White Shoe Boys

A Shuffle of Aluminum, but to Banks, Pure Gold

"The story of how this works begins in 27 industrial warehouses in the Detroit area where a Goldman subsidiary stores customers’ aluminum. Each day, a fleet of trucks shuffles 1,500-pound bars of the metal among the warehouses. Two or three times a day, sometimes more, the drivers make the same circuits. They load in one warehouse. They unload in another. And then they do it again. This industrial dance has been choreographed by Goldman to exploit pricing regulations set up by an overseas commodities exchange. The back-and-forth lengthens the storage time. And that adds many millions a year to the coffers of Goldman." Continue reading →

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The Gold Lease Story You Haven’t Heard

"A recent article in the Financial Times described a shortage of so-called 'leased' gold. According to the Times, the cost of borrowing gold 'has risen to the highest since the post-Lehman Bros. scramble for supplies as bullion markets adjust to a new era in which Western investor demand is less dominant.' The numbers are small, but the trends are intriguing. The one-month gold leasing rate rose from 0.12% in early June to 0.3% in early July. That’s a 150% rate rise in one month! It’s the highest gold lease rate since 2009, although still well below the peaks of previous eras." Continue reading →

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UK Telegraph: ‘We No Longer Have Free Markets’

"If Bernanke really shakes the tree, half the world may fall out ... We no longer have a free market. The world's financial asset prices have become a plaything of central banks and the sovereign wealth funds of a few emerging powers. Julian Callow from Barclays says they are buying $1.8 trillion worth of AAA or safe-haven bonds each year from an available pool of $2 trillion. Nothing like this has been seen before in modern times, if ever." Continue reading →

Continue ReadingUK Telegraph: ‘We No Longer Have Free Markets’

Federal Reserve rethinks 2003 move allowing banks to trade physical commodities

"The U.S. Federal Reserve is 'reviewing' a landmark 2003 decision that first allowed regulated banks to trade in physical commodity markets, it said on Friday, a move that may send new shockwaves through Wall Street. While it is well known that the Fed is considering whether or not to allow banks including Morgan Stanley and JPMorgan to continue owning trading assets like oil storage tanks or metals warehouses, Friday's one-sentence statement suggests that it is also reconsidering the full scope of banks' activities in physical markets, which help generate billions in profits." Continue reading →

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With Gold, Don’t Miss the Top

"Zero Hour is the moment the price of physical gold starts to run away from the ‘paper price’ you see on CNBC’s ticker. The most likely catalyst is a chain of events that goes like this: Western central banks have leased their gold to commercial banks like JPMorgan Chase at an interest rate of less than 1%. The commercial banks have sold that metal and ploughed the proceeds into assets that earn more than 1%. The chain of custody on gold bars has become so cloudy that a major exchange like the Comex in New York is liable to ‘default’ on a gold contract – settling in cash, instead of metal. A rush for real metal would then be underway." Continue reading →

Continue ReadingWith Gold, Don’t Miss the Top

Bill Bonner: Should Larry Summers replace Ben Bernanke?

"What sets Summers apart is his readiness to make mistakes on a colossal scale, with other people's money. But as far as we can see that gives him all the qualifications you need to be America's top banker. A high IQ moron is just what you need for this kind of work. You have to be smart enough to talk the talk, pretending that you know what you're talking about. But you have to be stupid enough to believe it. You must think you really can improve the financial decisions of 310 million people. And you have to be arrogant enough contradict all of them...putting your own asinine plans into action even though they will almost certainly bankrupt the entire nation." Continue reading →

Continue ReadingBill Bonner: Should Larry Summers replace Ben Bernanke?

Bernanke “The Only Game in Town”: Really?

"America's real economy is innovating away from the dead hand of the Fed and its toxic spew of free money to the predatory class. There's actually three games in town: the financier game the Fed is playing that will end in collapse, the Federal government's borrow-and-blow trillions of dollars game that will also end badly, and the real economy, where millions of people don't give a rat's rear-end about Bernanke's latest attempt to placate the financial Monster Id he has created. Bernanke is irrelevant to millions of people who are building the next economy beneath the rotting soggy mess of the financialized one Bernanke is attempting to resuscitate." Continue reading →

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Goldman Sachs quarterly profits more than double to $1.93bn

"Investors had feared that the looming prospect of an end to the US Federal Reserve’s $85bn-a-month bond-buying programme would impact profits at Wall Street’s major banks. However, Goldman Sachs navigated the turbulent quarter better than they expected. Profits climbed to $1.93bn (£1.28bn), from $962m in the same period last year, while revenues rose from $6.6bn to $8.6bn. Goldman Sachs employees were paid $253,691 on average, although the bank’s highest earning staff take home considerably more than that. Michael Sherwood, co-chief executive of Goldman Sachs and head of its London operation, received $15.8m as a share bonus alone last year." Continue reading →

Continue ReadingGoldman Sachs quarterly profits more than double to $1.93bn

JP Morgan Getting Ready To Settle For $1 Billion For Manipulating Energy Markets?

"Sources told the Journal the deal could come in close to a staggering $1 billion, the largest payout in the history of the Federal Energy Regulatory Commission (FERC), which overseas power trading markets. JPM and FERC, the little regulator that could, are reportedly exchanging drafts of an agreement. Sources told the Journal the bank is working quickly to finish the deal so they can gear up for even more regulatory hoopla in the wake of the London Whale debacle. The filings describe how traders rigged their bidding in order to be eligible for 'make-whole' payments that would cover trading losses and generate a healthy profit, according to the Journal." Continue reading →

Continue ReadingJP Morgan Getting Ready To Settle For $1 Billion For Manipulating Energy Markets?

Clarification of William Kaye Regarding German / US gold in Hong Kong refineries

"Hong Kong fund manager William Kaye identifies the Hong Kong gold refiner that is recasting Western gold, including Western central bank gold, for the Asian market. Kaye remarks that this movement and recasting of gold should hardly be a sensation because it is completely consistent with everything known about the current gold market. Kaye also denounces Western exchange-traded gold funds as facilitating 'enormous potential mischief and abuse' of gold investors at the hands of the bullion banks that are exclusively authorized to put gold into and take gold out of the funds." Continue reading →

Continue ReadingClarification of William Kaye Regarding German / US gold in Hong Kong refineries