Gold Daily and Silver Weekly Charts

"A shudder in the loins engenders there
The broken wall, the burning roof and tower
And Agamemnon dead."

W. B. Yeats, Leda and the Swan


"When clouds appear, wise men put on their cloaks;
When great leaves fall, the winter is at hand;
When the sun sets, who doth not look for night?...

Bloody thou art; bloody will be thy end."

William Shakespeare, Richard III


"As it will be in the future, it was at the birth of Man,
There are only four things certain since Social Progress began:
That the Dog returns to his Vomit, and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;

And that after this is accomplished, and the brave new world begins
When all men are paid for existing, and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!"

Rudyard Kipling, The Gods of the Copybook Headings

They are still not showing the ounces being delivered out of the Comex warehouses to standing February contracts.

It is thin on deliverables, not as thin as it had been, but it will be getting thinner.

Let's see what happens.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Want To Take you Higher

This will end badly.

Notice how equities hit the bottom of the trend channel, and then took off like a horse with a red hot poker applied to its posterior.

The real economy is not keeping pace with the financialisation of reality.  And that is a recipe for disaster, but in the future. 

In the meantime, try not to get in front of these drunk-with-power drivers.

Hong Kong Gold and Silver Exchange To Launch 1,500 Tonne Depository in China

Just a fad. Nothing to see here, move along.

Reuters
Hong Kong gold exchange eyes 1,500-tonne warehouse in mainland China
February 16, 2014

The Chinese Gold & Silver Exchange Society (CGSE), based in Hong Kong, aims to launch a physical bullion trading exchange and a 1,500-tonne depository in mainland China within the next year, its president said on Thursday. The century-old firm, which runs Hong Kong's only physical bullion trading exchange, is looking to tap the burgeoning demand for gold in China, which last year toppled India from its ranking as the world's top gold consumer.

Its 171 members include dealers, banks and jewellers, among them Chow Tai Fook Jewellery Group Ltd, the world's most valuable jewellery retailer. It has been in talks to open a warehouse in China's free trade zone in the Qianhai district of Shenzhen that has struggled to take off some three years after it was first touted as a new "mini-Hong Kong".

But talks are finally getting serious after last year's launch of the Shanghai free trade zone, CGSE President Haywood Cheung told Reuters. "Three years ago we started negotiating with them to build a vault for gold and silver. It is now finally down to an ad hoc committee," said Cheung, adding that Qianhai officials had asked for CGSE's plans and proposals...

Read the entire story here.

Margin Call: Ted Butler Wonders About the Real Cause of Bear Stearns' Collapse

Ted Butler has put one of his newsletters into the public domain.

It raises some interesting points.  As you may recall Bear was suffering losses in a number of financial instruments at the time.  But there has not been serious discussion about their precious metal positions.

At the time of the MF Global collapse it appeared that JPM had their fingerprints all over the squeeze and margin call that put them down.   JPM, In the City of London, With a Margin Call.

But I had never thought about it happening in the case of Bear Stearns.

Goldman may be the vampire squid, but JPM may be Mack the Knife.

And is MF Global Jenny Towler, and Bear Stearns Schmul Meier?   And if so, who then is Tiger Brown?

Mackie, what price did you pay?

Times may change, but the song remains the same.

What Really Happened To Bear Stearns?
By Theodore Butler
February 17, 2014

Six years ago the well-known investment bank Bear Stearns imploded. In February 2008, Bear Stearns stock traded as high as $93; by mid-March the insolvent company agreed to be taken over by JPMorgan for $2 a share (later raised to $10 after class-action lawsuits). In the annals of Wall Street, there was hardly a more sudden demise than the fall of Bear Stearns. The cause was said to be a run on the bank as nervous investors pulled assets from the firm. Bear Stearns was said to be levered by 35 times, meaning it had equity of $11 billion and total assets of $395 billion. This is a very small cushion if something negative suddenly appears.

Something negative did hit Bear Stearns in the first quarter of 2008; although there are remarkably few details of what went wrong. Since Bear had a significant presence in sub-prime mortgages and that market was in distress, it is assumed the fall of the firm was mortgage related. That may be true, but there was no general stress in the stock market through mid-March 2008 reflecting a credit crisis. Was there instead some specific trigger behind the company’s sudden collapse?

I believe that sudden and massive losses and margin calls of more than $2.5 billion on tens of thousands of short COMEX gold and silver contracts were the specific triggers that killed Bear Stearns. Let’s face it – Bear was so leveraged that a sudden demand of more than $2.5 billion in immediate payment for any reason could have put them under. Bear Stearns’ excessive gold and silver shorts on the COMEX are the most plausible reason for the sudden demise.

Bear Stearns did fail and due to a sudden cash crunch was acquired by JPMorgan for a fraction of what it was worth two months earlier. Bear Stearns was the largest short in COMEX gold and silver at the time. The day of Bear Stearns’ demise coincides precisely with the day of the historic high price points in gold and silver. That is also the same day the biggest COMEX gold and silver short would experience maximum loss and a cumulative demand for upwards of $2.5 billion in cash deposits for margin. It was no coincidence the music stopped for Bear Stearns that same day...

Read the entire article here.