JPM Eligible Gold Plummets By 66% In One Day To Just Over 1 Tonne, Total Gold At Fresh All Time Low Submitted by Tyler Durden on 07/19/2013 16:31 -0400 For over a month, JPMorgan managed to mysteriously avoid matching up the gold held in its (world's largest) vault with the Comex delivery notice update. However, as of today, that particular can will be kicked no more. Starting yesterday, JPM reported that just under 12,000 ounces of Eligible gold (the same Registered gold that two days earlier saw its warrants detached and convert to eligible) were withdrawn from its warehouse 100 feet below CMP 1. But it was today's move that was the kicker, as a whopping 90,311 ounces of eligible gold were withdrawn, accounting for a massive 66% of the firm's entire inventory of non-Registered gold, and leaving a token 46K ounces, or a little over 1 tonne in JPM's possession. Needless to say, today's massive move which increasingly puts JPM's gold holdings in the danger zone vis-a-vis future delivery notices which just refuse to stop, has pushed total JPM vault gold to a new all time low of just 436k ounces, or a little under 14k tonnes with just 12 tonnes, or 390k ounces, of Registered gold left and rapidly draining. And to think that two years ago around this time JPM had over 3 million ounces of gold in its possession. Finally, those who believe there is a connection between the ongoing run on JPM's vault gold, the suppressed price of the metal, the redemption of Bundesbank gold, and the fact that 3M GOFO has now been negative for 10 straight days or the longest period in history it has been below zero, and indicating an unprecedented gold collateral shortage, you are correct. Finally, putting it all in context, this is what 1 ton of gold looks like in the real world courtesy of Demonocracy : Average: 4.98 Your rating: None Average: 5 ( 50 votes) !-- -- Tweet !-- - advertisements - .AR_2 .ob_empty {display: none;} .AR_2 .rec-link {color: #565656;text-decoration: none;font-size: 12px;} .AR_2 .rec-link:hover {color: #565656;text-decoration: underline;font-size: 12px;} .AR_2 {float: left;width:50%} .AR_2 li {list-style: none outside none !important;font-size: 10px;padding-bottom: 10px;line-height: 13px;margin:0;} .AR_2 .ob_org_header {color: #000000;text-decoration:bold; margin-left: 0px; font-size:14px;line-height:35px;} .AR_3 .rec-link {color: #565656;text-decoration: none;font-size: 12px;} .AR_3 .rec-link:hover {color: #565656;text-decoration: underline;font-size: 12px;} .AR_3 .rec-src-link {font-size: 12px;} .AR_3 li {padding-bottom: 10px;list-style: none outside none !important;font-size: 10px;line-height: 13px;margin:0;} .AR_3 .ob_dual_left, .AR_3 .ob_dual_right {float: left;padding-bottom: 0;padding-left: 2%;padding-top: 0;} .AR_3 .ob_org_header {color: #000000; text-decoration:bold; margin-left: 0px; font-size:14px;line-height:35px;} .AR_3 .ob_ads_header {color: #000000; text-decoration:bold; margin-left: 0px; font-size:14px;line-height:35px;} -- - advertisemen Login or register to post comments 33729 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: JPMorgan's Eligible Gold Plummets 65% In 24 Hours To All Time Low Investors Pick Physical Gold Over ETFs In Q1; Comex Registered Silver Just Hit A Fresh All Time Low 2 Year Drops To Fresh All Time Low Yield, Prepares To Breach 0.4% As Gold Touches On Fresh Record JPM Eligible Vault Gold Drops To Fresh Record Market Levitating Just Above 200 DMA, Gold Stopped Just Fresh Of New All Time High
Spot The Bubble: Average New Home Price Soars By Most Ever In One Month To All Time High Submitted by Tyler Durden on 05/23/2013 10:35 -0400 Census Bureau Reality Curious why in yesterday's FOMC minutes the following line " a few participants expressed concern that conditions in certain U.S. financial markets were becoming too buoyant" received special attention? Here is the reason: as the chart below shows, according to the census bureau , the average new home sale price just hit a new all time high, rising by a record 15.4% to a record $330,800. In a country in which real disposable consumer income is flat at best and in reality declining, it only makes sense that the average new home price just hit a level not seen since the prior credit-bubble fueled housing peak. Average new home sale price: And the sequential change in the average new home sale price: Obviously both of the above charts are justified by the average real disposable income per capita in the US: Or maybe not... Average: 4.333335 Your rating: None Average: 4.3 ( 9 votes) Tweet - advertisements - VectorVest Stock Analysis. Find out Whether a Stock is a Buy, Sell or Hold. Get your Free Stock Analysis simply by clicking here! Login or register to post comments 14818 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: Guest Post: It's Always The Best Time To Buy Guest Post: Will John Paulson Be Wrong This Time? Guest Post: The Unsafe Foundation of Our Housing 'Recovery' New Home Sales Plummet 13% To 284,000 Annualized Rate, 19K Actual Homes Sold Lowest Monthly Ever Public College Tuition Soars By Most Ever (Or Searching For Deflation In All The Wrong Places)
Job Creation Under Barack Obama: Less Than Meets The Eye? Submitted by Tyler Durden on 11/03/2012 18:34 -0500 Barack Obama BLS Bureau of Labor Statistics President Obama Recession In the aftermath of yesterday's better than expected jobs number there have been many analyses in the media on both sides of the aisle, either attacking or defending Obama's track record in creating jobs. All have come up with arguments which according to their authors, are solid and defensible. There is one analysis, however, which is missing, and that is a follow up of what we showed yesterday in " Chart Of The Day: America's Geriatric Work F(a)rce ." In it we demonstrated the very much "under the radar" schism of America's workforce since the NBER-defined official end of the recession in June 2009 into the " haves ", or those above 55, who have been able to get a job since the end of the recession, and the " have nots ", or all those in the labor force who have not been able to find a job. So how does this data look when extended to the beginning of Obama's term, or the 46 full months starting with his inauguration in January 2009, and continuing through the latest, October 2012 data point. The chart is presented below; you decide. And for those wanting a more granular breakdown, here it is by all the age categories tracked by the BLS. In summary: while those in the 55-69 age group have gained nearly 4 million jobs under President Obama, everyone else has lost just over 2.5 million. In other words, those aged 55 and over should be scrambling for "4 more years." Everyone esle... perhaps not so much. Average: 4.117645 Your rating: None Average: 4.1 ( 17 votes) Tweet Login or register to post comments 18339 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: Guest Post: Why I Don't Vote Presenting America's Political Apathy: Voter Turnout Rate 50% The CEO Letter Heard Around The World "Vote Obama; Lose Your Job" Guest Post: Want More Tax Revenue? Increase Jobs Not Rates Charles Ferguson: "Standing Behind Every Great Con Artist Is Someone Like Glenn Hubbard "
Diagnosing Liquidity Addiction Submitted by Tyler Durden on 06/22/2012 08:47 -0400 Central Banks Commercial Paper CRB CRB Index default Deutsche Bank Gross Domestic Product Lehman Market Crash Nominal GDP Primary Dealer Credit Facility recovery Over the last few weeks markets have recovered from the significant stresses that were building towards the end of May (until yesterday's slow realization). The recovery has been in no small part due to expectations of intervention and that fresh rounds of QE and their equivalents will soon be implemented around the developed world. Deutsche Bank believes that markets are now addicted to stimulus and can’t function properly without it as they show that the periods between central bank balance sheet activity have actually been fairly poor/average periods for risk assets over the last three years. There is little evidence yet to suggest that markets in this post crisis world have the ability to prosper in a period without heavy intervention, though empirically asset prices benefit from liquidity but that the environment remains fragile enough for them to struggle to maintain their levels when the liquidity stops. Finally, they note that while QE in the US was partly implemented to bring long-term yields down to encourage investors into riskier assets and help lower borrowing/funding rates, the evidence is actually contrary to this. Critically, they agree with us that the structural problems the West faces mean that QE and its equivalents and refinements will likely need to be around for several years to come to ensure that the financial system and its economies don’t relapse into a depressionary tail-spin. There is no evidence that we are currently close to being able to wean ourselves off our liquidity addiction. The hope would be that with further injections we can prevent the worst case scenario but the base case remains for the stress and intervention cycle repeating itself as far as the eye can see. Central banks still have much to do. Deutsche Bank: A World Addicted To Liquidity Risk assets before, during and after monetary stimulus in the US Here we focus on the performance of risk assets through QE1 and QE2 as well as through Operation Twist. For each program we look not just at the actual announcement dates and program start and finish dates but also the date when it might be argued that further stimulus started to be priced in. Below in Figure 1 we provide a brief description for each of the three programs along with the relevant dates and explanations for those dates. The Fed’s balance sheet In Figure 2, we first take a look at the Fed’s balance sheet growth since the crisis started. The shaded areas highlight the three phases of monetary stimulus that have taken place and we have split each of them into three sections, as described below. The period where we have argued that QE/stimulus started to be expected until it was actually announced. The period from the announcement date to the actual start date. The period from the start date to the end date. The first major step change occurred in the weeks immediately after the Lehman default where the Fed looked to provide short-term funding to the market as interbank lending ground to a halt. These facilities included the Primary Dealer Credit Facility, the Term Auction Facility, the foreign-exchange swaps with other central banks, the Commercial Paper Funding Facility and the various money market support facilities. After that, the two rounds of QE did see the balance sheet increase by several hundred Billion Dollars. However since QE2 officially ended on June 30th 2011 the Fed’s balance sheet has been broadly static which is understandable given that Operation Twist simply extends the duration of their balance sheet rather than increasing it. Equities and credit performance In Figure 3 and Figure 4 we look at the performance of equities and credit through each of the three distinct monetary stimulus programs. Highlighting these phases of stimulus as described above. The take away from all three programs is that both credit and equities definitely seemed to benefit from the stimulus as in general risk assets had been quite weak leading up to the stimulus before generally performing through much of the stimulus period. It’s also probably worth noting that the magnitude of the performance seems to have diminished with each round of QE/stimulus . Of perhaps more interest is that since QE2 ended almost exactly a year ago, the SP 500 has essentially been flat. One would have to say that balance sheet expansion has been more risk positive than simply Twisting. Commodities – Benefitting from balance sheet expansion but not from Twist? The story for commodities is fairly interesting. As we can see in Figure 5, focusing on the CRB index, commodities certainly seemed to benefit from the liquidity boost provided by both QE1 and QE2. It’s also interesting to note towards the end of both QE1 and QE2 commodities started to weaken quite aggressively perhaps indicating their correlation to actual injections of liquidity. Indeed the period around Operation Twist has seen the CRB index fall by around 20%. Perhaps this is not entirely surprising. If our hypothesis about liquidity being the main reason for the rally during QE1 and QE2 then the fact that Operation Twist didn’t actually add any more liquidity could be a key reason for the lack of positive momentum for commodities . Treasuries – A confusing picture With regards to 10 year Treasuries the picture is slightly more confusing. The original broad intention of QE was to bring down yields to encourage money into riskier assets and investments. Figure 6 shows that QE1 actually saw yields rise sharply from around 2% as speculation of QE started to 2.5% on the announcement to 4% as the first round ended. This perhaps shows that the market believed that QE was very positive for the economy which outweighed the reduction of supply of Treasuries in the market place . Like with QE1, QE2 actually sent yields higher again to around 3.75% within 6 months as hope again prevailed that QE could restore health to the economy . However the data turned in early 2011 and yields fell back to around 3% by the time QE2 ended. Immediately after QE2 ended we then saw 10 year yields rally to below 1.65% in less than 3 months which repeated the extreme rally seen after QE1 ended. This is pretty much where yields are today as Operation Twist hasn’t had any lasting impact on yields. So overall, although QE was supposed to lower yields, the two largest rallies of the last 3 years have occurred in the period between QE1 and QE2 and then the period between QE2 and Operation Twist. The US economy before, during and after monetary stimulus We now turn our attention to how the US economy has reacted to the various stimulus programs. In order to have a fairly timely indicator of economic activity we have used the ISM manufacturing PMI, showing its progression through the various stages of QE. Focusing initially on QE1 we can see that the US economy saw a strong recovery based on the ISM as it rose from below 35 to around the 60 level. Where QE1 was very successful was that it pulled the economy out of a potential depressionary tailspin. For both QE2 and Operation Twist although the ISM has remained above the important 50 level throughout we have not seen the same kind of improvement in the PMI. In fact during QE2 it actually fell from around 60 to the low 50s where it broadly stands today. Indeed if we look back through history this recovery is one of the weakest on record in spite of all the Fed actions, plus the three largest peacetime deficits in the US on record. Figure 8 reminds us that only the recovery of 1927 (that ran into the 1929 stock market crash) has been weaker than this one in Nominal GDP terms. This probably tells us that a) the structural problems that encouraged QE were much larger than most believed at the time and b) that QE has limited power to actually power growth forward in such an environment. With regards to the European economy, it’s also interesting that the PMIs did pick up over the period of the LTROs before falling again immediately after their completion. Europe more than anyone is perhaps addicted and in need of constant intervention to prosper. Average: 4.857145 Your rating: None Average: 4.9 ( 7 votes) Tweet Login or register to post comments 6317 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: San Fran Fed Defends QE2 By Comparing It To Gold Scramble Prevention Contraption "Operation Twist" BofA's Jeffrey Rosenberg Blasts QE2, Says It Will Lead To Bubbles And Further Confidence Destruction Why QE2 + QE Lite Mean The Fed Will Purchase Almost $3 Trillion In Treasurys And Set The Stage For The Monetary Endgame Rosenberg Joins Chorus Of Those Accusing Bernanke Of Asset (Read Stock) Price Targeting Hilsenrath Speaks: "Fed Prepares To Act"
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