Posts Tagged ‘gold market’

THREE THINGS I THINK I THINK

THREE THINGS I THINK I THINK

Courtesy of The Pragmatic Capitalist 

Businessman holding a personal organizer

  • Everyone is making a big fuss over the fact that four U.S. banks went 61 days in a row without any losses.  Well, the better question in this environment is how did any bank manage to not make a profit on all 61 days?  These big banks are borrowing from the Fed for nothing and can effectively sell low risk bonds back to the government for a 3%+ annualized gain.  This is a no-brainer when it comes to making money.  If you’re a big bank you’re just laddering into a massive fixed income portfolio without almost no risk.  The confusion or misrepresentations made by many regarding this “phenomenal performance” is that these firms are just sitting around “trading” the Nasdaq 100 like Joe Schmo does at home.  That couldn’t be farther from the truth.  These firms make most of their “trading” revenues by playing market maker or “trading” in these low risk fixed income markets.  They’re essentially just pairing buyers and sellers and scraping a fee off inbeteween.  Yes, there are other higher risk portions of their portfolios, but for the most part these firms are just vacuuming money up from off the NYSE floor at every twist and turn.  It should shock no one that the big banks are making profits.  A better question for the Morgan Stanley’s and Goldman Sachs’s of the world might be why they still have their bank holding company status?   Allowing these firms to borrow from the Fed at 0% is a slap in the face to every other hard working financial firm.
  • Bondsquawk pointed out this morning that the LIBOR OIS spread continues to widen.  According to Prospects Daily:

    “Dollar money-market rates to highest levels since August. The cost of inter-bank borrowing for three-month dollar funds increased to the highest level in almost nine months, as the IMF/EU’s $1 trillion financial plan for Europe failed to boost confidence sufficiently in commercial banks to step up their lending. The three-month London interbank offered rate, or LIBOR, for dollar funds increased to 0.43% this morning from 0.423% yesterday, the most since August 17, according to the British Bankers’ Association. Meanwhile, the three-month rate for euro, or EURIBOR, fell to 0.624% today from 0.628% yesterday, after soaring to 0.634% last week. Notably, EURIBOR established fresh lows each trading day over January 2010 to date. The


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Don’t Invest In Ridiculously-Rigged (And Thin) Markets

Here’s Karl Denninger’s must-read take on the gold market rigging story. –  Ilene 

Don’t Invest In Ridiculously-Rigged (And Thin) Markets

Janet Tavakoli has written an interesting piece over at Huffington Post related to the gold market and a potential cornering attempt:

First, let your greed overcome all regard for the stability of the global market, and overcome your aversion to illegal activities.

….

Pump up the gold story. Get your friends to tell retail investors to buy some gold every month. Get your buddies in the financial business to offer exchange traded gold funds (ETFs) that claim to buy physical gold. This will sound safe to retail investors, but in fact, the ETFs are very risky. This will serve your purpose when you are ready to start a panic. These particular ETFs will allow the "gold" to be commingled with the custodian’s gold, and the custodian can lease out the gold. Moreover, the "gold" custodian can give it to a sub custodian that the manager doesn’t know. The sub custodian can give it to yet another sub custodian unknown to the original custodian. The manager will never audit the gold, and the gold is not "allocated" to a particular investor. Since this is an "exchange traded" gold fund, investors will probably assume the gold is regulated by the Commodities Futures Trading Commission (CFTC), but it isn’t. By the time investors wake up to the probability that there is very little actual gold backing their investment, your plan will be ready to execute.

That could be a problem, right?

Zerohedge has run a piece of alleged manipulation of the market (specifically, selling short an insane number of contracts – which would obligate you to deliver – when you have no possible way to do so.)  This, however, isn’t necessarily manipulation per-se, nor is the assertion that these are "financial" (that is, we trade ‘em for money, not to actually buy or sell physical gold) assets false.  They in fact are; if I sell short a S&P 500 Futures Contract I can assure you that I do not deliver a basket of 500 stocks to the buyer if I’m right (or wrong!)

However, the elements of a scam – which could be the intended…
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How to Corner the Gold Market

How to Corner the Gold Market

Courtesy of Janet Tavakoli, published previously at Janet’s website and in The Huffington Post 

Janet Tavakoli[For a pdf copy, click here.] 

First, let your greed overcome all regard for the stability of the global market, and overcome your aversion to illegal activities. Stay away from people like me, and fly under the radar, because I’d like to see you thrown in jail. Most Washington officials, regulators, and Wall Street managers are probably safe to hang around, especially if you cut them in for a piece of the action or give them vague promises of a future lucrative job.

Pump up the gold story. Get your friends to tell retail investors to buy some gold every month. Get your buddies in the financial business to offer exchange traded gold funds (ETFs) that claim to buy physical gold. This will sound safe to retail investors, but in fact, the ETFs are very risky. This will serve your purpose when you are ready to start a panic. These particular ETFs will allow the "gold" to be commingled with the custodian’s gold, and the custodian can lease out the gold. Moreover, the "gold" custodian can give it to a sub custodian that the manager doesn’t know. The sub custodian can give it to yet another sub custodian unknown to the original custodian. The manager will never audit the gold, and the gold is not "allocated" to a particular investor. Since this is an "exchange traded" gold fund, investors will probably assume the gold is regulated by the Commodities Futures Trading Commission (CFTC), but it isn’t. By the time investors wake up to the probability that there is very little actual gold backing their investment, your plan will be ready to execute.

Now you are ready to execute your plan.*

Step 1: Let everyone in the futures markets know you are buying gold, speculating in gold, and want to take physical delivery. It helps that China openly announced it wants to increase its gold reserves; the market isn’t looking too hard at you. At first, act like you’re naïve. Buy on margin and pyramid up by reinvesting your profits when you have them.

Step 2: Get the banks to let you finance your gold.

Step 3: Book up all of the space at gold refiners, so that no one else can do…
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Bombshell: Whistleblower Steps Forward On Gold Market Manipulation – Reports Violations to the CFTC

Bombshell: Whistleblower Steps Forward On Gold Market Manipulation – Reports Violations to the CFTC

Courtesy of JESSE’S CAFÉ AMÉRICAIN

JP Morgan

Do we have another Harry Markopolos here, describing in detail the manipulation of the silver markets by J.P. Morgan to the CFTC? How does this square with the testimony today from the CFTC Commissioners, who seem to indicate that the markets are functioning extremely well, and that investor can have full confidence in them?

I am led to understand that Mr. McGuire had offered to testify before the CFTC today, and that he was refused admittance. I do not know him, or the position he is in within the trading community. I cannot therefore assess his credibility or the validity of any evidence which he may present or possess. But I have the feeling that nothing will come of this.

Remember, there was no action on the Madoff scandal until AFTER his fraud collapsed, and the government was forced to acknowledge Markopolos’ existence. He had been ignored and dismissed by the bureaucrats at the SEC for years because of Madoff’s power and standing with the trading establishment. And of course by those who had an interest in hiding Madoff’s scheme, if nothing else, to promote ‘confidence’ in the markets.

What seems particularly twisted about this is that JPM is the custodian of the largest silver ETF (SLV). Is anyone auditing that ETF, and watching any conflicts of interest and self-trading? Multiple counterparty claims on the same bullion?

If you ever wanted to see a good reason for the Volcker rule, this is it. These jokers are one of the US’ largest banks, with trillions of dollars in unaudited derivatives exposure, and they seem to be engaging in trading practices like Enron did before it collapsed. 

Have they lost their minds, or are they just that reckless, immature, short term, and arrogant? Morgan practically holds the keys to the US Treasury, a recent recipient of billions in taxpayer support, and still receiving signficant subsidies from the Fed. They seem to be in dire need of adult supervision. Blatantly and clumsily rigging the silver market, and then bragging about it to people outside their company. What’s next, bumping off grannies for their Social Security checks? Three card monte games on the boardwalk?

I was trying to understand why this item struck me so hard this evening. It shocked me in a…
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How and Why China Will Flood the Gold Market

How and Why China Will Flood the Gold Market
By Jeff Clark, Editor, Casey’s Gold & Resource Report

Moneymaking Investments

As you read this, the Chinese government is doing an extraordinary thing… something nearly unheard of in the modern world.

It is encouraging citizens to put at least 5% of their savings into precious metals.

The Chinese government is telling people gold and silver are good investments that will safeguard their wealth. After last year’s meltdown in the stock market, people believe it. After all, Chinese citizens don’t receive government retirement money… and they don’t have company pension plans like people in many other countries do.

This is why folks in China are lining up outside of banks, post offices, and the new official mint stores to buy gold and silver (they especially like silver because it’s cheaper per ounce).

The Chinese attitude toward gold and silver is a striking contrast to the American attitude right now. I don’t recall a TV or radio ad from my congressman or President Obama encouraging me to buy gold or silver. Does your bank sell silver bars? Are gold mints popping up in your neighborhood? Are any of your friends, family, or coworkers scrambling to buy precious metals?

In spite of a few ads on television and satellite radio, buying gold and silver in the U.S. is still largely seen as a fringe-group activity. That’s not the case in China. And in the big picture, there are three distinct trends occurring in China today that many in the Occidental world are not paying attention to.

First, look where China stands as a gold-producing nation.

China, gold
In 2008, China produced 9,070,000 ounces of gold, exceeding all other countries. Further, its production continues to rise, while many of the top-producing countries are in decline.

Second, China had the lowest per-capita gold consumption of any country over the past half-century. This year, it is widely expected that Chinese demand for gold will surpass that of India. In other words, they’ll also become the world’s No. 1 retail buyer.

Third, the Chinese government has been using its foreign exchange reserves to buy gold – a lot of it – and doing so on the sly. This past April, Chinese officials made a surprise announcement


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Zero Hedge

Blain: "Markets Are Still In Denial/Fool-Themselves Mode"

Courtesy of ZeroHedge View original post here.

Authored by Bill Blain via MorningPorridge.com,

“Cheer up my lads ‘tis to glory we steer, to add something new to this wonderful year…”

Stocks tumbled 20% in H1, but Central Banks are fixated on Inflation as the No 1 priority with higher interest rates nailed on. Supply chain issues remain difficult, meaning corporate earnings will remain under pressure. The market is setting up for further weakness through H2....



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Kimble Charting Solutions

Nvidia Stock On The Ropes As Semiconductors Leadership Tested!

Courtesy of Chris Kimble

It is imperative for active investors to understand the importance of market leadership, both on the way up and down.

And this is proving to be very true of the Semiconductors sector. The Semis played a HUGE role in the tech bull market, helping to push the Nasdaq and Nasdaq 100 higher and higher over more than a decade.

But, as we have covered several times this year (click here for our latest article on Semis), tech turned lower late last year… and the Semis were the warning as a leader to the downside.

So t...



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ValueWalk

DE Shaw Ordered To Pay Record $52m Defamation Award To Daniel Michalow

By Anna Peel. Originally published at ValueWalk.

Today, a FINRA arbitration panel awarded the largest defamation award to an individual in recent history to Daniel Michalow in the amount of $52,125,000.

This dispute between D. E. Shaw, one of the largest and most successful hedge funds in the world, and its former partner Daniel Michalow, received significant press attention over the past four years.

Contrary to what D. E. Shaw led the public and its investors to believe about the firm’s “investigation” and Daniel’s departure, “the panel specifically finds that Claimant did not commit sexual misconduct.” The panel also found the members of D. E. Shaw’s Executive Committee, inc...



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Phil's Favorites

Kremlin tightens control over Russians' online lives - threatening domestic freedoms and the global internet

 

Kremlin tightens control over Russians’ online lives – threatening domestic freedoms and the global internet

Russia has pioneered the concept of digital sovereignty and used it to severely restrict Russians’ access to the internet. NurPhoto via Getty Images

Courtesy of Stanislav Budnitsky, Indiana University

Since the start of Russia’s war on Ukraine in late February 2022, Russian internet users have experienced what has been dubbed the descent of a “...



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Politics

Kremlin tightens control over Russians' online lives - threatening domestic freedoms and the global internet

 

Kremlin tightens control over Russians’ online lives – threatening domestic freedoms and the global internet

Russia has pioneered the concept of digital sovereignty and used it to severely restrict Russians’ access to the internet. NurPhoto via Getty Images

Courtesy of Stanislav Budnitsky, Indiana University

Since the start of Russia’s war on Ukraine in late February 2022, Russian internet users have experienced what has been dubbed the descent of a “...



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Chart School

Gold Stocks Review

Courtesy of Read the Ticker

Gold miners do well when gold is higher, and borrowing and gasoline costs are lower.

Lets start with a question: Why do governments own gold?

1) The need it to support their economy during an energy crisis. If their currency is collapsing oil producers will not take fiat for settlement, but they will accept gold.
2) While the US prints money the purchasing power of the US dollar is declining, hence gold is a hedge.

A particular market action which forces traders to move gold higher is when oil moves higher while the US dollar falls. This means the US dollar is losing purchasing power against oil, therefore gold will go higher as the demand for (1) above explodes. Some history, gold moved higher sharply in these years 2007, 2011, 2016, 2020. All ...

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Digital Currencies

Scams and cryptocurrency can go hand in hand - here's how they work and what to watch out for

 

Scams and cryptocurrency can go hand in hand – here’s how they work and what to watch out for

The anonymous nature of cryptocurrency transactions is ideal for con artists. seksan Mongkhonkhamsao/Moment via Getty Images

Courtesy of Yaniv Hanoch, University of Southampton and Stacey Wood, Scripps College

When one of our students told us they were going to drop out of college ...



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Biotech/COVID-19

At last, COVID-19 shots for little kids - 5 essential reads

 

At last, COVID-19 shots for little kids – 5 essential reads

Millions of U.S. children between the ages of 6 months and 4 years will soon be eligible for COVID-19 shots. FatCamera/E+ via Getty Images

Courtesy of Amanda Mascarelli, The Conversation

For many parents of kids under age 5, a safe and effective COVID-19 vaccine could not come soon enough. A full year and a half after shots first became available for adults, their wait is nearly over.

On June 17, 2022, the Food and Drug Administration ...



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Promotions

Phil: Be the House Not the Gambler at the Fintech Conference in Vegas

 

Phil gave an excellent, educational presentation called "Be the House Not the Gambler: Using Stock Options to Significantly Boost Your Portfolio Performance" at the FinTwit Conference hosted by Lupton Capital and Benzinga on May 14 in Las Vegas. The video is set to start playing at 5:30:45, when Phil takes the stage (but you can see previous presentations by backtracking).

AGENDA 
9:00 AM Opening Remarks with Jonah Lupton, Entrepreneur & Investor
9:05 AM Wagging the Dog: How to Profit From Derivative Driven Moves in the Market with Steven Place, Founder, Investingwithoptions.com
10:00 AM The MarketWebs & The Path of Least Resistance, Christian Fromhertz, CEO, The Tribeca Trade Group
10:55 AM Fireside Chat with Gareth Mann, Founder & CEO, AlphaStream & Spencer Israel, Executive Producer, Benzinga
11:25 AM Sponsor Pitch: Carolyn Bao, VP of Marke...



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Mapping The Market

Suez Canal: Critical Waterway Comes to a Halt

 

Suez Canal: Critical Waterway Comes to a Halt

Courtesy of Marcus Lu, Visual Capitalist

The Suez Canal: A Critical Waterway Comes to a Halt

On March 23, 2021, a massive ship named Ever Given became lodged in the Suez Canal, completely blocking traffic in both directions. According to the Suez Canal Authority, the 1,312 foot long (400 m) container ship ran aground during a sandstorm that caused low visibility, impacting the ship’s navigation. The vessel is owned by Taiwanese shipping firm, Evergreen Marine.

With over 2...



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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.