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.

Thomas Frank: Pity the Billionaires, Marxism for the Master Class

“Ayn Rand's 'philosophy' is nearly perfect in its immorality, which makes the size of her audience all the more ominous and symptomatic as we enter a curious new phase in our society....to justify and extol human greed and egotism.”

Gore Vidal


"It is not Man but nature that raises into one class those who are chiefly intellectual, in another those who are marked by muscular strength and temperament, and in a third those who are distinguished in neither one way or the other, but show only mediocrity -- the last-named represents the great majority, and the first two the select. The superior caste -- I call it the fewest -- has, as the most perfect, the privileges of the few...

The order of castes, the order of rank, simply formulates the supreme law of life itself; the separation of the three types is necessary to the maintenance of society, and to the evolution of higher types, and the highest types -- the inequality of rights is essential to the existence of any rights at all. A right is a privilege. Everyone enjoys the privileges that accord with his state of existence.

Wrong never lies in unequal rights; it lies in the assertion of equal rights."

Friedrich Wilhelm Nietzsche, Der AntiChrist

In light of the recent outcries by billionaire Tom Perkins for fair and loving treatment, I thought it might be interesting to explore the mindset that pictures the doyens of Wall Street, and those who have taken fortunes out of the dot.com and housing bubbles, as the real victims of the financial collapse and The Recovery™.

I think that part of this comes from the phenomenon that for some people, gratitude is their natural response to good fortune, even if it has come from hard work. Whereas others are possessed by a restlessness, an insatiable spirit, and their response to everything is 'I deserve more!.' 

Tom Perkins not only wishes his wealth, and his banal collection of toys, but he wishes to have public adulation as well, or at least the power to compel people to defer to him.

Mr. Frank thinks that this time around the cultural response to a Great Depression is 'backwards,' as compared to that of the 1930's, and one might tend to agree. There certainly has not been the rising of a national sympathy for victims, or a proper outrage at the arrogance and excesses of the financiers.

But this might overlook the fact that the US was a bit of an outlier back then, as only a few countries turned towards progressive reforms, while other developed nations embraced the hardness of totalitarianism, and even went so far as systematically murdering the weak.

But it is a mistake that the US is some sort of paragon, if one recalls John Steinbeck's The Grapes of Wrath. The allure of selfishness and evil is a natural tendency that we overlook in our economic models, among other things. And we certainly ought not overlook the consecration of the country to the principle that 'greed is good,' or more plainly to Mammon, in the latter part of the last century.

I agree with him that Obama has been a pivotal disappointment, and I was interested to hear the reasons why he thought this was so.  Overall I found his perspective to be interesting, as though he was not an American historian and journalist, but some foreign observer sharing an exterior perspective of wonderment.

I have started the tape beyond the introductory remarks and welcomes at this talk he gave in Seattle.

"Do you think he is so unskillful in his craft, as to ask you openly and plainly to join him in his warfare against the truth? No; he offers you baits to tempt you. He promises you civil liberty; he promises you equality; he promises you trade and wealth; he promises you a remission of taxes; he promises you reform.

This is the way in which he conceals from you the kind of work to which he is putting you; he tempts you to rail against your rulers and superiors; he does so himself, and induces you to imitate him; or he promises you illumination, he offers you knowledge, science, philosophy, enlargement of mind. He scoffs at times gone by; he scoffs at every institution which reveres them.

He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

J.H.Newman, The Times of Antichrist

David Simon: Our Rigged Political System

David Simon, journalist and creator of the TV series The Wire and Treme, returns to talk with Bill Moyers about the triumph of capital over democracy.

“If I could concentrate and focus on one thing … and start to walk the nightmare back, it would be campaign finance reform” Simon says.

Simon warns that if we don’t fix our broken election system — by getting big money out of elections and ending gerrymandering — we will have reached “the end game for democracy.”

Gold Daily and Silver Weekly Charts - Dead on Target

Gold ran right up to the chart's first 'red resistance' line today at 1320 and stuck to it, with the usual wobbling back and forth.

So needless to say it took out its 200 Daily Moving Average with some authority. 

Silver popped a buck and change, and settled for 21.50ish.

The Comex bullion warehouses took in 2,199 ounces of gold into the delivery bins at Brink's, but nothing seems to be going out, so far, even to those who have taken delivery.

As a reminder the US markets will all be closed on Monday for President's Day.  Please attempt to carry on without their guidance.

Have a pleasant weekend.  See you Monday evening.

SP 500 and NDX Futures Daily Charts - Neither Snow, Nor Rain, Nor Lousy Economics Reports

The US markets will be closed on Monday for a national holiday.

Please try to carry on without their imperial oversight.

Have a pleasant weekend.

Gold Daily and Silver Weekly Charts - Defeated When We See Them Running

There was intraday commentary on the precious metals here. You may wish to read it if you have not.

Gold is starting to threaten its 200 Day Moving Average.  A technical chart is included below. It is also starting to approach a short term overbought condition.  It is not clear yet how relevant that might be given some of the strong supply and demand issues at play at these price levels.

When will the manipulation of the precious metals end? The market manipulation will be defeated when we see the manipulators running for their lives, most likely ahead of a memorable break in the gold and silver markets. Try not to be caught within the blast radius of their downfall, which will be more contemptible than tragic.  The only tragedy is the damage done to the innocents by the needless greed of power and pride.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Carnival of Beasts With No Hope

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

Samuel Johnson


"Victory is a fleeting thing in the gambling business. Today's winners are tomorrow's blinking toads, dumb beasts with no hope."

Hunter S. Thompson

The economic news this morning was not good, with unemployment claims high and retail sales off.

But corporations are doing well, and the Time-Warner deal, which ought to face some serious anti-trust scrutiny, buoyed the bubble dreams of the one percent.

Snow day here. Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds - What Are They Thinking?

"The only way to partially explain away why JPM has been allowed to hold such controlling market shares [in gold and silver] is to claim that JPM is either hedging for clients or making markets. But in flipping from a 20% short gold market corner in Dec 2012 to a 20% long market corner 8 months later, the hedging argument goes out the window as it is impossible to reconcile what clients would be shorting so much in December and being long so much 8 months later. Remember, JPMorgan tried the same hedging excuse when the London Whale debacle was first reported, but dropped it immediately when it became obvious that it was nonsense. That leaves market making...

Market making is permitted and encouraged to enhance liquidity and tamp down price volatility, but not to rig prices...If JPMorgan is practicing market making in silver they couldn’t be doing a poorer job..."

Ted Butler, Butler Research LLC, Feb 12, 2014

"If you shut up truth and bury it under the ground, it will but grow, and gather to itself such explosive power that the day it bursts through it will blow up everything in its way."

Emile Zola

I think the whole matter of silver manipulation could have been cleared up if the CFTC had actually released the finding of their five year investigation into manipulation of that market, and stated that they had looked at the hedging and market making closely, found it to be legitimate, and backed it up with some verifiable and conclusive facts.

 But they chose instead to say nothing.  The lack of transparency in the financial system overall is harming confidence, and is morally appalling.

The precious metal cartel is giving up ground, but grudgingly.  We will know that they are defeated when we see them running for their lives, ahead of what is likely to be a memorable break in the paper gold and silver markets.

I do not expect the big insiders to get caught up in this debacle as I have said on numerous occasions. But they will be carrying some big specs and funds out on stretchers.  And perhaps a bureaucrat, politician, and banker or two.

In fact, it is likely that if the scheme is revealed and taken down before a crisis, it will happen because big players started complaining to the regulators.  The market overseers will listen to the financially powerful, if not the public, as had happened in the case of the London Whale.  This is the failure of equal justice, and it will bring down whole governments if it continues.

The gold/silver ratio remains unusually high. The discounts on some of the funds are narrowing and the PSLV premium is getting wider. Their cash level is a bit low, leading one to assume they will once again add to their units in an offering probably later this year, but not too long into it.

They are trying to get through this February delivery period. March may be a different story perhaps. But at the end of the day there will be a reckoning, and the longer this continues the worse it will be.

No scheme such as this can go on forever, no matter how confident they may seem. The cockier they become, the closer the resolution. That is all a part of the bluff, and too often, self-delusion.

Gold Daily and Silver Weekly Charts - Baby It's Cold Outside

“But today as then, the great propertied interests and their agents commit the most ferocious crimes in the name of the whole people, and bluff and brow-beat them by lying propaganda."

C.L.R. James, The Black Jacobins: Toussaint L'Ouverture and the San Domingo Revolution

Gold and silver tried to break higher today, with gold leading the way. After an early morning pop up to 1298, the Anglo-American gold cartel brought the water cannons to bear, and pushed it back down to 1292 in the after hours.

Tomorrow a major winter storm is going to have its way with the Northeastern US. The bailout boys will have to wear their mukluks to work, or hired some unemployed to carry them about. But never fear, they'll be there. Thank God for the financial system that they are not too lazy to steal.

Monday is a holiday in the States, so we'll be heading into a three day weekend.

The next option expiration for precious metals on the Comex is February 25th.

There was a little back and forth in storage, but nothing meaningful happened in the Comex warehouses yesterday.

Have a pleasant evening. Don't fall into any snowdrifts on the way to work tomorrow.

SP 500 and NDX Futures Daily Charts - Calm Before the Storm

Snowstorm that is, bringing nearly another foot of snow, with a possible mix of freezing rain and ice, to the NYC - Phila metroplex area tomorrow. We'll have to see if the dampens the enthusiasm of the masters of the universe.

Stocks paused today, digesting their recent gains, as they run to the top of the trend channels.

Tomorrow should bring a little more interesting menu of macroeconomic data for the US.

As a reminder, Monday is a holiday in the States and all the markets will be closed. So we are heading into a three day weekend.

Have a pleasant evening.

The Whining of the Bailout Boys: SEC Whistleblower Gary Aguirre and John Mack

"In an interview on Bloomberg TV, John J. Mack, the former chairman and chief executive of Morgan Stanley, called for an end to the harsh words that have been hurled at Mr. Dimon and Lloyd C. Blankfein, Goldman Sachs's chief executive, over their pay."

CNBC, 11 February 2014

The Bailout Boys

"In 2006, Gary Aguirre, a then-client of GAP [Government Accountability Project] attorneys, rocked the financial world by alleging wrongdoing by Securities and Exchange Commission officials for their failure to not allow a proper investigation to proceed, possibly due to political connections.

Aguirre is a former SEC lawyer who was dismissed by the agency following his attempt to subpoena John Mack – a prominent financial figure who later became the CEO of Morgan Stanley – in an insider trading investigation of Pequot Capital Management, one of the country’s leading hedge funds. Aguirre’s story sparked outrage, a Congressional investigation, and (eventual) vindication by the U.S. Senate.

Aguirre’s battle dates back to June 2005, when he suddenly encountered resistance at the S.E.C. during the course of his investigation of Pequot. A $7 billion hedge fund, Pequot’s CEO was Arthur J. Samberg, another prominent financial figure and longtime friend of John Mack, who preceded Samberg as Pequot CEO. Hedge funds are unregulated private investment funds that typically engage in unconventional investment strategies, such as short-selling.

Prior to that date, Aguirre had been investigating the case for months, issuing over 90 subpoenas without obstruction. When Aguirre recommended that Mack’s testimony be taken under oath, he was told by his supervisor that it would be difficult to obtain approval for the subpoena due to Mack’s powerful “political connections.” Over the course of the next two months, Aguirre’s supervisors refused to allow him to issue Mack a subpoena. Aguirre questioned this decision at every level up the chain of command (including SEC Chairman Christopher Cox), reporting his superior’s behavior and providing evidence supporting his subpoena request.

In September 2005, Aguirre was fired 11 days after being awarded a two-step pay increase....

Aguirre eventually testified again in front of the Senate Judiciary Committee, offering further analysis of the role of proper oversight in regards to hedge funds. More and more evidence emerged supporting Aguirre’s allegations. Finally, the Senate Finance and Judiciary committees released their full report, which completely validated all of Aguirre’s claims. This was a significant victory.

In May 2009, after numerous insider-trading investigations by the SEC, Pequot closed down. Many economists also feel that these large-scale hedge funds had a significant effect on the sub-prime mortgage market’s burst, which led to the current global recession. The S.E.C. continues to be criticized for a lack of internal oversight, as evidence by the Bernie Madoff scandal (which also involved a whistleblower)."

Government Accountability Project, The SEC and Gary Aguirre

Related:
Versailles Watch: John Mack Whines About How Badly Wall Street CEO's Are Treated - Yves
Report Says SEC Erred on Pequot - NY Times
Gary J. Aguire - Wikipedia

Why Isn't Wall Street In Jail: The Notorious Case of Gary Aguirre and John Mack - Taibbi
Mary Jo White's Involvement in the Gary Aguirre Case - Taibbi
Mobsters of Wall Street - Jim Hightower

"Call him a fat cat who mocks the public. Call him wicked. Call him what you will. He is, he says, just a banker 'doing God’s work'."

Times of London, Goldman Sachs and Lloyd Blankfein

Gold Daily and Silver Weekly Charts - Gold Runs Higher - Vichyssoise

Janet Yellen's testimony today was a bit painful at times, but perhaps it will improve as she becomes more familiar with dancing in the lions' den. Her answer about raising the minimum wage shows her to be a tried and true economic General Pétain, well versed in failure and capitulation to the forces of neo-liberalism.   At least le Maréchal de Vichy had a few moments of greatness, although much earlier in life.

Trickle down stimulus is going to most likely stretch the social fabric to the point of tearing. But its failure is going to have to be demonstrated quite forcefully it seems. Keep an eye on the UK and parts of Europe for early warning signs.

It was interesting to see gold move higher with stocks, with silver moving higher as well, but somewhat sluggishly.  I have a suspicion that this is about gold's February delivery issues and the general shortage of physical gold bullion which is developing.  But only time will tell.

About 26,858 ounces of gold bullion came out of Scotia yesterday, in both categories of storage.  We have yet to see the kinds of deliveries tacked up that the standing and stopped orders suggests, but it looks like there will be no close shaves this month. 

I have marked the key overhead resistance levels for gold in red lines on this chart.  And you will notice that gold is still 'channel bound.'  

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Calling Down the Thunder

Initial Claims and Retail Sales might provide some economic grist for the market's mills on Thursday, but for today it was all bullishness as the thin volumes and lack of organic selling let stocks take off on the news that there will be a clear debt ceiling bill up for a vote tonight, and Janet Yellen's pandering to the corporate classes in her testimony today.

Stocks are rising on a tide of misdirected and overly narrow liquidity, compliments of the Federal Reserve which is the tip of the banking cartel.

On a more practical note, another winter storm is expected to sweep through the NYC metro area on Thursday offering some potentially significant snowfall. Let's see if this has any affect on the bull's ardor for more. It may improve the occupancy of Manhattan hotels.

Have a pleasant evening.

NAV Premiums of Certain Precious Metal Trusts and Funds

“I believe in aristocracy, if that is the right word, and if a democrat may use it. Not an aristocracy of power, based upon rank and influence, but an aristocracy of the sensitive, the considerate and the plucky.

Its members are to be found in all nations and classes, and all through the ages, and there is a secret understanding between them when they meet. They represent the true human tradition, the one permanent victory of our queer race over cruelty and chaos.

Thousands of them perish in obscurity, a few are great names. They are sensitive for others as well as themselves, they are considerate without being fussy, their pluck is not swankiness but the power to endure, and they can take a joke.”

E.M. Forster

The word 'pluck' means spirited and determined courage. These days I think it might be best expressed as 'character,' or 'to be a mensch.

And it isn't often found amongst the financiers, or the one percent, or our pampered political overlords, with a few notable exceptions.  There is something about power and money that softens a person's mind and moral sensibility. 

They tend to become obsessed with themselves, and their special needs.  They all too often are told what they want to hear, like the admirers do for beautiful women who lose all sense of their real worth.  And so they lose the character that comes from remembering our common humanity, memento mori, and our own fallibility, weakness, and quite frankly, unworthiness.  No wonder the parable about the camel and the eye of a needle.

Therein lies the root of tragedy.  The best lack all conviction, while the worst are filled with passionate intensity, as Yeats observed in 1919.

Gold Daily and Silver Weekly Charts - Morgan Gold Warns of Possible Physical Gold Shortage

All right I will confess up front, that during the day I have been watching recordings of the Winter Olympics curling matches which were held at Sochi earlier today. The women's match between the US and the Swiss was of particular interest, especially the strategy of the two teams led by their captains, Erika Brown and the legendary Mirjam Ott.

 I will not give anything away if you have not yet seen it. I will be watching the curling matches all week.  It is one of my few idiosyncrasies.  Most Americans have never heard of it.

The bit of controversy today is how much gold exactly is flowing from West to East, most specifically to China?

Bloomberg had a piece in print today about the record amount of gold that was imported by China last year through Hong Kong, exceeding 1,000 tonnes for the first time.  You may read it here.

What was even more interesting were the gold bullish comments that were made by two guests, one from Pimco and the other by Ed Moy, the chief strategist at Morgan Gold.  I include the interview below. He notes that there is concern about a physical gold bullion shortage.

"Quantitative easing has had a distorting effect on the price of gold...Overall when you look at gold, there are two separate pieces here. One is how the West looks at gold, and they have been investing in a lot of electronic derivatives and proxies for gold. Whereas the East has been buying a lot of physical gold. That demand has actually gone up. China looks like it bought 1,000 tonnes in 2013 making them the number one buyer in the world

Do you have a concern about a possible gold shortage?

Absolutely!

How ironic, now that JPM has hammered the paper price of gold down and covered their shorts, and are said by some informed analysts to be sitting net long gold.  Classic.

By the way, Morgan Gold is NOT associated with JP Morgan.  I want to make that clear.

Koos Jansen has an even better, more comprehensive article discussing the China gold action through Shanghai. The Shanghai Gold Exchange delivered 2,181 last year.   And this may not include official gold purchases by the People's Bank of China.  You can read that piece here.

I still think that most of the mainstream media and analysts are still missing the big macro trend change in gold buying by the central banks, and the reasons for it.  And you know that I think that many of them do not get it, because they do not wish to get it.  It is dangerous to imagine that the status quo may change.

Gold is moving from West to East.  And the time is coming when all will be revealed, when the paper gold market freezes up in shock, and the call from the world is made, stand and deliver.

SP 500 and NDX Futures Daily Charts - All God's Children

Stocks had a little upward bias today, but are now more firmly up against resistance.

VIX has fallen back down to calmer levels as you can see.

There are enough economic statistics this week to make things interesting.

Have a pleasant evening.

Tainted Meat Joins the Stench of Political and Financial Corruption

“Wall Street had been doing business with pieces of paper; and now someone asked for a dollar, and it was discovered that the dollar had been mislaid.  It was an experience for which the captains of industry were not entirely prepared; they had forgotten the public.  It was like some great convulsion of nature, which made mockery of all the powers of men, and left the beholder dazed and terrified.   In Wall Street men stood as if in a valley, and saw far above them the starting of an avalanche; they stood fascinated with horror, and watched it gathering headway; saw the clouds of dust rising up, and heard the roar of it swelling, and realized it was only a matter of time before it swept them to their destruction...

But it is difficult to get a man to understand something when his salary depends upon him not understanding it."

Upton Sinclair, The Moneychangers


"You are a den of vipers and thieves. I intend to rout you out, and by the grace of the eternal God, I will rout you out."

Andrew Jackson

It was discovered that in all that blizzard of corruption, and the paper that covered it up, that the very basis of the value of things had been 'mislaid.' And then the deluge came.

If you listen to the reasoning of 'free market' types, and their paid mouthpieces and demagogues, this kind of thing could not happen, because companies, being rational and focused on the long term, would not allow tainted meat with their name on it to be sold into the markets.

They would not risk the lawsuits, and damage to their reputations. It is a similar argument that holds that financial markets need only light regulations because people will manage their own behaviour for the ultimate good, with almost perfect rational and altruistic self-constraint.

But alas, we know this is not true, as anyone who ever travels on a major highway can tell you. People and their tendencies to greed and careless stupidity require a certain association of people in a society for their common good, to take on not only large tasks with common and broad benefits to the pubic, but also in order for the majority to protect themselves from criminals, cheats, sociopaths, and plain old ignorant selfishness. This is why we establish police and fire departments, and have health laws, for example.

Government is never perfect. But its occasional flaws and corruption are no reason to do away with it. The power of government must be held in balance, but so must the power of private wickedness.

If you bother to look into the history of certain types of laws,  especially those designed to protect the public, and the often long progressive efforts of many dedicated souls to achieve them, from civil rights to basic food safety to voting rights to consumer protections against financial fraud, you can see what they have accomplished, and how their effectiveness must be upheld and occasionally renewed, since the corrupting power of easy money respects few if any boundaries.

Goodness may occasionally falter, but evil never sleeps.  And as many are now discovering, telling the truth becomes a subversive act, in times of general deceit.   Notice the patterns of smears and dehumanization of certain types of people.  This is how it begins.

And so it seems that every other generation forgets the lessons learned by their grandparents, and casts off their protections in fits of foolishness fuelled by the sweet words and slogans of the pampered princes of easy money, and their puppets, who will say and do anything for power and position.

Those who forget history are doomed to repeat it, and this is surely the story of the last thirty years, especially in the area of financial regulation, and the political standards of oaths and stewardship.

Recall of nearly 9 million pounds of meat not fully inspected
By Greg Botelho and Janet DiGiacomo, CNN
February 9, 2014

(CNN) -- Some 8.7 million pounds of meat from a Northern California company have been recalled because they came from "diseased and unsound" animals that weren't properly inspected, a federal agency announced Saturday.

The recall affecting Rancho Feeding Corporation products -- as detailed by the U.S. Department of Agriculture's Food Safety and Inspection Service -- marks a significant expansion of one announced January 13, when just over 40,000 pounds of the company's products were recalled.

According to the U.S. agency, Rancho Feeding "processed diseased and unsound animals and carried out these activities without the benefit or full benefit of federal inspection."

"Thus, the products are adulterated, because they are unsound, unwholesome or otherwise are unfit for human food and must be removed from commerce," the FSIS reported. The Petaluma company made the recall...

The FSIS recall notice indicates a "reasonable probability" that consumption could result in "serious, adverse health consequences or death."

Attempts to contact the Rancho Feeding Corporation for comment were unsuccesful Saturday and Sunday.

A wide range of products are listed in the recall, including beef carcasses and various parts such as heads, cheeks, lips, livers, feet and tongues in boxes of 20 pounds and bigger. Forty-pound boxes of veal bones and 60-pound boxes of veal trim are included as well...

Read the entire news article here.

Report of 'Intense Investigation' Into London Death of JPM VP

It will be interesting to see if this 'intense investigation' actually reveals anything of substance.

It might have been something inadvertent, or a suicide.  There was a suicide of another prominent financier in London just two days earlier there as well.  Perhaps it is a contagion.

Or just more collateral damage from the financialised, predatory economic environment I like to call The Hunger Games. 

And may the odds be ever in your favor.

Suspicious Death of JPMorgan Vice President, Gabriel Magee, Under Investigation in London
By Pam Martens
February 9, 2014

London Police have confirmed that an official investigation is underway into the death of a 39-year old JPMorgan Vice President whose body was found on the 9th floor rooftop of a JPMorgan building in Canary Wharf two weeks ago.

The news reports at the time of the incident of Gabriel (Gabe) Magee’s “non suspicious” death by “suicide” resulting from his reported leap from the 33rd level rooftop of JPMorgan’s European headquarters building in London have turned out to be every bit as reliable as CEO Jamie Dimon’s initial response to press reports on the London Whale trading scandal in 2012 as a “tempest in a teapot.”

An intense investigation is now underway into the details of exactly how Magee died and why his death was so quickly labeled “non suspicious.” An upcoming Coroner’s inquest will reveal the details of that investigation.

It’s becoming clear that when JPMorgan tells us “nothing to see here, move along,” that’s the precise time we need to bring in the blood hounds and law enforcement with the guts to get past this global behemoth’s army of lawyers who have a penchant for taking over investigations and producing their own milquetoast reports of what happened...

Read the entire story here.

Gold Daily and Silver Weekly Charts - Non-Farm Payrolls Fizzle, Precious Metals Held in Check

Today was an exceptionally interesting day, with a lot of things going on from the very start.

The premiere event was the US Non-Farm Payrolls Report, which pretty much sucked out loud, coming in with an underestimated 113,000 jobs versus a 175,000 expected. This was mitigated a bit by the 'private jobs' added of 142,000 which was closer to estimates. And it could make some feel good because it was in 'government jobs' that much of the shortfall occurred.

I didn't see how much play was given to the complete revision of all the employment numbers going back as far as I normally look. They even revised the CES Birth-Death model which is a plug, or imaginary jobs, if you prefer. How do you revise stuff you pretty much swagged (made up) in the first place?

So anyway, I was cranky off the get go, because I had to go and manually revise my spreadsheets everywhere, in addition to making minor corrections on the graphs for the first report of a new year. So I did not get a chance to do any serious analysis of the changes that the revisions made. I'll try to get to that later next week unless I find someone who does a good job of describing the effects that I can simply show to you. Why do extra work?

But then someone passed around a nice textbook description of how bullion banks work, and it prompted me to write something that I had been thinking about, but wasn't quite ready to do. That was put up intraday here. I hope it is of some value to you, if in no other way than to help you order the things you would like to know.

I probably said far too much in an attempt to be even-handed, and circumspect, in trying not to colour a particular situation with the broader brush of revulsion against a tendency of the TBTF Banks, some of whom are bullion banks as well, to misprice risk.  And of their one percent owners who promote abhorrent social policies and predatory 'capitalism' through fine sounding economic rubbish.

It would probably be better for those who are trying to defend their particular groups against unjust attacks to not attempt to justify the broader financial landscape which they might inhabit, because this financial system is so profoundly fouled that it will be like trying to clean the Augean stables.

Some days one might become discouraged at how the United States of Amnesia so quickly forgets the lessons, not from history, but from just a few years ago. This applies to both foreign policy and financial chicanery. It really is amazing at times.

Remember we are in a currency war, almost a kind of new cold war at times, and great changes are occurring in the international currency structures. In times like these, some hysteria is not uncommon,. There is propaganda, and sometimes not very subtle if you have a discerning eye for it, even in some seemingly petty and unrelated things.  And the deceitful are emboldened because they think they are operating with official sanction, and indeed sometimes it seems as though they are.

What, for example, was the Bank of England thinking when it turned a blind eye to trading desks actively gaming the foreign exchange markets to the point of cheating their customers? Is this some professional courtesy, or a sense of perverted noblesse oblige that entitles an entire financial class to an innovative seigniorage that exploits the difference between earning paper wealth and the ease by which one can steal it, if you are in the know.

What a world.  This too shall pass.

Have a pleasant evening.