Always excellent Harveys blogspot non redundant items posted !

http://harveyorgan.blogspot.com/2012/05/first-greek-bank-runs-now-spanish-bank.html

Good evening Ladies and Gentlemen:

Gold closed up today by a rather large $38.00 to $1574.80.  Silver also rallied to finish the comex session at $27.99 up 82 cents.  For a change today we saw the Dow plummet by 156 points and gold and silver
rallied.  The gold price rose above the 2% shackle put on by the bankers. The USA 30 yr bond fell in yield to 5 months lows indicating the serious nature in the USA economy.  The all important 10 yr bond yield finished at a yield of 1.69%. Bourses around the world tumbled at the Spanish IBEX fell 2.0%.

Here are some of the other major bourses results and all are lower by:

Dax  (Germany): - 1.18%
CAC: (France):- 1.2%.
Amsterdam:  -1.61%
Belgium: - 1.21%
Portugal: a huge -2.66% .

The Spanish 10 yr bond yield finished the session at 6.32% and the Italian 10 yr bond yield at 5.82%.
Europe reacted to huge bank runs in Greece as well as Spain. Spreads on all LTRO receiving banks increased again to their widest margins as the stigma continues to those banks receiving this ECB largess.
Early this morning the nationalized bank, Bankia was halted having fallen by 30% today.  They reported a massive run on its bank. The best article today was written by Mark Grant who outlines the true cost of a Greek failure.  If anything you do tonight, please read that one.  Bruce Krasting, one of the best FX traders out there, highlights what happened today with respect to the fall in the USA/Yen cross and Euro/FX cross.To him, this kind of signals some sort of disaster looming.  Rumours that Greece is printing Euros with a  red "G" to stop the flight of euros from Greece.  If this is so, then expect a massive flight from Spain, Portugal and Ireland and possibly Belgium.

Max Keiser reported today that JPMorgan has been using its stock as collateral in support of its massive silver shortfall. I am not sure if that is legal per CFTC rules. However it does show that JPMorgan is tapped out as far as collateral is concerned if they have to use their own stock and not cash.

There is so much to cover today so without further ado lets go.


We shall now head over to the comex and see how trading fared today.  The total gold comex open interest succumbed to the wishes of the bankers by falling 5135 contracts as the OI rests tonight at 416,956 compared to yesterday's level of 422,091.  The non official delivery month of May saw its OI rise by 12 contracts from 22 to 34 despite only 1 delivery notice yesterday.  So we thus gained 11 contracts or 1100 oz of gold standing.  We lost 1000 oz yesterday so now everything in the gold complex seems in balance. The next delivery month which I can assure you there will be fireworks is June (and we exactly two weeks away from first day notice), and here the June contract has it's OI lowered by 5502 contracts from 175,955 to 170,453.  Some rolled into August but generally it was this month that saw the greatest loss in OI.  The estimated volume today was very high at 231,475 contracts.  Yesterday the confirmed volume was astronomical at 307,912 and yet with that volume we should have seen a much greater liquidation in OI.

The total silver comex has now baffled our bankers for over a month and they just do not know what to do.The total OI retreated marginally from 114,208 back to 113,663 for a loss of only 545 contracts despite the drop in value of silver of approximately 1.00 dollar (if you include the access market trading) and the high volume of trading. The front delivery month of May saw its OI fall from 317 to 195 for a loss of 122 contracts.  We had 123 delivery notices yesterday so we again gained one contract standing or an additional 5000 oz. The estimated volume at the silver comex was quite strong at 49,900 contracts.  The confirmed volume yesterday was absolutely humongous (66,244) and to have no silver leaves fall from the tree is simply amazing.  These longs are resolute and willing and able to take on the likes of Jamie Dimon.  They are emboldened with the revelation that JPMorgan lost on their big derivative bet.  (IG9)

and.....

In the following commentary, Adrian Ash discusses Europe trading today with an emphasis on gold.
He highlights that the EU folk have been visiting Portugal for contingency discussions once Greece fails and the contagion like effects likely to fall upon this country of 9 million people. No wonder the Portugal stock exchange fell by 2.66% France announced today that it will not ratify the EU's fiscal pact which is no surprise. Adrian then discusses the demand from China which was highlighted in the above Goldcore article

(from Adrian Ash from London/bullion vault/Goldseek.com)

Jump in Gold as France Refutes EU Pact, Portuguese Contingency Rumored, Chinese Demand Overtakes India 

By: Adrian Ash

-- Posted Thursday, 17 May 2012 | Share this article | Source: GoldSeek.com London Gold Market Report THE WHOLESALE MARKET gold price jumped at the start of New York trade on Thursday, cutting the week's previous 3.3% dive to 5-month lows in half as the Euro fell and Eurozone stock markets slumped once again. The gold price touched $1558 per ounce before easing $3 lower. Silver did not follow, failing to break this morning's earlier Dollar high at $27.86 per ounce. German Bund yields fell to fresh record lows, but Spain had to offer investors in new 3-year debt an annual yield of 4.37%, up from the 2.89% charged at the last comparable sale in April. The European Central Bank confirmed it has ceased working with some Greek banks because it believes them to be insolvent, while Portugal's Diario Economico newspaper claimed a joint visit by the ECB, IMF and European Union to assess Lisbon's €78 billion bail-out will also discuss contigency plans should Greece quit the single currency. Greece's interim cabinet of academics, lawyers and diplomats was today sworn in, pending fresh elections in four weeks' time. The gold price in Euros jumped 1.9% from Wednesday's low, trading above last week's closing level. France's new finance minister, Pierre Moscovici, today said the socialist government of Françoise Hollande will not ratify the European Union's fiscal pact agreed by 25 out of 27 member states last December. Gold's Relative Strength Index – a technical measure of the speed and size of price change – "is approaching extreme oversold territory," says the latest technical note from bullion bank Scotia Mocatta, "but there are no warning signs yet of a change in trend." "Gold is definitely in oversold territory, and there should be some good buying interest around the low in December," Bloomberg quotes Dong Zhuying at Haitong Futures Co. "Paring its losses near key support at $1525," says Ed Meir at Intl FC Stone, the gold price likely saw "a decent amount of short-covering" by bearish traders on Wednesday, if not "fresh buying" after it held that level.European stock markets fell again Thursday, losing value for the 8th session out of 11 in May so far and taking Madrid's Ibex 35 index down to a fresh 9-year low, some 3.4% down on the day. Crude oil slipped to new 6-month lows after data on Wednesday showed US energy stockpiles more glutted than any time since 1990. Commeting on gold's 20% drop from last summr's all-time highs, "I believe gold will become a haven again, especially if you see fragmentation in the Eurozone," said the World Gold Council's Marcus Grubb to Bloomberg TV this morning, launching market-development group's latest Gold Demand Trendsreport. "Because then you're going to get currency depreciation, you may get inflation in some countries, deflation in others...and you'll see gold's attributes as a hedge come to the fore." In the first quarter of 2012, global gold investment demand rose 13% by weight and 38% by Dollar value from the Jan-March period last year, says the report. In the jewelry sector, "Gold is underpined now by two large markets and China is playing catch up to India," says Grubb, also speaking to Reuters this morning. "Per capita gramme consumption rates are rising in China." Acknowledged as the leading authority on global demand and supply analysis, the World Gold Council says that China's gold demand again beat India in the first quarter of 2012. "You're going to see China become the largest gold market overall by the end of this year for the first time," Grubb believes. "It's worth remembering that growth rates are still in the 7-8% range. So people are getting wealthier, and they will continue to buy gold strongly we believe." Beijing last month halved the rate of import rates on gold jewelry. So far in 2012, India has quadrupled its gold bullion import tax. After last weekend's cut by China's central bank to the reserve ratio requirement – easing credit by enabling commercial banks to lend out more of the cash deposits they take – the State Council of China said Wednesday it will spend CNY36.3 billion ($5.7bn) over the next 12 months subsidizing household purchases of large electrical items, fuel-efficient cars and energy-saving lightbulbs. Despite the cut in the reserve ratio requirement, however, lending by China's four largest banks has "been flat so far this month" says the Shanghai Securities Journal. Both the central and commercial banks were net sellers of foreign currency in April, the People's Bank of China said this week, indicating an outflow of capital. China's 12-month trade surplus has halved from its peak above $300 billion of early 2009, according to data cited by the Financial Times. Adrian Ash Adrian Ash is head of research at BullionVault, the secure, low-cost gold and silver market for private investors online, where you can buy gold today vaulted in Zurich on $3 spreads and 0.8% dealing fees. (c) BullionVault 2012 and..... Turkish gold sales to Iran soar as sanctions bite May 17, 2012 9:19am EDT ISTANBUL, May 17 (Reuters) - Turkish gold sales to Iran in March soared over 30 times and gold companies said Iranians were turning to gold for savings and possibly trade as Western sanctions tighten.Sanctions to force Iran to curb its nuclear programme have targeted its energy and banking sectors and new measures from both the United States and European Union take effect in July, aimed at strangling Tehran's foreign earnings. The sanctions have made neighbouring Turkey an ever more important channel for the Islamic republic. Data from Turkey's Statistics Institute on Thursday showed gold exports to Iran rose to nine tonnes, worth $480 million, in March, from 286 kg a year earlier and compared to just 30 kg in February this year. They were the highest monthly exports to Iran since records started in 2010. Total gold exports were 11.1 tonnes in March. "It wouldn't be wrong to say Iran chooses Turkey for gold imports because of embargoes," said Gokhan Aksu, vice chairman of Istanbul Gold Refinery, one of Turkey's biggest gold firms. "Iranians prefer jewels and precious stones to protect the value of their money and escape instability," he told Reuters. Turkey's trade with Iran is politically sensitive and one gold company official, speaking on condition of anonymity, said gold could also be in use for trade as sanctions made regular currency transactions harder. "Some payments may be made in gold because of problems in transferring money to Iran," he said. "For the most part, I think gold may be replacing money transfers in trade with Iran."Turkey has become an increasingly important gold producer over the last 12 years, producing 25 tonnes last year. It imported about 80 tonnes last year, but most was for re-export to unstable neighbours which also include Syria and Iraq, one gold company executive said.Iran's annual gold consumption was put at 300 tonnes by the head of its gold and jewellery association, according to a report from state news agency IRNA in February, but the lack of official data makes it hard to gauge. Dubai is also an important centre for Iranian gold buyers. Uncertainty in Iran has taken its toll on the rial currency, which fell as low as 19,000 to the dollar in late March from 12,000 in mid-2011 before recovering to 16,000 after Iran re-entered talks with world powers. "It's natural that savings are made in gold in Iran," said Ozgur Altug, chief economist at BGC Partners in Istanbul. Talks between Iran and world powers resume in Baghdad on May 23. Western countries suspect Iran is trying to enrich uranium to build atomic bombs. Iran says its nuclear programme has only peaceful ends. The U.S. Senate was due to consider a new package of sanctions on Thursday. In another indication of the impact of sanctions, petrochemical exports have plunged 90 percent in the last two weeks. and this is a biggie ..... The Death Cross: JPM’s stock price poised to cross below price of silver. Posted on May 11, 2012 by maxkeiser| 22 Comments As we’ve been saying for two years. JPM uses it’s own stock to collateralize naked silver short positions (echoes of Lehman and Enron). My analysis has concluded that liability from a rising silver price vs. loss of collateral value of the stock renders JPM’s balance sheet null and void when JPM’s stock price drops below the price of Silver. We’ve only seen this a couple of times since I made this call two years ago, BUT NEVER ON A SUSTAINED BASIS of more than a day or so. When the price of Silver popped over JPM’s stock price, the London desk quickly fabricated a few billion fresh naked silver shorts to tamp silver’s price down. Given this week’s revelations regarding JPM’s reckless balance sheet incineration the ‘crash jp morgan, buy silver’ trade has never been more important as a way to take down this financial terrorist. The SLA has been winning battles all along. Now we are poised to win the war as well. Bye-bye Jamie. NOTE TO HEDGE FUNDS: Sell JPM’s stock naked to Hell. This is the easiest money you’ll make this year. The JPM losses are the whiff of a significant deflationary force in play. JPM losses as a wise PM told me – $2 billion why not $20 billion. Is this bad risk management? This loss happened in the risk mitigation unit and not a risk taking one. There have been dislocations in the credit market these last few months and now we know why. Is it that the derivatives risk is becoming more and more centered with a few banks, and collateral is just not forthcoming because the collateral has been promised many times over? As we move towards central clearing of these contracts will we see legal reconstitution of said contracts to obfuscate the reality that they are worthless. They are being exposed for the sticks of dynamite, under the foundations of the financial system, that they are. Ben Davies – 3rd LTRO Coming & Fed to Power Up Swap Lines and..... From Jessie of American cafe as to his thoughts on JPMorgan's prop desk. He is 100% correct!! 17 MAY 2012 Corzine Syndrome: JPM's Stealth Prop Trading Unit Was Crafted for Risky Profit and Reported Directly To Jamie Dimon I want to put a spike in all this spin around the CEO defense, that poor Jamie could not have possibly known what was going on in London because the company was so large, and he is such a busy man. Sarbanes-Oxley was designed to put a stop to that lame excuse touted out by defense lawyers and apologists in the media every time something like this happens. The CIO operation was transformed under Jamie's direction as a dodge to the impending Volcker Rule, set to take effect in July, that prohibited this kind of risky prop trading by institutions backed with deposit insured money and both explicit and de facto government guarantees. He wanted it up to be what it was, an opaque profit center. It probably sounded like a good idea, taking a risk hedging and reduction function and turning it in to a profit center. Because of the accounting differential between the CIO and the portfolios it was alleged to hedge, one could take profits and not realize losses in a quarter, which provided a nice billion dollar cushion for earnings. Every industry has their accounting dodges like this that allow a company to 'manage earnings.' In tech it is in acquisition accounting and inventory writedowns. But in their clumsy piggishness, the JPM CIO traders took their usual overly large and manipulative positions as they have done in other markets, masquerading as hedges. But this market was too narrow and specialized, and they stepped on the toes of the wrong market insiders. And it blew up in their faces. When the media called Jamie on it a few months ago, after traders complained that 'the London Whale' was rigging market prices, he called it a legitimate hedging operation and dismissed it as 'not a problem.' The same thing is going on in other markets as well, even now, and on a much larger scale. The difference is that it is smaller traders and the public that are being hurt, while much of the risk is being misrepresented and unrealized, for now. And so the regulators are sitting on their hands and doing nothing about it because they are being discouraged from taking action by powerful interests in the Administration and the Congress. Remember, it was pressure from the Geithner Treasury and the Fed at the behest of JPM that created the loophole that would have permitted the CIO unit to continue to function as a prop trading unit even after the Volcker Rule supposedly shut such risky ventures down. And they are afraid of what will happen to JPM if these market positions, particularly in the derivatives and metals markets, are exposed for what they really are, and their own involvement in allowing it to happen for so long. That is the credibility trap, and the reason for the remarkable lack of investigation and prosecution of financial fraud. for the complete article: http://www.ifre.com/jp-morgan-investment-unit-played-by-different-high-risk-rules/21018207.article and.... Consider these stats as it is not just Spain and Greece that have massive youth unemployment: (special thanks to Robert H for sending this down to us) ( the BROAD rise in Youth Unemployment Rates, across the EU (this March, versus March of last year): --- Bulgaria ... 32.8% ... up from 26.7% ....up 6.1%--- Portugal ... 36.1% ... up from 27.6% ...up 8.5%--- Denmark ... 15.1% ... up from 13.7% --- Ireland ... 30.3% ... up from 28.7% --- Cyprus ... 28.8% ... up from 18.8% ....up 10%--- Hungary ... 28.8% ... up from 25.4% --- Netherlands ... 9.3% ... up from 6.9% --- Poland ... 26.7% ... up from 25.7% --- Slovenia ... 16.5% ... up from 16.3% "The Summer of 2012 could easily become the Summer of Social Dissent in the EU..." these are shocking numbers as it tells volumes about the real State of the economy.