Bill Moyers With Matt Taibbi and Yves Smith on the Banks - The Psychopathy of Wall Street

"Too many people hold the idea that psychopaths are essentially killers or convicts.

The general public hasn't been educated to see beyond the social stereotypes to understand that psychopaths can be entrepreneurs, politicians, CEOs and other successful individuals who may never see the inside of a prison."

Dr. Robert Hare

Source

Gold Daily and Silver Weekly Charts - Ending a Week of Shenanigans

Well, we can say goodby to this week, and good riddance to what proved to be a rough week for the metals bulls and miner mavens, except for the good news that Harvey Organ's illness was not life threatening and he will be fine it appears.

As you may recall, I warned about a 'hit' on the metals for FOMC meeting Tues-Wed. But I expected there to be a rebound and then another hit next week for the end of quarter and silver's July option expiration. That turned out not to be the case, as the metals were hammered lower. Interestingly enough, Silver OI increased.

Intraday commentary on this here.

So what next? Chart formations are really not so much help here except to track levels of support and resistance. I think the reason for this is the free-wheeling nature of these paper markets, only lightly traded, dominated by pros, disconnected from the real economy, and swinging around technicals and exogenous events.

Let's see how next week goes. There should be more data by then to be able to say something more substantial.

Chris Powell's interview on CNBC Asia is below the charts.

Have a pleasant weekend.

SP 500 and NDX Futures Daily Charts - Russell Rebalancing Today - End of Quarter Next Week

This was a rough week for trading as Benny did not please, but only tease.

The bank downgrades spooked shares but that may have been overblown. I think we saw selling this week tied into some technicals, including the Russell rebalancing, and the clearing of the decks for the end of quarter tape painting exercise next week, if nothing more blows up in Europe.

Next Tuesday 26 June Is Silver July Options Expiration - Shenanigans Reminder

Perhaps the reminder is a bit late, and the shenanigans have already occurred.

Although both gold and silver were hit hard around the FOMC meeting announcement, silver has been hit a bit harder.

Most curiously in yesterday's big down day the overall open interest EXPANDED by about 6,000 contract, mostly in the outer months of Sept - Dec. My friend Dave brought this to our attention this morning as Bill and some of the guys were discussing it.

Comex silver o/i went up +6034 contracts yesterday. Sept silver was up +4617, Dec silver up +976. July actually increased +147. This would be unusual for a day like yesterday but also very unusual given the July "contract roll" period is starting.

We did not see a similar expansion in gold open interest.

I cannot help but think that this is related to the July silver option expiration on the Comex next Tuesday and the end of trading.

I also have it in the back of my mind, subject to more data, that there has been an effort to depress the price of silver around the end of quarter as a few certain big shorts seek to make the losses on their silver short positions look a little better. But for now that is speculative.

So, unless the exchange report was incorrect, it is very odd for a large expansion in silver to occur on a huge down day, unless there was something like manipulative shorting.

As always, one must assume the lampreys are riding the momentum trade with the sharks. A hit on metals at the FOMC meeting is a traders' commonplace.

June 26 Comex July silver options expiry
June 26 Comex July copper options expiry
June 26 Comex July silver futures last trading day
June 27 Comex June gold futures last trading day
June 27 Comex June copper futures last trading day
June 27 Comex July miNY silver futures last trading day
June 29 Comex July silver futures first notice day
June 29 Comex July copper futures first notice day
July 26 Comex August gold options expiry
July 26 Comex August copper options expiry
July 27 Comex August miNY gold futures last trading day
July 27 Comex July gold futures last trading day
July 27 Comex July silver futures last trading day
July 27 Comex July copper futures last trading day
July 27 Comex August miNY gold futures last trading day
July 27 Comex August E-mini copper futures last trading day
July 31 Comex August gold futures first notice day
July 31 Comex August copper futures first notice day

Some Additional Questions For Jamie Dimon, Empereur de la République

“When a government is dependent upon bankers for money they, and not the leaders of the government, control the situation, since the hand that gives is superior to the hand that takes."

Napoleon Bonaparte

Interesting questions, but unlikely to come up at Mr. Dimon's next team building session with the Congress. They forgot to ask about this area while they were fawning all over the man, asking him advice on how to run the country.

I would like to see some elected official with the guts and the public concern willing to ask the pampered princes of the monied aristocracy these types of tough questions.

Alas, the likelihood of such a confrontation seems as whimsical and unlikely as the set pieces that Mad Magazine used to run when I was a young boy titled, Scenes We'd Like to See...

Futures
Additional questions for Jamie Dimon
Questions for Jamie Dimon that no Member of Congress had the Courage to Ask
By Stanley Haar
21 June 2012

The Golden Rule of government, “Whoever has the gold makes the rules,” was on full display in Washington over the past week as JPMorgan’s Jamie Dimon appeared at hearings held in both the Senate and the House to answer questions about the bank’s recently reported trading loss.

I am in full agreement with the argument that it is actually none of the government’s business when the shareholders of a private bank lose money due to the bad decisions of management, as long as the loss was incurred legally and does not threaten the integrity of the financial system.

However, the Congressmen and Senators missed an excellent opportunity to ask Mr. Dimon about any number of financial scandals (Madoff, Jefferson County, robo-signing, etc.) in which JPMorgan Chase has been involved, including the on-going MF Global scandal.

In our representative democracy, where Senators and Congressmen are supposed to serve the public interest, not the interests of big campaign bundlers, it is sad to report that not one member of Congress had the courage to ask Jamie Dimon the following questions:

1) It is reassuring to hear that JP Morgan has more than enough of its own capital to cover the trading losses that triggered this hearing. But suppose for the moment that under some circumstances the size of the loss were to grow to a substantially larger amount than you now anticipate. If you didn’t have enough capital to cover the loss, would you ever consider taking money from your customers’ accounts to cover the losses? That would be illegal, wouldn’t it?

Permit me to ask you one more not-so hypothetical question: If you were standing in the lobby of a JPMorgan Chase branch, and you saw through the window that one of your customers was robbing the candy store across the street, and the customer then ran into your bank with a bag of cash, would you let that guy pay off his car loan with the cash in his bag?

Isn’t that in essence exactly what happened last October with your customer, MF Global? According to the very detailed report released on June 6 by Trustee Giddens, the infamous transfer of $175 million from MF Global to your bank on October 28 to pay off an overdraft was a transfer entirely between JPMorgan accounts: From the segregated customer trust account to the MF Global Treasury house account to a JPMorgan London account. All of these moves were completely transparent on your blotter.

Your own employees, Donna Dellosso and Barry Zubrow, witnessed those transfers and were so concerned about them that they immediately requested a letter from Jon Corzine and Laurie Ferber, basically stating that they were not stealing customer money. You never got that letter, but kept the money anyway. Weren’t you concerned about receiving stolen property, and potentially being an accessory to the looting of customer accounts? Did you call the CFTC or SEC to report your suspicions?

[Mr. Dimon told the Senate Banking Committee that his bank received verbal assurances that the transfer was legitimate; however the Giddens report directly contradicts this………see page 134: MF’s in-house attorney, Dennis Klenja, “advised that he made no assurances of any kind to JPM”.]

JP Morgan was MF Global’s primary banker. You knew that they were scrambling to come up with cash to stay alive, day-by-day, hour-by-hour. Did you really think that they suddenly found a couple of hundred million dollars of excess cash in the segregated account? Or did you watch them steal customer money for a JPMorgan account, and then ask for the letter as a CYA in case they got caught?

That is the first question. Read the next six questions here.

Gold Daily and Silver Weekly Charts - Goldman Says 'Sell' And So They Do

Stocks were shaky but unchanged this morning, when Goldman came out and issued a 'sell' on the SP 500.

This shook the markets, but what really started them sliding were rumours that spread across the financial news channels and trading desks that Moodys would downgrade 17 global banks tonight, with a three level downgrade on Morgan Stanley.

Now whether this was true or not, the selling increased, and stocks and commodities went out on the lows in a steady trade.

I suspect quite a bit of this was engineered by some clever boys with an eye to the Russell index rebalancing tomorrow, and the end of month tape painting next week. They were playing games with the financials trying to suck in the bulls before the Goldman announcement for example.

But let's see what happens.

I took out the triple ETFs I owned today, including TZA and FAZ, since they had nice gains and I don't like to hold them except for brief trades.

I won't call bottom here for sure, but I did add a silver position for the first time in a while at this price below 27.

SP 500 and NDX Futures Daily Charts - Goldman Signals a Sell Off

The economic numbers came in a bit shakey this morning, but stocks were holding in as the metals were hit.

Interestingly enough the financial short ETF FAZ was running negative while the broader short ETFs were showing gains.

Goldman shook the markets with a 'sell' on the SP today, and then rumours were abounding of a big downgrade of the banks by Moody's tonight, including a specific rumour of a three level downgrade on Morgan Stanley.

This had the flavor of a trading desk operation today ahead of the Russell rebalancing tomorrow, but let's see what actually happens tonight, and what Moody might say.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Stocks and commodities started selling off hard today on rumours that Moody's would be downgrading 17 banks tonight, including a triple downgrade on Morgan Stanley.

Let's see if this really happens as the trading desks said. I found it interesting that just before the rumour came out, the financials were rallying and FAZ, the triple bank short, was running higher, contra market.

How Wall Street Financial Companies Stole Billions From Main Street

Funny how these stories of widespread and systematic financial corruption are so undercovered by the main stream media. Maybe it is because 'truth is a dagger pointed at their heart, which is their pocketbook.'

This is a long piece of investigative journalism, but well worth reading.

It is too bad that the Banks had their major nemesis, Eliot Spitzer, taken out by the Feds under Bush II. And they were able to buy off the White House and the Congress so that no one of substance is touched by indictment, much less conviction.

Later in the story Matt Taibbi mentions the LIBOR rigging scandal, and suggests the broader rigging of markets and the real economy by the financial interests.

In a way a brainwashed vocal minority of the people are to blame for this. Every time the move is made to reform this rotten system, and bring the banks and large financial corporations under control of the law,they pipe up, often hysterically, on cue that government has no business interfering with 'private enterprise.' These are the kind of unthinking used by the powerful as paid propandists, intellectual brown shirts, and even the unthinking and unpaid, known in the power trade as 'useful idiots.'

In political jargon, useful idiot is a pejorative term used to describe ordinary people serving as propagandists for a cause whose goals they do not truly understand, who are used cynically by the leaders of the cause.

The politicians and regulators are bought or cowed, and the people shout slogans calling for their own downfall.

Don't feed the sharks.  Don't let them turn you into a useful idiot.  Stop watching the propaganda stream and start thinking for yourself.

Stop letting these wiseguys play you for a fool, a sucker, a muppet, and a cockroach. Because that is what they think you are. You really don't deserve it. It just encourages them to be bolder, and discourages those around you from thinking that reform is possible. Think twice before you speak.

This is an old story, with the bad guys wearing different, more expensive suits, but the game remains the same.

"Do not fear your enemies. The worst they can do is kill you. Do not fear your friends. At worst, they may betray you. Fear those who do not care; they neither kill nor betray, but betrayal and murder exist because of their silent consent."

Bruno Jasienski

Rolling Stone
The Scam Wall Street Learned From the Mafia
By Matt Taibbi
June 21, 2012

Someday, it will go down in history as the first trial of the modern American mafia. Of course, you won't hear the recent financial corruption case, United States of America v. Carollo, Goldberg and Grimm, called anything like that. If you heard about it at all, you're probably either in the municipal bond business or married to an antitrust lawyer. Even then, all you probably heard was that a threesome of bit players on Wall Street got convicted of obscure antitrust violations in one of the most inscrutable, jargon-packed legal snoozefests since the government's massive case against Microsoft in the Nineties – not exactly the thrilling courtroom drama offered by the famed trials of old-school mobsters like Al Capone or Anthony "Tony Ducks" Corallo.

But this just-completed trial in downtown New York against three faceless financial executives really was historic. Over 10 years in the making, the case allowed federal prosecutors to make public for the first time the astonishing inner workings of the reigning American crime syndicate, which now operates not out of Little Italy and Las Vegas, but out of Wall Street.

The defendants in the case – Dominick Carollo, Steven Goldberg and Peter Grimm – worked for GE Capital, the finance arm of General Electric. Along with virtually every major bank and finance company on Wall Street – not just GE, but J.P. Morgan Chase, Bank of America, UBS, Lehman Brothers, Bear Stearns, Wachovia and more – these three Wall Street wiseguys spent the past decade taking part in a breathtakingly broad scheme to skim billions of dollars from the coffers of cities and small towns across America.

The banks achieved this gigantic rip-off by secretly colluding to rig the public bids on municipal bonds, a business worth $3.7 trillion. By conspiring to lower the interest rates that towns earn on these investments, the banks systematically stole from schools, hospitals, libraries and nursing homes – from "virtually every state, district and territory in the United States," according to one settlement. And they did it so cleverly that the victims never even knew they were being ­cheated. No thumbs were broken, and nobody ended up in a landfill in New Jersey, but money disappeared, lots and lots of it, and its manner of disappearance had a familiar name: organized crime.

Read the rest here.

Gold Daily and Silver Weekly Charts - More Wiggle Waggle

The Fed did what was expected, and the metals were hit going into this FOMC day, as expected.

Boring. Don't let these jokers muscle you out of your positions with their intraday shenanigans.

Let's see how the real trend develops.

I am long bullion and short stocks.

SP 500 and NDX Futures Daily Charts - Much Ado About Bernanke

Proctor and Gamble cast a pall over the real economy stocks as they lowered forecasts based on a weak consumer.

The wiseguys had some fun muscling prices after the Fed did the obvious, extending Operation Twist, and nothing else.

MF Global Customers "Get the Chance" To Auction Off Hopes For the Full Return of Stolen Funds

Great news for customers who had their money stolen by Wall Street!

No need to worry about its return, now they can sell their claims at a discount to -- Wall Street!

Perhaps we can get rid of the FDIC and cumbersome banking regulation and let people auction off their looted savings deposits and CD's when the Bankers lose their money by gambling on derivatives.

And as for education, well, children do have a lot of time and energy that might be better utilized in manual labor by privatizing schools in the model of privatized prisons, and dedicate them to learning through work.

Free market! Assymetry of information! Predatory finance! Innovation!

It's got something for everyone -- well, everyone that counts, that is.

This has to be considered with the other headline that was released about the same time by Gary Anderson at The Business Insider:  Did Dimon and JP Morgan Steal MF Global Funds?  Chris Whalen Thinks So.

"If Whalen's opinion is true, no account at a broker/dealer is safe from the investment bank that determines to get money from a bankruptcy proceeding. There is a loophole that allows a margin call, even from companies that are bankrupt, and the bank can accept money that comes from protected accounts. They do not have to wait for the bankruptcy proceeding and then no one is left to protect the account holders! Wow, I say."

Of course we still do not know who did it yet, but there is no doubt that the money, and some precious metal and Treasury bond assets held on account, were stolen. And it is an old axiom 'that Caesar's wife must be above suspicion.' And in this case, she is at least caught outdoors in her nightie.

Perhaps it is just an overdeveloped sense of justice, but I find this to be particularly repugnant.   Wall Street is taking advantage of people's fears of not receiving their money back in the face of a blatant theft by some undisclosed financial parties, and of course an overwhelming show of legal force and slick maneuvering in the bankruptcy process by JPM.

Especially when those fears have been created by some of the very institutions that stand to further benefit from the lack of justice in how this is being handled by their bought and paid for regulators and politicians. Slobbering Senators Woo Dimon While They Gut Dodd-Frank- Bloomberg.

Financial Times
MF Global clients get chance to auction claims
By Tracy Alloway in New York
June 19, 2012

Former customers of MF Global will have the chance to auction off their claims, giving them another opportunity to recoup money from the failed broker-dealer.

SecondMarket, a trading platform for bankruptcy claims and other specialised investments, on Tuesday began an auction process for MF Global customers wishing to sell their recovery rights in the company once run by Jon Corzine, a former Goldman Sachs chief executive.

MF Global collapsed in October, leaving $1.6bn worth of missing customer funds and triggering a series of complicated and continued cross-border bankruptcy proceedings. Clients of the failed broker-dealer who are owed money can choose to sell their claims to the bankruptcy estate in an effort to recoup their funds earlier.

Such claim trading is common after big bankruptcies, such as Lehman Brothers’ 2008 collapse or Hostess Brands’ early 2012 filing.  (Note that NO Customer Accounts had to be auctioned off at less than par in these cases - Jesse)

Buyers – including hedge funds and some large investment banks – are essentially punting on the ultimate recovery values of the claims.

MF Global claims already trade on SecondMarket, but the new auction system is meant to make it easier for sellers to find buyers. Former MF Global customers will be able list their claims for sale on a centralised platform, and potential buyers will be able to conduct due diligence and then make their bids....

Read the rest here.

Gold Daily and Silver Weekly Charts - Pre-FOMC Action

Please notice that I have never attempted yet to put one of the arcing lines of support and resistance yet this year.

When I do, it will be because the chart has said something decisive. So far we are in what Hugo Salinas-Price calls the 'wiggle waggle.'

There was an obvious divergence from the usual pattern in stocks and gold today, most likely due to tomorrow's FOMC meeting.

SP 500 and NDX Futures Daily Charts

FOMC tomorrow.

Europe stills looms.

SP 500 September Futures Daily Chart Closeup

Today's action added some refinement to the daily SP 500 futures chart.

How this formation resolves, up or down, may depend on what happens in the next few days with regard to Europe and the Fed as you might expect.

The Secret State and the Tyranny of the Faceless and the Lifeless

“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.

For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.”

Marcus Tullius Cicero


"Corporations have neither bodies to be punished, nor souls to be condemned, they therefore do as they like."

Edward Thurlow, Attorney General and Lord Chancellor of England

Golem XIV, aka David Malone, highlights a lesser understood aspect of the corporatism that seems to be taking the developed nations by storm.

The recent moves by the Supreme Court and the Congress to extend personhood and the rights of individuals to corporations as 'super people' are more dangerous than most realize.

All individuals are not equal in terms of influence and power. And if organizations such as corporations can become 'individuals,' that Frankenstein monster will be able to dominate as effectively as any tyrants in history.

The cure is transparency and accountability, and the recognition that the human individual alone is uniquely protected by the Bill of Rights. Corporations are not asked and expected to fight and die for the benefit of the State. They do not suffer and bleed, nor stay awake at night in worry about their children and their care. Corporations are lifeless.

The Sarbanes-Oxley law was designed to give the people who use corporations as their instruments no place to hide. But as we have seen, it is a law rarely used, and itself under determined resistance to be overturned as was Glass-Steagall.

"Every thing secret degenerates, even the administration of justice; nothing is safe that does not show how it can bear discussion and publicity."

John Dalberg Lord Acton

Corporations are but the artificial constructions of men, often designed to eliminate individual risk and accountability. When things go wrong, no one seems to know what happened. Money just vaporizes away. When recklessness leads to horrific accidents such as Bhopal, the corporation retreats into the aether of words and corporate laws, often held in disinterested foreign hands.

The modern Corporation aspires to the power of the unaccountable State.

Corporations are without sin, no matter what actions or even atrocities they may as a collective commit in pursuit of profits, because they are lifeless. They do nothing, really, except to hide and often excuse the actions of real men and women. Corporations live only in the courts. It is all upside.

And it is the great irony of our time that the platforms and agendas of the Tea Party reformers and the Christian Right  have been perverted by their representatives and their money men to become the proponents of the anti-human, the corporate ascendancy over human rights and individual life.  And that the elected reformers of the progressive left have largely sold themselves to Wall Street since the 1990's.

The definition of 'individual' as a living being with a soul thereby granting them inalienable rights, which is at the very heart of the American experience, is under determined assault by the power of the global monied interests, not from some godless enemy, but most effectively from the corruption of power within.

Secret State
By Golem XIV
June 19, 2012

"...We are all now sadly familiar with the role of Off-shore tax havens. They allow companies to avoid having to pay tax. They also allow companies to hide any dealings they may not want scrutinized by prying regulatory authorities. Tax havens are, as Nicholas Shaxson in his wonderful book Treasure Islands has suggested, better thought of as ‘secrecy jurisdictions’. They are purpose built for shrouding in impenetrable and legally protected secrecy any morally dubious financial arrangements which might be embarrassing or costly if revealed to regulators or governments. The world of Off-shore provides a legal and moral nul-space in where most things can be arranged for a price.

But that nul-space is growing and more than simply growing it is maturing.

Recently Off-shore havens have added to financial secrecy another valuable service – data and communications secrecy. There are now companies based in off-shore havens which offer to protect emails and data caches from prying regulatory or legal scrutiny...

Suddenly not only is it possible for corporate finances to be moved beyond the reach of national oversight and regulation, but now corporate emails and other data can also be removed from national democratic and legal oversight. Corporation can now operate within any nation, making their profits there. but without the elected government, the tax officials, financial regulators, courts or police having any power to see what the corporation is doing. The police could not force the disclosure of emails because those emails would not be under UK jurisdiction. It would be entirely possible for a company to be breaking the law, exactly as News International did, but now most if not all (depending on how careful they were) the evidence required to bring their illegal activities to light, would be beyond the reach of any authority in this country...

I look at it and think to myself – so now we have vast financial power shielded from any national, democratic regulation or legal oversight. We have data similarly hidden away from the pesky prying eyes of civilian democratic and legal accountability and we now also have the parts of the global military that routinely operate outside of democratic oversight and who regularly break the most fundamental national and international laws, being organized to operate together under an aspiring supra-national command...

In the week of May 21st of this year in Tampa Florida, Special Operations Forces from 90 countries got together at a Special Forces Convention. You can see a video of what they got up to here.

The purpose of convention, which is a regular thing now, is (from their web site):

The International Conference objective will be that U.S. and International SOF leaders recognize USSOCOM as a Global Command and gain a better understanding on how to become active partners in that partnership.

Who is USSOCOM? It is the umbrella US military command for all US Special forces. So here we have a programme the purpose of which is to integrate the operations and even the command structure with the US at the top, for the Special Forces of 90 nations. Is this anything to be concerned about? Well on one level, if you have Special forces why not have them work together well? Seems sensible. Except that Special Forces are by design the part of any nation’s armed forces which operate routinely and as a matter of course, outside of the law and beyond democratic oversight...

What this this and other documents now clearly indicate is that through this command and others the US can now commit troops to hostile actions without the Congress having to give its consent or even be informed. Now of course we all know this happens. SO what is new. In a sense nothing. In another sense it clearly shows how our governments, or at least elements within them, are keen to follow global finance’s lead in being able to operate outside of democratic oversight, outside its own laws and outside of any democratic accountability. This I think is, if not a new desire, a new maturation of the capability.

There is a clear disdain for democracy being voiced among those who run and own global finance, who make up the supra-national world of the IMF, the WTO and other non-national, non-democratic global technocratic bodies. We all know what disdain the global financial and media companies have for the laws which ‘regulate them’. We know how far outside their own laws and international law our governments have gone in rendition and torture of civilians.

It seems to me you don’t have to subscribe to any conspiracy theory to find this enough to worry about.

Read the entire article here.

A Closer Look at the SP 500 September Futures Daily Chart

I wonder if Benny will give the market what it needs on Wednesday.

They generally like to hit the metals on an FOMC meeting day.

Gold Daily and Silver Weekly Charts - Band-Aids and Butterfly Kisses

Nothing has been resolved in the international monetary and sovereign debt crisis.

This is all band-aids and butterfly kisses, soothing to little children, but nothing on the order of the change and reform that will be required to bring stability and growth back to the western economies, including the UK and the US.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained growth and recovery.

SP 500 and NDX Futures Daily Charts - Whistling Past the Parthenon

The market rallied last night by the 'win' of the 'pro-bailout' party. It looks as though they *might* be able to form a coalition with the center-socialist party at least on the assumption that the bailout can be renegotiated.

So the market came in ready for a rally that quickly evaporated, although stocks were able to finish unchanged.

The key news today is that NYSE volume was only about 600 million shares. No one with any real discretionary money is buying this 'crisis averted' story.

The FOMC starts a two day meeting tomorrow, and will announce their decision on Wednesday June 20.

The winners of the Greek elections will have until early Wednesday to form a practical coalition as explained earlier today.

So, there will be some more excitement I think. There are national assets to be taken, and on the cheap, as compared to looting on a grand scale in the past.

And there is also the difficulty in Spain. This will not be resolved until their are some very large changes made I think.

And the forces that will resist that change are determined, entrenched, and formidable.

Update on the Greek Political Situation

The Greek elections are of keen interest to many who do not normally follow their politics. And judging from questions I have received, not everyone in North America understands the mechanics of parliamentary government.

This is the best update and description of the process which I can find.

I cannot speak to accuracy of the PASOK party and the terms of their willingness to join a coalition with New Democracy, but they are the party of George Papandreou, and it does sound correct based on what I have heard.

What the ECB, the IMF and their money masters have to say about renegotiating terms is another matter altogether.

Some of the spin today has been that 'Greece does not matter, because it is so small' and that is wrong. Any failure matters here because of the overleveraged and highly unstable condition of the western financial system. Some do matter more than others, but if the anti-austerity party had won last night, the equity would have been in meltdown mode today.

As it was, NYSE volume was anaemic.

Greek coalition talks to enter 2nd day
NICHOLAS PAPHITIS, Associated Press
Monday, June 18, 2012 3:07 PM

ATHENS, Greece (AP) — Greece's two pro-bailout parties appeared likely Monday to agree on forming a coalition government after a bruising election watched closely because of its potential impact on the world economy, but negotiations were pushed to a second day after the head of the socialist party insisted on a broad partnership.

Sunday's vote — the second national election in six weeks — again left no party with enough votes to form a government on its own. Antonis Samaras' conservative New Democracy party won the most seats in parliament and was leading efforts to forge a coalition.

The socialist PASOK party, led by former finance minister Evangelos Venizelos, came in third. But its 33 seats in the 300-member Parliament means it can form a government with New Democracy, which gained 129 seats. A coalition would have to have a minimum of 151 seats combined in order to form a government.

Both PASOK and New Democracy have said they will stick to Greece's international bailout commitments, although they want to renegotiate some of the harsh austerity measures imposed in return for the international rescue loans that have kept the country afloat since May 2010.

The election results eased concern that Greece faced an imminent exit from Europe's joint currency. A Greek exit from the 17-nation eurozone would have potentially catastrophic consequences for other ailing European nations and hurt the United States and the entire global economy.

As head of the party that came first, Samaras was given the mandate Monday to seek coalition partners. He has three days to reach an agreement, and if he fails the second party is given another three days to try. The radical left-wing anti-bailout Syriza party came in second...

Read the rest here.

MF Global: Follow the Customer Money - The Economics of Demagogues

One of the key facts, which ought to have been apparent in the first week or so after its collapse given the tracking mechanism of wire transfers, is 'who got the customer money' and 'who received a preferential return of funds in the last weeks when the brokerage was failing?'

That we still do not know who 'got the money,' although recent admissions show that JPM did in fact receive about $768 million or so which they have recently and quietly returned, claiming that they were just waiting for someone in authority to ask for it back. MF Global's Banker Returns $600 Million - WSJ 6/1/12

It raises serious questions about what the Trustees are not disclosing and why. But since JPM has voluntarily returned the 600 million at this late date, after having earlier returned $168 million, shows that these disclosures may be forthcoming. MF Global is the poster child for asymmetry of information and insider dealing, that flies in the face of any claims and fantasies about the natural efficiency and honesty of self-regulation of the markets.

I get it. I understand why people who are well paid to say these things and promote these public policies, or who directly benefit from this kind of unequal insider privilege, might oppose and seek to dilute and weaken effective regulation and push for more and larger free style fraud.  It is a transaction and their integrity is for sale.

And this becomes a particular problem in times and places where there are no real penalities for deceit.  That is the definition of 'moral hazard.'

What I don't fully understand is how some of the victims of this type of predatory arrangement can get carried away in supporting their own oppression and the ruin of their families, and are so easily led to parrot slogans specifically designed to lead them to destruction and despair.  

I have read about it in history, and have seen it in my own life, but I still do not understand it except to say that sometimes when faced with problems that are confusing and troubling it is easier to think what someone tells you to think, particularly something that touches a deep and dark nerve in your nature, rather than carry the burden and ambiguity of struggling with the facts and thinking for yourself.  Repeating a party line is a shorthand way of avoiding real thought.  And the predators are always there to take advantage of it.  They welcome trouble and often foment crisis in order to advance their agendas.

"The undeserving maintain power by promoting hysteria."

Frank Herbert

Anyone can be misled by a clever person, and no one likes to readily admit that they have been had.  It is a sign of character and maturity to realize this, and admit your were deceived, and to demand change and reform. But some people cannot do this, even when the facts of the deception are revealed.  It seems as though the more incorrect that the truth shows them to be, the louder and more strident they become in shouting down and denying the reality of the situation.   And anyone who denies their perspective becomes 'the other,' someone to be feared and hated, shunned and eliminated, one way or the other.

Although competition and even tribalism are a natural and sometimes surprising force in many aspects of society, as anyone who has attended grammar school atheletics can attest, they become difficult and conter-productive in their excess.  The more extremely held the views, left or right, the more ardent the self-deception and loss of individual identity.  Because at the extremes, it is no longer about justice, but about the objectification and irrelevance of the individual, and the dehumanisation and demonisation of 'the other.' 

"He who makes a beast of himself, gets rid of the pain of being a man."

Samuel Johnson

For whatever reason, extremists cannot easily let go of the lie, because it seems to give them a substance which they fear they cannot provide for themselves, because they cannot bear the uncertainty and loss of purpose.  Their very identity becomes intermingled with the lie.  This is the essence of the cult, and the stuff of demagogues, and the phenomenon of mass suicides and self-destruction when the lies come to an end: the bunker mentality.

I would hope that these disclosures shed some light on this aspect of the MF Global collapse that raises serious questions about the integrity of the regulators, the CME, and any pretensions to fairness on Wall Street.

"But perhaps the most stunning piece of news we're getting in the wake of the MF Global collapse is in the clients of the firm who managed to get away scot-free, with no freezing of accounts or capital -- particularly the accounts of the mega-cap independent oil company Koch Industries, run by the politically active Koch brothers.

A recent report in Reuters has described the billions of dollars of client accounts that were withdrawn from MF Global in the last few weeks before their collapse, including 8 accounts from Koch industries engaged in oil trade that were transferred to Mizuho Securities after years of a steady and profitable relationship with MF. The Reuters piece concentrates on the possibilities of legal "clawback" of client money if the bankruptcy does not allow remaining client accounts to be made whole.

The Reuters piece misses the point.

Both the Commodity Futures Trading Commission and the Chicago Mercantile Exchange were charged with overseeing MF Global, their clearing member. If we are to believe them, they had no idea of any difficulties within the firm before customer accounts went missing just a few days before the collapse. But someone clearly knew of the cratering positions and imminent collapse of MF Global, as billions of dollars of accounts were "coincidentally" withdrawn. And what do the Koch brothers say was the reason for these withdrawals? There's been no comment."

Daniel Dicker, MF Global and the Koch Brothers: Friends to the End, Huffington Post, Nov. 11, 2011

Francine McKenna raises this issue in this interview, and in particular, the large amount of money that were wired at the same time that customers were being denied wire transfer access to their funds.

Greek Election Final Results - A House Divided

Click here for igraphics.gr

The pro-austerity party did not receive enough votes to promote a stable government without making significant coalition arrangments with one or more of the other parties. And it appears that none of the others will join with them on their austerity platform.

So as we suggested, nothing has been resolved for now.

The Guardian UK

"Syriza's Alexis Tsipras has called to give his congratulations but has warned of the dangers of not having popular support. He said the party would begin a strong position as opposition from Monday

Pasok has said it won't form a government without Syriza. Syriza has indicated that it would prefer a spell in opposition. The Independent Greeks, who were one option for New Democracy, have said they keen to support a government that will condemn the bailout agreements."

In memory of Journalist Carl von Ossietzky

"We cannot look to the conscience of the world when our own conscience is asleep."

Carl von Ossietzky


"Only one who spent the years following the First World War in Germany can fully understand how hard a battle it was that a man like Ossietzky had to fight. He knew that the tradition of his countrymen, bent on violence and war, had not lost its power. He knew how difficult, thankless and dangerous a task it was. to preach sanity and justice to his countrymen who had been hardened by a rough fate and demoralizing influence of a long war.

In their blindness they repaid him in hatred, persecution and slow destruction; to heed him and to act accordingly would have meant their salvation and would have been a true relief for the whole world.

It will be to the eternal fame of the Nobel Foundation that it bestowed its high honor to this humble martyr and that it is resolved to keep alive the memory of his work. It is also wholesome for mankind today, since the fatal illusion against which he fought has not been removed by the outcome of the last war.

The abstention from the solution of human problems by brute force is the task today as it was then.

Albert Einstein, Out of My Later Years, 1956

In memory of Carl von Ossietzky, an investigative journalist and editor of Die Weltbühne who died in hospital in Gestapo custody after being held in various prisons and concentration camps.

He was awarded the Nobel Peace Prize in 1935. The award was controversial because von Ossietzky had been imprisoned for revealing the illegal steps the German government had been taking to rearm militarily.

There are those who believe that no matter what a country may do, it is the duty of its citizens to obey their laws without objection. And there are those who hold the primacy of natural law and private conscience and moral duty to resist evil even when it has been declared by a temporal authority to be legal.



Carl von Ossietzky was born in Hamburg, the son of Carl Ignatius von Ossietzky (1848–1891), a Protestant from Upper Silesia, and Rosalie (née Pratzka), a devout Catholic and Social Democrat. His father worked as a stenographer in the office of a lawyer and senator, but died when Carl was two years old.

During the years of the Weimar Republic (1919 – 1933), his political commentaries gained him a reputation as a fervent supporter of democracy and a pluralistic society. He was convicted in 1931 of revealing state secrets, the illegal German militarization, and served 18 months in prison. He was released in 1932.

Ossietzky continued to be a constant warning voice against militarism and Nazism when, in January 1933, Adolf Hitler was appointed Chancellor and the Nazi dictatorship began. Even then, Ossietzky was one of a very small group of public figures who continued to speak out against the now ruling Nazi Party.

On 28 February 1933, after the Reichstag fire, he was taken by the police and held without trial in 'protective custody' in Spandau prison. Ossietzky underestimated the speed with which the Nazis would go about ridding the country of unwanted political opponents. He was detained afterwards at the concentration camp KZ Esterwegen near Oldenburg, among other camps.

He was visited while in the camp by Swiss historian Carl Jacob Burkhardt, as a representative of the International Red Cross. Burkhardt described Ossietzky as “a deadly pale broken creature, who seemed numb, with one eye swollen over, and his teeth broken.” Ossietzky said,

“Tell my friends that I have come to the end, soon it will be over and that is good. I hear my wife tried to visit me. I only wanted peace.”

Ossietzky's international rise to fame began in 1936 when, already suffering from serious illness that was not being treated, he was awarded the 1935 Nobel Peace Prize after an international campaign of people who hoped to achieve his release through this recognition and honor. Despite intimidation and protests directed against the Norwegian government, the Nazis had been unable to prevent this, but they now refused to release him so that he could travel to Oslo to receive the prize.

In an act of civil disobedience, after Hermann Göring, then Minister of the Interior for Prussia and head of the police, prompted him to decline the prize, Ossietzky issued a note from the hospital saying that he disagreed with the authorities who had stated that by accepting the prize he would cast himself outside the deutsche Volksgemeinschaft (community of German people).

'After much consideration, I have made the decision to accept the Nobel Peace Prize which has fallen to me. I cannot share the view put forward to me by the representatives of the Secret State Police that in doing so I exclude myself from German society. The Nobel Peace Prize is not a sign of an internal political struggle, but of understanding between peoples. As a recipient of the prize, I will do my best to encourage this understanding and as a German I will always bear in mind Germany's justifiable interests in Europe.'

The award divided public opinion, and was generally condemned by conservative forces. The leading conservative Norwegian newspaper Aftenposten argued in an editorial that Ossietzky was a criminal who had attacked his country "with the use of methods that violated the law long before Hitler came into power" and that "lasting peace between peoples and nations can only be achieved by respecting the existing laws".

Ossietzky's Nobel Prize was not allowed to be mentioned in the German press, and a government decree forbade German citizens from accepting future Nobel Prizes.

The Nobel Peace Prize money was sent to Germany where it was stolen by Ossietzky's Nazi 'defense attorney.'

In May 1936 he was sent to the Westend hospital in Berlin-Charlottenburg because of his tuberculosis, but under Gestapo surveillance. He was largely forgotten during the period of favorable international regard for the Third Reich, sparked in part by the massive public relations campaign surrounding the 1936 Berlin Olympics and the German 'economic miracle.'

Ossietzky died in the Nordend hospital in Berlin-Pankow, still in police custody, on 4 May 1938, of tuberculosis and from the after-effects of the abuse he suffered in the concentration camps. In 1938 Time Magazine named Adolf Hitler as their "Man of the Year."

In November of that year, the Reich entered a new phase of their oppression of dissent and undesirables and those to be cast outside the community of the German people, such as the mentally ill, the disabled, Gypsies, homosexuals, socialists, and trade unionists, with Kristallnacht.

In 1991, the University of Oldenburg was renamed Carl von Ossietzky Universität Oldenburg in his honor. This could be seen as a political statement, as Ossietzky's case was being decided upon by the German courts at the time. In 1992 the Federal Court of Justice upheld his 1931 conviction.

“Never forget that everything Hitler did in Germany was legal.”

Martin Luther King

Remember.

"I visited the Esterwegen camp a first time at a re-union of Ossietzky's old friends at the Carl von Ossietzky University in Oldenburg. We all went to the old concentration campsite,  now a memorial park,  and Chancellor Willy Brandt spoke to us and former inmates. Many came from the Netherlands since Dutchmen were imprisoned. Esterwegen and Oldenburg are close to the Dutch border.

We learned then that Esterwegen had no gas chambers because the stench and smoke would have disturbed the Oldenburg citizens. On my second visit to Esterwegen in 1990 I found a small memorial museum on the old camp grounds and the curator told me that most inmates were German and Dutch socialists, communists and intellectuals."

Carl von Ossietzky: The Peace Hero In the Concentration Camp by Kurt Singer

Bill Moyers and James K. Galbraith Talk About the Financial Crisis and John Kenneth Galbraith

Gold Daily and Silver Weekly Charts - Market Manipulation and Special Message from Jim Sinclair

A Few Questions, One Answer
By Ted Butler
June 15, 2012

Please read this article carefully because I’m disclosing for the first time that the U.S. government has given JPMorgan the green light to manipulate the silver market. This fact explains the shenanigans in the silver market. It answers all the questions and exposes this tawdry affair for all to see.

The scandal recently became more outrageous. The June Bank Participation Report, as of Tuesday, June 5, along with the COT confirmed that JPMorgan’s silver short position has increased by at least 5,000 contracts in the past two reporting weeks. That is the equivalent of 25 million ounces of silver, truly an enormous amount in a two week period and about equal to all the silver produced and consumed in the world in the same period. I calculate JPMorgan’s net short position in COMEX silver futures to be between 16,000 and 17,000 contracts. JPMorgan has been the sole net commercial silver short seller over the past two weeks. That is the clearest proof yet of manipulation. A market dominated by one buyer or seller is the ultimate definition of manipulation...

The President’s Working Group on Financial Markets answers all my questions. It explains why JPMorgan and the CME remain silent about allegations of manipulation. They have been given legal cover by the Working Group. This also explains why the CFTC says they are conscientiously investigating silver when it is clear they are not. The agency can’t come out and disclose silver was smashed with the full knowledge of the Working Group, so it pretends to go through the motions of investigating. What is going through Gary Gensler’s mind? Is he not tormented by the blatant silver manipulation which runs contrary to all his public utterances? Commodity law is being broken.

If my analysis is correct, what does this mean for silver from here? It will prove to be wildly bullish for the price; maybe not immediately, but on a long term basis. It sets the stage for the really big move in silver. This overt government interference in the silver market will boomerang at some point, just as every attempt at artificial price setting has failed...

Read the rest here

This is an interesting piece by Ted Butler and well worth reading in its entirety. But he does not paint the complete picture for the circumstantial case, which includes motive. GATA does a much better job in their detailed analysis of government interference in the gold market. But Ted's added voice is welcome.

The Greek elections will be Sunday and it is unlikely that any party will win enough votes to establish a stable government on their own, making a difficult coalition a requirement.

The markets were banking on massive and decisive action by the central banks early next week.

Let's see if that is what happens.

Later: A Special Message From Jim Sinclair:

Have you had enough of the manipulation of your gold and silver shares? The more noise we make the closer we come to getting the light shined on these evil people.

Complain about the raids of your investments by short sellers if you have witnessed it.

Hi Jim,

Looking at quite a few issues this afternoon, this same phenomenon occurred with huge volumes right at the close or even trading after the close. THIS is the biggest, most blatant and in your face manipulation since this whole fiasco started. I entered the PM arena in 1998 and thought that I had seen it all. Apparently not! Of course, we will not hear anything from the regulators but we must yell louder and louder. To suffer in silence is madness and cowardly.

CIGA Bill

Dear Bill,

I am asking my readers that if any gold shares they hold were sneak attacked after the close tonight that they raise total hell with both the regulators and the exchange.

I am asking for 400,000 complaints on Monday morning. Suffering in silence is madness. These people do not want sunlight on themselves so our only weapon is to turn as much light on as we can.

Dear Friends,

Please complain about the blatant manipulation of your company today to the following:

SEC – http://www.sec.gov/complaint/select.shtml

Amex – http://usequities.nyx.com/customer-support

SP 500 and NDX Futures Daily Charts - Muscling the Shorts On the Quad Witch

The futures charts have now been rolled over to the September front month.

Big things are expected to happen in the world economy and quickly. It will be most likely that nothing really decisive happens to change this debt crisis, but let's keep an open mind and see what the Greeks do, and what the central banks do in response.

Long bullion and short stocks.

See you Sunday evening.

The Senate's Embarrassing Performance in the Dimon Inquiry

Apparently I was not the only one who could not bear to watch this. As I said, it was iffy going, but Jim DeMint pushed me right over the edge.


Senators Grovel, Embarrass Themselves at Dimon Hearing - Rolling Stone


And here is Jon Stewart's take:

The Daily Show
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

Former Goldman Sachs Director Rajat Gupta Found Guilty on Four Counts of Insider Trading

Jury deliberated only two days, finding Gupta guilty on four counts of insider trading, and innocent of two counts.

This was clearly a case of failing to maintain GPS coordinates when burying the bodies for your masters, and failing to provide sufficient campaign donations to the plutocracy.

The pampered princes have thrown another one of their Immortals to the wolves.

So Lloyd has given up one of his thralls, and a whale sized proxy at that. But nonetheless still prey whose moment had come.

Who will take the axe for Jon Corzine and Jamie Dimon?

Key Takeaway: Unless you are a made member of the Billionaire Boys Club, too big to jail, and not merely a faithful servant, take the deal...

Daily Word: Anagnorisis (an·ag·no·ri·sis) from the Greek anagnōrizein, to recognize. See also hamartia

the point in the plot, especially a tragedy, at which the protagonist recognizes their or some other character's true identity and motivation, or discovers the true nature of their own situation

From Bloomberg:

"Gupta, 63, was found guilty of securities fraud and conspiracy by a federal jury in Manhattan today in its second day of deliberations. The trial began May 21. Securities fraud carries a maximum prison sentence of twenty years. Conspiracy carries a five-year maximum prison sentence. He will remain free on bail until his sentencing on Oct. 18...

Gupta is the most prominent of those convicted at trial or to plead guilty since the nationwide crackdown began in October 2009. To date, the U.S. has brought cases against 66 traders and their sources from Wall Street to Silicon Valley. No one has won an acquittal; six cases are pending.

Besides his tenure at Goldman Sachs and McKinsey, which he ran from 1994 to 2003, the Kolkata-born Gupta served on the boards of the Rockefeller Foundation and the Bill & Melinda Gates Foundation. He is also a co-founder of the Indian School of Business in Hyderabad."

Gold Daily and Silver Weekly Charts - Rough Waters Ahead

"All this wiggle-waggle of the gold price below or around $1600 is simply the result of official efforts to delay the appearance of $2,000+ gold.

That is the big event ahead, whose appearance will have deep psychological impact on markets, because the establishment of $2000+ gold will reinforce the idea that gold has still much higher to go."

Hugo Salinas-Price

Central Banks Stand Ready to Combat Greek Market Storm

And to provide advance notice of what is coming to their banking friends?


Tomorrow is stock option expiration, an important quad witch expiry as well.

The FOMC meets next week, and the Greek people have an important election on Sunday that may have some impact on their stance towards an austerity deal.

Today Egan-Jones downgraded France to BBB+ with outlook negative.

There should be no doubt in anyone's mind that the Anglo-American banking cartel is deeply interested in acquiring key European assets on the cheap. This will not stop until the means of executing their trading gambits are removed.

This is a new and more brutal phase of the currency war.

Find something you can believe in and feel comfortable with within reason, and then stick with it until you succeed or are proven wrong. And if wrong, then do not be afraid or ashamed to change.

The only certainty we have is that 'this too shall pass.' But there are some things that remain when all other things pass away, and it is good to be mindful of them in our every day lives, conducted quietly while the greater events of the world unfold and then pass by. Sometimes it seems confusing in all the hysteria and 'fog of war,' but we have a guide to which our eyes can always turn, the pillar and the cloud that leads our way through the wilderness.

"Whatever is right, whatever is wrong, in this perplexing world, we must be right in doing justly, in loving mercy, in walking humbly with our God, in denying our wills, in ruling our tongues, in softening and sweetening our tempers, in mortifying our lusts; in learning patience, meekness, purity, forgiveness of injuries, and continuance in well-doing."

J. H. Newman

"The more I think about the human suffering in our world and my desire to offer a healing response, the more I realize how crucial it is not to allow myself to become paralyzed by feelings of helplessness and guilt. More important than ever is to be very faithful to my vocation to do well the few things I am called to do and hold on to the joy and peace they bring me. I must resist the temptation to let the forces of darkness pull me into despair and make me one more of their many victims."

Henri J. M. Nouwen

"Please, Lord, teach us to laugh again; but, God, don't ever let us forget that we have cried."

Bill Wilson

SP 500 and NDX Futures Daily Charts - The Old Whipsaw Ahead of Quad Witching Expiration

"Those that have so much power over others as to be able to oppress them have seldom so much over themselves as not to oppress."

Matthew Henry

There was some profound whipsawing in the stock futures market today as rumours were spread liberally by trading desks attempting to exit positions and square their books ahead of tomorrow's big option expiration and the exogenous events of the next five days.