JPM Customer Delivers 500 Gold Contracts of Bullion, Goldman Takes Most For the House

It is not possible to interpret the action fully from this report below.  Let me stipulate that up front.

It seems that a 'customer' trading with JPM has allowed 500 of their August gold receipts to be taken for 'delivery.' And most of them, 442 to be exact, were picked up by Goldman Sachs for their 'House' account.

In and of itself this may not be so significant. For example, we do not know who the 'customer' at JPM might be, or why they might have been selling their bullion receipts. Perhaps they were just raising some cash to cover stock losses.

And we do not know why Goldman picked up receipts for 44,200 ounces of gold at $1124. And what exactly this 'house account' might be.

Goldman has been stopping, or taking deliveries, for their House account pretty steadily this month.

Don't be too impressed by the words, because a 'delivery' just means paper receipts change hands.  Most of the time nothing really happens to the bullion, at least in The Bucket Shop.  It just gets shoved around the plate.  Up for delivery, back to storage, rinse and repeat.

I do like to keep track of how many receipts are marked 'deliverable' or offered for sale at the prevailing price, compared to the potential number of claims, or active contracts.

This is how it is for gold.   Silver, not so much.

CNT seems to be using the Comex for an actual sale and delivery and withdrawal mechanism for their actual business of obtaining a supply of bullion for their wholesale customers.

What an odd thing to do, actually transact deals between people who will take and use what they sell.  Well, they are an oversized coin shop, so you will have to excuse them.

And as the pit slugs will be quick to point out, we do not know exactly what this transaction on this report 'means.'  That is in the nature of these markets and their reports.  It could have been this, it could have been that.   Don't stand too close to the table kid.

I just thought it was interesting, and wanted to make a note of it for future reference.   I am curious to see how things in the warehouse reports set up for the big month of December.

And besides, it's nice to watch someone busy doing God's work.

Gold Daily and Silver Weekly Charts - The Only Certainty Is Change - Option Expiration

The stock market was finally taken in hand by some adults, who worked to stabilize the prices, and then slowly and deliberately walked it backed up, getting a little greedy perhaps in the last hour when they started running the bears into short covering.

I do not expect this to end well. It is just a matter of time, and timing.

To that end I have posted intraday my favorite commentary on hubris and will to power that was American finance and politics in the 1920s. It is titled Remembering the Summer of 1929.

You may wish to do yourself some service and watch the entire documentary.  It is worth it.

Today was an option expiration at The Bucket Shop.  Gold and silver fell somewhat to the campaign of managing the wallets of passing speculators, as well as perceptions.  The pinnacle of the Banks, the Fed, seeks to restore confidence in paper, and discourage even a thought of just about every other alternative.

The dollar managed to rally a bit back up today. A stronger dollar is definitely not in the interests of the US economy, but it does favor the predatory financial class.  And since they are 'in the driver's seat' of the markets these days, they bend them to their will as they may.

Forces backing the supremacy of  US dollar based paper financial assets and decision making are fighting this trend towards economic and monetary alternatives in the rest of the world with all their power.  So we are watching an historic, great drama unfolding.

The rise and decline of Empire are often not discernible to the participants at the time, and often tend to follow their own schedules, seemingly slow and then in great rushes of change that seemingly could not have possibly been foreseen.

And never forget this great truth that in the long timescale of monetary history, gold and silver are almost constants, but purely paper money is just a glimmer, a relative flash in the pan that is here, and then it is gone, with whatever passing regime of the day that may have fathered it.

Gold and silver are forged in the hearts of great and uncommon stars, and nowhere else. And the trappings and ornaments of mortal men are often powerful, and sometimes seemingly irresistible for a time, but in the end they are just dust, returning to the vanity and nothingness of their creators.

As will even gold and silver return to nothingness, at some even more and very distant day.    But the soul of even the most common and ordinary person will endure in its Creator forever.  So let us mark our priorities accordingly.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Walk the Market Higher, Slowly and Deliberately, and Then?

Yesterday we saw a furious rally in the morning that failed, and badly.

Today the bulls and their backers in various moneyed quarters were a little smarter. They gather themselves together, stabilized the market at a sustainable bottom, and then slowly and deliberately walked it up into the close.

This should give a little cheer to the rest of the world, and hopefully we will see some more stability especially in the Asian markets.

Nothing has changed, really. This is all perception and cosmetics.

Not one thing has changed.  Nothing.   This was only a taste of things to come if nothing really changes.

There is not an ounce of will to reform anything in New York and Washington. What we saw this week was the pigs getting frightened that they were losing control, and especially losing ready access to their personal feedbags.

The worst thing that these jokers can do now is get overconfident and greedy, and run the markets back up, trying to achieve the former high so they can get their dopey rate increase out in September or October.  I would not put this past them since for the most part they are fluff and stuff, lacking all wisdom and proportion.  

If they do this, and if the market falters and begins a slight downward again, the risks to the economy are unimaginable to most. But they are especially unimaginable to these myopic, puffed-up, bureaucrats at the Banks, and the indentured servants of Big Money in Washington.

Have a pleasant evening.

Remembering the Summer of 1929

This is one of the best documentaries on the Crash of 1929 if you wish to get a feel for the times.   You may find it interesting to watch the whole thing below.

I have posted the entire documentary twice before:  once, on the 80th anniversary of Black Thursday in 2009, and once before in December of 2007.

I remember the Summer of 1929 being described as unusually hot, with the stock market going up and down like a roller coaster, making investors and pundits almost dizzy.  That is, until the great push up to the very height of the market in early September.

It was the laissez-faire abuses of the 1920's, the reign of supply side economics,  the institutionalized political corruption of easy money, an oversized,  overly influential and powerful financial/industrial sector that set the stage for the terrible Depression of the 1930's.

It also gave rise to the many reforms introduced by the FDR administration.

Most of which have been steadily overturned, one by one, by the big money interests who care for nothing but themselves, and would do it again, and again, if allowed to do so.

Most of the scams of the moneyed interests are remarkably simple, and the same over time.  At least they are once you scrape away the jargon, the bells and whistles, and paid for policy theories of pedigreed prostitutes.

The titans of Wall Street are no smarter than many smart people who do much more difficult jobs and lead simple, honest lives. But they are driven, they are insatiable, and they are shameless.

Enough people are easily fooled in each generation by well scripted ideological PR campaigns, clever revisions and misrepresentations of history, and the steady drumbeat of slogans and propaganda to allow the same old scams and abuses to come back again.  And unfortunately even very smart and powerful and greatly advantaged people are always willing to do anything for money.

Here is a link to the transcript of this documentary.

Narrator: At sea and on land, everyone seemed to be making money. It was a stampede of buying. And major speculators like John Jacob Rascob whipped up the frenzy. He told readers of The Ladies’ Home Journal that now everyone could be rich. September 2nd, Labor Day. It was the hottest day of the year. The markets were closed and people were at the beach. A reporter checked in with astrologer Evangeline to ask about the future of stock prices. Her answer: the Dow Jones could climb to heaven. The very next day, September 3rd, the stock market hit its all-time high.

Ben Karol, Former Newspaper Delivery Boy: My father and I had an ongoing discussion about the stock market. And I used to say, “Pop, everybody’s getting rich but you. You know, you work so hard and you’re never going to make a nickel. All you do is you keep delivering these newspapers and that’s about it. The guy who’s shining shoes is in the stock market, the grocery clerk is in the stock market, the school teacher’s in the stock market. The teller at the bank is in the stock market. Everybody’s in the stock market. You’re the only one that’s not in the stock market.” And he used to sit and laugh and say, “You’ll see. You’ll see. You’ll see.”

Narrator: On September 5th, economist Roger Babson gave a speech to a group of businessmen. “Sooner or later, a crash is coming and it may be terrific.” He’d been saying the same thing for two years, but now, for some reason, investors were listening. The market took a severe dip. They called it the “Babson Break.” The next day, prices stabilized, but several days later, they began to drift lower. Though investors had no way of knowing it, the collapse had already begun

Narrator: In the weeks to follow, the market fluctuated wildly up and down. On September 12th, prices dropped ten percent. They dipped sharply again in the 20s. Stock markets around the world were falling, too. Then, on September 25th, the market suddenly rallied.

Reuben L. Cain, Former Stock Salesman: I remember well that I thought, “Why is this doing this?” And then I thought, “Well, I’m new here and these people” — like every day in the paper, Charlie Mitchell would have something to say, the J.P. Morgan people would have something to say about how good things were — and I thought, “Well, they know a lot more about this market than I do. I’m fairly new here and I really can’t see why it’s going up.” But then, when they say it can’t go down or if it does go down today, it’ll go back tomorrow, you think, “Well, they really are like God. They know it all and it must be the way it’s going because they say so.”

Narrator: As the market floundered, financial leaders were as optimistic as ever, more so. Just five days before the crash, Thomas Lamont, acting head of the highly conservative Morgan Bank, wrote a letter to President Hoover. “The future appears brilliant. Our securities are the most desirable in the world.” Charles Mitchell assured nervous investors that things had never been better.

Craig Mitchell, Son of Charles E. Mitchell: Practically every business leader in America, and banker, right around the time of 1929, was saying how wonderful things were and the economy had only one way to go and that was up.

"Running for President under the slogan "Rugged Individualism" made it difficult for Hoover to promote massive government intervention in the economy. In 1930, succumbing to pressure from American industrialists, Hoover signed the Hawley-Smoot Tariff which was designed to protect American industry from overseas competition. Passed against the advice of nearly every prominent economist of the time, it was the largest Tariff in American history. (at that time the US was a large export economy with a trade surplus).

Believing in a balanced budget, Hoover's 1931 economic plan cut federal spending and increased taxes, both of which inhibited individual efforts to spur the economy.

Finally in 1932 Hoover signed legislation creating the Reconstruction Finance Corporation. This act allocated a half billion dollars for loans to banks, corporations, and state governments. Public works projects such as the Golden Gate Bridge and the Los Angeles Aqueduct were built as a result of this plan.

Hoover and the RFC stopped short of meeting one demand of the American masses — federal aid to individuals. Hoover believed that government aid would stifle initiative and create dependency where individual effort was needed. Past governments never resorted to such schemes and the economy managed to rebound. Clearly Hoover and his advisors failed to grasp the scope of the Great Depression."

Gold Daily and Silver Weekly Charts - Option Expiration Tomorrow - How To Manipulate a Market

There will be an option expiration tomorrow for precious metals on the Comex.

Gold and silver were hit in the classic contract dump early on in the New York Trade.

Surprisingly the US dollar also fell.   Stocks tried to stage a rally but faded badly and fell into the close.

I wanted to take a moment to give the reader a little better view of the paper precious metals landscape into year end.

In the fourth chart below you can see the Comex gold contracts listed, with their volumes.  As you can see the most active contract remaining is December.  It will be the next active month.   There is some minor activity in October because of the options activity.

The fifth chart shows the silver contracts.  There the most active contracts are September and December.

So, if tomorrow is the option expiration for the September contracts, we would expect to see the action become more pivotal for silver, since silver is going to be an active month for that contract.

Gold, not so much as the active month fades.  But that does not mean that gold will become quiet, except perhaps at The Bucket Shop.   There is clearly a huge market for gold, and the exchanges in the East will keep buying and delivering large amounts of bullion.

Lastly I show the small amount of 'delivery' at the Comex in gold yesterday in which Goldman was most notable taking 4400 ounces worth of contracts for their 'house account.'

Let's see what happens as we work our way through the option expiration tomorrow, and also see how the equity and bonds markets keep digesting this disruption in their long climb to bubbledom.

Honest markets are not a nicety; they are a necessity, a sine qua non for productivity and prosperity.

The appalling lack of reform in the Anglo-American markets is extracting a heavy price.   We may not see it, we may be distracted and befuddled as to the true nature of things.  We may be deluded, and blinded to the true nature of our involvement and actions with the global markets.

The rest of the world may not be so similarly inclined.  And therein we have the basis for the currency war.

And finally at the end there is a brief video from Jim Cramer about how one goes about manipulating markets like stocks and commodities.  You move prices up, and then you smack them lower to create negative sentiment.

You spread stories and biases with the media.   You abuse the market system under the noses of regulators with the acquiescence hopefully of your fellow professionals, wreaking carnage on honest people and the real economy.

Have a pleasant evening.

SP 500 and NDX Futures Daily Charts - Whiplash

US equities came in roaring this morning, with punters buying the dip with abandon.

Alas, it was not to be.

The rally faded badly into the afternoon, and the equity futures ended up in a classic whiplash reversal of an attempted 'dead cat bounce.'

So what next.

One thing is that the Fed is probably, if they are wise, taking any idea of a September rate increase off the table.

Not that a 25 basis point increase would make much difference.   The Fed has distorted the real economy badly, and created a formidable asset bubble in paper, and a systemically dangerous financial sector through policy errors and malign regulation .

No they won't do it if the markets are still wobbly because they do not want to do anything visible that could be pointed at later when the search for a scapegoat begins, like the last time, with furious words and much fake anger by the wise men of Capitol Hill.

Today's action was not encouraging since almost everything went lower.   We might have to spend a little time at these levels, allowing things to consolidate, before the bulls and their pals in the banking sector begin to attempt to reinflate this pig.

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

When the suffering becomes visible and the reaction strong and widespread enough, perhaps change will come.

Have a pleasant evening.