BIS

Alarm bells in the European banking system have been ringing for quite a while but nobody seems to be listening. The roaring capital markets are just too loud. But we have been keeping track of a few things.

As long as people remain obsessed with false paradigms and faux enemies, the establishment's goal of complete centralized dominance will be predictably attainable. If we change our focus to the internationalists as the true danger instead of playing their game by their rules, then things will become far more interesting...

"Although the levitation of financial assets has yet to levitate gold, we will grit our collective teeth on that score and await either 'asset price justice' or the 'end times,' whichever comes first."

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. 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 (mostly downward) direction: whichever suits the London Fix member banks.

It's one thing to implicitly admit that there is a physical gold shortage and as a result nations - such as Germany - are unable to repatriate their physical gold held in the safe and trusted confines 90 feet below the NY Fed, gold which may or may not be there and has likely been leased out exponentially to cover paper shorts by virtually every BIS-overseen central bank (and the BIS paper gold selling team itself of course). It is something totally different to corzine, as in vaporize, 87,000 ounces of physical gold, some 2.7 tons, and blame it on a computer upgrade glitch. Which is precisely what Rand, Afrrica's largest refinery and processor of about a third of the world's gold since 1920, has done after it "discovered" that $113 million in precious metal was missing after "adopting a new computer system."

In the absence of any major economic events, it will be another day tracking geopolitical headlines out of Ukraine (lots of accusations, propaganda and fingerpointing on both sides, zero actual evidence and facts - expect more European sanctions to be announced today to match last week's latest US-led round ) and Israel (where the death toll has now risen over 500, almost entirely on the Gaza side), and then promptly spinning any bad news as great news. For now, however, futures are modestly lower from the Friday close pushed down by the AUDJPY which has rebased around 95.00. We expect the momentum ignition correlation algos will promptly take of that as soon as the US market opens, a market which has now been described as bubbly by the BIS, the Fed and the IMF.

"The head of the International Monetary Fund warned on Friday that financial markets were "perhaps too upbeat" because high unemployment and high debt in Europe could drag down investment and hurt future growth prospects." To summarize: first the BIS, then the Fed and now the IMF are not only warning there is either a broad market bubble or a localized one, impacting primarily the momentum stocks (which is ironic in a new normal in which momentum ignition has replaced fundamentals as the main price discovery mechanism), they are doing so ever more frequently.

"We would be far better served as a species if we were to turn our back on the NWO altogether and move swiftly in the opposite direction. Imagine what tomorrow would be like if there were no controllers, no statists, no despots and no philosopher kings. Imagine a tomorrow where people respect the natural-born rights of others. Imagine a tomorrow where people’s irrational fears are not allowed to inhibit other people’s freedoms. Imagine a tomorrow where interactions between citizens and government are rare or nonexistent. Imagine if we could live our days in peace, independently building our own destinies, in which our successes and failures are our own, rather than the property of the collective. It may not be a perfect world, or a utopia, but I suspect it would be a much better place than we live in today."

• BRICS set up bank to counter Western hold on global finances (Reuters)
• Fed's Yellen Hedges Her View on Rates (Hilsenrath)
• China GDP Grows 7.5% in Second Quarter (WSJ)
• Get More Acquainted With Your Knees as Boeing Reworks 737 (BBG)
• Israel Warns Gazans of New Attack After Hamas Rejects Truce (WSJ)
• Israel poised for Gaza incursions after truce collapses (Reuters)
• China Housing Sales Fall in First Half of 2014 (WSJ)
• IBM to offer iPads and iPhones for business users (Reuters)
• Fed's George says strengthening economy warrants quick rate rise (Reuters)

Paul Krugman is at it again – distorting or misinterpreting work by other economists to attack critics of today’s central bank driven low interest rate environment and to defend policy status quo or to push for even more stimulus.

"We’re in a world where there are very few unambiguously cheap assets...If you ask me to give you the one big bargain out there, I’m not sure there is one." But frustrating as the situation can be for investors hoping for better returns, the bigger question for the global economy is what happens next. How long will this low-return environment last? And what risks are being created that might be realized only if and when the Everything Boom ends?

There has been an informational overload this morning, when as we reported previously, one after another bank scrambled to issue reports, some full of typos and clearly unvetted by compliance, calming the market and desperate to see all important confidence return to the peripheral market. Most of these notes have been nothing short of outright propaganda and disinformation, or a confirmation the analysts had zero idea what they were doing (case in point Goldman which had the stock at a Buy rating until this morning, even as the stock was virtually wiped out in recent weeks). Some, actually, have done the work. Below we provide some of the less then insightful reports, as conveniently summarized by Bloomberg, and we conclude with perhaps the best piece so far - one written by Bank of America's Richard Thomas who alone among the sell-side penguin circus, was as close as he could be, to predicting this week's outcome.

This clown parade of clueless opinions (did we mention Goldman had BES at a buy until this morning?), stretched all the way to the very top with Bank of Portugal itself issuing the following pearl:

• BANK OF PORTUGAL SAYS BES DEPOSITORS CAN STAY CALM

Uhhh, what else would the Portugal central bank say? Panic and withdraw your deposits from a bank whose exposures to insolvent entities have been largely unknown until today (and even now).

Is there any doubt that we are living in a bubble economy? At this moment in the United States we are simultaneously experiencing a stock market bubble, a government debt bubble, a corporate bond bubble, a bubble in San Francisco real estate, a farmland bubble, a derivatives bubble and a student loan debt bubble. And of course similar things could be said about most of the rest of the planet as well. And when these current financial bubbles in America burst, the pain is going to be absolutely enormous.

Yesterday we heard from the CEO of the world's biggest company that the exuberant jobs data did not reflect any economic reality Wal-Mart was seeing. Overnight, William Arthur Tindell, CEO of The Container Store, further destroyed the myth of a 'recovery' stalled by 'weather' and threw the rest of his 'retailer' brethren under the bus: "We thought our sluggish sales were all because of weather and calendar shift...but now we've come to realize it's more than that, consistent with so many of our fellow retailers, we're experiencing a retail funk."