liberia, Which Shuts Down Borders To Slow Epidemic http://www.zerohedge.com/news/2014-07-27/second-us-citizen-infected-ebola-liberia <p><em><strong>Update, </strong></em>one which many will say has been long overdue: <strong>Liberia Shuts Border Crossings to Slow Ebola Spread</strong>. From Bloomberg:</p> <ul> <li>Liberia Shuts Border Crossings to Slow Ebola Spread: Allafrica</li> <li>Only major border crossings at Roberts International Airport, James Spriggs Payne Airport, Foya Crossing, Bo Waterside Crossing, Ganta Crossing to remain open, AllAfrica.com says, citing Liberian govt statement.</li> <li>At those entry points, testing centers to be set up; “stringent” preventive measures to be announced</li> <li>New travel policy by Liberia Airport Authority on inspection, testing of all passengers to be strictly observed</li> <li>There will be restrictions on public gatherings incl. solidarity marches, demonstrations</li> <li>Hotels, restaurants, entertainment centers, video clubs to play 5-min. film on Ebola awareness, prevention</li> <li>Govt vehicles to be commandeered, as needed, to support health delivery system</li> <li>All govt facilities, public places to install/provide public access for hand-washing</li> </ul> <p>* * * </p> <p>It was a <a href="http://www.zerohedge.com/news/2014-07-27/runaway-ebola-infected-woman-dies-us-doctor-tests-positive-virus">few short hours ago </a>when we reported that as part of the escalating Ebola epidemic in West Africa a US doctor, Kent Brantly had himself succumbed to the deadly virus. Moments ago we found out that a second US doctor from the same aid organization in Liberia, Nancy Writebol, has been infected with Ebola. </p> <p><img src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/07/Nancy%20writebol%20taser_0.jpg" width="600" height="600" /></p> <p><em>Writebol in a June 2011 photo from the <a href="http://ls.rafikifoundation.org/TemplatePreview.aspx?id=1820">Rafiki missionary foundation</a></em><a href="http://ls.rafikifoundation.org/TemplatePreview.aspx?id=1820"></a></p> <p>From <a href="http://www.cbsnews.com/news/american-doctor-in-west-africa-contracts-deadly-ebola-virus/">CBS</a>:</p> <blockquote><div class="quote_start"> <div></div> </div> <div class="quote_end"> <div></div> </div> <p>Two U.S. citizens are now reported to be infected with the deadly and incurable Ebola virus in West Africa.</p> <p>&nbsp;</p> <p>The first American reported to have contracted the disease is an American doctor working with Ebola patients in Liberia, who tested positive for the deadly virus, North Carolina-based Samaritan's Purse issued said in a news release on Saturday.<strong>&nbsp;</strong></p> <p>&nbsp;</p> <p><strong>The second person who reportedly tested positive for Ebola is a woman employed by an aid organization in Liberia who is a married mother of two.</strong></p> <p>&nbsp;</p> <p>In a statement on Sunday, Samaritan's Purse said: "<strong>Nancy Writebol is employed by SIM in Liberia and was helping the joint Samaritan's Purse/SIM team that is treating Ebola patients at the Case Management Center in Monrovia</strong>."</p> <p>&nbsp;</p> <p>Writebol's age and hometown have not been released at this time.</p> </blockquote> <p>What is most disturbing is that the two physicians have contracted the lethal disease despite apparently taking much needed precations to avoid infection as the following photos below demonstrate.</p> <p><span class="img "><img src="http://cbsnews1.cbsistatic.com/hub/i/r/2014/07/27/f1695eb0-91a8-4c69-9642-5006d829f541/thumbnail/620x350/edec393cc4e3907faab60f9d03d52f5e/kentbrantly1.jpg" alt="kentbrantly1.jpg" width="599" height="338" /></span></p> <p><em><span class="img ">Dr. Kent Brantly assists two ELWA Hospital staff in transporting an Ebola patient from the triage unit to the isolation unit in the rain on Tuesday July 22, 2014, in Liberia.</span></em></p> <p>&nbsp;</p> <p><span class="img "><img src="http://cbsnews1.cbsistatic.com/hub/i/r/2014/07/27/83912742-7dde-4cb4-94b3-d91e8719d43c/thumbnail/620x350/467c686be3898d57977b01333fb7a2fc/kentbrantly4.jpg" alt="kentbrantly4.jpg" width="600" height="339" /></span></p> <p><span class="img "><em>Dr. Kent Brantly (right) collects a blood sample from a suspected Ebola patient in the ELWA isolation ward in Liberia</em><br /></span></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="1860" height="1860" alt="" src="http://www.zerohedge.com/sites/default/files/images/user5/imageroot/Nancy%20writebol%20taser.jpg?1406494154" /> </div> </div> </div> http://www.zerohedge.com/news/2014-07-27/second-us-citizen-infected-ebola-liberia#comments Sun, 27 Jul 2014 21:31:41 +0000 Tyler Durden 491841 at http://www.zerohedge.com