Jul 30

US money market funds return to EU banks

“In the first half of the year, the 10 biggest US money market funds allocated about 15 per cent of their $652bn in assets to short-term deposits and debt securities with eurozone banks, according to Fitch, the credit rating agency. That represents an increase of nearly 90 per cent since June 2012, when fears over a eurozone break-up were at their peak.” — Since all the problems are solved over there, and all… so back to the shark tank with Grandma’s money market balance!

Jul 30

Gold Backwardation Explained


Given that interest rates reflect the risk of debasement, and that physical gold cannot be debased as national currencies are debased by ‘printing’ too many of them, how can gold’s interest rate be higher than those of the dollar?

The answer is that it cannot, or at least not in a market unfettered by government intervention. Gold backwardation is an abnormal condition, but theory and practice are different things. It is extremely rare for gold to be in backwardation, but it does happen when governments intervene in the market process.

Amazingly, gold has remained in backwardation against the dollar since my KWN interview. The duration of this backwardation is unprecedented in the 4+ decades that I have been following the gold market. Clearly, something noteworthy is happening, which I believe in turn is signalling that something significant may yet happen.

Jul 30

Overstock CEO: SAC Indictment is "Civilization Scraping Dog Sh– Off Its Shoe"


“Eight years ago I was roundly criticized by coming out publicly and saying, in brief: A network of dirty hedge funds were practicing all kinds of dicey practices, including insider trading and naked short selling (and being serial killers of firms in the process),” Byrne wrote. “The SEC was not doing its job protecting our markets because it is a captured regulator, and this combination was destabilizing the system.”

He continued: “Also that the mastermind, the Napoleon of crime, so to speak, was someone I initially identified as the “Sith Lord” of all that was evil and wrong on Wall Street. In the months after, I gradually dropped broader and broader public hints that I was talking about Stevie Cohen. Of course, through all of this my claims were spun, ridiculed, and mocked.”

Jul 30

Bank of England refuses comment on huge discrepancy in custodial gold reports

“The Bank of England refuses to explain what appears to be a huge discrepancy in its accounting of the gold it holds in custody, a difference of as much as 1,200 tonnes between the total reported in the bank’s annual report in February and the total reported in a “virtual tour” of the bank posted this month at the bank’s Internet site.” — Actually, they did comment, by saying that the gold bar numbers are “deliberately nonspecific”, in other words, that instead of missing a huge amount of gold since this spring, they may simply be lying…

Jul 30

The National Debate Over Loan Modification Re-defaults is Stupid – Mandelman Matters

“It was a stupid debate back in 2009, and it’s an even stupider one now.  There’s no question about whether or not loan modifications work to prevent foreclosures… of course they do.  It’s just like asking whether step ladders work to help people slam dunk basketballs.  The answer is… yes, of course they do. Now, if it’s only a two-foot step ladder, and the person is only five feet tall, then it might not work… but you wouldn’t describe that situation as, “step ladders don’t work to help people dunk basketballs,” right? ”

Jul 30

Hussman – "Baked in the Cake"

“To quote my friend John Mauldin, “We are watching the Fed employ a trickle-down monetary policy. They hope that if they pump up the banks and the stock market, increased wealth will lead to more investment and higher consumption, which will in turn translate into more jobs and higher incomes as the stimulus trickles down the economic ladder. The kindred policy of trickle-down economics was thoroughly trashed by the same people who now support a trickle-down monetary policy and quantitative easing. It is not working.”

Jul 30

Is The Emptying Of Comex’ Silver Vaults Next On The Agenda?

“Alternatively if indeed gold’s inventory plunge was driven by the permissive nature of Singapore vaults as willing recipients for all the gold that has departed the assorted Comex system vaults, and thus are merely a physical receptacle to absorb the pent up Chinese “golden” demand, it would explain why this has not happened to silver. At least not yet.

That may change very soon because as Bloomberg reports, silver is the new gold when it comes to vaulting in Singapore, and thus China’s precious metal warehousing ambitions.”

Jul 30

Is The Emptying Of Comex’ Silver Vaults Next On The Agenda?

“Alternatively if indeed gold’s inventory plunge was driven by the permissive nature of Singapore vaults as willing recipients for all the gold that has departed the assorted Comex system vaults, and thus are merely a physical receptacle to absorb the pent up Chinese “golden” demand, it would explain why this has not happened to silver. At least not yet.

That may change very soon because as Bloomberg reports, silver is the new gold when it comes to vaulting in Singapore, and thus China’s precious metal warehousing ambitions.”