http://harveyorgan.blogspot.com/2013/07/july-182013ecb-relaxes-lending.html
Gold closed up $6.70 to $1284.60 (comex closing time ). Silver is down by 3 cents to $19.38 (comex closing time)
In the access market at 5:00 pm, gold and silver finished trading at the following prices :
gold: $1284.00
At the Comex, the open interest in silver rose by 832 contracts to 133,445.
Tonight, the Comex registered or dealer inventory of gold lowers again and remaining below the 1 million oz mark to 950,441.152 oz or 29.56 tonnes. This is dangerously low especially when we are coming up to the August delivery month.
Remember in June we had almost 31 tonnes of gold stand for delivery. The total of all gold at the comex (dealer and customer) remains constant and registers a reading of 7.079 million oz or 220.2 tonnes of gold.
JPMorgan's customer inventory rests tonight to 136,380.609 oz or 4.245 tonnes. It's dealer inventory rests at 390,092.326 oz (12.13 tonnes) but it still must settle upon contracts issued in the May and June delivery month which far exceeds its inventory. (see yesterday the Bill Kaye interview with Lars Schall on the lack of deliveries at the comex per outstanding issues)
The total of the 3 major gold bullion dealers( Scotia , HSBC and JPMorgan) in its Comex gold dealer account registers only 24.92 tonnes of gold. The total of all of the dealers falls badly tonight to 29.56 tonnes!! Brinks continues to record a low of only 4.18 tonnes in its dealer account.
The GLD reported a loss in inventory tonight of 1.5 tonnes of gold with an inventory reading of 936.07 tonnes of gold. We gained 772,000 oz of silver inventory at the SLV
Dave Kranzler weighs on the the 9th consecutive day for negative GOFO rates.
The negativity is increasing numerically!
Today, we have a huge commentary from Bill Holter on the backwardation of gold, accompanied by a 2nd big Dutch bank, Rabobank that just defaulted on gold deliveries to its customers. Bill again emphasizes the huge demand for gold coupled with a huge negative GOFO occurring for 9 straight days.
The total gold comex open interest fell by 2029 contracts from 440,283 down to 438,254 with gold falling in price by $15.00 yesterday. We are now into the the non active July contract and here the OI rests at 81 down 6 contracts . We had 0 delivery notices filed yesterday so in essence we lost 6 contracts or 600 oz gold ounces will not stand for the July delivery month. The next active delivery month for gold is August and here the OI fell by 9077 contracts from 149,467 down to 140,390 as we are less than 2 weeks away from first day notice for the August contract month. The estimated volume today was poor at 128,943 contracts. The confirmed volume yesterday was strong at 270,051.
The total silver Comex OI rose by 832 contracts with silver falling in price yesterday by 42 cents. The total of all comex silver OI stands at 134,277 contracts. We are now into the big delivery month of July and here the OI fell by 123 contracts down to 734. We had 141 notices filed yesterday so in essence we gained 18 contracts or 90,000 oz of additional silver standing. The next big delivery month is September and here the OI rose by 362 contracts up to 79,234. The estimated volume today was fair coming in at 39,425 contracts. The confirmed volume yesterday was very strong at 62,182.
We had 1 customer deposits today :
i) Into HSBC : 31,814.29 oz (and almost all of that gold immediately vacated the premises ie. 31,749.864 oz left)
total customer deposits: 31,814.29 oz
we had 4 customer withdrawals
i) Out of Brinks a tiny 64.30 oz left
ii) Out of JPMorgan: 11,298.161 oz
iii) Out of HSBC 31,749.864 oz (no doubt, from the original deposit of 31,814.29 today)
iv) Out of Scotia: 11,298.161
Total Customer withdrawals: 54,897.492 oz
I wonder what on earth is scaring our owners of gold at the Comex.
Today we had 0 adjustments
Thus tonight we have the following JPMorgan gold inventory
JPM dealer inventory: 390,092.326 oz 12.13 tonnes
JPM customer inventory: 136,380.609 oz or 4.24 tonnes
Today, zero notices were issued from JPMorgan
So we have no changes on the customer side of JPM:
As we reported to you 5 weeks ago, that JPMorgan withdrew a huge amount of gold from its customer account:
Out of JPMorgan: 217,844.96 oz.
If you will recall, we needed to see 100,000 oz of gold removed from JPMorgan's customer account. (1000 contracts served upon our longs in mid May).
The last Tuesday in May (May 28), we had 15,416.93 oz removed from the JPM's customer account. No doubt that this gold was part of the 1000 contracts issued by JPMorgan customer account and thus we calculated that as of tonight 28,389.579 oz was settled upon, leaving 71,611.00 oz still left to arrive in the settling process.
Tuesday, June 11, we had 217,844.96 actual ounces leave JPMorgan
and on, June 28.2013 we had 4,817.251 oz leave jPMorgan customer account
and on Friday July 5.2013: we had 6,831.54 oz leave jPMorgan customer account
and today, July 18.2013: we had 11,785.167 oz leave JPMorgan customer account.
Summary from the 28th of June until today on issuance from JPMorgan:
On Friday, June 28th we had 23 notices filed and all of these were issued by JPMorgan on the customer side.
Two weeks ago:
Tuesday we had 24 contracts were issued and all from the dealer or house account.
Thursday, 20 contracts were issued and all from JPMorgan's dealer or house account.
Friday,we had 10 contracts were issued and all from JPMorgan's dealer or house account.
And on, July 15.2013 we had 24 notices filed from its dealer side.
In summary on the customer side of things for JPMorgan:
On Friday, the 28th of June, I reported that we had from the beginning of June, 2543 notices or 254,300 oz issued. If we add the 71,611.00 oz owing from May issuance, we get 325,911 oz. If we subtract the actual withdrawal of gold from JPMorgan of 241,278.91 (which includes July 18.2013 withdrawal), this still leaves 84,632.09 oz that needs to be settled upon from the vaults of JPMorgan customer side. (I am assuming that the withdrawal from the customer side is a settlement. It may be just a nervous holder of gold that wants to get out of Dodge. I am giving JPMorgan the benefit of the doubt.
The total dealer comex gold remains dramatically below 1 million oz at 959,705.039 oz or 29.85 tonnes of gold.The total of all comex gold, dealer and customer remains tonight at 7.111 million oz or 221.18 tonnes.
Now for JPMorgan's dealer side and what the inventory should be:
On June 11.2013 we reported that 4935 contracts have been issued by JPMorgan's house account(dealer account) since first day notice and not yet subtracted out of inventory.
Tuesday, July 2: 24 contracts (notices) were issued by JPMorgan's dealer or house account.
Wednesday: July 3: 20 contracts were issued by JPMorgan's dealer or house account.
Friday: July 5: 10 contracts were issued byJPMorgan's dealer our house account.
Tuesday; July 15.2013: 16 notices issued by JPMorgan dealer side.
You will also recall 6 weeks ago on Saturday (and again on that following Monday night,) I reported that JPMorgan had 470,322.102 oz in it's dealer account. From that day until now, 80,229.777 oz was either withdrawn or adjusted out dealer , leaving the dealer side at 390,092,33 oz where it sits tonight.
On the dealer side here are the last 27 trading sessions as to notices issued from JPMorgan's dealer side:
Friday: zero
Monday: 1
Another disturbing piece of news is the low dealer gold inventory for our 3 major bullion banks(Scotia, HSBC and JPMorgan). These 3 dealer gold lowers to 24.92 tonnes tonight
i) Scotia: 190,375.136 oz or 6.206 tonnes (199,539.37 oz or 6.206 tonnes)
ii) HSBC: 221,093.814 oz or 6.87 tonnes
iii) JPMorgan: 390,092.326 oz or 12.13 tonnes (Prev 401,877.493 oz or 12.50 tonnes)
total: 24.92 tonnes
Brinks dealer account which did have the lions share of the dealer gold remains tonight at 134,524.79 oz or 4.18 tonnes (in the beginning of July they had over 13 tonnes and today only 4.18 tonnes!!)
Today we had 0 notices served upon our longs for nil oz of gold. In order to calculate what I believe will stand for delivery in July, I take the total number of notices served (103) x 100 oz per contract to give us 10,300 oz served + I take the OI remaining for July (81) and subtract out today's notices (0) which leaves us with 81 notices still left to be served upon our longs or 8,100 oz
Thus we have the following gold ounces standing for metal:
103 contracts served x 100 oz = 10,300 oz, + 81 contracts left to be served upon x 100 oz = 8,100 oz to give us 18,400 oz or 0.5723 tonnes of gold. We lost 600 gold ounces standing for July.
Ladies and Gentlemen: we have a three-fold problem:
i) the total dealer inventory of gold remains at a very dangerously low level of only 29.56 tonnes and none of the 9.5 tonnes delivery notices from May and the major part of the 30.70 tonnes from June issued by JPM on its dealer side has yet to leave.
ii) a) JPMorgan's customer inventory remains at an extremely low 136,380.609 oz.
If you are a customer of JPMorgan and have your gold in its vault, I think it is best to remove it before we have another fiasco like MFGlobal.
ii b) JPMorgan's dealer account rests tonight at 390,092.326 oz. However all of this gold has been spoken for plus an additional 112,307.68 oz of deficient gold.
iii) the 3 major bullion banks have collectively only 24.92 tonnes of gold left in their dealer account.
i) Out of Brinks: 18,138.99 oz
ii) Out of CNT: 20,036.18 oz
iii) Out of Scotia; 80,944.85
total customer withdrawal : 119,120.02 oz
Now let us check on gold inventories at the GLD first:
July 17.2013: we had another gold bleed of exactly 1.5 tonnes again today.
July 16.2013: we had another gold bleed of 1.5 tonnes today.
Thursday, July 18, 2013
July 18.2013/ECB relaxes lending requirements/Comex dealer gold falls again/the top 3 bullion bankers have their inventory cut to only 24.92 tonnes/
Good evening Ladies and Gentlemen:
Gold closed up $6.70 to $1284.60 (comex closing time ). Silver is down by 3 cents to $19.38 (comex closing time)
In the access market at 5:00 pm, gold and silver finished trading at the following prices :
gold: $1284.00
silver: $19.38
At the Comex, the open interest in silver rose by 832 contracts to 133,445.
The open interest on the entire gold comex contracts fell by 2029 contracts to 438,254 with gold's fall in price of $15.00 yesterday.
Tonight, the Comex registered or dealer inventory of gold lowers again and remaining below the 1 million oz mark to 950,441.152 oz or 29.56 tonnes. This is dangerously low especially when we are coming up to the August delivery month.
Remember in June we had almost 31 tonnes of gold stand for delivery. The total of all gold at the comex (dealer and customer) remains constant and registers a reading of 7.079 million oz or 220.2 tonnes of gold.
JPMorgan's customer inventory rests tonight to 136,380.609 oz or 4.245 tonnes. It's dealer inventory rests at 390,092.326 oz (12.13 tonnes) but it still must settle upon contracts issued in the May and June delivery month which far exceeds its inventory. (see yesterday the Bill Kaye interview with Lars Schall on the lack of deliveries at the comex per outstanding issues)
The total of the 3 major gold bullion dealers( Scotia , HSBC and JPMorgan) in its Comex gold dealer account registers only 24.92 tonnes of gold. The total of all of the dealers falls badly tonight to 29.56 tonnes!! Brinks continues to record a low of only 4.18 tonnes in its dealer account.
The GLD reported a loss in inventory tonight of 1.5 tonnes of gold with an inventory reading of 936.07 tonnes of gold. We gained 772,000 oz of silver inventory at the SLV
Dave Kranzler weighs on the the 9th consecutive day for negative GOFO rates.
The negativity is increasing numerically!
Today, we have a huge commentary from Bill Holter on the backwardation of gold, accompanied by a 2nd big Dutch bank, Rabobank that just defaulted on gold deliveries to its customers. Bill again emphasizes the huge demand for gold coupled with a huge negative GOFO occurring for 9 straight days.
We will go over these and many other stories today, but first......
Let us now head over to the comex and assess trading over there today.
Here are the details:
The total gold comex open interest fell by 2029 contracts from 440,283 down to 438,254 with gold falling in price by $15.00 yesterday. We are now into the the non active July contract and here the OI rests at 81 down 6 contracts . We had 0 delivery notices filed yesterday so in essence we lost 6 contracts or 600 oz gold ounces will not stand for the July delivery month. The next active delivery month for gold is August and here the OI fell by 9077 contracts from 149,467 down to 140,390 as we are less than 2 weeks away from first day notice for the August contract month. The estimated volume today was poor at 128,943 contracts. The confirmed volume yesterday was strong at 270,051.
The total silver Comex OI rose by 832 contracts with silver falling in price yesterday by 42 cents. The total of all comex silver OI stands at 134,277 contracts. We are now into the big delivery month of July and here the OI fell by 123 contracts down to 734. We had 141 notices filed yesterday so in essence we gained 18 contracts or 90,000 oz of additional silver standing. The next big delivery month is September and here the OI rose by 362 contracts up to 79,234. The estimated volume today was fair coming in at 39,425 contracts. The confirmed volume yesterday was very strong at 62,182.
Comex gold/May contract month:
July 18/2013
the July contract month
the July contract month
Ounces
| |
Withdrawals from Dealers Inventory in oz
|
9,263.887 (Scotia)
|
Withdrawals from Customer Inventory in oz
|
54,897.492 (HSBC,Brinks,Scotia)
|
Deposits to the Dealer Inventory in oz
|
nil
|
Deposits to the Customer Inventory, in oz
| 31,814.29 (HSBC) |
No of oz served (contracts) today
|
0 ( nil oz)
|
No of oz to be served (notices)
|
81 (8,100 oz)
|
Total monthly oz gold served (contracts) so far this month
|
103 (10,300 oz)
|
Total accumulative withdrawal of gold from the Dealers inventory this month
|
339,257.96 oz
|
Total accumulative withdrawal of gold from the Customer inventory this month
| 390,203.66 oz |
We had huge activity at the gold vaults
The dealer had 0 deposits and 1 dealer withdrawal
i) Out of Scotia: 9,263.887 oz
i) Out of Scotia: 9,263.887 oz
We had 1 customer deposits today :
i) Into HSBC : 31,814.29 oz (and almost all of that gold immediately vacated the premises ie. 31,749.864 oz left)
total customer deposits: 31,814.29 oz
we had 4 customer withdrawals
i) Out of Brinks a tiny 64.30 oz left
ii) Out of JPMorgan: 11,298.161 oz
iii) Out of HSBC 31,749.864 oz (no doubt, from the original deposit of 31,814.29 today)
iv) Out of Scotia: 11,298.161
Total Customer withdrawals: 54,897.492 oz
I wonder what on earth is scaring our owners of gold at the Comex.
Today we had 0 adjustments
Thus tonight we have the following JPMorgan gold inventory
JPM dealer inventory: 390,092.326 oz 12.13 tonnes
JPM customer inventory: 136,380.609 oz or 4.24 tonnes
Today, zero notices were issued from JPMorgan
So we have no changes on the customer side of JPM:
As we reported to you 5 weeks ago, that JPMorgan withdrew a huge amount of gold from its customer account:
Out of JPMorgan: 217,844.96 oz.
If you will recall, we needed to see 100,000 oz of gold removed from JPMorgan's customer account. (1000 contracts served upon our longs in mid May).
The last Tuesday in May (May 28), we had 15,416.93 oz removed from the JPM's customer account. No doubt that this gold was part of the 1000 contracts issued by JPMorgan customer account and thus we calculated that as of tonight 28,389.579 oz was settled upon, leaving 71,611.00 oz still left to arrive in the settling process.
Tuesday, June 11, we had 217,844.96 actual ounces leave JPMorgan
and on, June 28.2013 we had 4,817.251 oz leave jPMorgan customer account
and on Friday July 5.2013: we had 6,831.54 oz leave jPMorgan customer account
and today, July 18.2013: we had 11,785.167 oz leave JPMorgan customer account.
Summary from the 28th of June until today on issuance from JPMorgan:
On Friday, June 28th we had 23 notices filed and all of these were issued by JPMorgan on the customer side.
Two weeks ago:
Tuesday we had 24 contracts were issued and all from the dealer or house account.
Thursday, 20 contracts were issued and all from JPMorgan's dealer or house account.
Friday,we had 10 contracts were issued and all from JPMorgan's dealer or house account.
And on, July 15.2013 we had 24 notices filed from its dealer side.
In summary on the customer side of things for JPMorgan:
On Friday, the 28th of June, I reported that we had from the beginning of June, 2543 notices or 254,300 oz issued. If we add the 71,611.00 oz owing from May issuance, we get 325,911 oz. If we subtract the actual withdrawal of gold from JPMorgan of 241,278.91 (which includes July 18.2013 withdrawal), this still leaves 84,632.09 oz that needs to be settled upon from the vaults of JPMorgan customer side. (I am assuming that the withdrawal from the customer side is a settlement. It may be just a nervous holder of gold that wants to get out of Dodge. I am giving JPMorgan the benefit of the doubt.
The total dealer comex gold remains dramatically below 1 million oz at 959,705.039 oz or 29.85 tonnes of gold.The total of all comex gold, dealer and customer remains tonight at 7.111 million oz or 221.18 tonnes.
Now for JPMorgan's dealer side and what the inventory should be:
On June 11.2013 we reported that 4935 contracts have been issued by JPMorgan's house account(dealer account) since first day notice and not yet subtracted out of inventory.
Tuesday, July 2: 24 contracts (notices) were issued by JPMorgan's dealer or house account.
Wednesday: July 3: 20 contracts were issued by JPMorgan's dealer or house account.
Friday: July 5: 10 contracts were issued byJPMorgan's dealer our house account.
Tuesday; July 15.2013: 16 notices issued by JPMorgan dealer side.
You will also recall 6 weeks ago on Saturday (and again on that following Monday night,) I reported that JPMorgan had 470,322.102 oz in it's dealer account. From that day until now, 80,229.777 oz was either withdrawn or adjusted out dealer , leaving the dealer side at 390,092,33 oz where it sits tonight.
On the dealer side here are the last 27 trading sessions as to notices issued from JPMorgan's dealer side:
Friday: zero
Monday: 1
Tuesday: 0
Wednesday : 0
Wednesday : 0
Thursday: 0
Friday: 0
Monday: 0 .
Tuesday: 0
Wednesday: 0
Thursday: 0
Friday: 0
Monday:0
Tuesday: 0
Wednesday: 0
Thursday:0
Friday: 0
Monday: 0
Tuesday: 24
Wednesday: 20
Thursday/Friday: 10
Monday: 0
Tuesday: 0
Wednesday:0
Thursday: 0
Friday: 0
Friday: 0
Monday: 0 .
Tuesday: 0
Wednesday: 0
Thursday: 0
Friday: 0
Monday:0
Tuesday: 0
Wednesday: 0
Thursday:0
Friday: 0
Monday: 0
Tuesday: 24
Wednesday: 20
Thursday/Friday: 10
Monday: 0
Tuesday: 0
Wednesday:0
Thursday: 0
Friday: 0
Monday: 0
Tuesday: 24
Wednesday:0
Thursday :0
we will now account for the new data tonight:
Thus, 5024 notices have been issued by JPMorgan (dealer side) for the month of June until today for 502,400 oz and these ounces have yet to settle from JPMorgan's dealer side.
JPMorgan's dealer vault registers tonight 390,092.326 oz.
Somehow we have a huge negative balance as i) the gold has not left JPMorgan's dealer account and has yet to settle
and
ii) it is now deficient by 102,307.68 oz (390,092.326 inventory - 502,400 oz issued = -112,307.68 oz)
In other words, the entire 390,092.326 oz must be first transferred out of Morgan's dealer category ( in the same format as in the customer category) leaving it with zero, plus the 112,307.68 of additional deficient gold
JPMorgan has not had any deposits in gold in quite some time. As a matter of fact, zero ounces has entered on the dealer side from the beginning of 2013.
How will JPMorgan satisfy this shortfall??
Tuesday: 24
Wednesday:0
Thursday :0
we will now account for the new data tonight:
Thus, 5024 notices have been issued by JPMorgan (dealer side) for the month of June until today for 502,400 oz and these ounces have yet to settle from JPMorgan's dealer side.
JPMorgan's dealer vault registers tonight 390,092.326 oz.
Somehow we have a huge negative balance as i) the gold has not left JPMorgan's dealer account and has yet to settle
and
ii) it is now deficient by 102,307.68 oz (390,092.326 inventory - 502,400 oz issued = -112,307.68 oz)
In other words, the entire 390,092.326 oz must be first transferred out of Morgan's dealer category ( in the same format as in the customer category) leaving it with zero, plus the 112,307.68 of additional deficient gold
JPMorgan has not had any deposits in gold in quite some time. As a matter of fact, zero ounces has entered on the dealer side from the beginning of 2013.
How will JPMorgan satisfy this shortfall??
Another disturbing piece of news is the low dealer gold inventory for our 3 major bullion banks(Scotia, HSBC and JPMorgan). These 3 dealer gold lowers to 24.92 tonnes tonight
i) Scotia: 190,375.136 oz or 6.206 tonnes (199,539.37 oz or 6.206 tonnes)
ii) HSBC: 221,093.814 oz or 6.87 tonnes
iii) JPMorgan: 390,092.326 oz or 12.13 tonnes (Prev 401,877.493 oz or 12.50 tonnes)
total: 24.92 tonnes
Brinks dealer account which did have the lions share of the dealer gold remains tonight at 134,524.79 oz or 4.18 tonnes (in the beginning of July they had over 13 tonnes and today only 4.18 tonnes!!)
Today we had 0 notices served upon our longs for nil oz of gold. In order to calculate what I believe will stand for delivery in July, I take the total number of notices served (103) x 100 oz per contract to give us 10,300 oz served + I take the OI remaining for July (81) and subtract out today's notices (0) which leaves us with 81 notices still left to be served upon our longs or 8,100 oz
Thus we have the following gold ounces standing for metal:
103 contracts served x 100 oz = 10,300 oz, + 81 contracts left to be served upon x 100 oz = 8,100 oz to give us 18,400 oz or 0.5723 tonnes of gold. We lost 600 gold ounces standing for July.
Ladies and Gentlemen: we have a three-fold problem:
i) the total dealer inventory of gold remains at a very dangerously low level of only 29.56 tonnes and none of the 9.5 tonnes delivery notices from May and the major part of the 30.70 tonnes from June issued by JPM on its dealer side has yet to leave.
ii) a) JPMorgan's customer inventory remains at an extremely low 136,380.609 oz.
If you are a customer of JPMorgan and have your gold in its vault, I think it is best to remove it before we have another fiasco like MFGlobal.
ii b) JPMorgan's dealer account rests tonight at 390,092.326 oz. However all of this gold has been spoken for plus an additional 112,307.68 oz of deficient gold.
iii) the 3 major bullion banks have collectively only 24.92 tonnes of gold left in their dealer account.
end
now let us head over and see what is new with silver:
now let us head over and see what is new with silver:
Silver:
July 18/2013: July silver contract month:
July contract month
July contract month
| Silver |
Ounces
|
| Withdrawals from Dealers Inventory | 598,822.71 (Scotia) |
| Withdrawals from Customer Inventory | 119,120.02 oz (Scotia, Brinks, CNT,) |
| Deposits to the Dealer Inventory | nil |
| Deposits to the Customer Inventory | 598,822.71 (JPM) |
| No of oz served (contracts) | 396 (1,980,000 oz) |
| No of oz to be served (notices) | 338 (1,690,000 oz) |
| Total monthly oz silver served (contracts) | 2993 (14,965,000) |
| Total accumulative withdrawal of silver from the Dealers inventory this month | 746,701.48 |
| Total accumulative withdrawal of silver from the Customer inventory this month | 1,767,671.6 oz |
Today, we had good activity inside the silver vaults.
we had 0 dealer deposits and 1 dealer withdrawal.
i) Out of Scotia dealer: 598,822.70 oz
Thus total dealer withdrawals: 598,822.70 oz
you will see that this lands into JPMorgan customer account.
We had 1 customer deposit:
i) Into JPMorgan: 598,822.70 oz (the exact dealer withdrawal from Scotia)
total customer deposit: 598,822.70 oz
We had 3 customer withdrawals:
i) Out of Scotia dealer: 598,822.70 oz
Thus total dealer withdrawals: 598,822.70 oz
you will see that this lands into JPMorgan customer account.
We had 1 customer deposit:
i) Into JPMorgan: 598,822.70 oz (the exact dealer withdrawal from Scotia)
total customer deposit: 598,822.70 oz
We had 3 customer withdrawals:
i) Out of Brinks: 18,138.99 oz
ii) Out of CNT: 20,036.18 oz
iii) Out of Scotia; 80,944.85
total customer withdrawal : 119,120.02 oz
we had 0 adjustments today
Thus we have the following:
Thus we have the following:
Registered silver at : 48.695 million oz
total of all silver: 166,904 million oz.
The CME reported that we had 396 notices filed for 1,980,000 oz today.
To calculate what will stand for this active delivery month of July, I take the number of contracts served thus far this month at 2993 x 5,000 oz per contract = 14,965,000 oz + 338 notices left to be served upon our longs x 5000 oz per contract = 1,6900,000 oz to give us a total of 16,655,000 oz.
Thus here are the standings:
2993 contracts served x 5000 oz per contract (served) or 14,965,000 oz + 338 notices x 5,000 oz or 1,690,000 oz = 16,6555,000 oz
we gained 90,000 oz of additional silver standing today.
we gained 90,000 oz of additional silver standing today.
end
***I have to go out. I will send what I have written so far out to you.
At 8:30 I will provide data on the GLD and SLV plus further comments.
Harvey
***I have to go out. I will send what I have written so far out to you.
At 8:30 I will provide data on the GLD and SLV plus further comments.
Harvey
The two ETF's that I follow are the GLD and SLV. You must be very careful in trading these vehicles as these funds do not have any beneficial gold or silver behind them. They probably have only paper claims and when the dust settles, on a collapse, there will be countless class action lawsuits trying to recover your lost investment.
There is now evidence that the GLD and SLV are paper settling on the comex.
Now let us check on gold inventories at the GLD first:
July 17.2013: we had another gold bleed of exactly 1.5 tonnes again today.
Tonnes936.07
Ounces30,095,574.72
Value US$39.030 billion
July 16.2013: we had another gold bleed of 1.5 tonnes today.
Tonnes937.57
Ounces30,143,884.76
Value US$38.920 billion
* * *
Selected news and views.....
How much is too much?
India has imported over 900 tons of Gold so far this year while China has imported just shy of 1,100 tons. To put these amounts into perspective, the world (ex China) produces 2,200 tons per year. As an aside, with prices where they are right now, production will decrease in the future as some mines are not profitable at these levels. My question is this, with China and India buying almost every ounce that comes out of the ground "how much is too much"?
"Too much" as in what level is THE level where existing inventories cannot absorb the demand from "the rest of the world" as India and China are speaking for the current production. Where is the Gold going to come from? It is already clear that existing inventories are being squeezed as evidenced by the backwardated GOFO rates 8 days running. I would like to point out that this is not only the longest streak, but more days total than ALL of the last 20 years combined!
Also lurking in the shadows is allegedly a second Dutch bank to call a halt to delivering out Gold. Why would this be? Why would any of this be? Why is the Gold market so tight after so much "selling"? Shouldn't inventories be not only flush with product but simply overflowing with so much metal that they don't know what to do with it? Where did all of this "metal" that was sold, in a panicked, fast and furious fashion go? Did it evaporate? Is it being held in some alien, invisible vault system that we don't know about?
Of course not...because it was not GOLD in the first place. We are now more than 90 days past the April "fool's" selling of supposed Gold. This is enough time to look back and see for sure what happened. At the time "we" said that the selling was not physical Gold and in fact was merely paper contracts without any real metal backing. "We" said that only those who wanted a lower price would ever sell futures in the fashion that they were sold. Well guess what, WE were right. If we were wrong then Gold would be plentiful right now...it is not. Not only is the Gold market "tight", it is tighter than it has ever been over the last 20 years.
I took some serious flack back in April when I said that "the plan" all along was to default. I said this because I knew that there was no way 1,000+++ tons of real metal could, or ever would in that fashion hit the market over less than 12 trading hours. So here we are, 90 days later and inventories have done nothing but bleed everywhere you look. Not only that but as I see it, some deliveries have not even been made. Unless someone can show me where JP Morgan has concluded their May deliveries or delivered anything at all on their June deliveries I will assume that I have read their reports correctly and are in serious arrears. Please, send me data that illustrates the movement of Gold from JP Morgan to those contractually entitled to receive it.
That said, I will again state what I wrote back in April. We are facing a major default in both the Gold and Silver markets on COMEX which has a whopping 29 tons of registered Gold inventory available for delivery. I also believe we will see the LBMA in the same boat though they do not publish inventory numbers. All that is needed is to look at the inventory drain coupled with the explosion in demand caused by fraudulent prices to see that this will come to a head shortly. August COMEX deliveries of Gold should be at least 30 tons which would take care of all existing registered for delivery inventory...and then what? What happens after August? Like I said "How much is too much?" ...demand that is.
Regards, Bill H
The following is a huge story. We now have a second Dutch bank default on gold deliveries.
Rabobank is an extremely large international bank and for them to default on gold is nothing short of bewilderment. When this event is coupled with the largest Dutch bank Amro defaulting coupled with 9 days of negative GOFO rates, you can be assured that physical gold is in extremely tight supply:
Translated from Dutch into English :
(courtesy of deMorgen.be/silver doctors for getting the story)
The end of the precious metals account?
The following is not good: the mining industry would rather hedge than fight the crooks.
(courtesy Bloomberg/David Stringer)
Gold mining industry would rather go back to hedging than fight
Submitted by cpowell on Wed, 2013-07-17 21:34. Section: Daily Dispatches
Gold Slump Revives Hedges Scrapped During Bull Run
By David Stringer
Bloomberg News
Wednesday, July 17, 2013http://www.bloomberg.com/news/2013-07-16/gold-slump-revives-hedges-scrap...
Gold slump revives hedging:
(courtesy Bloomberg)
MELBOURNE, Australia -- Tumbling gold prices are raising the prospect of a return to hedging -- a strategy that's been shunned by investors and producers who spent at least $10 billion at the end of the last decade unwinding forward sales.
"You can't just stick your head in the sand and pray that gold is going to go back up again,” Gavin Thomas, chief executive officer of Sydney-based Kingsgate Consolidated Ltd., operator of Thailand's biggest gold mine, said by phone. He's considering hedging despite investors' resistance. "Hedging is a call on gold. If you believe it's going up, you don't hedge. If you believe it's going down, you do hedge.”
Petropavlovsk Plc, Russia's second-largest producer, and Australia's OceanaGold Corp. have begun hedging and brokers including Societe Generale SA are flagging more may follow to bolster revenue and ensure debt servicing as prices are forecast to extend losses. Gold is heading for its first annual drop since 2000 and any move toward forward sales of output could accelerate declines, according to Bank Julius Baer & Co.
"The days of being beholden to a religious belief that the gold price will rise are gone, company directors have to be cognizant of that,” said Tim Schroeders, who helps manage $1 billion in equities, including gold companies, at Pengana Capital Ltd. in Melbourne. "There are very few producers who don't have problems. A lot of them have large debts or high costs. Producers have got to look at" hedging, he said
Hedging involves mining companies selling future output at fixed prices to secure loans and protect margins. The practice fell out of favor in the past 10 years amid gold's longest bull run in at least nine decades.
Investors pressured producers to unwind their hedge books as prices soared sevenfold during bullion's winning streak. AngloGold Ashanti Ltd. spent $2.6 billion in 2010 to wind up its hedge book, while Barrick Gold Corp., the largest producer, took a $5.6 billion charge in the third quarter of 2009 to eliminate hedging.
"It would be a negative impact on price, the more hedging you see, because what it basically does is to take a stream of gold and sells it into the market,” Tyler Broda, a London-based analyst at Nomura International Plc, said by phone, adding that producers already may have missed the chance to lock in prices. "At the top of the cycle, you should have seen mining companies start to hedge.”
Gold, which hit a 34-month low on June 28, is heading for the first annual drop in 13 years and Goldman Sachs Group Inc. forecasts it will reach $1,050 by the end of 2014. Gold futures for December delivery rose 0.2 percent to $1,295 at 10:23 a.m. in New York.
Standard Chartered Plc forecasts the net amount of gold hedged will soar more than 16-fold to 500 metric tons by 2017 from 30 tons this year. Fitch Ratings Ltd. predicted last month that increased royalty sales, forward sales and gold price hedging may occur for less well-capitalized companies.
"If it's cheaper to hedge than to issue paper at deep discounts, then it makes sense,” Mark Bristow, CEO of Randgold Resources Ltd., said in Johannesburg on July 10, adding his company isn't against hedging.
A revival of hedging may be a last resort for producers from Toronto to Melbourne who have announced plans to trim spending, sell mines, cut staff and reduce high-cost production in response to a decline in the price of gold that could shave about $10 billion from earnings, according to data compiled by New Jersey-based Kenneth Hoffman at Bloomberg Industries.
Cutting costs "might not be sufficient given the recent acceleration in the correction of the gold price," and some producers, including Barrick may be forced to hedge, Philipp Lienhardt, an analyst at Julius Baer Group Ltd., said in a June 28 note to clients.
While hedging made sense in the past for Barrick, the company now has other options, its CEO Jamie Sokalsky told the Bloomberg Canada Summit in Toronto on May 21. Andy Lloyd, a Barrick spokesman, declined to comment.
OceanaGold, a top 10 Australian gold miner by market value, said June 27 it would hedge 115,650 ounces of production at its Reefton mine in New Zealand over the next two years as the project moves toward care and maintenance.
"It's just a risk-mitigation step -- had the gold price stayed up where it was, we wouldn't have had to do it," Mick Wilkes, CEO of the Melbourne-based company, said in a phone interview. It doesn't plan additional hedging, Wilkes said.
With gold dropping from $1,600, "you're starting to hear conversations from producers about hedging," said Michael Haigh, head of commodities research at Societe Generale, who in April correctly predicted gold's rout. It's likely to be the start of a trend, the bank said in a report last month.
"On the day you put a hedge in, within the next day it is either the right decision or the wrong decision. It never stays static,” said Peter Bowler, managing director of Beadell Resources Ltd., which hedged 195,000 ounces of gold at $1,600 an ounce over three years in April 2012 under the terms of a financing agreement. "You go from a hero to zero in this game fairly quickly."
GATA's Murphy, Bullion Bulls Canada's Nielson interviewed on gold rigging
Submitted by cpowell on Thu, 2013-07-18 02:30. Section: Daily Dispatches
10:27p ET Wednesday, July 17, 2013
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy and Jeff Nielson of Bullion Bulls Canada were interviewed this week about gold market manipulation by Mo Dawoud of the Wall Street for Main Street Internet site. The interview is 39 minutes long and can be heard here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
The European markets skyrocket on news that the ECB is relaxing collateral rules trying to unclog European lending. All European bourses ended in the green. Nobody asked the question that maybe all the collateral is crap!!
(courtesy zero hedge)
ECB Eases Collateral Rules Requirements In Bid To Unclog European Lending
Submitted by Tyler Durden on 07/18/2013 09:16 -0400
As Welt reported overnight, the ECB just announced a change to its collateral framework, changing the haircuts and acceptability rules for ABS and covered bonds in an attempt to boost moribund and stalled European lending. As part of its announcement, the ECB reduced haircuts applicable to ABS rated A- or higher to 10% from 16% and to 22% from 26%. The bank also cut the minimum rating for ABS subject to loan level reporting requirements to 2 "A" ratings from 2 "AAA" ratings as more and more credit in Europe sinks into the quicksand of NPL-ness. Draghi also announced he would tighten risk control measures for covered bonds and that all the announced changes would have an overall neutral effect on amount of collateral available. Will this latest Hail Mary attempt work to boost lending in Europe? Of course not: Europe's issue is not credit supply constraints but a deterioration in asset quality and an explosion in NPLs, which has lead to an acceleration in overall deleveraging at both the bank and consumer level, and which is unlikely to end any time soon and certainly not before more widespread liability liquidations a la Cyprus.
From the ECB:
ECB further reviews its risk control framework allowing for a new treatment of asset-backed securities
The Governing Council of the European Central Bank (ECB) decided to further strengthen its risk control framework. To maintain adequate risk protection, the ECB regularly adjusts its collateral eligibility rules and haircuts applied when accepting collateral in Eurosystem monetary policy operations. In addition, some measures aim to improve the overall consistency of the framework. At the same time, the list of collateral accepted under the permanent Eurosystem collateral framework will be expanded. These measures taken together have an overall neutral effect on the amount of collateral available.
In the biennial review of its risk control framework applied in Eurosystem monetary policy operations, the Governing Council decided in particular to:
- Update the haircuts for marketable instruments;
- Adjust the risk control measures for retained covered bonds to take into account the additional risk which results from the use of such securities by the issuer itself and to ensure a level playing field between securities with comparable risks;
- Replace the current requirement of two ‘triple A’ ratings with the requirement of two ‘single A’ ratings for the six classes of asset-backed securities (ABS) subject to loan level reporting requirements, reflecting their improved transparency and standardisation;
- Reduce the haircuts applicable to ABS eligible under the permanent and temporary Eurosystem collateral framework.
In addition, the Governing Council has adjusted the eligibility criteria and haircuts applied by National Central Banks (NCBs) to pools of credit claims and certain types of the additional credit claims (ACC) eligible under the temporary Eurosystem collateral framework. The amendments will lead to more consistency of the ACC framework and is expected to generate collateral gains without affecting the overall risk contribution of ACCs.
Besides the adjustments to the risk control framework, the ECB will continue to investigate how to catalyse recent initiatives by European institutions to improve funding conditions for Small and Medium-sized Enterprises (SMEs), in particular as regards the possible acceptance of SME linked ABS guaranteed mezzanine tranches as Eurosystem collateral in line with established guarantee policies.
The Governing Council reserves the right to limit or exclude the use of certain assets as collateral in its credit operations, also at the level of individual counterparties.
These measures will come into force once formalised with the relevant Eurosystem legal acts and/or national implementing provisions.
Today Dave Kranzler of the GoldenTruth weighs in:
*Gold, interest rates, derivatives … Dave from Denver: (apart from GOFO going into its 9th consecutive negativity)
Here's why I think the liquidity problem at the big banks is getting worse
But of course the biggest problem with rapidly rising interest rates is the potential for a derivatives crisis.
There are several major U.S. banks that have tens of trillions of dollars of exposure to derivatives. The following is from one of my previous articles entitled "The Coming Derivatives Panic That Will Destroy Global Financial Markets"...
JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)
Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)
Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)
Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars - yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.
The largest chunk of those derivatives contracts is made up of interest rate derivatives.
I have mentioned this so many times before, but it bears repeating that there are approximately 441 trillion dollars worth of interest rate derivatives sitting out there.
If rapidly rising interest rates suddenly cause trillions of dollars of those bets to start going bad, we could potentially see several of the "too big to fail" banks collapse at the same time
Here's the link: http://theeconomiccollapseblog.com/archives/a-nightmare-scenario
That interest rate spike has created derivatives liquidity issues for the big banks. Good times ahead - not.
India has imported over 900 tons of Gold so far this year while China has imported just shy of 1,100 tons. To put these amounts into perspective, the world (ex China) produces 2,200 tons per year. As an aside, with prices where they are right now, production will decrease in the future as some mines are not profitable at these levels. My question is this, with China and India buying almost every ounce that comes out of the ground "how much is too much"?
"Too much" as in what level is THE level where existing inventories cannot absorb the demand from "the rest of the world" as India and China are speaking for the current production. Where is the Gold going to come from? It is already clear that existing inventories are being squeezed as evidenced by the backwardated GOFO rates 8 days running. I would like to point out that this is not only the longest streak, but more days total than ALL of the last 20 years combined!
Also lurking in the shadows is allegedly a second Dutch bank to call a halt to delivering out Gold. Why would this be? Why would any of this be? Why is the Gold market so tight after so much "selling"? Shouldn't inventories be not only flush with product but simply overflowing with so much metal that they don't know what to do with it? Where did all of this "metal" that was sold, in a panicked, fast and furious fashion go? Did it evaporate? Is it being held in some alien, invisible vault system that we don't know about?
Of course not...because it was not GOLD in the first place. We are now more than 90 days past the April "fool's" selling of supposed Gold. This is enough time to look back and see for sure what happened. At the time "we" said that the selling was not physical Gold and in fact was merely paper contracts without any real metal backing. "We" said that only those who wanted a lower price would ever sell futures in the fashion that they were sold. Well guess what, WE were right. If we were wrong then Gold would be plentiful right now...it is not. Not only is the Gold market "tight", it is tighter than it has ever been over the last 20 years.
I took some serious flack back in April when I said that "the plan" all along was to default. I said this because I knew that there was no way 1,000+++ tons of real metal could, or ever would in that fashion hit the market over less than 12 trading hours. So here we are, 90 days later and inventories have done nothing but bleed everywhere you look. Not only that but as I see it, some deliveries have not even been made. Unless someone can show me where JP Morgan has concluded their May deliveries or delivered anything at all on their June deliveries I will assume that I have read their reports correctly and are in serious arrears. Please, send me data that illustrates the movement of Gold from JP Morgan to those contractually entitled to receive it.
That said, I will again state what I wrote back in April. We are facing a major default in both the Gold and Silver markets on COMEX which has a whopping 29 tons of registered Gold inventory available for delivery. I also believe we will see the LBMA in the same boat though they do not publish inventory numbers. All that is needed is to look at the inventory drain coupled with the explosion in demand caused by fraudulent prices to see that this will come to a head shortly. August COMEX deliveries of Gold should be at least 30 tons which would take care of all existing registered for delivery inventory...and then what? What happens after August? Like I said "How much is too much?" ...demand that is.
Regards, Bill H
The following is a huge story. We now have a second Dutch bank default on gold deliveries.
Rabobank is an extremely large international bank and for them to default on gold is nothing short of bewilderment. When this event is coupled with the largest Dutch bank Amro defaulting coupled with 9 days of negative GOFO rates, you can be assured that physical gold is in extremely tight supply:
Translated from Dutch into English :
(courtesy of deMorgen.be/silver doctors for getting the story)
The following is a huge story. We now have a second Dutch bank default on gold deliveries.
Rabobank is an extremely large international bank and for them to default on gold is nothing short of bewilderment. When this event is coupled with the largest Dutch bank Amro defaulting coupled with 9 days of negative GOFO rates, you can be assured that physical gold is in extremely tight supply:
Translated from Dutch into English :
(courtesy of deMorgen.be/silver doctors for getting the story)
The end of the precious metals account?
The following is not good: the mining industry would rather hedge than fight the crooks.
(courtesy Bloomberg/David Stringer)
The following is not good: the mining industry would rather hedge than fight the crooks.
(courtesy Bloomberg/David Stringer)
Gold mining industry would rather go back to hedging than fight
Submitted by cpowell on Wed, 2013-07-17 21:34. Section: Daily Dispatches
Gold Slump Revives Hedges Scrapped During Bull Run
By David Stringer
Bloomberg News
Wednesday, July 17, 2013http://www.bloomberg.com/news/2013-07-16/gold-slump-revives-hedges-scrap...
Gold slump revives hedging:
(courtesy Bloomberg)
MELBOURNE, Australia -- Tumbling gold prices are raising the prospect of a return to hedging -- a strategy that's been shunned by investors and producers who spent at least $10 billion at the end of the last decade unwinding forward sales.
"You can't just stick your head in the sand and pray that gold is going to go back up again,” Gavin Thomas, chief executive officer of Sydney-based Kingsgate Consolidated Ltd., operator of Thailand's biggest gold mine, said by phone. He's considering hedging despite investors' resistance. "Hedging is a call on gold. If you believe it's going up, you don't hedge. If you believe it's going down, you do hedge.”
Petropavlovsk Plc, Russia's second-largest producer, and Australia's OceanaGold Corp. have begun hedging and brokers including Societe Generale SA are flagging more may follow to bolster revenue and ensure debt servicing as prices are forecast to extend losses. Gold is heading for its first annual drop since 2000 and any move toward forward sales of output could accelerate declines, according to Bank Julius Baer & Co.
"The days of being beholden to a religious belief that the gold price will rise are gone, company directors have to be cognizant of that,” said Tim Schroeders, who helps manage $1 billion in equities, including gold companies, at Pengana Capital Ltd. in Melbourne. "There are very few producers who don't have problems. A lot of them have large debts or high costs. Producers have got to look at" hedging, he said
Hedging involves mining companies selling future output at fixed prices to secure loans and protect margins. The practice fell out of favor in the past 10 years amid gold's longest bull run in at least nine decades.
Investors pressured producers to unwind their hedge books as prices soared sevenfold during bullion's winning streak. AngloGold Ashanti Ltd. spent $2.6 billion in 2010 to wind up its hedge book, while Barrick Gold Corp., the largest producer, took a $5.6 billion charge in the third quarter of 2009 to eliminate hedging.
"It would be a negative impact on price, the more hedging you see, because what it basically does is to take a stream of gold and sells it into the market,” Tyler Broda, a London-based analyst at Nomura International Plc, said by phone, adding that producers already may have missed the chance to lock in prices. "At the top of the cycle, you should have seen mining companies start to hedge.”
Gold, which hit a 34-month low on June 28, is heading for the first annual drop in 13 years and Goldman Sachs Group Inc. forecasts it will reach $1,050 by the end of 2014. Gold futures for December delivery rose 0.2 percent to $1,295 at 10:23 a.m. in New York.
Standard Chartered Plc forecasts the net amount of gold hedged will soar more than 16-fold to 500 metric tons by 2017 from 30 tons this year. Fitch Ratings Ltd. predicted last month that increased royalty sales, forward sales and gold price hedging may occur for less well-capitalized companies.
"If it's cheaper to hedge than to issue paper at deep discounts, then it makes sense,” Mark Bristow, CEO of Randgold Resources Ltd., said in Johannesburg on July 10, adding his company isn't against hedging.
A revival of hedging may be a last resort for producers from Toronto to Melbourne who have announced plans to trim spending, sell mines, cut staff and reduce high-cost production in response to a decline in the price of gold that could shave about $10 billion from earnings, according to data compiled by New Jersey-based Kenneth Hoffman at Bloomberg Industries.
Cutting costs "might not be sufficient given the recent acceleration in the correction of the gold price," and some producers, including Barrick may be forced to hedge, Philipp Lienhardt, an analyst at Julius Baer Group Ltd., said in a June 28 note to clients.
While hedging made sense in the past for Barrick, the company now has other options, its CEO Jamie Sokalsky told the Bloomberg Canada Summit in Toronto on May 21. Andy Lloyd, a Barrick spokesman, declined to comment.
OceanaGold, a top 10 Australian gold miner by market value, said June 27 it would hedge 115,650 ounces of production at its Reefton mine in New Zealand over the next two years as the project moves toward care and maintenance.
"It's just a risk-mitigation step -- had the gold price stayed up where it was, we wouldn't have had to do it," Mick Wilkes, CEO of the Melbourne-based company, said in a phone interview. It doesn't plan additional hedging, Wilkes said.
With gold dropping from $1,600, "you're starting to hear conversations from producers about hedging," said Michael Haigh, head of commodities research at Societe Generale, who in April correctly predicted gold's rout. It's likely to be the start of a trend, the bank said in a report last month.
"On the day you put a hedge in, within the next day it is either the right decision or the wrong decision. It never stays static,” said Peter Bowler, managing director of Beadell Resources Ltd., which hedged 195,000 ounces of gold at $1,600 an ounce over three years in April 2012 under the terms of a financing agreement. "You go from a hero to zero in this game fairly quickly."
GATA's Murphy, Bullion Bulls Canada's Nielson interviewed on gold rigging
Submitted by cpowell on Thu, 2013-07-18 02:30. Section: Daily Dispatches
10:27p ET Wednesday, July 17, 2013
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy and Jeff Nielson of Bullion Bulls Canada were interviewed this week about gold market manipulation by Mo Dawoud of the Wall Street for Main Street Internet site. The interview is 39 minutes long and can be heard here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
The European markets skyrocket on news that the ECB is relaxing collateral rules trying to unclog European lending. All European bourses ended in the green. Nobody asked the question that maybe all the collateral is crap!!
(courtesy zero hedge)
ECB Eases Collateral Rules Requirements In Bid To Unclog European Lending
Submitted by Tyler Durden on 07/18/2013 09:16 -0400
As Welt reported overnight, the ECB just announced a change to its collateral framework, changing the haircuts and acceptability rules for ABS and covered bonds in an attempt to boost moribund and stalled European lending. As part of its announcement, the ECB reduced haircuts applicable to ABS rated A- or higher to 10% from 16% and to 22% from 26%. The bank also cut the minimum rating for ABS subject to loan level reporting requirements to 2 "A" ratings from 2 "AAA" ratings as more and more credit in Europe sinks into the quicksand of NPL-ness. Draghi also announced he would tighten risk control measures for covered bonds and that all the announced changes would have an overall neutral effect on amount of collateral available. Will this latest Hail Mary attempt work to boost lending in Europe? Of course not: Europe's issue is not credit supply constraints but a deterioration in asset quality and an explosion in NPLs, which has lead to an acceleration in overall deleveraging at both the bank and consumer level, and which is unlikely to end any time soon and certainly not before more widespread liability liquidations a la Cyprus.
From the ECB:
ECB further reviews its risk control framework allowing for a new treatment of asset-backed securities
The Governing Council of the European Central Bank (ECB) decided to further strengthen its risk control framework. To maintain adequate risk protection, the ECB regularly adjusts its collateral eligibility rules and haircuts applied when accepting collateral in Eurosystem monetary policy operations. In addition, some measures aim to improve the overall consistency of the framework. At the same time, the list of collateral accepted under the permanent Eurosystem collateral framework will be expanded. These measures taken together have an overall neutral effect on the amount of collateral available.
In the biennial review of its risk control framework applied in Eurosystem monetary policy operations, the Governing Council decided in particular to:
- Update the haircuts for marketable instruments;
- Adjust the risk control measures for retained covered bonds to take into account the additional risk which results from the use of such securities by the issuer itself and to ensure a level playing field between securities with comparable risks;
- Replace the current requirement of two ‘triple A’ ratings with the requirement of two ‘single A’ ratings for the six classes of asset-backed securities (ABS) subject to loan level reporting requirements, reflecting their improved transparency and standardisation;
- Reduce the haircuts applicable to ABS eligible under the permanent and temporary Eurosystem collateral framework.
In addition, the Governing Council has adjusted the eligibility criteria and haircuts applied by National Central Banks (NCBs) to pools of credit claims and certain types of the additional credit claims (ACC) eligible under the temporary Eurosystem collateral framework. The amendments will lead to more consistency of the ACC framework and is expected to generate collateral gains without affecting the overall risk contribution of ACCs.
Besides the adjustments to the risk control framework, the ECB will continue to investigate how to catalyse recent initiatives by European institutions to improve funding conditions for Small and Medium-sized Enterprises (SMEs), in particular as regards the possible acceptance of SME linked ABS guaranteed mezzanine tranches as Eurosystem collateral in line with established guarantee policies.
The Governing Council reserves the right to limit or exclude the use of certain assets as collateral in its credit operations, also at the level of individual counterparties.
These measures will come into force once formalised with the relevant Eurosystem legal acts and/or national implementing provisions.
Today Dave Kranzler of the GoldenTruth weighs in:
*Gold, interest rates, derivatives … Dave from Denver: (apart from GOFO going into its 9th consecutive negativity)
Here's why I think the liquidity problem at the big banks is getting worse
But of course the biggest problem with rapidly rising interest rates is the potential for a derivatives crisis.
There are several major U.S. banks that have tens of trillions of dollars of exposure to derivatives. The following is from one of my previous articles entitled "The Coming Derivatives Panic That Will Destroy Global Financial Markets"...
JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)
Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)
Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)
Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars - yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.
The largest chunk of those derivatives contracts is made up of interest rate derivatives.
I have mentioned this so many times before, but it bears repeating that there are approximately 441 trillion dollars worth of interest rate derivatives sitting out there.
If rapidly rising interest rates suddenly cause trillions of dollars of those bets to start going bad, we could potentially see several of the "too big to fail" banks collapse at the same time
Here's the link: http://theeconomiccollapseblog.com/archives/a-nightmare-scenario
That interest rate spike has created derivatives liquidity issues for the big banks. Good times ahead - not.
Submitted by cpowell on Wed, 2013-07-17 21:34. Section: Daily Dispatches
Hedging involves mining companies selling future output at fixed prices to secure loans and protect margins. The practice fell out of favor in the past 10 years amid gold's longest bull run in at least nine decades.
Gold Slump Revives Hedges Scrapped During Bull Run
By David Stringer
Bloomberg News
Wednesday, July 17, 2013http://www.bloomberg.com/news/2013-07-16/gold-slump-revives-hedges-scrap...
Gold slump revives hedging:
(courtesy Bloomberg)
Bloomberg News
Wednesday, July 17, 2013http://www.bloomberg.com/news/2013-07-16/gold-slump-revives-hedges-scrap...
Gold slump revives hedging:
(courtesy Bloomberg)
MELBOURNE, Australia -- Tumbling gold prices are raising the prospect of a return to hedging -- a strategy that's been shunned by investors and producers who spent at least $10 billion at the end of the last decade unwinding forward sales.
"You can't just stick your head in the sand and pray that gold is going to go back up again,” Gavin Thomas, chief executive officer of Sydney-based Kingsgate Consolidated Ltd., operator of Thailand's biggest gold mine, said by phone. He's considering hedging despite investors' resistance. "Hedging is a call on gold. If you believe it's going up, you don't hedge. If you believe it's going down, you do hedge.”
Petropavlovsk Plc, Russia's second-largest producer, and Australia's OceanaGold Corp. have begun hedging and brokers including Societe Generale SA are flagging more may follow to bolster revenue and ensure debt servicing as prices are forecast to extend losses. Gold is heading for its first annual drop since 2000 and any move toward forward sales of output could accelerate declines, according to Bank Julius Baer & Co.
"The days of being beholden to a religious belief that the gold price will rise are gone, company directors have to be cognizant of that,” said Tim Schroeders, who helps manage $1 billion in equities, including gold companies, at Pengana Capital Ltd. in Melbourne. "There are very few producers who don't have problems. A lot of them have large debts or high costs. Producers have got to look at" hedging, he said
Investors pressured producers to unwind their hedge books as prices soared sevenfold during bullion's winning streak. AngloGold Ashanti Ltd. spent $2.6 billion in 2010 to wind up its hedge book, while Barrick Gold Corp., the largest producer, took a $5.6 billion charge in the third quarter of 2009 to eliminate hedging.
"It would be a negative impact on price, the more hedging you see, because what it basically does is to take a stream of gold and sells it into the market,” Tyler Broda, a London-based analyst at Nomura International Plc, said by phone, adding that producers already may have missed the chance to lock in prices. "At the top of the cycle, you should have seen mining companies start to hedge.”
Gold, which hit a 34-month low on June 28, is heading for the first annual drop in 13 years and Goldman Sachs Group Inc. forecasts it will reach $1,050 by the end of 2014. Gold futures for December delivery rose 0.2 percent to $1,295 at 10:23 a.m. in New York.
Standard Chartered Plc forecasts the net amount of gold hedged will soar more than 16-fold to 500 metric tons by 2017 from 30 tons this year. Fitch Ratings Ltd. predicted last month that increased royalty sales, forward sales and gold price hedging may occur for less well-capitalized companies.
"If it's cheaper to hedge than to issue paper at deep discounts, then it makes sense,” Mark Bristow, CEO of Randgold Resources Ltd., said in Johannesburg on July 10, adding his company isn't against hedging.
A revival of hedging may be a last resort for producers from Toronto to Melbourne who have announced plans to trim spending, sell mines, cut staff and reduce high-cost production in response to a decline in the price of gold that could shave about $10 billion from earnings, according to data compiled by New Jersey-based Kenneth Hoffman at Bloomberg Industries.
Cutting costs "might not be sufficient given the recent acceleration in the correction of the gold price," and some producers, including Barrick may be forced to hedge, Philipp Lienhardt, an analyst at Julius Baer Group Ltd., said in a June 28 note to clients.
While hedging made sense in the past for Barrick, the company now has other options, its CEO Jamie Sokalsky told the Bloomberg Canada Summit in Toronto on May 21. Andy Lloyd, a Barrick spokesman, declined to comment.
OceanaGold, a top 10 Australian gold miner by market value, said June 27 it would hedge 115,650 ounces of production at its Reefton mine in New Zealand over the next two years as the project moves toward care and maintenance.
"It's just a risk-mitigation step -- had the gold price stayed up where it was, we wouldn't have had to do it," Mick Wilkes, CEO of the Melbourne-based company, said in a phone interview. It doesn't plan additional hedging, Wilkes said.
With gold dropping from $1,600, "you're starting to hear conversations from producers about hedging," said Michael Haigh, head of commodities research at Societe Generale, who in April correctly predicted gold's rout. It's likely to be the start of a trend, the bank said in a report last month.
"On the day you put a hedge in, within the next day it is either the right decision or the wrong decision. It never stays static,” said Peter Bowler, managing director of Beadell Resources Ltd., which hedged 195,000 ounces of gold at $1,600 an ounce over three years in April 2012 under the terms of a financing agreement. "You go from a hero to zero in this game fairly quickly."
GATA's Murphy, Bullion Bulls Canada's Nielson interviewed on gold rigging
Submitted by cpowell on Thu, 2013-07-18 02:30. Section: Daily Dispatches
10:27p ET Wednesday, July 17, 2013
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy and Jeff Nielson of Bullion Bulls Canada were interviewed this week about gold market manipulation by Mo Dawoud of the Wall Street for Main Street Internet site. The interview is 39 minutes long and can be heard here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
The European markets skyrocket on news that the ECB is relaxing collateral rules trying to unclog European lending. All European bourses ended in the green. Nobody asked the question that maybe all the collateral is crap!!
(courtesy zero hedge)
ECB Eases Collateral Rules Requirements In Bid To Unclog European Lending
Submitted by Tyler Durden on 07/18/2013 09:16 -0400
As Welt reported overnight, the ECB just announced a change to its collateral framework, changing the haircuts and acceptability rules for ABS and covered bonds in an attempt to boost moribund and stalled European lending. As part of its announcement, the ECB reduced haircuts applicable to ABS rated A- or higher to 10% from 16% and to 22% from 26%. The bank also cut the minimum rating for ABS subject to loan level reporting requirements to 2 "A" ratings from 2 "AAA" ratings as more and more credit in Europe sinks into the quicksand of NPL-ness. Draghi also announced he would tighten risk control measures for covered bonds and that all the announced changes would have an overall neutral effect on amount of collateral available. Will this latest Hail Mary attempt work to boost lending in Europe? Of course not: Europe's issue is not credit supply constraints but a deterioration in asset quality and an explosion in NPLs, which has lead to an acceleration in overall deleveraging at both the bank and consumer level, and which is unlikely to end any time soon and certainly not before more widespread liability liquidations a la Cyprus.
From the ECB:
ECB further reviews its risk control framework allowing for a new treatment of asset-backed securities
The Governing Council of the European Central Bank (ECB) decided to further strengthen its risk control framework. To maintain adequate risk protection, the ECB regularly adjusts its collateral eligibility rules and haircuts applied when accepting collateral in Eurosystem monetary policy operations. In addition, some measures aim to improve the overall consistency of the framework. At the same time, the list of collateral accepted under the permanent Eurosystem collateral framework will be expanded. These measures taken together have an overall neutral effect on the amount of collateral available.
In the biennial review of its risk control framework applied in Eurosystem monetary policy operations, the Governing Council decided in particular to:
- Update the haircuts for marketable instruments;
- Adjust the risk control measures for retained covered bonds to take into account the additional risk which results from the use of such securities by the issuer itself and to ensure a level playing field between securities with comparable risks;
- Replace the current requirement of two ‘triple A’ ratings with the requirement of two ‘single A’ ratings for the six classes of asset-backed securities (ABS) subject to loan level reporting requirements, reflecting their improved transparency and standardisation;
- Reduce the haircuts applicable to ABS eligible under the permanent and temporary Eurosystem collateral framework.
In addition, the Governing Council has adjusted the eligibility criteria and haircuts applied by National Central Banks (NCBs) to pools of credit claims and certain types of the additional credit claims (ACC) eligible under the temporary Eurosystem collateral framework. The amendments will lead to more consistency of the ACC framework and is expected to generate collateral gains without affecting the overall risk contribution of ACCs.
Besides the adjustments to the risk control framework, the ECB will continue to investigate how to catalyse recent initiatives by European institutions to improve funding conditions for Small and Medium-sized Enterprises (SMEs), in particular as regards the possible acceptance of SME linked ABS guaranteed mezzanine tranches as Eurosystem collateral in line with established guarantee policies.
The Governing Council reserves the right to limit or exclude the use of certain assets as collateral in its credit operations, also at the level of individual counterparties.
These measures will come into force once formalised with the relevant Eurosystem legal acts and/or national implementing provisions.
Today Dave Kranzler of the GoldenTruth weighs in:
*Gold, interest rates, derivatives … Dave from Denver: (apart from GOFO going into its 9th consecutive negativity)
Here's why I think the liquidity problem at the big banks is getting worse
But of course the biggest problem with rapidly rising interest rates is the potential for a derivatives crisis.
There are several major U.S. banks that have tens of trillions of dollars of exposure to derivatives. The following is from one of my previous articles entitled "The Coming Derivatives Panic That Will Destroy Global Financial Markets"...
JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)
Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)
Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)
Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars - yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.
The largest chunk of those derivatives contracts is made up of interest rate derivatives.
I have mentioned this so many times before, but it bears repeating that there are approximately 441 trillion dollars worth of interest rate derivatives sitting out there.
If rapidly rising interest rates suddenly cause trillions of dollars of those bets to start going bad, we could potentially see several of the "too big to fail" banks collapse at the same time
Here's the link: http://theeconomiccollapseblog.com/archives/a-nightmare-scenario
That interest rate spike has created derivatives liquidity issues for the big banks. Good times ahead - not.
Submitted by cpowell on Thu, 2013-07-18 02:30. Section: Daily Dispatches
10:27p ET Wednesday, July 17, 2013
Dear Friend of GATA and Gold:
GATA Chairman Bill Murphy and Jeff Nielson of Bullion Bulls Canada were interviewed this week about gold market manipulation by Mo Dawoud of the Wall Street for Main Street Internet site. The interview is 39 minutes long and can be heard here:
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
Gold Anti-Trust Action Committee Inc.
The European markets skyrocket on news that the ECB is relaxing collateral rules trying to unclog European lending. All European bourses ended in the green. Nobody asked the question that maybe all the collateral is crap!!
(courtesy zero hedge)
The European markets skyrocket on news that the ECB is relaxing collateral rules trying to unclog European lending. All European bourses ended in the green. Nobody asked the question that maybe all the collateral is crap!!
(courtesy zero hedge)
(courtesy zero hedge)
ECB Eases Collateral Rules Requirements In Bid To Unclog European Lending
Submitted by Tyler Durden on 07/18/2013 09:16 -0400
As Welt reported overnight, the ECB just announced a change to its collateral framework, changing the haircuts and acceptability rules for ABS and covered bonds in an attempt to boost moribund and stalled European lending. As part of its announcement, the ECB reduced haircuts applicable to ABS rated A- or higher to 10% from 16% and to 22% from 26%. The bank also cut the minimum rating for ABS subject to loan level reporting requirements to 2 "A" ratings from 2 "AAA" ratings as more and more credit in Europe sinks into the quicksand of NPL-ness. Draghi also announced he would tighten risk control measures for covered bonds and that all the announced changes would have an overall neutral effect on amount of collateral available. Will this latest Hail Mary attempt work to boost lending in Europe? Of course not: Europe's issue is not credit supply constraints but a deterioration in asset quality and an explosion in NPLs, which has lead to an acceleration in overall deleveraging at both the bank and consumer level, and which is unlikely to end any time soon and certainly not before more widespread liability liquidations a la Cyprus.
From the ECB:
ECB further reviews its risk control framework allowing for a new treatment of asset-backed securities
The Governing Council of the European Central Bank (ECB) decided to further strengthen its risk control framework. To maintain adequate risk protection, the ECB regularly adjusts its collateral eligibility rules and haircuts applied when accepting collateral in Eurosystem monetary policy operations. In addition, some measures aim to improve the overall consistency of the framework. At the same time, the list of collateral accepted under the permanent Eurosystem collateral framework will be expanded. These measures taken together have an overall neutral effect on the amount of collateral available.
In the biennial review of its risk control framework applied in Eurosystem monetary policy operations, the Governing Council decided in particular to:
- Update the haircuts for marketable instruments;
- Adjust the risk control measures for retained covered bonds to take into account the additional risk which results from the use of such securities by the issuer itself and to ensure a level playing field between securities with comparable risks;
- Replace the current requirement of two ‘triple A’ ratings with the requirement of two ‘single A’ ratings for the six classes of asset-backed securities (ABS) subject to loan level reporting requirements, reflecting their improved transparency and standardisation;
- Reduce the haircuts applicable to ABS eligible under the permanent and temporary Eurosystem collateral framework.
In addition, the Governing Council has adjusted the eligibility criteria and haircuts applied by National Central Banks (NCBs) to pools of credit claims and certain types of the additional credit claims (ACC) eligible under the temporary Eurosystem collateral framework. The amendments will lead to more consistency of the ACC framework and is expected to generate collateral gains without affecting the overall risk contribution of ACCs.
Besides the adjustments to the risk control framework, the ECB will continue to investigate how to catalyse recent initiatives by European institutions to improve funding conditions for Small and Medium-sized Enterprises (SMEs), in particular as regards the possible acceptance of SME linked ABS guaranteed mezzanine tranches as Eurosystem collateral in line with established guarantee policies.
The Governing Council reserves the right to limit or exclude the use of certain assets as collateral in its credit operations, also at the level of individual counterparties.
These measures will come into force once formalised with the relevant Eurosystem legal acts and/or national implementing provisions.
Today Dave Kranzler of the GoldenTruth weighs in:
*Gold, interest rates, derivatives … Dave from Denver: (apart from GOFO going into its 9th consecutive negativity)
Here's why I think the liquidity problem at the big banks is getting worse
But of course the biggest problem with rapidly rising interest rates is the potential for a derivatives crisis.
There are several major U.S. banks that have tens of trillions of dollars of exposure to derivatives. The following is from one of my previous articles entitled "The Coming Derivatives Panic That Will Destroy Global Financial Markets"...
JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)
Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)
Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)
Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars - yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.
The largest chunk of those derivatives contracts is made up of interest rate derivatives.
I have mentioned this so many times before, but it bears repeating that there are approximately 441 trillion dollars worth of interest rate derivatives sitting out there.
If rapidly rising interest rates suddenly cause trillions of dollars of those bets to start going bad, we could potentially see several of the "too big to fail" banks collapse at the same time
Here's the link: http://theeconomiccollapseblog.com/archives/a-nightmare-scenario
That interest rate spike has created derivatives liquidity issues for the big banks. Good times ahead - not.
As Welt reported overnight, the ECB just announced a change to its collateral framework, changing the haircuts and acceptability rules for ABS and covered bonds in an attempt to boost moribund and stalled European lending. As part of its announcement, the ECB reduced haircuts applicable to ABS rated A- or higher to 10% from 16% and to 22% from 26%. The bank also cut the minimum rating for ABS subject to loan level reporting requirements to 2 "A" ratings from 2 "AAA" ratings as more and more credit in Europe sinks into the quicksand of NPL-ness. Draghi also announced he would tighten risk control measures for covered bonds and that all the announced changes would have an overall neutral effect on amount of collateral available. Will this latest Hail Mary attempt work to boost lending in Europe? Of course not: Europe's issue is not credit supply constraints but a deterioration in asset quality and an explosion in NPLs, which has lead to an acceleration in overall deleveraging at both the bank and consumer level, and which is unlikely to end any time soon and certainly not before more widespread liability liquidations a la Cyprus.
From the ECB:
ECB further reviews its risk control framework allowing for a new treatment of asset-backed securitiesThe Governing Council of the European Central Bank (ECB) decided to further strengthen its risk control framework. To maintain adequate risk protection, the ECB regularly adjusts its collateral eligibility rules and haircuts applied when accepting collateral in Eurosystem monetary policy operations. In addition, some measures aim to improve the overall consistency of the framework. At the same time, the list of collateral accepted under the permanent Eurosystem collateral framework will be expanded. These measures taken together have an overall neutral effect on the amount of collateral available.In the biennial review of its risk control framework applied in Eurosystem monetary policy operations, the Governing Council decided in particular to:
- Update the haircuts for marketable instruments;
- Adjust the risk control measures for retained covered bonds to take into account the additional risk which results from the use of such securities by the issuer itself and to ensure a level playing field between securities with comparable risks;
- Replace the current requirement of two ‘triple A’ ratings with the requirement of two ‘single A’ ratings for the six classes of asset-backed securities (ABS) subject to loan level reporting requirements, reflecting their improved transparency and standardisation;
- Reduce the haircuts applicable to ABS eligible under the permanent and temporary Eurosystem collateral framework.
In addition, the Governing Council has adjusted the eligibility criteria and haircuts applied by National Central Banks (NCBs) to pools of credit claims and certain types of the additional credit claims (ACC) eligible under the temporary Eurosystem collateral framework. The amendments will lead to more consistency of the ACC framework and is expected to generate collateral gains without affecting the overall risk contribution of ACCs.Besides the adjustments to the risk control framework, the ECB will continue to investigate how to catalyse recent initiatives by European institutions to improve funding conditions for Small and Medium-sized Enterprises (SMEs), in particular as regards the possible acceptance of SME linked ABS guaranteed mezzanine tranches as Eurosystem collateral in line with established guarantee policies.The Governing Council reserves the right to limit or exclude the use of certain assets as collateral in its credit operations, also at the level of individual counterparties.These measures will come into force once formalised with the relevant Eurosystem legal acts and/or national implementing provisions.
Today Dave Kranzler of the GoldenTruth weighs in:
Here's why I think the liquidity problem at the big banks is getting worse
But of course the biggest problem with rapidly rising interest rates is the potential for a derivatives crisis.
There are several major U.S. banks that have tens of trillions of dollars of exposure to derivatives. The following is from one of my previous articles entitled "The Coming Derivatives Panic That Will Destroy Global Financial Markets"...
JPMorgan Chase
Total Assets: $1,812,837,000,000 (just over 1.8 trillion dollars)
Total Exposure To Derivatives: $69,238,349,000,000 (more than 69 trillion dollars)
Citibank
Total Assets: $1,347,841,000,000 (a bit more than 1.3 trillion dollars)
Total Exposure To Derivatives: $52,150,970,000,000 (more than 52 trillion dollars)
Bank Of America
Total Assets: $1,445,093,000,000 (a bit more than 1.4 trillion dollars)
Total Exposure To Derivatives: $44,405,372,000,000 (more than 44 trillion dollars)
Goldman Sachs
Total Assets: $114,693,000,000 (a bit more than 114 billion dollars - yes, you read that correctly)
Total Exposure To Derivatives: $41,580,395,000,000 (more than 41 trillion dollars)
That means that the total exposure that Goldman Sachs has to derivatives contracts is more than 362 times greater than their total assets.
The largest chunk of those derivatives contracts is made up of interest rate derivatives.
I have mentioned this so many times before, but it bears repeating that there are approximately 441 trillion dollars worth of interest rate derivatives sitting out there.
If rapidly rising interest rates suddenly cause trillions of dollars of those bets to start going bad, we could potentially see several of the "too big to fail" banks collapse at the same time
Here's the link: http://theeconomiccollapseblog.com/archives/a-nightmare-scenario
That interest rate spike has created derivatives liquidity issues for the big banks. Good times ahead - not.
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