Silver First Notice Day

This note just received from a metals trader:

"Today is first notice day for the silver futures contract. The open interest as of the end of yesterday is a good approximation for the number of contracts that will stand for delivery, as brokers typically require any longs not funded for delivery to be sold or rolled forward by the end of trading the day before 1st Notice (some require this up to 3 days before).

Comex May silver Open Interest as of yesterday's close was 4365. I don't think this includes the old CME contract, which is the NYSE Liffe contract, so this number ultimately may be low.

These 4365 contracts equate to 21.8 million ounces, or 33% of the amount of silver on the Comex that is registered for delivery. Not enough to do real damage to the Comex inventory, but probably enough raise some eyebrows around the world. I am absolutely convinced that part of this week's pure paper attack on silver was designed to discourage longs from taking delivery."

The silver market has been manipulated for some time now based on what we have seen. Interestingly enough one of the principle players had been the London crew of AIG, who apparently had to find a new routine when AIG exited that trade a few years ago. What was an insurance company doing as a major trading player in the metals markets? Because they had not yet discovered the benefits of selling increasingly worthless derivatives.

If this is true, if these markets are being used in this way, then we should see increasing shortages of the physical products until the exchange delivery mechanism is broken, and the contracts force settled in cash, with defaults in funds galore.

The investigation into the metals and energy markets by the CFTC and other government agencies makes the SEC appear to have the wisdom and integrity of Solomon.

Let's see how this plays out, and how it is spun if and when it breaks. It's sure to be amusing.

SP Futures Hourly Charts: Frauds R' US

Do not get in front of this rally on the short side. It appears to be the end of month tape painting, but the primary short term trend is still up.

If we break key supports it may drop quickly.

This 'could be' an official reflation, supported by the Treasury and the Fed, such as we saw from the bottom of the market in 2003 that provoked the housing bubble. But the economy is now so crippled that we doubt they can sustain this latest attempt to cover over the rotting Potemkin economy with paper and paint.

These fellows leading us are like a more sophisticated and polished version of Bernie Madoff, full of smooth talk, impressive results and short term gains that lead to worse problems and staggering losses.

How many times can we be fooled? How many times will the world fall for this fraudulent printing of wealth?

You are not wrong; you are not alone in your thoughts. Madness is madnesss, no matter how popular it may be, appearing attractive, clever, well-presented, and enticing in the short term.

A Crisis of the Fed's Making

After many years of credit binging and monetary mismanagement, the sorcerer's apprentices at the Fed are having to bail hard as the credit tsunami crashes.



Thanks to Sean Corrigan of Diapason Commodities Management for this chart.

The Insiders Are Selling Into This Rally.... Heavily

Do you need to buy a vowel?

Again?

Keep the possibility of a significant monetary inflation in mind, with no advance in real terms but a handsome nominal rally.

Yes, they are that desperate and reckless and short-sighted. That's what they did in 2003 in creating the housing bubble to save Wall Street and the financial markets.

But the greater probability remains that this is an engineered short squeeze that will fail about this level and fall back to the bottom of the trend channel.

Bloomberg
Insider Selling Jumps to Highest Level Since ‘07 as Stocks Gain
By Michael Tsang and Eric Martin

April 24 (Bloomberg) -- Executives and insiders at U.S. companies are taking advantage of the steepest stock market gains since 1938 to unload shares at the fastest pace since the start of the bear market.

... While the Standard & Poor’s 500 Index climbed 26 percent from a 12-year low on March 9, CEOs, directors and senior officers at U.S. companies sold $353 million of equities this month, or 8.3 times more than they bought, data compiled by Washington Service, a Bethesda, Maryland-based research firm, show. That’s a warning sign because insiders usually have more information about their companies’ prospects than anyone else, according to William Stone at PNC Financial Services Group Inc.

“They should know more than outsiders would, so you could take it as a signal that there is something wrong if they’re selling,” said Stone, chief investment strategist at PNC’s wealth management unit, which oversees $110 billion in Philadelphia. “Whether it’s a sustainable rebound is still in question. I’d prefer they were buying.”

Insiders Sell

Insiders from New York Stock Exchange-listed companies sold $8.32 worth of stock for every dollar bought in the first three weeks of April, according to Washington Service, which analyzes stock transactions of corporate insiders for more than 500 mostly institutional clients.

That’s the fastest rate of selling since October 2007, when U.S. stocks peaked and the 17-month bear market that wiped out more than half the market value of U.S. companies began. The $42.5 million in insider purchases through April 20 would represent the smallest amount for a full month since July 1992, data going back more than 20 years show. That drop preceded a 2.4 percent slide in the S&P 500 in August 1992....

The S&P 500 has rallied 26 percent over 32 trading days, the sharpest rally since 1938, as speculation increased that the longest contraction since World War II will soon end....