Gold Daily and Silver Weekly Charts: Markets Settle After a Clown Show Smash and Grab

Intraday commentary here.

The guys who ran the clumsy rigging of the  metals market,  up and down  this week, are embarrassing.   Do they actually get paid for this sort of thing?

For all the money the nation has given away to Wall Street, I would like to think it can afford a better class of white collar criminal, who know how to run a scam, and not a clown show smash and grab. 

This obvious incompetency of the whole thing made me wonder if it was not in fact a more 'official' type of operation, and not something orchestrated by more experienced trading desks.

A big tech IPO may get squeezed out tonight. YELP may price at $840M. They are an online restaurant reviewing business.

Not sure, but they are losing money, and it sounds like GRPN^2.

postscript: Sharps Pixley had a particularly good commentary.

"A reported 31 tonne sell order on the CME rocked gold which saw prices collapse from a high of $1790 in London hours to $1703 during NY trading, followed by a further dip to the low of $1687 in out of hours electronic trading. A fall of over 6% which erased roughly half of the gains since the beginning of the year...

Ordinarily if a seller wanted to get the best price for his metal he would seek to finesse the selling over time, hunting out liquidity (finding people who are the other side of his sell order) and thereby ensure he gets the best possible profit. This seller was clearly simply out for effect."

SP 500 and NDX Futures Daily Charts

A quiet day, with the usual light volume rally in stocks after mixed to bad economic news.

Make way for the YELP IPO.

Bank of America announced today that it is going to start charging a $6 to 25 per month checking account fee for retail customers in Arizona, Georgia, and Massachusetts.  Depending on how that works for them, they intend to expand it to the rest of the country.

As the spokesmodels chuckled, that's not so bad, you pay at least that much for a gym membership. You pay for service in a restaurant and you don't complain to them.

Typically checking accounts had been free in return for receiving no interest on the balance in the account. But given the ZIRP environment of today, and the high cost structures but shrinking revenues of the TBTFs, Banks are looking to maintain their bubble economy lifestyles with more transactional fees.

The shame of course is that the only retail customers who will pay this outrageous fee are older people who are afraid to change, and will not use online banking to save fees.

Waiter, what's this pig doing in my soup? Oh I'm sorry I'm at the bank.

AIJ: Japan Regulators Look Overseas for Rest of ¥200 Billion in Missing Customer Pension Funds

So far they have found about ¥20 Billion in the local Japanese accounts. The rest is 'missing.'

Word has it that AIJ lost the money trading futures. Should have gone to Vegas.

A list of 36 of the 84 pension funds who lost money is now available.   The rest declined to be identified for fear of stirring up 'public unrest.'  

These pensioners are apparently a cranky lot.

Since the Japan press seems to think the money was 'burned through,' perhaps they should look for the vapor trails like the MF Global team is doing.

Hong Kong and the Cayman Islands are prime destinations in their own right, but I will be surprised if a big western financial firm is not involved here somewhere.

The Japan Times
AIJ likely lost pension funds trading futures
March 2, 2012
AIJ Investment Advisors Co. used clients' corporate pension money to conduct futures trading in Japan, after first transferring the money to the Cayman Islands and Hong Kong, sources said.

The details offer clues on how the suspended asset manager allegedly burned through most of what is now believed to be ¥210 billion entrusted to it by 84 employee pension funds covering more than 880,000 people as of the end of 2011.

In a related development Thursday, the Health, Labor and Welfare Ministry published the names of 36 of the 84 corporate pension funds damaged by AIJ after they agreed to be publicly identified.

The others refused on the grounds that disclosure might fuel public "unrest."

Those that lost money include software developer SCSK Corp., Cosmo Oil Co., Nihon Unisys Ltd., Lion Corp., Dai Nippon Printing Co. and Fuji Electric Co.

Wall Street Journal
Japan Looks Abroad for AIJ Funds
By KANA INAGAKI
March 1, 2012, 11:40 a.m.

TOKYO—Japanese regulators plan to ask Hong Kong and other overseas authorities for help as they try to track down nearly $2.5 billion in allegedly missing pension funds, according to a person familiar with the matter.

The Securities and Exchange Surveillance Commission is looking at whether AIJ Investment Advisors Co., a little-known Tokyo asset-management firm, channeled pension money it managed into private investment trusts in the Cayman Islands, the person said. Accounts may also have been set up with financial institutions in Bermuda and Hong Kong, the person added.

While such moves wouldn't violate Japanese rules, regulators need the help to check on overseas accounts.

Japan's Financial Services Agency suspended AIJ's operations last week, saying the firm can't account for most of the money it managed...

AIJ has told regulators that it believes about 90% of the roughly ¥200 billion in pension assets that it managed is gone, and only around ¥20 billion remain, the person familiar with the matter said...

Israeli Central Bank to Use Its Reserves to Buy US Equities

Not even bonds yet, but stocks?

It makes sense that some Central Banks have started to buy in the stock markets for private corporations. After all, central banks have always held the debt of their sovereigns, and this is just the reality of corporatism.

It is hard to figure out who might be more upset about this story: the US stock bears, or the Israeli taxpayers.

Well, Stan Fischer, the Governor of the Bank of Israel, was Ben Bernanke's mentor at MIT. Maybe he is just helping?

This adds a new dimension of flexibility to the Fed's swap lines with foreign central banks. 

Can you say ponzi scheme, bubbe? תוכנית פונזי

I know it's over when the fat lady sings, but the cantor?

Bloomberg
Israel to Begin Investing Reserves in U.S Equities Today
By Alisa Odenheimer
Mar 1, 2012 4:45 AM ET

The Bank of Israel will begin today a pilot program to invest a portion of its foreign currency reserves in U.S. equities.

The investment, which in the initial phase will amount to 2 percent of the $77 billion reserves, or about $1.5 billion, will be made through UBS AG and BlackRock Inc. (BLK), Bank of Israel spokesman Yossi Saadon said in a telephone interview today. At a later stage, the investment is expected to increase to 10 percent of the reserves.

A small number of central banks have started investing part of their reserves in equities. About 9 percent of the foreign- exchange reserves of Switzerland’s central bank were invested in shares at the end of the third quarter, the Swiss bank said on its website.

The investment will be made in equity index trackers and will include between 1,500 to 2,000 shares, among them stocks like Apple Inc. (AAPL), Saadon said.

The central bank decided to add equities to its investment portfolio in order to diversify, reduce risk and give better performance, Barry Topf, senior adviser to Governor Stanley Fischer, said in a Dec. 1 interview.

Note: When they say 'Securities' on the balance sheet below, they mean debt as in sovereign bonds. I don't know how they will characterize equities.