Commerzbank Pulling Greek Repos, Lehman Deja Vu As Greece Shifts To Full Blown Liquidity Crisis ModeSubmitted by Tyler Durden on 04/07/2010 10:04 -0500
And so the Greek funding crisis shifts to a liquidity crisis yet again. Bankingnews.gr reports that Commerzbank, among many others, is now pulling its repos with Greek banks, essentially killing liquidity in the entire financial system. Cue Lehman Brothers and Sunday CDS trading. At least it's not Friday so OTC traders don't have to worry they will be pulled from their Hamptons retreat. The Greek website is reporting that according to sources, Commerzbank which is one of the biggest repo counterparties to Greek institutions, was dumping bonds in yesterday's sell off. Not only that, but it is now pulling repos, in essence starting a cascade of asset liquidation, in which banks, already experiencing a depositor run, will be forced to sell assets at any prices they can get just to fund their operations for one extra day.
“We Are in a Cabal... Five or Six Players ... Own the Regulatory Apparatus. Everybody Is Afraid to Regulate Them"Submitted by George Washington on 04/01/2010 19:59 -0500
I'm not against derivatives - including credit default swaps. But keeping them secret and hidden is a recipe for disaster ...
When we put up a link to last week's CFTC hearing webcast little did we know that it would end up being the veritable (physical) gold mine (no pun intended) of information about what really transpires in the commodities market. First, we obtained direct evidence from Andrew Maguire (who may or may not have been the target of an attempt at "bodily harm" as reported yesterday) of extensive manipulation in the silver market. Today, Adrian Douglas, director of GATA, adds to the mountain of evidence that the commodities market, and the CFTC, stand behind what is potentially the biggest market manipulation scheme in the history of capital markets (we are assuming for the time being that all allegations of the Fed manipulating the broader equity and credit markets are completely baseless). Using the testimony of a clueless Jeffrey Christian, formerly a staffer at the Commodities Research Group in the Goldman Sachs Investment Research Department and now head and founder of the CPM Group, Douglas confirms that the "LBMA trades over 100 times the amount of gold it actually has to back the trades."
Christian, who describes himself as "one of the world’s foremost authorities on the markets for precious metals" yet, in the words of Gary Gensler, said "that the bullion banks had large shorts to hedge themselves selling elsewhere- how do you short something to cover a sale, I didn’t quite follow that?" and proves that current and former Goldman bankers are some of the most arrogant people alive, assuming that everyone else is an idiot and will buy whatever explanation is presented just because the CV says Goldman Sachs. Yet Christian confirms that the gold market is basically a ponzi: "in the “physical market” as the market uses that term, there is much more metal than that…there is a hundred times what there is." And there you have it: as Douglas eloquently summarizes: "the giant Ponzi trading of gold ledger entries can be sustained only if there is never a liquidity crisis in the REAL physical market. If someone asks for gold and there isn’t any the default would trigger the biggest “bank run” and default in history. This is, of course, why the Central Banks lease their gold or sell it outright to the bullion banks when they are squeezed by high demand for REAL physical gold that can not be met from their own stocks" and concludes "Almost every day we hear of a new financial fraud that has been exposed. The gold and silver market fraud is likely to be bigger than all of them. Investors in their droves, who have purchased gold in good faith in “unallocated accounts”, are going to demand delivery of their metal. They will then discover that there is only one ounce for every one hundred ounces claimed. They will find out they are “unsecured creditors”.
The NY Fed's Trading Desk Head Laments The End Of Stupid Leverage And Wants His Derivatives Back (Or Why We Are Stuck With ZIRP For A Long, Long Time)Submitted by Tyler Durden on 03/27/2010 10:12 -0500
In a video conference before the ACI 2010 World Congress in Sydney, Australia, the head of the FRBNY's trading desk, aka, the busiest daytrader over the past year, Brian Sack, demonstrated once again that Fed members are either completely clueless about ongoing market dynamics or are so good at octuple re-reverse psychology, that they make the squid pale in shame and squirt ink in envy.
Internal Email Indicates Exchange Outage Is Affecting Order Flow As Selling Intensifies, ES Upchannel BrokenSubmitted by Tyler Durden on 03/26/2010 12:15 -0500
And you thought we were joking when we said the various exchanges will start breaking when the selling volume intensifies.
From an internal email:
"One of the exchanges to which we submit order flow is experiencing a system outage affecting some Listed and OTC orders"
Awaiting official information from the NYSE if it is in fact the impacted exchange.
Earlier today the CFTC held a sham hearing in which, among other things, the organization discussed position limits in PM speculation, because, you know, it's the mom and pop speculators that destroy the precious metal market (not JP Morgan or the New York Fed mind you). The hearing could not have come at a more opportune time. GATA has just broken a major story, in which a London metals trader-slash-whistleblower exposes JP Morgan's silver price suppression/manipulation scheme. At this point none of this should be at all shocking, and the only thing that matters is when CFTC's ex-Goldmanite Gary Gensler will be fired for allowing hundreds of billions of dollars to be sucked out of the PM market on behalf of such major market manipulating entities as JP Morgan and the New York Federal Reserve, for whom it transacts. Don't worry - the answer to that rhetorical question is "never", as it is the administration's goal to make all the millionaires among the bulge bracket firms billionaires, via legalized theft from honest investors. Furthermore, if indeed the CFTC is complicit in these manipulative events, as GATA suggest, we hope our objective mainstream media readers enjoin GATA in seeking justice for this criminal breach of proper regulatory enforcement.
Remember yesterday's 2 Year which closed at 1.000% and everyone was so happy? Oops. One short day later and the bond has hit 1.11%, leading to "massive" (not our word) losses for all those who bought on expectations that the 2 year part of the curve would be subsumed by the Fed's "near term" part of the window. Not happening. The weakness from today's 5 year as well as various other factors have contributed to one of the biggest broad curve sell offs so far in 2010. With about a trillion in issuance still to come in the near future, things are only going to get uglier.
" We have taken testimony from dozens of witnesses and reviewed tens of thousands of documents .... We have looked at the silver market like we never have before and I think there is a window of success that has been opened for understanding about what has been going on and why .... In 35 years, there has been only one successful prosecution for manipulation. So if you ask me if the manipulation standard in the law is working, I'd have to say no .... We need to be more like the police department and less like the fire department. We need to deter and prevent things from happening, rather than merely responding. "
It is irrefutable. The Bernanke Fed will go down in history as the most wildly successful ever. Nobody in financial history has been able to re-sky stocks in one year after the two largest banks in the country were within a hairsbreadth of imploding. No doubt, he will be trumpeted and hailed as a national hero, for orchestrating the fastest run in retail stocks in world history.
Why is the President's Working Group Oppossing the FDIC Reform Proposals on Residential Mortgage Securitization by Banks?Submitted by rc whalen on 03/14/2010 20:42 -0500
This week in The IRA, we remind one and all about the impending FDIC rule-making process on bank securitizations. Then we ponder whether zombie love won't bring together Barclays Bank and Citigroup in an unholy but politically fortuitous union. And we feature an interview with derivatives market veteran Bill King about OTC derivatives and earnings fraud. The rant on the President's Working Group follows below. -- Chris
Things are really starting to get wild. CNBC should just eliminate the NYSE trading floor shots and replace them with battle scenes from "Hamburger Hill" or some of the medieval battles in "Lord of the Rings". Basically, everyone is out for blood today as panicked put and call holders are getting barbecued with Goldman's flamethrowers or getting bludgeoned to death by spiked clubs.
GATA Claims To Have Evidence Of "Massive Physical Short Gold And Silver Positions That Can Not Be Covered"Submitted by Tyler Durden on 03/08/2010 17:08 -0500
In a letter to the CFTC's Chairman, Gary Gensler, GATA Chairman William Murphy shares the following bombshell:"GATA has evidence that there are enormous physical short positions in the gold and silver markets that cannot be covered." Even as the CFTC is meeting later this month to establish position limits in the gold, silver, and other precious metals' markets, it could be none other than the CFTC's core banks, and Mr. Gensler's former Goldman bosses, that form the very core of the biggest market manipulation collusion syndicate in the history of the commodity markets. If GATA is not bluffing and indeed has evidence of massively uncoverable physical positions, and should this evidence be made public, the repercussions for the price of gold will be unprecedented.
GERMANY MERKEL: CANNOT BAN CDS MARKET OUTRIGHT
Following up on the earlier post in which German TV station ProSieben has disclosed proof of the existence of tungsten "gold" bars in circulation within the bank community, we share with you the following highly informative presentation by Adrian Douglas of Market Force Analysis titled "LBMA OTC Market - "Alchemists" Turn Paper Into Gold." For anyone who has even a passing interest into what, as the author characterizes, could possibly be "the next Madoff scandal, except multiplied by 100", we recommend reading this paper.
The motivation for writing this report is the fact that the gold market doesn’t make sense. Basically, the numbers don’t add up. This became apparent to me while I was writing the Gold War report at Redburn Partners in 2007. At the time, I was more interested in discussing the upcoming bust in the credit cycle and why gold and silver were the “go to” assets for investors. Since then, I’ve been meaning to write a piece interpreting the “official data” for the gold market. My analysis suggests that the data on the volume of gold traded, if put in its proper context, does not tally with my estimate of the amount of gold that is held in the form of bars which conform to “London Good Delivery” standard. - Paul Mylchreest, Thunder Road Report