SilverDoctors: Moody's Downgrades Spain, Portugal, Italy, Places ...

SilverDoctors: Moody's Downgrades Spain, Portugal, Italy, Places ...: So much for waiting till Friday night after the markets close to announce big downgrades.  Moody's has just dropped the hammer on the Euroz...

MFGlobal and our vaporizing 1.2 billion dollars/Greece and Portugal/Gold and silver raid prior to first day notice

Good evening Ladies and Gentlemen:

I guess our boys decided that a raid on silver and gold was necessary prior to first day notice.  The object of the exercise was to dampen the spirits of the long holders into taking cash and depositing it into the brokerage account in order to take delivery of gold and silver.  Gold closed down by 3.00 dollars to $1729.80 whereas silver fell by 25 cents to $33.50.  I would have to say that the raid was a total wipe out for our bankers.

Let us head over to the comex and assess trading.  First day notice is tomorrow.  However I still do not have delivery notices going into tomorrow.  This will be important so I will post it tonight in my comments sections.
The total comex gold OI today fell by 3551 contracts from 433,710 to 430,159.  On Friday we had a very good day for gold so again a few bankers bit the dust. The front options expiry month of January is now complete.  The big delivery month of February saw its OI rest tonight at a monstrously high 29,103 contracts.  I will still need tomorrow's OI data to see how many rolled into April.  The next front month of April saw its OI rise from 175,305 to 213,997 for a rollover of 38,692 contracts.  This snapshot would be as of Friday as all OI numbers are 24 hours back.  The estimated volume at the gold comex today was very very light at 184,065.  I would have thought that more rolled to the April month today.  The confirmed volume on the gold comex on Friday was very high at 343,879 but many were rollovers.

The total silver comex OI fell marginally by 121 contracts from 102,006 to 101,885.  Since silver had a great day on Friday we again lost some bankers who could not stand the heat.  The front options expiry month of January is now off the board.  The new front options expiry is now February and here the OI rose from 124 to 159 as these guys will be given a futures contract for February and thus automatically stand for metal.  The next big delivery month for silver is March and here the OI stayed quite constant rising by 500 contracts to 49,053.  The estimated volume at the silver comex today was anemic at 31,583 contracts.  The confirmed volume on Friday was also anemic at 34,752.

No Pushing In The Default Line, Please

By: Michael Ashton | Mon, Jan 30, 2012

Europe continues to smolder, but it is about to burst into outright flame. The 'private sector initiative' (PSI) discussions, which were supposed to be completed the Friday before last, continue. The leaks of an imminent deal continue, and eventually I am certain that a deal will be announced because eventually we will be down to just one bondholder still represented by the IIF. It is pretty clear by now - or it should be - that the PSI is no panacea. The only ray of hope to that process is that the approval of a 'haircut' (in the same way that Hannibal Lecter gave haircuts) would give the EU a fig leaf to approve a deal to send good money after bad, if it could overlook the failure to implement austerity measures that currently has German Finance Minister Schaeuble in a tizzy.
It would be a colossal mistake to agree to another €130bln bailout, even if the chances of it actually being disbursed would be slim (after all, remember the PSI process is necessary for the disbursement of the past-due tranche of the current bailout). And, honestly, I think the only reason they are continuing the charade is to give themselves more time to ready the Plan B default and/or Euro exit.
However, the market may not give them the time. Today Portugal's 10-year rate rose nearly 200bps (see Chart, source Bloomberg), likely triggered in part by a headline saying "ECB cuts off bond buying as pressure mounts."

It didn't actually cut off bond buying, but it bought very little last week. It seems fairly clear that the limits of the ECB's ability to sterilize the transaction are nearby, if they have not already been reached, and no doubt some cooler heads have pointed out that failing to have enough buyers for a 7-day ECB tender would be much worse than allowing bond yields to reach free-market levels. After all, what's the difference to Portugal of 15% or 17% on 10-year notes? Neither level makes Portugal's situation even vaguely sustainable.

Portugal's Debt Will Be Restructured; 3-Year Government Bond Yield Tops 25%; CDS at Record High, Implies 72% Chance of Default

MISH'S
Global Economic
Trend Analysis

Inquiring minds are watching Portuguese government bonds soar into the stratosphere, with record-high bond yields across the entire yield curve.

In all the images below, the numbers are accurate but the charts reflect yesterday. I have mentioned this to Bloomberg a number of times to no avail.

Portugal 2-year Government Bonds



Portugal 3-year Government Bonds

Gold and silver rise again/Greece/Italy/Portugal/Spain all in turmoil as Fitch downgrades

Saturday, January 28, 2012

Good morning Ladies and Gentlemen:
Before commencing my report, here our Friday's entrants to the banking morgue:
1. Bank East, Knoxville Tennessee
2. Patriot Bank of Minnesota, Forest Lake MN
3. First Guaranty Bank and Trust of Jacksonville Fla, Jacksonsville FL
3. Tennessee Commerce Bank of Franklin, TN
The price of gold rose on Friday finishing the comex session at $1731.80 up $5.80 on the session. The price of silver rose by only 5 cents to close at $33.75. However in the access market both metals shot up considerably. Here is how they finished the evening:
Gold: 41737.30
Silver: $33.99
If gold and silver hold up on Monday, this will be the first time in a decade that these metals were not smashed prior to or right after options expiry. For many years the bankers modus operandi was to raid these precious metals prior to options expiry as they wanted to preserve as much physical as possible. They would knock the paper price of metal below the level where many options were written whether puts or calls. For the past several months, the bankers new ploy was to attack right after options expiry but before first day notice to inflict pain on those who exercised. The plan was to prevent the longs from putting up the entire contract price. If Monday holds up this will be a massive defeat to our bankers as many options were suddenly "in the money" and many will stand for metal. I will report on the progress of these longs for you once the delivery month of February commences for gold, and the non delivery options expiry month of February for silver.
Let us head over to the comex and assess trading, inventory levels, a final amount of silver and gold standing for January and then position levels by our major players with our COT report.
The total gold comex open interest fell by 1287 contracts from 434,997 to 433,710.
This occurred with gold sharply rising on Thursday which generally means that we lost some
of our banker friends. The front options expiry month of January saw its OI fall from 62 to 6
for a loss of 56 contracts. We had 61 delivery notices on Thursday so we gained 5 contracts
or 500 oz of additional gold standing. First day notice for the gold contract is this Tuesday.
Here the OI contracted from 110,572 to 75,705 which is a considerable drop. Monday night
we will receive delivery notices and on Tuesday we should be a good glimpse on how many gold oz will be standing. As always I will report this to you. The estimated volume on the gold comex on Friday was a very large 310,459 as we had considerable rollovers. The confirmed volume on Thursday was very high at 358,282. Now we await to see if we have many determined longs standing for February.
The total silver comex OI continues to trade in a narrow channel. On Friday, the resting OI for the silver comex rested at 102,006 down 510 contracts from Thursday's level of 102,514. The front options expiry month of January saw its OI drop from 84 to 52 for a loss of 32 contracts. We had 43 delivery notices on Thursday, so we gained another 11 contracts of additional silver or 55,000 oz. The next big delivery month is March and here the OI dropped from 51,142 to 49,576. Since silver had a great advance on Thursday, this must indicate some banking liquidation as they are probably scared out of their minds with the rapid rise silver. The estimated volume on the silver comex was an extremely anemic 31,194. The confirmed volume on Thursday came in at 43,149. If Butler is right, that the comex volume is approaching 100% for the HFT traders, this does not look good for our bankers as our longs are resolute and there is no activity whatsoever that will force the silver leaves to leave the silver tree. However I caution you that volatility in the silver comex will be like a yo-yo.

Portugal 10 yr bond at 15%/Private PSI deal in Greece a non starter/USA raises debt ceiling to 16.4 trillion

Good evening Ladies and Gentlemen;

Gold closed up today for the second straight day to the tune of $26.50 to finish the comex session at $1726.30. Silver followed her older and wiser cousin by 61 cents to $33.70. Today is options expiry so this day had saw some early resistance from the bankers but not much. Gold and silver are being viewed as a safe haven with all the noise of sovereign defaults. Today Portugal saw its 10 yr bond rise above 15% signalling that it too will join Greece in bankruptcy momentarily. Japan for the first time saw a trade deficit as the nuclear damage is certainly having an effect on their economy.

Let us now head over to the comex and assess trading, inventory movements and amounts of metal standing.
The total gold comex OI fell by 7965 contracts despite gold's big advance. Many bankers jumped ship with the news yesterday that the USA Fed policy is for ZIRP to continue to 2014. As far as I am concerned, it will continue to infinity. The front options expiry month of January saw its OI rise by 51 contracts despite only 1 delivery notice yesterday. We thus gained 50 contracts or 5000 oz of additional gold standing. The front delivery month of February saw its OI contract from 121,002 to 110,512 as all of these players rolled into April. The estimated volume today was a monstrous 316,070 contracts. The confirmed volume yesterday was also huge at 323,392. It seems that many are trying to locate as much physical as possible.

The total silver comex OI certainly did not follow in the footsteps of its older and wiser cousin, gold. Here the OI fell by 509 contracts from 103,025 to 102,516 despite the huge advance in silver yesterday and today. It looks like we had a few post-mortems for our bankers today. The front options expiry month of January saw its OI rise by 43 contracts despite 34 delivery notices. Thus 77 contracts or 385,000 additional oz of silver are standing in January. The next big delivery month is March and here we saw the OI remain relatively constant at 51,142 dropping by a little less than 500 contracts. The estimated volume today was very weak at 37,154. The confirmed volume yesterday was a lot better coming in at 55,886.
I have been telling you that the silver comex has been trading differently to gold for at least the last 3 months.
It seems that the high frequency traders are almost the entire volume at the comex and these guys are nothing but day traders. Thus silver can move in monstrous directions as the remaining longs are by definition are strong in nature and cannot be suckered into selling. The other issue is that Butler believes now that JPMorgan is now liquidating its short position and will soon be going long. This will be the end game as nobody will supply the paper short.

(courtesy ted Butler from his paid subscription. Special thanks to Ted and Ed Steer)


"If JPMorgan is not selling but is, in fact, buying, then a very different scenario could develop, similar to how I have speculated in the past. If JPMorgan is buying and not the technical funds, then a very different and bullish scenario emerges. If JPMorgan decides not to put its head back into the lion’s mouth and withdraws from manipulating silver, then a new silver chapter may have begun. Let me be clear – there is no way of determining for sure who is buying and selling today and this past Friday; only future COTs will reveal that. If it turns out that JPMorgan is buying back more of its short position on these rallies that would suggest much higher prices to come and maybe real soon. This goes to the heart of the silver manipulation. Take away the big silver short and you should take away the manipulation itself. I’m not saying that is the case, just that it might be. I would play it, as I always do, like it may be the end of the manipulat ion, simply because if it is, there will be little likelihood of second chances to get on board easily."
"That’s not to say that the commercials will roll over and play dead. I sense a profound lack of true liquidity since the MF Global disaster, in which the HFT operators are now responsible for an even higher share of total volume than before. I think that the HFT share of silver volume has approached 100% at times recently, rendering the silver market to its most illiquid state in my experience. More than anything else, this low true liquidity environment is behind the price spikes of Friday and today. In such a low liquidity environment we must be prepared for more price volatility, not less. We must be prepared for whatever may come, but we must also hang on to silver positions like never before. Be prepared for volatility that will rattle your bones. But volatility is a two-way street and up is one of the ways. So is up big."
end

SilverDoctors: Portuguese 10 Year Yield Passes 15%!

SilverDoctors: Portuguese 10 Year Yield Passes 15%!: The Portuguese 10 year yield passed 15% today for the first time , as Portugual has now officially morphed into Greece. The banking system ...

Portugal Downgraded to Junk; Bond Yields Soar; Record Spread vs. Germany; Portugal to Follow Greece Into Default Abyss

Portugal is poised to quickly follow Greece into the default abyss following a debt downgrade to junk status by the S&P on Friday.

The Wall Street Journal reports Portugal's Bond Yields Rise Sharply After Rating Cut To Junk

Portuguese borrowing costs rose sharply Monday as some investors were forced to sell their government bond holdings after Standard and Poor's Corp. downgraded the country to junk status late Friday.

It's Offical: S&P Announces Mass Downgrade Of Eurozone Countries

Eric Platt | Jan. 13, 2012, 4:38 PM

Standard & Poor's has officially cut the long-term credit rating of France and eight other Eurozone nations.

Italy, Portugal, Cyprus, and Spain saw two notch downgrades, while Austria, France, Malta, Slovakia, and Slovenia were dropped one level.

The ratings agency reiterated its ratings on Belgium, Estonia, Finland, Germany, Ireland, Luxembourg, and the Netherlands.