Category: zerohedge

Whether it is due to the recent margin hikes, a dwindling of greater fools, more scrutiny (albeit weak) by the regulators, increased free-money competition, or the monopolization of bandwidth; it would appear, from the following charts from Nanex, that we have seen Peak HFT. Quote Spam (the number of quotes per actual trade) has dropped to a 3 year low today.

 

Via Nanex,

On October 18, 2013, Quote/Trade ratios dropped to 3 year lows. Charts below chronicle the average number of quotes per trade for each 5 minute period of the regular trading session (9:30 to 16:00 ET) for all ~8000 NMS Stocks from 2007 to October 18, 2013 (through 10:45 ET). Each day is color coded by age – older dates start with purple while more recent dates are colored red.. The horizontal red line is in the future (after 10:30 ET on October 18, 2013).

 

Quotes per $10,000 Traded (accounts for trade size drop and changes in stock price)…

 

Quote per Trade overall…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/tNMYcUXk3WQ/story01.htm Tyler Durden

Whether it is due to the recent margin hikes, a dwindling of greater fools, more scrutiny (albeit weak) by the regulators, increased free-money competition, or the monopolization of bandwidth; it would appear, from the following charts from Nanex, that we have seen Peak HFT. Quote Spam (the number of quotes per actual trade) has dropped to a 3 year low today.

 

Via Nanex,

On October 18, 2013, Quote/Trade ratios dropped to 3 year lows. Charts below chronicle the average number of quotes per trade for each 5 minute period of the regular trading session (9:30 to 16:00 ET) for all ~8000 NMS Stocks from 2007 to October 18, 2013 (through 10:45 ET). Each day is color coded by age – older dates start with purple while more recent dates are colored red.. The horizontal red line is in the future (after 10:30 ET on October 18, 2013).

 

Quotes per $10,000 Traded (accounts for trade size drop and changes in stock price)…

 

Quote per Trade overall…

Given his track record, Alan Greenspan’s publication of a guide to economic forecasting will likely prove as successful as Lance Armstrong’s guide to drug-free cycling. As Bloomberg reports, Greenspan’s new book “The Map and the Territory” is about as credible as art history by Mr. Magoo; as it pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.” Bloomberg’s Daniel Akst sums it up best with his concluding sentence: “‘The Map and the Territory’ is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.” Indeed…

Via Bloomberg,

…

 

As Fed chairman until 2006, practically the eve of the financial crisis, Greenspan couldn’t see the storm on the horizon.

 

Despite his mastery of the techniques described at somewhat numbing length in his book, he failed to draw any useful conclusions from a host of indicators that were pointing to trouble.

 

Omens were plentiful: the bubble in housing prices, the gross inadequacy of banking capital, the systemic risks of money-market funds, the explosive dangers of complex derivatives, the rise of an enormous and poorly regulated shadow banking system, the transparent pandering of the bond-rating companies, the collapse in mortgage-lending standards and the massive overleveraging of U.S. consumers.

 

…

 

“The Map and the Territory” pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.”

 

…

 

Greenspan’s plodding text oscillates maddeningly between equivocation and chutzpah. He implies that it was a mistake to bail out the big banks in 2008, yet doesn’t say what he would have done instead, leaving us to wonder if, in Ben Bernanke’s shoes, he would have let the global financial system go up in flames.

 

…

 

But this is an odd concern from the man whose actions as Fed chief gave rise to faith in the “Greenspan put,” the notion that, while he was in office, the central bank would rush to float sinking markets with lower interest rates whenever they faltered.

 

“The Map and the Territory” is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/jGk63tsSeVI/story01.htm Tyler Durden

Given his track record, Alan Greenspan’s publication of a guide to economic forecasting will likely prove as successful as Lance Armstrong’s guide to drug-free cycling. As Bloomberg reports, Greenspan’s new book “The Map and the Territory” is about as credible as art history by Mr. Magoo; as it pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.” Bloomberg’s Daniel Akst sums it up best with his concluding sentence: “‘The Map and the Territory’ is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.” Indeed…

Via Bloomberg,

…

 

As Fed chairman until 2006, practically the eve of the financial crisis, Greenspan couldn’t see the storm on the horizon.

 

Despite his mastery of the techniques described at somewhat numbing length in his book, he failed to draw any useful conclusions from a host of indicators that were pointing to trouble.

 

Omens were plentiful: the bubble in housing prices, the gross inadequacy of banking capital, the systemic risks of money-market funds, the explosive dangers of complex derivatives, the rise of an enormous and poorly regulated shadow banking system, the transparent pandering of the bond-rating companies, the collapse in mortgage-lending standards and the massive overleveraging of U.S. consumers.

 

…

 

“The Map and the Territory” pretends to tackle the subject of forecasting while saying next to nothing about the author’s historic failure to reduce the risks leading to the crisis, which he calls “almost universally unanticipated.”

 

…

 

Greenspan’s plodding text oscillates maddeningly between equivocation and chutzpah. He implies that it was a mistake to bail out the big banks in 2008, yet doesn’t say what he would have done instead, leaving us to wonder if, in Ben Bernanke’s shoes, he would have let the global financial system go up in flames.

 

…

 

But this is an odd concern from the man whose actions as Fed chief gave rise to faith in the “Greenspan put,” the notion that, while he was in office, the central bank would rush to float sinking markets with lower interest rates whenever they faltered.

 

“The Map and the Territory” is an infuriating book, one that will leave readers wondering how its author could have come all this way and yet remain so hopelessly lost.

Submitted by John Rubino via The Dollar Collapse blog,

In one sense, the past couple of weeks’ debt ceiling debate was just one more in a long line of annoying-but-otherwise-pointless pieces of bad political theater. But in another sense it was a turning point, one that may have put the democrats completely in charge. Consider:

In a system with two viable parties, each side has to pretend to be more reasonable than it really is in order to attract just enough moderate votes to win the next election. So democrats pay lip service to fiscal responsibility and deficits – occasionally even signing bills like welfare reform that they find repugnant – when they’d much rather spend their days indiscriminately tossing other people’s money at new entitlement programs. Republicans, meanwhile, pretend to empathize with people they privately view as prey when they’d rather be cutting taxes and invading places that have oil.

We only rarely get to see the major parties’ true selves because the 20% of voters in the middle are turned off by displays of naked avarice, and in a two-party system elections go to whoever carries a majority of that block.

That’s why the latest debt ceiling debacle is such a big deal. Government shutdowns and related turmoil have become a standard bargaining chip lately, without affecting the make-up of either party. But this time the main conflict was not between republicans and democrats, but between mainstream, log-rolling, back-scratching, career-politician republicans and a handful of representatives and senators elected with Tea Party – i.e., highly ideological – support. The latter have no interest in raising the debt ceiling under any circumstances and see a government shutdown as a positive end in itself. Defunding Obamacare was just the excuse.

They got rolled, of course, as regular republicans chose to raise the debt ceiling without condition (as everyone always knew they would). But the cost of reopening the government is a republican civil war with only two likely outcomes: 1) The two groups stay in the big tent but challenge each other in primaries and intrigue over committee seats, etc., making a united, coherent policy front impossible and handing the next few elections to the democrats. 2) The Tea Party/libertarian republicans leave and either join the existing libertarian party or start one of their own, siphoning just enough votes from republicans in future elections to keep the democrats in charge.

Already, it has started. See this from today’s Bloomberg:

Republican Civil War Erupts: Business Groups v. Tea Party

A battle for control of the Republican Party erupted today as an emboldened Tea Party is moving to oust senators who voted to reopen the government, and business groups began mobilizing to defeat allies of the small-government movement.

 

“We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.” The chamber spent $35.7 million on federal elections in 2012, according to the Center for Responsive Politics, a Washington-based group that tracks campaign spending.

 

Meanwhile, two Washington-based groups that finance Tea Party-backed candidates said today they’re supporting efforts to defeat Mississippi Senator Thad Cochran, who voted this week for the measure ending the 16-day shutdown and avoiding a government debt default. Cochran, a Republican seeking a seventh term next year, faces a challenge in his party’s primary by Chris McDaniel, a state legislator.

 

McDaniel, who announced his candidacy today, “is not part of the Washington establishment and he has the courage to stand up to the big spenders in both parties,” Matt Hoskins, executive director of the Senate Conservatives Fund, said in a statement supporting him. Read more

 

Once the civil war costs the republicans control of the House of Representatives (November 4, 2014), the democrats will be relieved of the need to fool the middle about their commitment to fiscal sanity. The incoming Clinton administration and its congressional majorities will ramp up domestic spending and finance it with higher taxes, more borrowing and way more money printing. Janet Yellen (the perfect Fed chair for this transition) will expand QE and make it permanent. The Fed’s balance sheet will grow in trillion-dollar chunks as it buys up all the bonds issued by the government and the mortgage packagers and pretty much anybody else with paper to sell.

The resulting tidal wave of hot money will swamp emerging markets and drive Europe and Japan crazy, but the democrats won’t care because they’ll be favored by 20 points in the polls and in any event will be too busy hiring more staff to handle the upcoming legislative season to listen to non-believers. Oh, and they’ll counter any dissent with capital controls and stepped-up surveillance.

Could there be a better environment for gold? Not at first glance. But then almost the same could have been said two years ago when the Fed started buying $85 billion of bonds each month and bubbles began to form in stocks and houses. Some of that cash certainly should have found its way into precious metals. Instead the result was an epic correction. So logic isn’t necessarily our best guide here.

Still, the republican implosion/democrat ascendance comes after a two-year precious metals correction (during which China, India, and Russia bought something like 4,000 tons of gold, an amount greater than Germany’s entire gold reserves). So coming when it does, the combination of democrat dominance, an even more accommodating Fed and a growing shortage of Western gold to be shipped East…well, at the risk of being wrong again, this really does look like precious metals paradise.

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/oKAQvg6w7iY/story01.htm Tyler Durden

Submitted by John Rubino via The Dollar Collapse blog,

In one sense, the past couple of weeks’ debt ceiling debate was just one more in a long line of annoying-but-otherwise-pointless pieces of bad political theater. But in another sense it was a turning point, one that may have put the democrats completely in charge. Consider:

In a system with two viable parties, each side has to pretend to be more reasonable than it really is in order to attract just enough moderate votes to win the next election. So democrats pay lip service to fiscal responsibility and deficits – occasionally even signing bills like welfare reform that they find repugnant – when they’d much rather spend their days indiscriminately tossing other people’s money at new entitlement programs. Republicans, meanwhile, pretend to empathize with people they privately view as prey when they’d rather be cutting taxes and invading places that have oil.

We only rarely get to see the major parties’ true selves because the 20% of voters in the middle are turned off by displays of naked avarice, and in a two-party system elections go to whoever carries a majority of that block.

That’s why the latest debt ceiling debacle is such a big deal. Government shutdowns and related turmoil have become a standard bargaining chip lately, without affecting the make-up of either party. But this time the main conflict was not between republicans and democrats, but between mainstream, log-rolling, back-scratching, career-politician republicans and a handful of representatives and senators elected with Tea Party – i.e., highly ideological – support. The latter have no interest in raising the debt ceiling under any circumstances and see a government shutdown as a positive end in itself. Defunding Obamacare was just the excuse.

They got rolled, of course, as regular republicans chose to raise the debt ceiling without condition (as everyone always knew they would). But the cost of reopening the government is a republican civil war with only two likely outcomes: 1) The two groups stay in the big tent but challenge each other in primaries and intrigue over committee seats, etc., making a united, coherent policy front impossible and handing the next few elections to the democrats. 2) The Tea Party/libertarian republicans leave and either join the existing libertarian party or start one of their own, siphoning just enough votes from republicans in future elections to keep the democrats in charge.

Already, it has started. See this from today’s Bloomberg:

Republican Civil War Erupts: Business Groups v. Tea Party

A battle for control of the Republican Party erupted today as an emboldened Tea Party is moving to oust senators who voted to reopen the government, and business groups began mobilizing to defeat allies of the small-government movement.

 

“We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.” The chamber spent $35.7 million on federal elections in 2012, according to the Center for Responsive Politics, a Washington-based group that tracks campaign spending.

 

Meanwhile, two Washington-based groups that finance Tea Party-backed candidates said today they’re supporting efforts to defeat Mississippi Senator Thad Cochran, who voted this week for the measure ending the 16-day shutdown and avoiding a government debt default. Cochran, a Republican seeking a seventh term next year, faces a challenge in his party’s primary by Chris McDaniel, a state legislator.

 

McDaniel, who announced his candidacy today, “is not part of the Washington establishment and he has the courage to stand up to the big spenders in both parties,” Matt Hoskins, executive director of the Senate Conservatives Fund, said in a statement supporting him. Read more

 

Once the civil war costs the republicans control of the House of Representatives (November 4, 2014), the democrats will be relieved of the need to fool the middle about their commitment to fiscal sanity. The incoming Clinton administration and its congressional majorities will ramp up domestic spending and finance it with higher taxes, more borrowing and way more money printing. Janet Yellen (the perfect Fed chair for this transition) will expand QE and make it permanent. The Fed’s balance sheet will grow in trillion-dollar chunks as it buys up all the bonds issued by the government and the mortgage packagers and pretty much anybody else with paper to sell.

The resulting tidal wave of hot money will swamp emerging markets and drive Europe and Japan crazy, but the democrats won’t care because they’ll be favored by 20 points in the polls and in any event will be too busy hiring more staff to handle the upcoming legislative season to listen to non-believers. Oh, and they’ll counter any dissent with capital controls and stepped-up surveillance.

Could there be a better environment for gold? Not at first glance. But then almost the same could have been said two years ago when the Fed started buying $85 billion of bonds each month and bubbles began to form in stocks and houses. Some of that cash certainly should have found its way into precious metals. Instead the result was an epic correction. So logic isn’t necessarily our best guide here.

Still, the republican implosion/democrat ascendance comes after a two-year precious metals correction (during which China, India, and Russia bought something like 4,000 tons of gold, an amount greater than Germany’s entire gold reserves). So coming when it does, the combination of democrat dominance, an even more accommodating Fed and a growing shortage of Western gold to be shipped East…well, at the risk of being wrong again, this really does look like precious metals paradise.

 

While “hard” data has been scarce in the US thanks to the shutdown, we recently noted that whet little we had recently indicated notable weakness relative to the survey-based “soft” data. Goldman has, in the past, indicated how little forecasting power the soft survey data has in Europe and yet still, day after day we are treated to the herd of mainstream media types proclaiming that Europe is recovering and that their fundamentals have turned a corner. The problem with that “story” is that is that is a lie. In fact, European macro data has been sliding since the start of September and has plunged recently to 3 month lows. Of course, the reality is that a record high for European stocks is all that matters to the fast-money charging momo players and betting against divergences from fundamentals is for dummies…

 

 

So please – please – do not try and pretend that the reason to buy European stocks is that fundamentals are improving – they are not! And Greece, well we already showed that they need a 3rd bailout, so don’t start!

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/BgmyM32NSkE/story01.htm Tyler Durden

While “hard” data has been scarce in the US thanks to the shutdown, we recently noted that whet little we had recently indicated notable weakness relative to the survey-based “soft” data. Goldman has, in the past, indicated how little forecasting power the soft survey data has in Europe and yet still, day after day we are treated to the herd of mainstream media types proclaiming that Europe is recovering and that their fundamentals have turned a corner. The problem with that “story” is that is that is a lie. In fact, European macro data has been sliding since the start of September and has plunged recently to 3 month lows. Of course, the reality is that a record high for European stocks is all that matters to the fast-money charging momo players and betting against divergences from fundamentals is for dummies…

 

 

So please – please – do not try and pretend that the reason to buy European stocks is that fundamentals are improving – they are not! And Greece, well we already showed that they need a 3rd bailout, so don’t start!

After the quickest collapse since the first week of the year (another congressional “fold”), spot VIX is now heading towards its highs of the day. The divergence between an ever-rising demand for the S&P 500 at all-time-highs and the bid for VIX is notable to say the least… or is this demand for calls (because when you know it’s going up, why not lever up as much as possible?)…

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Qbl6UtvwWEA/story01.htm Tyler Durden

After the quickest collapse since the first week of the year (another congressional “fold”), spot VIX is now heading towards its highs of the day. The divergence between an ever-rising demand for the S&P 500 at all-time-highs and the bid for VIX is notable to say the least… or is this demand for calls (because when you know it’s going up, why not lever up as much as possible?)…

 

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CONAFr4cDok/story01.htm Tyler Durden

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/CONAFr4cDok/story01.htm Tyler Durden

In what is the most remarkable news of the day, which has so far passed very quietly under the radar, Fosun International, China’s largest private-owned conglomerate which invests in commodities, properties and pharmaceuticals also known as “Shanghai’s Hutchison Whampoa”, announced in a statement filed just as quietly with the Hong Kong stock exchange, that it had purchased JPM’s iconic former headquarters, the tower built by none other than David Rockefeller, at 1 Chase Manhattan Plaza for a measly $725 million.

Here is Bloomberg described the transaction:

Over the past year, other Chinese developers and wealthy investors have been buying real estate in the U.S.

 

China Vanke Co., the biggest homebuilder listed in mainland China, said in February it joined a residential real estate venture in San Francisco. The families of Zhang Xin, co-founder of Soho China Ltd. (410), the biggest developer in Beijing’s central business district, and Brazilian banking billionaire Moise Safra this year bought a 40 percent stake in New York’s General Motors Building.

 

The landmark 1 Chase Manhattan Plaza, designed by architect Gordon Bunshaft and built in the 1950s, was once the headquarters of Chase Manhattan Bank. Rockefeller, as head of the bank’s building committee, selected the site and oversaw its construction.

 

JPMorgan intends to relocate about 4,000 employees, most of the people who work in the 60-story skyscraper, to other New York locations, Brian Marchiony, a spokesman, said in August. JPMorgan occupies about half of its space.

None of this is particularly newsworthy What is, however, is what Zero Hedge exclusively reported back in March, namely that the very same former JPM HQ at 1 Chase Manhattan Plaza is also the building that houses the firm’s commercial gold vault: incidentally, the largest in the world.

Recall:

What do we know about 1 Chase Manhattan Plaza. Well, aside from the fact that the 60-story structure, built in the 1950s, was the headquarters of the once-legendary Chase Manhattan corporation, and which when it was built was the world’s sixth tallest building, not much.

So we set off to learn more.

To learn more, we first went to the motherlode: the Landmarks Preservation Commission, whose report on 1 CMP describes everyone one wants to know about this building and then much more, such as that:

One Chase Manhattan Plaza combines three main components: a 60-story tower, a 2½ acre plaza, and a 6-story base, of which 5 floors are beneath grade.

So the old Chase HQ, once the stomping grounds of one David Rockefeller, and soon to be the other half of JPMorgan Chase, has 5 sub-basements, just like the NY Fed…

Reading on:

Excavations, said to be the largest in New York City history, reached a depth of 90 feet

Or, about the same depth as the bottom-most sub-basement under the NY Fed…

But then we hit the jackpot:

Originally constructed with white marble terrazzo paving and enclosed by a solid parapet of white marble travertine that was personally selected by Bunshaft in Tivoli, Italy, the L-shaped plaza levels the sloping site and conceals six floors of operations that would have been difficult to fit into a single floor of the tower, including an auditorium seating 800 [and] the world’s largest bank vault.

And there you have it: the JPM vault, recommissioned to become a commercial vault, just happens to also be the “world’s largest bank vault.”

Digging some more into the curious nature of this biggest bank vault in the world, we learn the following, courtesy of a freely available book written by one of the architects:

On the lowest level was the vault, which rested directly on the rock – the “largest bank vault in the world, longer than a football field.” It was anchored to the bedrock with steel rods. This was to prevent the watertight, concrete structure from floating to the surface like a huge bubble in the event that an atomic bomb falling in the bay would blow away the building and flood the area.

In other words, the world’s biggest bank vault, that belonging to the private Chase Manhattan empire, and then, to JPMorgan, was so safe, the creators even had a plan of action should it sustain a near-direct hit from a nuclear bomb, and suffer epic flooding (such as that from Hurricane Sandy).

* * *

So, what the real news of today is not that JPM is selling its gold vault, we knew that two months ago, or that it is outright looking to exit the physical commodities business, that too was preannounced. What is extremely notable is that in one very quiet transaction, China just acquired the building that houses the world’s largest gold vault.

Why? We don’t know. We do know that China’s gross gold imports from Hong Kong alone have amounted to over 2000 tons in the past two years. This excludes imports from other sources, and certainly internal gold mining and production.

One guess: China has decided it has its fill of domestically held gold and is starting to acquire gold warehouses in the banking capitals of the world.

For now the reason why is unclear but we are confident the answer will present itself shortly.

 

The investment media regularly proclaims that Gold is a terrible investment and that investors should shun it in favor of stocks.

 

However, the fact of the matter is that Gold has dramatically outperformed the stock market for the better part of 40 years.

 

I say 40 years because there is no point comparing Gold to stocks during periods in which Gold was pegged to world currencies. Most of the analysis I see comparing the benefits of owning Gold to stocks goes back to the early 20^th century.

 

However Gold was pegged to global currencies up until 1967. Stocks weren’t. Comparing the two during this time period is just bad analysis.

 

However, once the Gold peg officially ended with France dropping it in 1967, the precious metal has outperformed both the Dow and the S&P 500 by a massive margin.

 

 

See for yourself… the above chart is in normalized terms courtesy of Bill King’s The King Report.

 

According to King, Gold has risen 37.43 fold since 1967. That is more than twice the performance of the Dow over the same time period (18.45 fold). So much for the claim that stocks are a better investment than Gold long-term.

 

Indeed, once Gold was no longer pegged to world currencies there was only a single period in which stocks outperformed the precious metal. That period was from 1997-2000 during the height of the Tech Bubble (the single biggest stock market bubble in over 100 years).

 

That’s Gold as a long-term investment. But what about as a short-term investment?

 

Since the Crash hit in 2008, the price of Gold has been very closely correlated to the Fed’s balance sheet expansion. Put another way, the more money the Fed printed, the higher the price of Gold went.

 

Gold did become overextended relative to the Fed’s balance sheet in 2011 when it entered a bubble with Silver.  However, with the Fed now printing some $85 billion per month, the precious metal is now significantly undervalued relative to the Fed’s balance sheet.

 

Indeed, for Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today.

 

 

Thus we have an asset class that historically has outperformed stocks, trading at a discount to the primary driver of its prices in the last five years. Seems like a set up worth considering….

 

For more market insights as well as several FREE investment reports, swing by:

http://gainspainscapital.com

 

Best Regards

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/5_uWoRu0DiQ/story01.htm Phoenix Capital Research

 

The investment media regularly proclaims that Gold is a terrible investment and that investors should shun it in favor of stocks.

 

However, the fact of the matter is that Gold has dramatically outperformed the stock market for the better part of 40 years.

 

I say 40 years because there is no point comparing Gold to stocks during periods in which Gold was pegged to world currencies. Most of the analysis I see comparing the benefits of owning Gold to stocks goes back to the early 20^th century.

 

However Gold was pegged to global currencies up until 1967. Stocks weren’t. Comparing the two during this time period is just bad analysis.

 

However, once the Gold peg officially ended with France dropping it in 1967, the precious metal has outperformed both the Dow and the S&P 500 by a massive margin.

 

 

See for yourself… the above chart is in normalized terms courtesy of Bill King’s The King Report.

 

According to King, Gold has risen 37.43 fold since 1967. That is more than twice the performance of the Dow over the same time period (18.45 fold). So much for the claim that stocks are a better investment than Gold long-term.

 

Indeed, once Gold was no longer pegged to world currencies there was only a single period in which stocks outperformed the precious metal. That period was from 1997-2000 during the height of the Tech Bubble (the single biggest stock market bubble in over 100 years).

 

That’s Gold as a long-term investment. But what about as a short-term investment?

 

Since the Crash hit in 2008, the price of Gold has been very closely correlated to the Fed’s balance sheet expansion. Put another way, the more money the Fed printed, the higher the price of Gold went.

 

Gold did become overextended relative to the Fed’s balance sheet in 2011 when it entered a bubble with Silver.  However, with the Fed now printing some $85 billion per month, the precious metal is now significantly undervalued relative to the Fed’s balance sheet.

 

Indeed, for Gold to even realign based on the Fed’s actions, it would need to be north of $1,800. That’s a full 30% higher than where it trades today.

 

 

Thus we have an asset class that historically has outperformed stocks, trading at a discount to the primary driver of its prices in the last five years. Seems like a set up worth considering….

 

For more market insights as well as several FREE investment reports, swing by:

http://gainspainscapital.com

 

Best Regards

Phoenix Capital Research

 

 

 

 

 

 

 

 

 

 

 

BANZAI7 NEWS–A Japanese company, Acme Fukuppy Enterprises, has launched anti-radiation swimwear and underwear as Fukushima nuclear crisis spirals towards the Tokyo Radiation Olympics.

The products are clearly targeting high-risk dare devil workers in and around the waste water sopped Fukushima nuclear power plant as well as Olympic swimmers.

However, the clothing, which is designed as an additional form of protection alongside conventional anti-radiation jock straps worn by workers at the plant, is not cheap: the swimwear will sell for Y105,000 (£663) and the underwear for Y80,850 (£511).

Workers will be able to acquire the safety garments in lieu of the payment of salary and a free seasonal parking pass at Fukushima Beach.

 

 

.

 

.

 

A Plumbing We Will Go…

.

 

 

 

 

[No we did not make this up: Link]

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/14ytH0OVAwQ/story01.htm williambanzai7

 

BANZAI7 NEWS–A Japanese company, Acme Fukuppy Enterprises, has launched anti-radiation swimwear and underwear as Fukushima nuclear crisis spirals towards the Tokyo Radiation Olympics.

The products are clearly targeting high-risk dare devil workers in and around the waste water sopped Fukushima nuclear power plant as well as Olympic swimmers.

However, the clothing, which is designed as an additional form of protection alongside conventional anti-radiation jock straps worn by workers at the plant, is not cheap: the swimwear will sell for Y105,000 (£663) and the underwear for Y80,850 (£511).

Workers will be able to acquire the safety garments in lieu of the payment of salary and a free seasonal parking pass at Fukushima Beach.

 

 

.

 

.

 

A Plumbing We Will Go…

.

 

 

 

 

[No we did not make this up: Link]

Today’s AM fix was USD 1,317.00, EUR 962.09 and GBP 813.16 per ounce.
Yesterday’s AM fix was USD 1,308.50, EUR 959.87 and GBP 813.09 per ounce.

Gold climbed $40.20 or 3.14% yesterday, closing at $1,319.70/oz. Silver rose $0.53 or 2.49% closing at $21.80. Platinum jumped $44.84 or 3.2% to $1,432.74/oz, while palladium soared $23.50 or 3.3% to $737.50 /oz.

 

COMEX Gold In U.S. Dollars and Volumes – October 17

Gold is 3.5% higher for the week and headed for its best weekly gain in two months due to concerns about the latest episode of fiscal “can kicking” in Washington after U.S. politicians reached another temporary budget deal.

Besides the extension in the U.S. debt ceiling, gold also got traction after the increasingly influential Chinese credit rating agency, Dagong, downgraded the U.S.

The move higher was encouraging as it was on high volume with broad based buying seen.
During the gold surge COMEX gold saw volumes at 80% above the 100 day average for this time.

Physical buyers were evident too as the uncertainty of recent weeks came to a close … for now.
U.S. politicians have set the stage for another standoff as soon as January as the deal reached earlier this week only lasts until early next year. This will support gold and lead to continued safe haven buying.

Gold in USD and Debt Ceiling – Quarterly, 1933-2013 (Bloomberg)

Premiums in China and India remained robust overnight. Shanghai premiums are at $18 over spot and in Mumbai premiums remain extremely high near record highs at $100 per ounce.

Bullion premiums in western markets have not seen any movement due to the recent slowdown. Gold bullion bars (1 oz) are trading at $1,377.52/oz (up from $1,335.25 last week) or premiums of between 3.75% and 4.5%, and gold  bars (1 kilo) are trading at $43,864/oz (up from $42,602 last week) or premiums of between 3% and 3.5%.

Gold and Silver in USD and Debt Ceiling – Quarterly, 2000-2013 (Bloomberg)

The fact that gold forward offered rates have gone negative this week and remain so today suggests there remains difficulty in sourcing large London Good Delivery bars in volume which will be supportive of gold.

Reuters Precious Metals Poll (Q4, 2013)
1. Reuters: Where do you expect gold prices to end this year?
GoldCore: We expect gold prices to end 2013 around the $1,450-1,550/oz. This would be a gain of between 10% and 17%.

2. Reuters: What will bring gold prices out of the overall downtrend we’ve seen so far this year?

GoldCore: Significant physical demand from Asia, especially from China and official sector foreign exchange diversification.

Also, the risk of a continuing debt crisis in the U.S. and a re-emergence of the Eurozone debt crisis should lead to safe haven diversification in western markets.

3. Reuters: Do you see further systemic risk to the euro-zone having an impact?

GoldCore: Yes. Much of the Eurozone remains a basket case with Portugal, Spain, Italy and of course Greece very susceptible to a new sovereign debt crisis and bail-ins which will lead to renewed contagion risk.
Japan and the UK have their severe fiscal challenges.

4. Reuters: How will demand for silver, platinum and palladium be affected by the wider macroeconomic picture?

GoldCore: All precious metals now have favourable supply demand characteristics and we believe that diversification and even small allocations to silver, platinum and palladium should propel prices higher. In the event of a severe deflationary event or a global Depression, the PGM metals would be vulnerable as would silver to a degree but gold would benefit due to safe haven demand for an asset that cannot default, be “bailed-in” or go bankrupt.

Gold Is A”Reserve Of Safety” – Draghi of ECB
Dr. Mario Draghi, former Governor of the Bank of Italy and the current President of the European Central Bank (ECB), during an open forum at Harvard’s Kennedy School of Government, answered a question about gold and why central banks want gold and what value it offers.

Larry Summers, also in attendance, introduced Draghi and expressed his belief in Draghi’s having “saved the European continent in 2012.”

Tekoa Da Silva, Bull Market Thinking Question: 
Dr. Draghi what are your thoughts on gold as a reserve asset, you have the central banks like China and  Russia increasing their reserves especially in the last 10 years, Germany for example asking for its holdings back from New York, it doesn’t offer any income unless its leased,  why do you think they would want that and what value do you think it will offers in your opinion?

Mario Draghi, ECB. Answer:
“Well you’re also asking this to the former Governor of the Bank of Italy, and the Bank of Italy is the fourth largest owner of gold reserves in the world, which is out of all proportion to the size of the country. But I never thought it wise to sell it, because for central banks this is a reserve of safety, it’s viewed by the country as such. In the case of non-dollar countries it gives you a value-protection against fluctuations against the dollar, so there are several reasons, risk diversification and so on. So that’s why central banks which have started a program for selling gold a few years ago, substantially I think stopped…most of the experiences of central banks that have leased or sold the stock of gold about ten years ago, were not considered to be terribly successful from a purely money viewpoint.”

Tekoa Da Silver of Bull Market Thinking (see commentary) summed up the view of Draghi and the ECB on gold quite well:

“A key takeaway from Draghi’s commentary should be the point that while many still debate the value of gold as an asset class, and whether or not it remains in a bull market—central banks are quietly accumulating the metal in ton-sized increments, and as Draghi implied, with plans of never selling it.

When the president of a banking organization which arguably controls trillions of dollars (or euros in this case), indicates it to be “unwise” to sell core gold holdings—what more needs to be said for the individual? Can we not all, “Be our own central bank”, as economist Marc Faber is known for having stated?

Gold in USD and Debt Ceiling – 2011 (Bloomberg)

U.K. Gold Exports to Switzerland Fell in August From Record Levels
U.K. gold exports to Switzerland fell in August. Exports were 98.5t, down from 120.1t in July and the lowest since record levels seen in February, Macquarie says.

Exports to Hong Kong and UAE, next largest destinations, also fell from record levels.
‘Reduced level of exports is in line with lower outflows from gold ETFs in July, supporting our theo
ry that the U.K.’s exports in 2013 have been of sold ETF gold, which is being sent to Switzerland for transformation into bars and other products conducive to Asian consumers or possibly to be vaulted there instead’.’

Russian Launches Physically Backed Gold ETF On Irish Stock Exchange and Moscow Exchange
Russia’s first gold-backed exchange-traded fund has been launched as part of a bid to turn Moscow into an international financial centre.

The FinEx Physically Held Gold ETF fund has been listed on the Irish Stock Exchange and cross listed on the Moscow Exchange, tracks the gold price as calculated using the London Gold Fixing Price, FinEx said. Shares will be available in U.S. dollars but also traded in Russian roubles.

Moscow Exchange, Russia’s stock exchange, plans to launch spot trading in gold and silver this month. Russia’s over-the-counter market in gold is currently dominated by large banks such as Sberbank and VTB .

U.S. Mint October Gold-Coin Sales Exceed September Total
The U.S. Mint’s sales of American Eagle gold coins have reached 22,000 ounces so far this month, according to figures from the Mint’s website. Sales totaled 13,000 ounces in September.

The American Eagle 1 ounce Silver bullion coin is the official U.S. national silver bullion coin, and is the world’s most widely sold 1 oz silver coin. Everything you need to know about the world’s most popular silver bullion coin – download your comprehensive guide to the American Silver Eagle here.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/w7RiK-aza90/story01.htm GoldCore

Today’s AM fix was USD 1,317.00, EUR 962.09 and GBP 813.16 per ounce.
Yesterday’s AM fix was USD 1,308.50, EUR 959.87 and GBP 813.09 per ounce.

Gold climbed $40.20 or 3.14% yesterday, closing at $1,319.70/oz. Silver rose $0.53 or 2.49% closing at $21.80. Platinum jumped $44.84 or 3.2% to $1,432.74/oz, while palladium soared $23.50 or 3.3% to $737.50 /oz.

 

COMEX Gold In U.S. Dollars and Volumes – October 17

Gold is 3.5% higher for the week and headed for its best weekly gain in two months due to concerns about the latest episode of fiscal “can kicking” in Washington after U.S. politicians reached another temporary budget deal.

Besides the extension in the U.S. debt ceiling, gold also got traction after the increasingly influential Chinese credit rating agency, Dagong, downgraded the U.S.

The move higher was encouraging as it was on high volume with broad based buying seen.
During the gold surge COMEX gold saw volumes at 80% above the 100 day average for this time.

Physical buyers were evident too as the uncertainty of recent weeks came to a close … for now.
U.S. politicians have set the stage for another standoff as soon as January as the deal reached earlier this week only lasts until early next year. This will support gold and lead to continued safe haven buying.

Gold in USD and Debt Ceiling – Quarterly, 1933-2013 (Bloomberg)

Premiums in China and India remained robust overnight. Shanghai premiums are at $18 over spot and in Mumbai premiums remain extremely high near record highs at $100 per ounce.

Bullion premiums in western markets have not seen any movement due to the recent slowdown. Gold bullion bars (1 oz) are trading at $1,377.52/oz (up from $1,335.25 last week) or premiums of between 3.75% and 4.5%, and gold  bars (1 kilo) are trading at $43,864/oz (up from $42,602 last week) or premiums of between 3% and 3.5%.

Gold and Silver in USD and Debt Ceiling – Quarterly, 2000-2013 (Bloomberg)

The fact that gold forward offered rates have gone negative this week and remain so today suggests there remains difficulty in sourcing large London Good Delivery bars in volume which will be supportive of gold.

Reuters Precious Metals Poll (Q4, 2013)
1. Reuters: Where do you expect gold prices to end this year?
GoldCore: We expect gold prices to end 2013 around the $1,450-1,550/oz. This would be a gain of between 10% and 17%.

2. Reuters: What will bring gold prices out of the overall downtrend we’ve seen so far this year?

GoldCore: Significant physical demand from Asia, especially from China and official sector foreign exchange diversification.

Also, the risk of a continuing debt crisis in the U.S. and a re-emergence of the Eurozone debt crisis should lead to safe haven diversification in western markets.

3. Reuters: Do you see further systemic risk to the euro-zone having an impact?

GoldCore: Yes. Much of the Eurozone remains a basket case with Portugal, Spain, Italy and of course Greece very susceptible to a new sovereign debt crisis and bail-ins which will lead to renewed contagion risk.
Japan and the UK have their severe fiscal challenges.

4. Reuters: How will demand for silver, platinum and palladium be affected by the wider macroeconomic picture?

GoldCore: All precious metals now have favourable supply demand characteristics and we believe that diversification and even small allocations to silver, platinum and palladium should propel prices higher. In the event of a severe deflationary event or a global Depression, the PGM metals would be vulnerable as would silver to a degree but gold would benefit due to safe haven demand for an asset that cannot default, be “bailed-in” or go bankrupt.

Gold Is A”Reserve Of Safety” – Draghi of ECB
Dr. Mario Draghi, former Governor of the Bank of Italy and the current President of the European Central Bank (ECB), during an open forum at Harvard’s Kennedy School of Government, answered a question about gold and why central banks want gold and what value it offers.

Larry Summers, also in attendance, introduced Draghi and expressed his belief in Draghi’s having “saved the European continent in 2012.”

Tekoa Da Silva, Bull Market Thinking Question: 
Dr. Draghi what are your thoughts on gold as a reserve asset, you have the central banks like China and  Russia increasing their reserves especially in the last 10 years, Germany for example asking for its holdings back from New York, it doesn’t offer any income unless its leased,  why do you think they would want that and what value do you think it will offers in your opinion?

Mario Draghi, ECB. Answer:
“Well you’re also asking this to the former Governor of the Bank of Italy, and the Bank of Italy is the fourth largest owner of gold reserves in the world, which is out of all proportion to the size of the country. But I never thought it wise to sell it, because for central banks this is a reserve of safety, it’s viewed by the country as such. In the case of non-dollar countries it gives you a value-protection against fluctuations against the dollar, so there are several reasons, risk diversification and so on. So that’s why central banks which have started a program for selling gold a few years ago, substantially I think stopped…most of the experiences of central banks that have leased or sold the stock of gold about ten years ago, were not considered to be terribly successful from a purely money viewpoint.”

Tekoa Da Silver of Bull Market Thinking (see commentary) summed up the view of Draghi and the ECB on gold quite well:

“A key takeaway from Draghi’s commentary should be the point that while many still debate the value of gold as an asset class, and whether or not it remains in a bull market—central banks are quietly accumulating the metal in ton-sized increments, and as Draghi implied, with plans of never selling it.

When the president of a banking organization which arguably controls trillions of dollars (or euros in this case), indicates it to be “unwise” to sell core gold holdings—what more needs to be said for the individual? Can we not all, “Be our own central bank”, as economist Marc Faber is known for having stated?

Gold in USD and Debt Ceiling – 2011 (Bloomberg)

U.K. Gold Exports to Switzerland Fell in August From Record Levels
U.K. gold exports to Switzerland fell in August. Exports were 98.5t, down from 120.1t in July and the lowest since record levels seen in February, Macquarie says.

Exports to Hong Kong and UAE, next largest destinations, also fell from record levels.
‘Reduced level of exports is in
line with lower outflows from gold ETFs in July, supporting our theory that the U.K.’s exports in 2013 have been of sold ETF gold, which is being sent to Switzerland for transformation into bars and other products conducive to Asian consumers or possibly to be vaulted there instead’.’

Russian Launches Physically Backed Gold ETF On Irish Stock Exchange and Moscow Exchange
Russia’s first gold-backed exchange-traded fund has been launched as part of a bid to turn Moscow into an international financial centre.

The FinEx Physically Held Gold ETF fund has been listed on the Irish Stock Exchange and cross listed on the Moscow Exchange, tracks the gold price as calculated using the London Gold Fixing Price, FinEx said. Shares will be available in U.S. dollars but also traded in Russian roubles.

Moscow Exchange, Russia’s stock exchange, plans to launch spot trading in gold and silver this month. Russia’s over-the-counter market in gold is currently dominated by large banks such as Sberbank and VTB .

U.S. Mint October Gold-Coin Sales Exceed September Total
The U.S. Mint’s sales of American Eagle gold coins have reached 22,000 ounces so far this month, according to figures from the Mint’s website. Sales totaled 13,000 ounces in September.

The American Eagle 1 ounce Silver bullion coin is the official U.S. national silver bullion coin, and is the world’s most widely sold 1 oz silver coin. Everything you need to know about the world’s most popular silver bullion coin – download your comprehensive guide to the American Silver Eagle here.