NAV Premiums of Certain Precious Metal Trusts and Funds

Still thin, but a bit less so.

On the Eve of Saint Crispin's Day

Tomorrow, October 25, is the feast of Saints Crispin and Crispinian.

It is not otherwise notable or observed in the liturgical calendar anymore, but is remembered because it marks the anniversary of the Battle of Agincourt.

"All things are ready if our minds be so."

William Shakespeare, Henry V

Stand and deliver.




After the Battle - "A Royal Fellowship of Death"



Shakespeare does not include it in his historical drama, which after all was written for his English audiences and the Crown, but as I recall during the Battle of Agincourt King Henry V ordered the execution of a hundred or so French prisoners, because he feared their numbers would turn and in a rearguard action overwhelm his much smaller and highly vulnerable force.

This occurred after a successful raid by the French on the English supply vans, which were guarded by 'old men and boys.' Shakespeare portrays this as a dishonourable deed against the rules of war, but makes no mention of the expediency of killing prisoners in his play. Such is the chronicle of war.

If anything the Battle of Agincourt was fortuitous for the English, having everything to do with the choice of terrain and defensive position, the vagaries of the heavy rains and mud which seriously hurt the French cavalry, even to causing heavily armoured knights to be unhorsed and drown, and the superior range and power of the English longbow.

In a very real sense in their overconfident eagerness for victory, the French chose the wrong tactics for the wrong place at the worst time to try and halt the English army from retreating from France. They ill-advisedly went 'in for the kill' to settle the score decisively, and in turn were slaughtered in one of the bloodiest battles of the Hundred Years War.

The Henry IV-Henry V plays of Shakespeare were among my favorites both in high school and University. The comedic character of Falstaff in Henry IV is among Shakespeare's most memorable creations from the non tragic plays. Kenneth Branagh's version of Henry V is exceptionally well done, and among the most enjoyable.

Gold Daily and Silver Weekly Charts - Straining at the Leash

Yesterday we had 32,000 ounces of gold bullion come into customer storage at HSBC, and 64,000 come out of customer storage at Scotia Mocatta.  There was no movement in the registered category.

If you look at the last chart, you can see the details of the individual warehouse holdings.  In addition to outlining the movements of bullion in and out, in green and red, I have also rank ordered the holdings of registered bullion in blue.

As you can see, JPM by far holds the most registered bullion in their vault.  As a reminder, the Comex has on that same statement the disclaimer that they take no responsibility for the bullion statements given to them by parties they assume to be reliable.

Mr. T Ferguson had an interesting commentary today wherein he rightly noted that JPM brought in a couple of tranches of gold into the Comex recently that were 'exceptionally round numbers.'  And they were, down to the metric tonne.

I had assumed that this bullion came from a single source, and it has to be in 100 oz bars as you will recall.  And it has to go through a process to be admitted to the Comex, although by the disclaimer we see that JPM is the party standing behind that statement, and no one else that I can determine.

So, if the bars were received, let's say, from storage by an agreement with some central bank on a lease arrangement, I wonder if one would bother with going through the laborious process of refining them again into bars, or merely recertifying them with a friendly refiner.  And one has to wonder if they are 'unemcumbered' by any conflicting claims.

But what struck me as most odd on the JPM front is how much of the registered gold they are holding, around 283,102 ounces out of a total of about 707,000.  That is about 40 percent of the total registered gold.    I thought they were trying to get out of that business of storing and dealing gold.   

However this turns out, I suspect we will not see the details of what has been going on up close.  But my opinion is that it will be advisable for traders to start settling up now as best they can, and not try to get lucky and skin a few more dollars out of a market whose fundamental structure is starting to look dangerously unstable.  

And if I were in the Exchange or the Regulator, I would not hope to stand quietly behind the fig leaf of my disclaimers and otherwise-too-busy-to-look-and-understaffed life, and start giving a look at what the heck is going on behind closed doors.   Maybe I am wrong, but I see smoke starting to come out of the cracks and seams.

It looks to be about one significant event away from a serious debacle that could prove to be highly embarrassing to a number of Very Serious People.  Not to mention otherworldly economists, bankers, and pundits who dwell in the realms of well spun models land.

But what do I know.  I am just a humble proprietor of my little domain.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Here Comes Twitter

Stocks caught a big today with tech having a bit of an edge.

The big news came out after the bell as Goldman announced that Twitter would be priced somewhere between 17 and 20 dollars per share.

Also after the bell Amazon announced some slightly better than expected earnings and sales numbers.

Microsoft beat revenue as well. So after the bell tech is rising.  The SP 500 caught a bit of a bid, but the Banks were hit with fresh news of a DOJ probe into the Mortgage Backed Securities activity, so that held back the SP a bit.

I will be watching the Twitter IPO very carefully and looking for an opportunity to get on the shorter side of equities sometime after that if I see things forming in that direction.  Goldman is going to make a major effort to get Twitter out well, and avoid the travesty that was the Facebook IPO.

And in a thin market, barring some unforeseen event, it is not hard to move the markets where you wish, especially if quite a few wiseguys are incented to go with the flow.

Have a pleasant evening.