http://harveyorgan.blogspot.com/2012/05/g8-group-hound-germany-for-eurobond-by.html
Gold closed down by $3.20 to $1588.40 Silver fell by 39 cents to $28.30.
In the access market right now:
gold 1592.40
silver: $28.47
Late Friday night, we learned that the CFTC's enforcement arm was undergoing a probe on the trading practices of JPMorgan with respect to its derivatives, something that is within the jurisdiction of the CFTC. Bloomberg also noted that the FBI investigation into the IG9 affair on JPMorgan, is criminal in nature. Europe opened brighter this morning on hopes of a successful G8 meeting as this rubbed off into New York with it rising by 135 points on the day. Before heading into those and other stories let us head over to the comex and assess trading today.
* * *
By goodness, the gold vaults were comatose today. The only transaction was a tiny
225.04 oz enter the customer and the vault was Brinks.
We had no dealer activity and no customer withdrawal and no adjustments.
The total registered gold inventory tonight rests at 2.424 million oz or 75.4 tonnes of gold
The CME notified us that we had 19 notices filed for 1900 oz of gold. The total number of notices filed so far this month total 524 for 52400 oz. To obtain what is left to be served upon our longs, we take the OI standing for May (34) and subtract out today's notices (19) which leaves us with 15 notices or 1500 oz left to be served upon.
Thus the total number of gold ounces standing in this non official delivery month of May is as follows;
52400 oz (served) + 1500 oz (to be served upon) = 53,900 oz or 1.676 tonnes of gold
we gained 1200 oz of additional gold standing.
Please note that last month's official delivery was 15.4 tonnes of gold. If we add this month's non official delivery gold at 1.67 tonnes we have now over 17 tonnes of gold delivered upon.
Now let us see the accumulative gold withdrawal from the dealer side this month: ZERO
Now let us see the accumulative gold withdrawal from the customer or gold from the eligible category or not for sale: 156,043 oz or4.8 tonnes of gold.
How on earth is the comex settling on gold?
Gold closed down by $3.20 to $1588.40 Silver fell by 39 cents to $28.30.
In the access market right now:
gold 1592.40
silver: $28.47
Late Friday night, we learned that the CFTC's enforcement arm was undergoing a probe on the trading practices of JPMorgan with respect to its derivatives, something that is within the jurisdiction of the CFTC. Bloomberg also noted that the FBI investigation into the IG9 affair on JPMorgan, is criminal in nature. Europe opened brighter this morning on hopes of a successful G8 meeting as this rubbed off into New York with it rising by 135 points on the day. Before heading into those and other stories let us head over to the comex and assess trading today.
* * *
By goodness, the gold vaults were comatose today. The only transaction was a tiny
225.04 oz enter the customer and the vault was Brinks.
We had no dealer activity and no customer withdrawal and no adjustments.
The total registered gold inventory tonight rests at 2.424 million oz or 75.4 tonnes of gold
The CME notified us that we had 19 notices filed for 1900 oz of gold. The total number of notices filed so far this month total 524 for 52400 oz. To obtain what is left to be served upon our longs, we take the OI standing for May (34) and subtract out today's notices (19) which leaves us with 15 notices or 1500 oz left to be served upon.
Thus the total number of gold ounces standing in this non official delivery month of May is as follows;
52400 oz (served) + 1500 oz (to be served upon) = 53,900 oz or 1.676 tonnes of gold
we gained 1200 oz of additional gold standing.
Please note that last month's official delivery was 15.4 tonnes of gold. If we add this month's non official delivery gold at 1.67 tonnes we have now over 17 tonnes of gold delivered upon.
Now let us see the accumulative gold withdrawal from the dealer side this month: ZERO
Now let us see the accumulative gold withdrawal from the customer or gold from the eligible category or not for sale: 156,043 oz or4.8 tonnes of gold.
How on earth is the comex settling on gold?
* * *
Let's do the same exercise in silver as we did in gold:
This month in silver we have 12.1 million oz standing.(official delivery month of May)
Last month in silver we had 2.0 million oz standing (non official delivery month of April)
add the two and we get 14.1 million oz of silver.
Now add both of our accumulative withdrawals of silver and you get 5.6 million oz.
How are they settling upon silver?
This month in silver we have 12.1 million oz standing.(official delivery month of May)
Last month in silver we had 2.0 million oz standing (non official delivery month of April)
add the two and we get 14.1 million oz of silver.
Now add both of our accumulative withdrawals of silver and you get 5.6 million oz.
How are they settling upon silver?
* * *
and things are getting interesting with missing physical gold now.....
I will lead off with this story from Switzerland where an allocated holder of gold wishing to remove his gold from a Swiss vault, and place it into a safer area found that his gold just was not there. He could not understand the delay tactics that the Swiss bank were orchestrating upon him when requested his allocated gold. The customer went to the Swiss vault and found his gold gone.
Now this is the second country that have been noted to sell allocated gold belonging to an account holder. The Perth mint has also been shown to have sold allocated metal:
In the second part of the interview,Von Greyerz believes that they are going to blackmail Germany in saving Greece as it is cheaper to save this country than to ringfence all of the peripheral European countries.
(courtesy KingWorldNews/Von Greyerz/GATA)
Now this is the second country that have been noted to sell allocated gold belonging to an account holder. The Perth mint has also been shown to have sold allocated metal:
In the second part of the interview,Von Greyerz believes that they are going to blackmail Germany in saving Greece as it is cheaper to save this country than to ringfence all of the peripheral European countries.
(courtesy KingWorldNews/Von Greyerz/GATA)
Banks may not have even 'allocated' gold, von Greyerz warns
Submitted by cpowell on Mon, 2012-05-21 17:21. Section: Daily Dispatches
So, to summarise: The central banks at the heart of price manipulation have had the means to sell substantial amounts of bullion without having to account for it. ...
1:20p ET Monday, May 21, 2012
Dear Friend of GATA and Gold:
Gold fund manager Egon von Greyerz, interviewed today by King World News, tells about a customer who sought to transfer his supposedly allocated gold from a bank vault to von Greyerz's vault only to discover that the bank didn't really have the gold at all. Get your gold out of the banking system, von Greyerz reminds everyone. An excerpt from the interview is posted at the King World News blog here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
and more nuggets of the crimes behind the scenes.....
You will enjoy this presentation from Alasdair Macleod as he discusses the mechanics behind the gold suppression scheme namely, the leasing of gold by central banks. In a lease, the ownership still rests with the lessor and that is why gold is still on the books of central banks as owners even though the gold has been leased out years ago and never returned. The IMF and the BIS both refuse to call this gold with what it should be called: a gold receivable. Instead it is called just gold which is wrong. Alasdair also believes that the IMF gold sales two years ago was nothing but sight sales or sale of non allocated gold from one party to another. The IMF refused to accept private party offers for this gold which probably means it does not exist.
The author also comments on the LBMA's desire to have its members hold gold in non allocated accounts.
They discourage allocated gold. As one of our readers, Hugo noted, that the huge yearly gold turnover at the LMBA approximates the entire gold produced from the beginning of civilization or 150,000 tonnes of gold. Jeff Christian who testified against me at the CFTC hearings blurted that the LBMA is becoming a paper market and not a physical market in that there are 100 oz of obligations against that one ounce of physical.
However his most intriguing comment is on the swap dealers. These guys are close to the physical scene in gold. Two years ago these guys were net short 120,000 contracts or 373 tonnes of gold.
Today their short position is zero. Total open interest at the comex has been reduced from 650,000 to 420,000.Why were they short? The only logical reason for them to be short was the fact that central banks were supplying bullion. In 2009, a total of 349 tonnes of gold appeared as collateral on the BIS balance sheet.
Many GATA supporters like Reg Howe, myself, James Turk, suspected that Portugal was in trouble as they list 349 tonnes of gold as reserves. We wrote then and now truly believe that Portugal has sold all of its gold due to the crisis that they are in. What dummies !!The author also comments on the LBMA's desire to have its members hold gold in non allocated accounts.
They discourage allocated gold. As one of our readers, Hugo noted, that the huge yearly gold turnover at the LMBA approximates the entire gold produced from the beginning of civilization or 150,000 tonnes of gold. Jeff Christian who testified against me at the CFTC hearings blurted that the LBMA is becoming a paper market and not a physical market in that there are 100 oz of obligations against that one ounce of physical.
However his most intriguing comment is on the swap dealers. These guys are close to the physical scene in gold. Two years ago these guys were net short 120,000 contracts or 373 tonnes of gold.
Today their short position is zero. Total open interest at the comex has been reduced from 650,000 to 420,000.Why were they short? The only logical reason for them to be short was the fact that central banks were supplying bullion. In 2009, a total of 349 tonnes of gold appeared as collateral on the BIS balance sheet.
Alasdair Macleod details the mechanics of gold price suppression
Submitted by cpowell on Sun, 2012-05-20 18:46. Section: Documentation
2:52p ET Sunday, May 20, 2012
Dear Friend of GATA and Gold (and Silver):
This week our friend the British economist Alasdair Macleod presented what he modestly called two "lectures" about gold at the Hard Assets Investment Conference in New York. The "lectures" are actually the equivalents of state papers -- the latter one a masterful and detailed description of the mechanics of the gold price suppression scheme. A few excerpts from that lecture:
It is the leasing activities and other unannounced interventions that are not reflected in central bank gold accounts, the former because in a leasing agreement ownership remains with the lessor so it is not reported, and the latter because they are hidden by the sight account system. The logical conclusion is that 30 years of supplying gold to the market to keep gold well below its free-market value has depleted official gold reserves to a significant degree. And since central banks refuse to discuss the matter, we have no idea how much of the officially declared gold actually exists.
The International Monetary Fund's gold is likely to be held on a sight basis in its entirety. When the IMF disposed of 400 tonnes between 2009 and 2010, they turned down bids from the private sector, selling only to other central banks. I believe this gold was in sight accounts (that is, did not actually exist), so a condition of sale was that it could be transferred and held only between central banks and supra-national government organisations. This certainly seems likely, but the sale terms were never actually made public.
So, to summarise: The central banks at the heart of price manipulation have had the means to sell substantial amounts of bullion without having to account for it. ...
* * *
London Bullion Market Association members strongly encourage clients to hold unallocated accounts by charging little or no fees for the privilege. They discourage clients from holding allocated accounts by charging high storage and custody fees. There are very good reasons why this is so. They are unable to make use of allocated gold, whereas every ounce of unallocated gold is used to back the LBMA members' dealings in the market. The disadvantage to the client is that he is exposed to counter-party risk.
Now if you have looked recently at the balance sheets of some of the European banks, you may not wish to take that risk. So while there has never been a bankruptcy in the market (though there have been some covert rescues -- for example, the one I mentioned earlier which [former Bank of England Governor] Eddie George talked about), implying that unallocated accounts are safe, for many clients this is not an assumption they are prepared to accept anymore.
*
The money in the [gold] market is always unbalanced in favour of the commercial bullion banks. They have lots of money, even your money as a taxpayer if they are too big to fail, and can always bluff anyone not prepared to put up funds for delivery. This is because the non-commercials and speculators have geared positions, which will magnify their losses.
We see this happening time and time again. The big commercial bullies wait for the punters to build up their long positions and then they whack it hard. They know that by doing so they will trigger all those stop-losses. In an afternoon they can make $100 an ounce this way. They make lots more money trading this way than they lose from being continually short in a bull market. You have been warned!
* * *
In the chart above I have derived from disaggregated data the net positions of the swap dealers. Two years ago they were short a net 120,000 contracts, which is the equivalent of 373 tonnes of gold. Since March 2011 they have reduced their net shorts from -110 thousand to zero give or take at the peak of the gold market last September. At the same time open interest fell from a peak 650,000 in November 2010 to the 420,000 level.
Why were the swaps short? The only logical reason has to be that the central banks were supplying the market with physical. It is that extra physical that was being hedged two years ago. And what is interesting is that at that time Portugal was rumoured to have given its gold up as collateral to the Bank for International Settlements. The amount that actually showed up in the BIS accounts was 349 tonnes, and the date was late 2009. Fits perfectly! Put another way, Portugal's entire gold stock appears to have been sold and absorbed into the market.
* * *
The balance of power has shifted to Asia, particularly China, and central to that power is control of real money, the money that society chooses for itself, not that enforced by government as a monopoly upon us. Untold amounts of gold have disappeared from the advanced economies' central banks, and the London Bullion Market is exposed to a sharp rise in the gold price. With this knowledge, anyone who does not take steps to protect him or herself from the increasingly certain event, a collapse in paper money, a fundamental change in our whole economic paradigm, is nuts.
* * *
The first part of Macleod's lecture, explaining gold's central position in economic theory, is posted at his Internet site, Finance and Economics, here:
The second part, quoted above, about the mechanisms of gold market rigging, likely to be of more immediate interest, is here:
Because of their supreme importance Macleod's two papers will be posted in the "Documentation" section of GATA's Internet site and should be distributed by gold's advocates as widely as possible.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
and....
On Friday night, we learned that the CFTC through its enforcement arm opened a probe into the JPMorgan trading loss. Gary Gensler will make a public statement tomorrow outlining why the CFTC are involved and that they are disclosing this early due to the serious nature of the loss. The CFTC is involved as it relates to derivatives which is in their jurisdiction. I will highlight two commentaries on this subject, the first from Reuters and the second from the New York Times. These events are no doubt extremely intriguing. We have had 4 years of a CFTC enforcement investigation into JPMorgan. The CFTC boys have done nothing. They, no doubt have figured out the scam quite early. However when they found out that the boys behind the scam are not just JPMorgan but the USA government itself, they decided it best to keep mum on this and hope that this goes away. In October we had the scandal of JPMorgan receiving MFGlobal customer accounts and this investigation is still on. Now we have a 3rd major investigation into JPMorgan. The one line that JPMorgan always uses is that that their short position at the comex is really hedged because of their long positions over at the LBMA. JPMorgan previously has stated that all of their trading is hedged and that is how they earn their profits. The revelation of the IG 9 trades certainly dispels that notion and the CFTC now must know glean with utmost accuracy the extent of JPMorgan's overseas silver and gold hedges. I feel that the regulators must now act for fear that they would be accomplices to these crimes.
Following are the two newspaper accounts on the CFTC enforcement investigation in the trading practices of JPMorgan:
First; Reuters:
CFTC opens probe into JPMorgan trading loss: source
(Reuters) - The Commodity Futures Trading Commission (CFTC) has opened an investigation into possible wrongdoing at JPMorgan Chase & Co in connection with the bank's multi-billion-dollar trading loss, a source familiar with the probe told Reuters.
The agency will soon disclose the existence of the investigation, the source said on Friday.
Earlier on Friday, the New York Times reported that the CFTC had opened an enforcement case, quoting people briefed on the matter.
The CFTC would join the FBI and the U.S. Securities and Exchange Commission among federal agencies examining the loss, which the largest U.S. bank said last week was at least $2 billion.
The CFTC has disclosed an investigation into last October's collapse of MF Global Holdings Ltd, a futures and commodities brokerage from where large sums of customer money remain missing.
JPMorgan spokesman Joe Evangelisti declined to comment. The CFTC did not immediately respond to a request for comment.
The bank has not been accused of wrongdoing, and the newspaper said all of the investigations into its trading loss are preliminary.
CFTC Chairman Gary Gensler is expected to reveal his agency's investigation when he testifies before the Senate Banking Committee on Tuesday, the newspaper said.
JPMorgan Chief Executive Jamie Dimon is also expected to testify before that committee, after hearings on Wall Street reforms that are expected to end on June 6.
The CFTC began tracking JPMorgan's trading in April, the newspaper said, when reports surfaced that London-based trader Bruno Iksil was taking big bets in credit derivatives.
Its probe may examine whether the bank's trading affected that market, the newspaper said. And now the NY times article.
(Reporting By Jonathan Stempel in New York and Alexandra Alper in Washington,; Editing by Daniel Magnowski)
A 3rd U.S. Agency Said to Open Inquiry Into JPMorgan Loss
WASHINGTON — A federal investigation into JPMorgan Chase’s multibillion-dollar trading loss widened Friday as regulators pursued a new line of inquiry.
The Commodity Futures Trading Commission opened an enforcement case, people briefed on the matter said, making it the third federal agency to examine the trading loss.
The agency joins the Securities and Exchange Commission and the Federal Bureau of Investigation, which are also examining possible wrongdoing at the bank, the nation’s biggest by assets.
The various investigations are all preliminary. No one at JPMorgan has been accused of any wrongdoing.
The commodity commission’s members also voted on Friday to publicly disclose the existence of their investigation soon, an uncommon step that occurs only in the most serious cases. Last year, the agency confirmed that it was investigating the collapse of MF Global, the brokerage firm that misused customers’ money.
In the JPMorgan matter, the futures commission will potentially examine, among other things, whether the bank’s trading affected the market for credit derivatives, the instruments at the heart of the bank’s trading debacle.
While the agency is not the bank’s front-line regulator, it does have jurisdiction over the derivatives industry. It started tracking the bank’s trading in April, one person said, after reports emerged that a London-based trader was taking large bets in credit derivatives that distorted the market. But it was not until recently that the agency opened a formal investigation.
The agency’s chairman, Gary Gensler, is expected to disclose the investigation when he testifies on Tuesday before the Senate Banking Committee. It is unclear whether he will offer additional insight into the scope of the case.
The S.E.C. and the F.B.I. office in New York are examining JPMorgan’s accounting practices and public disclosures surrounding the risky trades.
Both of those inquiries are likely to examine JPMorgan’s regulatory filings that mention the chief investment office, which is the internal unit that placed the trades, and recent statements from the firm’s top executives. On April 13, Jamie Dimon, the bank’s chief executive, publicly played down the concerns about the unusual trading by the “London whale,” calling them a “complete tempest in a teapot.”
On May 10, the bank disclosed that it had lost at least $2 billion in trading, blaming “errors, sloppiness and bad judgment.” A bet with credit derivatives, meant to be a hedge, was “poorly constructed and poorly monitored,” according to Mr. Dimon. The losses are now believed to have grown by at least another $1 billion.
Federal prosecutors in New York have also contacted the bank.
A spokeswoman for JPMorgan did not immediately respond to a request for comment.
and....
In the following Bloomberg article Michael Platt of Blue Crest Capital Management discussed with Erik
Schatzker the ongoing crisis with JPMorgan. Blue Crest itself is counterparty to some of JPMorgan's IG 9 trades. He states that when things get nasty in Europe then JPMorgan will heap a huge amount of future losses.
What are events which can cause further deterioration in Europe?
1. A Greek exit
2. Spain becomes the ultimate battleground for the Euro due to its deteriorating banking sector.
Spain had to revise its budgetary deficit from 8.5% of GDP to 8.9%.
3. a full fledged banking run as citizens are scared to keep their euros in their respective country.
Either Europe decides to issue eurobonds or a full scale meltdown occurs.
(courtesy Erik Schatzker of Bloomberg)
Schatzker the ongoing crisis with JPMorgan. Blue Crest itself is counterparty to some of JPMorgan's IG 9 trades. He states that when things get nasty in Europe then JPMorgan will heap a huge amount of future losses.
What are events which can cause further deterioration in Europe?
1. A Greek exit
2. Spain becomes the ultimate battleground for the Euro due to its deteriorating banking sector.
Spain had to revise its budgetary deficit from 8.5% of GDP to 8.9%.
3. a full fledged banking run as citizens are scared to keep their euros in their respective country.
Either Europe decides to issue eurobonds or a full scale meltdown occurs.
(courtesy Erik Schatzker of Bloomberg)
JPMorgan Counterparty Platt Says Bank’s Trading Loss May Widen
JPMorgan Chase & Co. (JPM) may face even bigger losses on faulty bets in credit markets if Europe’s debt crisis worsens, according to one of the hedge funds that took the other side of the trades.
“They’re not out of those positions,” Michael Platt, co- founder and chief executive officer of BlueCrest Capital Management LLP, said today in an interview on Bloomberg Television’s “Inside Track.” “If we end up with a catastrophe in Europe in the short run, they’re probably not positions that anyone would want to have.”
BlueCrest, based in Geneva, manages $32 billion. Platt said a credit fund run by his firm took a “small” position against JPMorgan after finding “anomalies” in the pricing of certaincredit derivatives. BlueCrest would make money as the prices corrected, he said.
JPMorgan, the biggest U.S. bank by assets, is seeking to stanch losses in its chief investment office as other hedge funds exploit its money-losing positions by trading in indexes tied to credit-default swaps. New York-based JPMorgan revealed a $2 billion loss on May 10, and CEO Jamie Dimon said it could increase by as much as $1 billion this quarter.
The bank’s positions were built by Bruno Iksil, a JPMorgan trader nicknamed the “London whale” because his bets had become so large, Bloomberg News reported on April 5. Traders on the other side, known as counterparties, say the market has since moved even further against JPMorgan.
HEDGES QUESTIONED
Platt said he doubted Dimon’s explanation that the trades had spawned from hedges intended to protect the value of credit assets such as corporate loans.
“I don’t think they could be described in any way as a hedge,” he said. “I think it’s a trading loss. They deliberately put the positions on. The London whale, who has subsequently been harpooned, put the positions on.”
Platt said the crisis in Europe could worsen quickly if Greece leaves the euro, a possibility now being discussed by European politicians.
“The order of events would be Greek exit, shock wave across Europe, massive stress in banks,Spain turns into the battleground for the euro, because of the stresses in their own banking system,” he said. “Then we either get a very swift and strong European solution or we get a hugely disorderly meltdown in Europe.”
Platt, 44, is a former trader for JPMorgan who founded BlueCrest in 2000. He said the hedge fund took its positions against the bank “in the normal course of our business” and “not looking to try and cause them any problem.”
ABLE TO EXIT
Dimon, 56, has said JPMorgan is in no rush to unwind the trades, even if adverse market moves produce bigger losses in the short term. Platt said he agrees with that approach.
“They would ultimately be able to exit this position,” he said. “I would be looking, if I was in that position, creatively at finding other avenues to reduce the value at risk of the book.”
At a conference organized by Deutsche Bank AG today Dimon called the trading loss an isolated event and said JPMorgan is making progress in efforts to limit fallout. The positions are “very volatile right now,” though less so than previously, he said, declining to answer a question on how big the loss may get.
To contact the reporters on this story: Erik Schatzker in New York ateschatzker@bloomberg.net; Stephanie Ruhle in New York at sruhle2@bloomberg.net
To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net
and Jamie really must think folks are idiots .....
as Jamie states: this has nothing to do with the criminal investigation by the FBI, the CFTC investigation and the big losses that they are incurring:
(courtesy zero hedge) the loss
(courtesy zero hedge) the loss
JPM Halts Share Repurchase Program
Submitted by Tyler Durden on 05/21/2012 09:44 -0400
Remember when Jamie Dimon showed the Fed who's boss and preannounced it was starting a share repurchase program? Turns out the Chairsatan will have the final laugh:
- DIMON SAYS JPM IS SUSPENDING SHARE REPURCHASES
- DIMON SAYS SUSPENDING REPURCHASE PROGRAM ISN'T RELATED TO LOSS
- JPM'S DIMON SAYS THERE'S UNREALIZED $8B IN PROFIT FROM CIO
- JPM'S DIMON: DOESN'T SEE INVESTIGATION TO UNVEIL BIG SUPRISES
- DIMON SAYS LOSS IS AN ISOLATED EVENT
And the joke of the day:
- DIMON SAYS FORTRESS BALANCE SHEET REMAINS
But at least Bank of America will be announcing a dividend any minute now. And so the hits just keep on coming.
but the market isn't convinced....
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