http://harveyorgan.blogspot.com/2012/06/spain-officially-requests-bailout.html
Good evening Ladies and Gentlemen:
Gold closed up by $12.30 to $1587.30. Silver also followed suit rising by 87 cents to $27.52.
Today's big news comes from the official asking for funds from Spain. I can remember that Rajoy stated that the bailout will be unconditional. Guess again, there will be strings attached. We are waiting momentarily for Moody's to place the entire Spanish banking sector in junk status. Credit default swaps rise big time today along side the huge bloodbath in bourses from Europe and the USA. The unemployment in Spain surpasses 25% and is close to that in Greece. Today the Troika was scheduled to visit Athens but that that trip was cancelled due to:
a) the sudden surgery of the new Prime Minister for a retina detachment
b) the fainting of the new Finance Minister upon seeing the real Greek figures.
He subsequently resigned a few hours later.
Also today, Cyprus officially asked for a bailout as we reported that they would do so.
However China surprisingly has said no to them even though nasal bases would be of importance to China.
I will cover all of these stories and others but first let us now head over to the comex and assess trading today.
The total gold comex OI fell by 3895 contracts from 415,699 to 411,804 as the constant raids are having their gold on the paper gold players. The front delivery month of June saw its OI fall from 622 to 602 for a loss of 20 contracts. We had only 6 delivery notices on Friday so we lost 14 contracts or 1400 oz of gold standing. The next big delivery month is August and here the OI fell by 4767 from 217,686 to 212,919 as it was this month that took the brunt of the bankers attack. The estimated volume today was tiny at 119,665. The confirmed volume on Friday was a touch better at 129,498.The total silver comex OI continues to baffle our bankers. The total OI again differed from gold rising by 416 contracts from 127,983 to 128,399 despite the huge attempted ( and failed) raid on the precious metals on Friday. The non official delivery month of June saw its OI rise 160 contracts despite only 1 delivery notice on Friday. So somebody was in urgent need of silver as we gain in additional oz standing to the tune of 159 contracts or 795,000 oz. The estimated volume at the silver comex today was simply astounding at 107,478. The confirmed volume on Friday was also very high at 72,246. It looks to me like some major entities are in need of silver. I guess we are going to have another of those midnight oil meetings by the banking cartel as they must decide how they are going to shed those huge number of silver leaves still attached to the silver tree.
It behoves any investor to follow the smart money, and the nouveau riche nations must have gotten something right. They only want to hold on to wealth that has been hard won for many.Buying opportunitySo when the gold price dips as it may well do this summer as global financial markets sell-off and some investors are forced to dump their precious metals because they cannot afford to keep them, expect more record months of buying by China and Russia.
It makes sense to pay as little as possible for the asset class of the future and to get out of the US dollar while the dollar is strong, rather than to wait until it becomes weakened by devaluation and inflation.
Those who have US dollars stuffed into shoe boxes in the emerging markets will be switching in favor of shiny metals that they can see preserving their wealth in the global economic reset that is coming.
Submitted by Tyler Durden on 06/25/2012 07:45 -0400
Good evening Ladies and Gentlemen:
Gold closed up by $12.30 to $1587.30. Silver also followed suit rising by 87 cents to $27.52.
Today's big news comes from the official asking for funds from Spain. I can remember that Rajoy stated that the bailout will be unconditional. Guess again, there will be strings attached. We are waiting momentarily for Moody's to place the entire Spanish banking sector in junk status. Credit default swaps rise big time today along side the huge bloodbath in bourses from Europe and the USA. The unemployment in Spain surpasses 25% and is close to that in Greece. Today the Troika was scheduled to visit Athens but that that trip was cancelled due to:
a) the sudden surgery of the new Prime Minister for a retina detachment
b) the fainting of the new Finance Minister upon seeing the real Greek figures.
He subsequently resigned a few hours later.
Also today, Cyprus officially asked for a bailout as we reported that they would do so.
However China surprisingly has said no to them even though nasal bases would be of importance to China.
I will cover all of these stories and others but first let us now head over to the comex and assess trading today.
The total gold comex OI fell by 3895 contracts from 415,699 to 411,804 as the constant raids are having their gold on the paper gold players. The front delivery month of June saw its OI fall from 622 to 602 for a loss of 20 contracts. We had only 6 delivery notices on Friday so we lost 14 contracts or 1400 oz of gold standing. The next big delivery month is August and here the OI fell by 4767 from 217,686 to 212,919 as it was this month that took the brunt of the bankers attack. The estimated volume today was tiny at 119,665. The confirmed volume on Friday was a touch better at 129,498.The total silver comex OI continues to baffle our bankers. The total OI again differed from gold rising by 416 contracts from 127,983 to 128,399 despite the huge attempted ( and failed) raid on the precious metals on Friday. The non official delivery month of June saw its OI rise 160 contracts despite only 1 delivery notice on Friday. So somebody was in urgent need of silver as we gain in additional oz standing to the tune of 159 contracts or 795,000 oz. The estimated volume at the silver comex today was simply astounding at 107,478. The confirmed volume on Friday was also very high at 72,246. It looks to me like some major entities are in need of silver. I guess we are going to have another of those midnight oil meetings by the banking cartel as they must decide how they are going to shed those huge number of silver leaves still attached to the silver tree.
and non redundant articles of note.....
China and Russia buying gold as protection against currency reset
Posted on 22 June 2012
Consumers made the most of the dip in the price of bullion and mainland China’s gold purchases via Hong Kong hit a record 101.7 tonnes in April, up 62 per cent, reported Bloomberg.
Meantime, the Russian central bank has again increased its gold reserves by 500,000 ounces. Former Russian finance minister Alexei Kudrin said that a full-blown economic and financial crisis in the euro zone is inevitable and will develop within a year.
Real moneyRussia is clearly buying gold to protect the ruble from devaluations and Russia from an international monetary crisis. China is doing the same both by official gold purchases and by encouraging individuals to buy precious metals.
This is eminently understandable and sensible. It is the antithesis of the argument that central banks have everything under control. They know that is not true and so buy gold themselves.Their action also marks the transfer of real wealth in a global reset of wealth towards the emerging markets. They are the ones with the growing economies – Russia with its hydrocarbon wealth and China as the workshop of the world.
At first it was the almighty US dollar that everybody in emerging markets wanted. Now they worry that too many dollars are being created by the Fed and the obvious and unavoidable consequence is inflation down the road.Posted on 22 June 2012
Consumers made the most of the dip in the price of bullion and mainland China’s gold purchases via Hong Kong hit a record 101.7 tonnes in April, up 62 per cent, reported Bloomberg.
Meantime, the Russian central bank has again increased its gold reserves by 500,000 ounces. Former Russian finance minister Alexei Kudrin said that a full-blown economic and financial crisis in the euro zone is inevitable and will develop within a year.
Real moneyRussia is clearly buying gold to protect the ruble from devaluations and Russia from an international monetary crisis. China is doing the same both by official gold purchases and by encouraging individuals to buy precious metals.
This is eminently understandable and sensible. It is the antithesis of the argument that central banks have everything under control. They know that is not true and so buy gold themselves.Their action also marks the transfer of real wealth in a global reset of wealth towards the emerging markets. They are the ones with the growing economies – Russia with its hydrocarbon wealth and China as the workshop of the world.
It behoves any investor to follow the smart money, and the nouveau riche nations must have gotten something right. They only want to hold on to wealth that has been hard won for many.Buying opportunitySo when the gold price dips as it may well do this summer as global financial markets sell-off and some investors are forced to dump their precious metals because they cannot afford to keep them, expect more record months of buying by China and Russia.
It makes sense to pay as little as possible for the asset class of the future and to get out of the US dollar while the dollar is strong, rather than to wait until it becomes weakened by devaluation and inflation.
Those who have US dollars stuffed into shoe boxes in the emerging markets will be switching in favor of shiny metals that they can see preserving their wealth in the global economic reset that is coming.
and......
The Two Scariest Charts In Europe (Got Scarier)
Submitted by Tyler Durden on 06/25/2012 12:56 -0400
- European Central Bank
- Germany
- Greece
- Gross Domestic Product
- Italy
- Michael Cembalest
- Portugal
- Unemployment
It seems, as JPMorgan's CIO Michael Cembalest notes, that ahead of yet another EU Summit; everyone understands now why Europe matters (even the once-bloviating decoupling diehards). The summit is likely to focus on bank recapitalization, easier repayment timetables for Greece, bank deposit guarantees and an alleged “roadmap” for EU integration. The challenge, Cembalest confirms, is that Germany cannot afford a blank check given debt levels already over 80% of GDP. However, if policymakers don’t do something about growth in the Periphery (bailouts primarily designed to aid German and French banks don’t count), the North-South divide will continue to widen, putting pressure on the ECB and EU taxpayers. Sometimes there are no easy answers. Italy, Spain, Greece and Portugal are contracting at a 2%-5% annualized pace, and unemployment in Spain and Greece is sky-rocketing(1st chart). These levels are notable from an historical perspective. As shown in the 2nd chart, 20%+ unemployment was the level at which National Socialists in Germany began to take seats away from liberal democratic parties during the 1930’s. If the jobs picture does not improve, other EU policy decisions may not matter much (as we noted six months ago)!
Spanish and Greek Unemployment
Unemployment and The End of Liberal Capitalism 1930s
Source: JPMorgan
Finally for all those who vehemently claim this can never happen in Europe, feel free to click on the logo below:
and......
Overnight Summary: Euro Summit Burnout
- Across the Curve
- Blue Chips
- Bond
- Borrowing Costs
- Capital Markets
- European Central Bank
- European Union
- fixed
- Global Economy
- Nikkei
- recovery
- Sovereign Debt
- Wall Street Journal
Last week, Europe was the source of transitory euphoria on some inexplicable assumption that just because the continent has run out of assets, and the ECB has no choice but to expand "eligible" collateral to include, well, everything, things are fixed and it is safe to buy. Today, it is the opposite. Go figure. Call it pre-eurosummit burnout, call it profit taking on hope and prayer, call it Brian Sack packing up his trading desk (just 5 more days to go), and handing over proper capital markets functioning to a B-grade economist, or best just call it deja vu all over again.
Rom Bank of America
Market action
Markets are selling off across the globe as investors grow cautious ahead of this week's European Union (EU) summit. In addition, Greek leaders will try to renegotiate their current bailout package to ease austerity measures and boost growth in the short term. In Asia, the worst performers were the Shanghai Composite (-1.6%), the Korean Kospi (-1.2%) and the Japanese Nikkei (-0.7%). All the other regional indices we cover also finished in the red.
In Europe, equities are selling off sharply, down 1.0% in the aggregate. The region's blue chips are getting crushed, down 1.8%. At home, futures are pointing to a 0.7% lower opening for the S&P 500. That would reverse the 0.7% gain on Friday.
In bondland, Treasuries are bid across the curve as investors seek out their safety. The 10-year yield is down 5bp to 1.63% while the long bond is trading at 2.71%. In Europe, Spain's 10-year borrowing costs jumped in early trading up 20bp to 6.46%. Italian's 10-year borrowing costs are also higher, rising 10bp to 5.88%.
Overseas data wrap-up
On June 28 and 29, European leaders will meet for the EU Heads of State summit. European leaders will discuss options for resolving the ongoing sovereign debt and banking crises plaguing the euro area. Our European team believes there will be few concrete measures to come out of this week's summit. Agreement may be found on a package to support growth in the medium term, but nothing concrete on further euro integration. The options on the table include a roadmap towards some form of federalism, debt mutualisation, banking union, banking sector recapitalisation, extension of the permanent rescue mechanism (ESM) and the growth package. To read more details about the summit see: European Macro Watch, 21 June 2012. Also take a look at today's Wall Street Journal article, "Outlook for Euro Tied To EU Summit."
On the data front, exports from Thailand increased 7.7% yoy in May. That was ahead of consensus expectation for a modest 0.4% increase and a reversal from last month's 3.9% contraction in Exports. Auto exports were the main growth contributor, rising 83% yoy. We suspect this is largely the result of fulfilling the backlog of orders resulting from last year's floods. Recovery from the floods and the backlog of orders make it difficult to ascertain the impact from a weaker global economy. However, the effect of the latter is likely to become more apparent during 2H when the Thai economy is expected to recover fully and the backlog of orders is filled
and.....
As Mark Grant states: only pay attention to what Germany says:
(courtesy zero hedge)
As we noted over the weekend, there really is only one voice on which to act in Europe (and plenty of noise that should be ignored) and that is Germany. This morning we already heard from Herr Schaeuble and Herr Siebert, but Frau Merkel has just come over the top with her hope-crushing reality that (via Bloomberg):
(courtesy zero hedge)
Merkel Crushes Hopes For German-Funded Pan European Socialism Once Again
Submitted by Tyler Durden on 06/25/2012 09:09 -0400
- *SEIBERT SAYS MERKEL CONCERNED EU SEEKING 'EASY WAYS' ON CRISIS
- *MERKEL SAYS ECONOMIC GROWTH MUST BE SUSTAINABLE
- *MERKEL SAYS LIVING BEYOND MEANS LED TO EURO DEBT CRISIS
- *MERKEL SAYS SHARED EURO-AREA DEBT 'COUNTERPRODUCTIVE' NOW
- *MERKEL REJECTS JOINT EURO BONDS, JOINT EURO BILLS
- *MERKEL REJECTS JOINT DEPOSIT INSURANCE IF MEANS JOINT LIABILITY
endHere are the final closing yields for Spanish and Italian bond 10 yr bonds:
First the Spanish 10 yr bond yield closing price/yieldSPANISH GOVERNMENT GENERIC BONDS - 10 YR NOTE
Add to PortfolioGSPG10YR:IND
6.637000.25700 4.03%As of 12:01:00 ET on 06/25/2012.and now for Italy: (scary!!! rising over 6.00%)ITALY GOVT BONDS 10 YEAR GROSS YIELD
Add to PortfolioGBTPGR10:IND
6.010000.21100 3.64%As of 12:01:00 ET on 06/25/2012.and.....European Bloodbath As Merkel Won't Go Dutch
Submitted by Tyler Durden on 06/25/2012 11:53 -0400Equity, credit, and sovereigns all ugly. Merkel's unequivocal comment on her nation's unwillingness to 'share' burdens and slap the proverbial cheek of Monsieur Hollande, Italy's banking union looking for more 'aid', Spain actually asking for their bailout, Greece 'avoiding' reality, and Cyprus pulling the 'China rescue plan' last ditch retort to market angst; but apart from that, things are dismal in Europe. Italy down over 4% and Spain almost as bad on the day as every major equity index is well into the red. Italian banks monkey-hammered down 6/7.5% and halted a number of times. Investment grade credit outperformed (though was notably wider) as financials (subs and seniors), XOver, and stocks are plummeted to 11-day lows. After breaking below the pre-Spanish bailout levels on Friday, Spain and Italy 10Y are now 20-40bps wider with Italy and Spain 5Y CDS notably wider and well over 500bps. Notably the short-end of the Italian and Spanish curves underperformed significantly (curves flattened): 2Y BTPs +57bps vs 10Y +21bps - biggest flattening in 6 months!; 2Y SPG +37bps vs 10Y +17bps. Europe's VIX snapped back above 27% (and we note that our EU-US Vol compression trade is moving well in our favor). EURUSD has been smacked lower by over 80pips ending under 1.25 once again.Stocks and credit down hard led by financials...
and Italian banks leading the dump today...
and Italian 2s10s plunged (flattened) by the most in over 6 months today...
we can only imagine what this is doing to LTRO-bound Italian banks that took up Sarkozy's idiotic symbiotic carry trade. (as 2Y ITA shows below post LTRO)
Charts: Bloomberg
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