Net Asset Value of Certain Precious Metal Trusts and Funds

An extra 'gut check' for the over eager dip buyer perhaps, and a sign of things to come as the battle intensifies over the June futures and deliveries.

I let my hedges go when the SP futures dropped to support around 1334. I could put some back on but not yet. I was buying a few things that looked to be getting down to reasonable valuations, but the word is 'lightly' and with 'agility.'

Rajaratnam Guilty On All 14 Counts of Insider Trading - Faces 19+ Years In Prison

"The tapes show he didn't believe the rules applied to him. Cheating became part of his business model."

"He" is a microcosm of a financial system in which the currency of fraud drives out honest price discovery and displaces productive activity, and large institutions game the markets on a daily basis with near impunity, while the public underwrites their steady gains and occasional but spectacular losses.

Sentencing will be on July 29.

AP
Hedge fund founder convicted in inside-trade case
May 11, 2011

NEW YORK (AP) — A former Wall Street titan was convicted Wednesday of making a fortune by coaxing a crew of corporate tipsters to give him an illegal edge on blockbuster trades in technology and other stocks — what prosecutors called the largest insider trading case ever involving hedge funds.

Raj Rajaratnam was convicted of five conspiracy counts and nine securities fraud charges at the closely watched trial in federal court in Manhattan. The jury had deliberated since April 25, and at one point was forced to start over again when one juror dropped out due to illness.

Prosecutors had alleged the 53-year-old Rajaratnam made profits and avoided losses totaling more than $60 million from illegal tips. His Galleon Group funds, they said, became a multibillion-dollar success at the expense of ordinary stock investors who didn't have advance notice of the earnings of public companies and of mergers and acquisitions.

Rajaratnam will remain free on bail, though now with electronic monitoring, at least until his July 29 sentencing.

The verdict came after seven weeks of testimony showcasing wiretaps of Rajaratnam wheeling and dealing behind the scenes with corrupt executives and consultants. Some of the people on the other end of the line pleaded guilty and agreed to take the witness stand against the Sri Lanka-born defendant.

Authorities said the 45 tapes used in the case represented the most extensive use to date of wiretaps — common in organized crimes and drug cases — in a white-collar case.

The defense had fought hard in pretrial hearings to keep the avalanche of audio evidence out of the trial by arguing the FBI obtained it with a faulty warrant. Once a judge allowed them in, prosecutors put the recordings to maximum use by repeatedly playing them for jurors.

"You heard the defendant commit his crimes time and time again in his own words," Assistant U.S. Attorney Reed Brodsky said in closing arguments.

"The tapes show he didn't believe the rules applied to him," the prosecutor added. "Cheating became part of his business model."

In one July 29, 2008, call, Rajaratnam could be heard grilling former Goldman Sachs board member Rajat Gupta...."

Gold Daily and Silver Weekly Charts - The Architect and Her Nemesis

"Our sales of physical metal yesterday were the second-highest so far this year. Considering where gold is trading, the strength of this demand was surprising. Without necessarily expecting this very high pace of buying to continue, we nonetheless would look for Indian demand to continue at above-average levels, given how willing these buyers have lately been at prices in excess of $1500. Physical demand elsewhere remains subdued. Scrap supply is underwhelming at these price levels." UBS

A nice bounce, but now follow through is everything, for both the metals and the equity markets.

Short term market movements are indeed highly correlated to changes in liquidity if they are present, as even a casual observers knows.

And I would hope that most by now realize that the 'efficient markets hypothesis' is a dead duck, a propaganda piece put forward by the banksters and their demimonde.

This is the theory that the exchanges are naturally fair and neutral parties, perfectly capable of self-regulating themselves so that a level playing field exists for all participants, big and small, insider or not, without any need for regulatory oversight from an official public body. And that participants do not use extra-legal means to gain advantages, paricularly over the non-professional investor. The exchange is like a vending machine, merely taking a small fee for their efforts, and their members would never engage in any trading advantaged by their superior positioning and access to power and money.

The events of the past few years have tossed this canard on the rubbish heap of discredited whimsy where it belongs, although some still reflexively reach for it under duress.

And so when someone appeals to this theory, even if indirectly, to rationalize the recent action in the silver market in which the exchange increased margin requirements five times, in conjunction with bear raids well timed to the off hours, with some of their largest members and customers trapped in massive short positions, you will just have to wonder at the substance and integrity of such an argument.

Most fundamental arguments that appeal to short term market movements as proofs are dodgy in and of themselves.

But let's see what happens. Blythe is not out of money by a long shot, but as the levels of the Comex seem to attest, they remain steadily trending lower on the amounts of silver at their disposal for delivery. Perhaps they can find fresh supplies, but it is unlikely that it will be at lower prices. And so they continue their campaign to discourage and dampen demand.

Volatility comes with wars, even currency wars, and some items are more on the front lines than others.

Therefore I have taken my short term trading profits, and added hedges short the indices to cover what remains. I wish to see if this bounce continues, or if the Street continues to game the markets to perpetuate their perfect trading records.

The Architect and Her Nemesis

SP 500 and NDX Futures Daily Charts - Self-Consuming Capitalism

“And the British political economist Fred Hirsch generalized the point:  once a social system, such as capitalism, convinces everyone that it can dispense with morality and public spirit, the universal pursuit of self-interest being all that is needed for satisfactory performance, the system will undermine its own viability, which is in fact premised on civic behaviour and on the respect of certain moral norms to a far greater extent than capitalism’s official ideology avows.”

Rival Views of Market Society and Other Recent Essays, pg 156