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Duncan |
12-Dec-08, 02:58 PM (GMT)
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"headlock" |
http://www.dailymail.co.uk/news/article-1094162/Lib-Dem-MP-wasted-brigade-time-calling-999-boiler-making-noises.html?ITO=1490
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What If They Returned To The Gold Standard? (They can't, but we can.) Silver Stock Report Jason Hommel December 10, 2008 What if the Government went back on a Gold Standard?
To do that, they would need to use their gold to pay off all their debt. That would give a price of gold if the U.S. Government backed the dollar with gold. We only need to know two numbers, and do a simple problem of division. First number: The national debt.
www.treasurydirect.gov/NP/BPDLogin?application=np The government tells us this is:
$10,656,119,227,403 That's 10.6 trillion dollars. Second number: The U.S. Gold stock.
www.fms.treas.gov/gold/current.html The government tells us this is:
261,498,899 ounces of gold That's 261 million ounces of gold. So $10,656,119,227,403 divided by 261,498,899 = $40,750/oz. of gold. In theory, if the U.S. government had the restraint to stop issuing any kind of new debt, and if there was a runaway hyperinflation, the government could credibly stop any sort of runaway gold price by offering gold at a price of $40,750/oz. That's the price that could cap the gold market if the U.S. government sold all their gold to all their bond holders. At that point, all new taxes would have to be levied in gold, not dollars. It's important to realize that any effort by the government to sell gold below that price will ultimately fail, and will eventually cause the gold price to go even higher than that price, as that would only deplete their limited stock of gold at inappropriate price levels. The main point is that T-Bills, which are perceived as the safest haven around, are not safe. They are only backed up by gold at a rate of $40,750 per oz. With gold trading today at around $800/oz., the U.S. gold backs less than 2% of the value of the issued bonds, or stated another way, $800 is 2% of the price of $40,750. Gold, at today's prices, is clearly a far superior safe haven. And silver, which is in short supply, due to relentless industrial demand that has consumed nearly all world silver supplies, is even safer. Clearly, the government cannot offer gold at $40,750 per oz. today. There would be no buyers. But, over time, the gold price may rise to such levels, and beyond, as a generation of people slowly wake up to the monetary fraud of the last 29 to 95 years, depending on whether you count from 1980 or 1913. I am not an advocate of a return to a gold standard, where gold backs up paper money. I'm in favor of a return to using silver and gold coins and bars as money, as measured by weight, and traded at their intrinsic value according to the price in an open and free market place.
Sincerely,
Jason Hommel
www.seekbullion.com
www.silverstockreport.com
www.bibleprophesy.org
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http://www.gold-eagle.com/editorials_08/orlandini121108.html
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December 12, 2008
Lawyer Charged With Huge Fraud Is Denied Bail
By WILLIAM K. RASHBAUM
A prominent New York lawyer arrested this week on fraud charges ranks as “a Houdini of impersonation and false documents” who used guile, a box of cellphones and a series of phony Web sites and e-mail addresses to steal more than $380 million, a federal prosecutor said on Thursday. The prosecutor, Jonathan R. Streeter, made the allegations in United States District Court in Manhattan, where he successfully argued that the lawyer, Marc S. Dreier, 58, should be held without bail on wire and securities fraud charges. Mr. Dreier is accused of cheating hedge funds and investors through the brazen use of bogus identities and documents. Since his arrest, all of Mr. Dreier’s known assets in the United States, and those of the law firm that bear his name, have been put under the control of a receiver, Mr. Streeter, an assistant United States attorney, said. But, he said, investigators believed Mr. Dreier might have hidden assets overseas. “He has absolutely no incentive to stay in the United States; his life has completely unraveled,” Mr. Streeter told United States Magistrate Judge Douglas F. Eaton. “He has gone from being an extremely rich man that flies around in private jets and meets with rich and famous people, to a person who has absolutely nothing and is facing potentially the rest of his life in jail.” Judge Eaton concluded that the high-living Harvard- and Yale-educated lawyer posed “an extraordinary risk of flight” and rejected for now a proposal by Mr. Dreier’s defense lawyer that his client be held under house arrest at his home in Quogue, N.Y., or his triplex apartment in Manhattan. The defense lawyer, Gerald L. Shargel, had asked the judge to release him on a $10 million bond, guaranteed by his 19-year-old stepson and 85-year-old mother, whom he said Mr. Dreier would be loath to saddle with such a debt. Mr. Shargel suggested placing his client under the supervision of armed guards to ensure he complied with a series of conditions, including no use of a computer or a BlackBerry. But Mr. Streeter described the evidence in the case as overwhelming, characterized Mr. Dreier as “a person of exceptional ingenuity and exceptional resourcefulness,” and said he “is in a desperate situation and the only way out of that desperate situation is for him to flee.” Mr. Dreier, the owner and founder of Dreier L.L.P., which employs 250 lawyers, was charged in a complaint unsealed on Monday with stealing about $113 million from hedge funds since October. But the government on Thursday told Judge Eaton that the losses were climbing. “He faces almost certain conviction, given the mountains of evidence against him that are growing every day,” Mr. Streeter said. “As of this morning, and the information keeps coming into us, the actual loss in this case is over $380 million dollars.” In arguing for home detention, Mr. Shargel said Mr. Dreier — who was arrested in Canada on a related matter five days before his arrest in New York — had returned to face likely charges even though he could have stayed and fought extradition, a process that could have taken up to two years. “Mr. Dreier rejected that option,” he said. Clad in a blue prison smock and orange slip-on sneakers, his salt-and-pepper hair matted and unruly, Mr. Dreier appeared concerned during the hourlong proceeding as he sat beside Mr. Shargel, sometimes leaning his chin into his hand, with his index finger across his lips. Mr. Shargel said his client had been held in solitary confinement since his arrest, had been allowed to shower only once, and had no reading material, no phone calls and no visitors. Mr. Shargel said prison officials had explained the treatment by saying that they did not have a bed in the general population section and needed to make sure Mr. Dreier was not a gang member. Mr. Dreier was initially arrested in Canada on Dec. 2 after an elaborate ruse to sell $45 million of the phony promissory notes there collapsed, according to a Toronto police department document. After meeting with a lawyer for a teachers’ pension plan on another matter and obtaining that man’s business card, Mr. Dreier asked to use a phone and was ushered into a conference room by a secretary, according to the document. A short time later, he used the room to meet with the representative of a hedge fund whom he had previously invited to the offices, and impersonated the lawyer whose card he had just been handed. But the scheme quickly unraveled, authorities said, when the hedge fund representative and the secretary felt something was amiss, and Mr. Dreier was arrested soon after. He was held in a Toronto jail until his arraignment last Friday and he returned Sunday night to New York, where he was arrested by federal authorities. While jailed in Toronto, Mr. Dreier called the Dreier L.L.P. controller several times and asked him to move millions of dollars from the firm’s escrow accounts into Mr. Dreier’s personal account, but the man refused, Mr. Streeter said. Mr. Streeter, and court records, say Mr. Dreier was able to persuade the controller to transfer his call to the firm’s banker, who transferred $10 million from an escrow account into Mr. Dreier’s personal account. It remains unclear whether the $10 million was frozen as a result of Mr. Dreier’s arrest, or whether he moved it again to a financial institution outside the United States. But Mr. Streeter emphasized that a review of Mr. Dreier’s assets — artworks, homes, and law firm assets — “do not come up to $380 million, meaning that there is a large amount of money that is completely unaccounted for.” Jason Grant contributed reporting.
Copyright 2008 The New York Times Company
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December 12, 2008
Prominent Trader Accused of Defrauding Clients
By DIANA B. HENRIQUES and ZACHERY KOUWE
On Wall Street, his name is legendary. With money he had made as a lifeguard on the beaches of Long Island, he built a trading powerhouse that had prospered for more than four decades. At age 70, he had become an influential spokesman for the traders who are the hidden gears of the marketplace. But on Thursday morning, this consummate trader, Bernard L. Madoff, was arrested at his Manhattan home by federal agents who accused him of running a multibillion-dollar fraud scheme — perhaps the largest in Wall Street’s history. Regulators have not yet verified the scale of the fraud. But the criminal complaint filed against Mr. Madoff on Thursday in federal court in Manhattan reports that he estimated the losses at $50 billion. “We are alleging a massive fraud — both in terms of scope and duration,” said Linda Chatman Thomsen, director of the enforcement division at the Securities and Exchange Commission. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors.” Andrew M. Calamari, an associate director for enforcement in the S.E.C.’s regional office in New York, said the case involved “a stunning fraud that appears to be of epic proportions.” According to his lawyers, Mr. Madoff was released on a $10 million bond. “Bernie Madoff is a longstanding leader in the financial services industry,” said Daniel Horwitz, one of his lawyers. “He will fight to get through this unfortunate set of events.” Mr. Madoff’s brother and business colleague, Peter Madoff, declined to comment on the case or discuss its implications for the Madoff firm, which at one point was the largest market maker on the electronic Nasdaq market, regularly operating as both a buyer and seller of a host of widely traded securities. The firm employed hundreds of traders. There was some worry on Wall Street that Mr. Madoff’s fall would shake more foundations than his own. According to the most recent federal filings, Bernard L. Madoff Investment Securities, the firm he founded in 1960, operated more than two dozen funds overseeing $17 billion. These funds have been widely marketed to wealthy investors, hedge funds and other institutional customers for more than a decade, although an S.E.C. filing in the case said the firm reported having 11 to 23 clients at the beginning of this year. At the request of the Securities and Exchange Commission, a federal judge appointed a receiver on Thursday evening to secure the Madoff firm’s overseas accounts and warned the firm not to move any assets until he had ruled on whether to freeze the assets. A hearing on that request is scheduled for Friday. Regulators said they hoped to have a clearer picture of the losses facing investors by that court hearing. “We have 16 examiners on site all day and through the night poring over the records,” said Mr. Calamari of the S.E.C. The Madoff funds attracted investors with the promise of high returns and low fees. One of Mr. Madoff’s more prominent funds, the Fairfield Sentry fund, reported having $7.3 billion in assets in October and claimed to have paid more than 11 percent interest each year through its 15-year track record. Competing hedge fund managers have wondered privately for years how Mr. Madoff generated such high returns, in bull markets and bear, given the generally low-yielding investment strategies he described to his clients. “The numbers were too good to be true, for too long,” said Girish Reddy, a managing director at Prisma Partners, an investment firm that invests in hedge funds. “And the supporting infrastructure was weak.” Mr. Reddy said his firm had looked at the Madoff funds but decided against investing in them because their performance was too consistently positive, even in times when the market was incredibly volatile. But the essential drama is a personal one — one laid out in the dry language of a criminal complaint by Lev L. Dassin, the acting United States attorney in Manhattan, and a regulatory lawsuit filed by the S.E.C. According to those documents, the first alarm bells rang at the firm on Tuesday, when Mr. Madoff told a senior executive he wanted to pay his employees their annual bonuses in December, two months early. Just days earlier, Mr. Madoff had told another senior executive he was struggling to raise cash to cover about $7 billion in requested withdrawals from his clients, and he had appeared “to have been under great stress in the prior weeks,” according to the S.E.C. complaint. So on Wednesday, the senior executive visited Mr. Madoff’s office, maintained on a separate floor with records kept under lock and key, and asked for an explanation. Instead, Mr. Madoff invited the two executives to his Manhattan apartment that evening. When they joined him there, he told them that his money-management business was “all just one big lie” and “basically, a giant Ponzi scheme.” The senior employees understood him to be saying that he had for years been paying returns to certain investors out of the cash received from other investors. In that conversation, according to the criminal complaint, Mr. Madoff “stated that he was ‘finished,’ that he had ‘absolutely nothing.’ ” By this account, Mr. Madoff told the executives he intended to surrender to the authorities in about a week but first wanted to distribute approximately $200 million to $300 million to “certain selected employees, family and friends.” On Thursday morning, however, he was arrested on a single count of securities fraud, which carries a maximum penalty of 20 years in prison and a maximum fine of $5 million. According to the S.E.C., Mr. Madoff confessed to an F.B.I. agent that there was “no innocent explanation” for his behavior and he expected to go to jail. He had lost money on his trades, he told the agent, and had “paid investors with money that wasn’t there.” Although not a household name, Mr. Madoff’s firm has played a significant role in the structure of Wall Street for decades, both in traditional stock trading and in the development of newer electronic networks for trading equities and derivatives. In building those new trading networks, his firm had formed partnerships with some of the largest brokerage businesses on Wall Street, including Goldman Sachs and Merrill Lynch. Mr. Madoff founded Bernard L. Madoff Investment Securities in 1960 and liked to tell interviewers about earning his initial stake by working as a lifeguard at city beaches and installing underground sprinkler systems. By the early 1980s, his firm was one of the largest independent trading operations in the securities industry. The company had around $300 million in assets in 2000 at the height of the Internet bubble and ranked among the top trading and securities firms in the nation. Mr. Madoff ran the business with several family members, including his brother Peter, his nephew Charles, his niece Shana and his sons Mark and Andrew. Vikas Bajaj and Gretchen Morgenson contributed reporting.
Copyright 2008 The New York Times Company
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Duncan |
12-Dec-08, 03:10 PM (GMT)
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2. "Royal Dutch Shell's Dutch pension fund has fallen into deficit as share market turmoil knocked 40 percent off the fund's value" |
http://www.safehaven.com/article-12061.htm\
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\ December 12, 2008 It's Always About the Money
by The Mogambo Guru
"'It is always about the money!' for me, and you are hoping that I will use my dictatorial powers to get your money back for you, again proving that 'It is always about the money!' with you, too! Hahaha!"
Since gold has fallen so far, so quickly, for so little reason, the future for gold looks increasingly good, too, as the future of the dollar and the economy looks increasingly bad, and asset-type things (like houses and stocks) falling in value certainly looks deflationary, like the $30 trillion that has been lost in the world's stock markets in the last year, which may have been what prompted Howard Ruff of the The Ruff Times newsletter to say, "It is axiomatic that deflation is the spawning ground for inflation, as the government doesn't know how to fix deflation, depression or recession other than to throw money at it. The creation of all the money floating through the economy will eventually meet all the conditions for inflation." Exactly! But before I could take over and start with my usual rant about inflation and why you should buy gold as a result, Mr. Ruff cleverly cuts me off by saying that "Gold and silver will bounce back when inflation reasserts itself." Well, inflation "reasserting itself" is a given, as far as I am concerned! Hell, the money and credit necessary to finance all those higher prices is already being created, and if you don't believe me, then explain how there is already an estimated $8 trillion in new government spending and lending announced, in an economy whose GDP is a measly $13 trillion to start with! This means a budget deficit of over 50 percent of GDP! 50 percent! Yikes! Unheard of! That's the kind of astounding news that makes you run screaming into your Mogambo Blast-Proof Bunker (MBPB), locking the doors behind you in a panic, mentally making plans to get more physical gold bullion against the day when this Whole Stinking Mess (WSM) blows up. And that kind of panicky, mama's boy, gold-buying cowardice (The Mogambo Way (TMW)!) may be getting more popular than ever, as Antal Fekete of professorfekete.com reports that "According to the December 3rd Comex delivery report, there are 11,759 notices to take delivery. This represents 1.1759 million ounces of gold, while the Comex-approved warehouses hold 2.9 million ounces. Thus 40% of the total amount will have to be delivered by December 31st." Not being an expert on Comex, commodity futures, or much of anything else, or even being sure that I have the facts, if any, I am nevertheless sure that corruption and fraud permeates the Comex like, umm, the apparently eye-watering stink of my feet whenever I take my shoes off (according to my wife and family, although the cat often seems fascinated with the novelty), just like the stench of corruption has permeated everything else, which is always what you get at the end of long booms financed by over-expansion of the money supply. And that is why I am proposing that everyone should send me as much cash money and gold as they can, addressed to "Occupant", priming me with huge, blatant bribes to take command and lead this proud country in a Second American Revolution to replace a hateful government that is "eating out our substance", which was the cause of the first American Revolution, which proves that "It is always about the money!", which is also why I am running this "Bribe The Mogambo" scam for all it is worth, again proving that "It is always about the money!" for me, and you are hoping that I will use my dictatorial powers to get your money back for you, again proving that "It is always about the money!" with you, too! Hahaha! Well, I can see that Mr. Fekete is suddenly anxious to get away from being seen with a raving revolutionary anarchist con-man swindling little cheating rat-like bastard and world's worst husband and father. So, prior to retreating, he supplies the synopsis, which is, "Since not all the gold in the warehouses is available for delivery, Comex supply of gold falls far short of the demand at present rates. Futures markets in gold are breaking down. Paper gold is progressively being discredited." Then he was suddenly gone, but from the gist of it, it looks like there could be some fireworks in gold within a matter of days or weeks, where the best-case scenario is that gold goes to a zillion dollars an ounce, finally giving us gold bugs the money to skip town and get the hell away from this sleepy little nowhere burg and start over, perhaps to find real love and purpose in life, where thoughts of armed rebellion seem suddenly so far, far away! Whee! P.S. To get The Daily Reckoning sent directly to your inbox, sign up for our free email newsletter, or if you prefer to use RSS, subscribe to the Daily Reckoning RSS feed. Richard Daughty, the angriest guy in economics
The Mogambo Guru Richard Daughty is general partner and COO for Smith Consultant Group, serving the financial and medical communities, and the editor of The Mogambo Guru economic newsletter - an avocational exercise to heap disrespect on those who desperately deserve it. The Mogambo Guru is quoted frequently in Barron's, The Daily Reckoning and other fine publications. Copyright © 2005-2008 Richard Daughty
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http://www.safehaven.com/article-12060.htm \
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Duncan |
12-Dec-08, 05:46 PM (GMT)
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4. "Madoff's auditor, Friehling & Horowitz, operated from a 13-by-18-foot office" |
http://news.goldseek.com/BullionVault/1229089826.php\
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\ http://news.goldseek.com/GoldSeek/1229089673.php \
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\ The Fed’s AIG Scam and the Price of Gold
By: Michael S. Rozeff -- Posted Friday, 12 December 2008 | Digg This Article | Source: GoldSeek.com Lee Strasberg has that unforgettable line in Godfather II about "small potatoes." That's what the Illinois corruption case is compared to the Fed's hanky-panky with AIG. Here are the details, in simple language, of how that scam worked. AIG had insured bond-like securities called CDOs against default. Default on a bond occurs when the issuer of the bond can’t make the promised interest payments. AIG, which is an insurance company, had collected insurance premiums from the buyers of these bonds for insuring them against the possible default of those bonds. That insurance it sold is called a "credit default swap," or CDS. The buyers of the insurance were banks like France's Societe Generale, Germany's Deutsche Bank, France's Credit Agricole, and Merrill Lynch. The face value amounts were large, some $65 billion. When the loans that were packaged into the CDOs began to go bad and fail to pay interest, these CDOs fell in price by half. That meant that AIG had to put up earnest money as a sign that they'd make good on their insurance. These are called collateral payments. AIG ran out of cash to make these payments. These kinds of payments are a common and legitimate business practice in financial matters in order to control risk. For example, in borrowing to buy stocks, the broker calls for more margin (money) if the stocks decline by a certain amount, in order to make sure that the borrower-buyer will be able to pay the purchase price. Enter the Fed. The Fed formed a company with AIG called Maiden Lane (it's a real street near Wall Street). The Fed then purchased the CDOs from these and other banks at their full insured value. The Fed became the insurer of last resort. When the Fed buys Treasury bills, it gets something of value that is backed by the Treasury's taxes. In the AIG case, the Fed has overpaid for the CDOs and given away its currency to the insured banks. The Fed has made good on bets made by a private company. It has the legal right to do this under the Federal Reserve Act, since it can accept the notes of a private corporation. This shows the Fed’s enormous power. Who gains? Obviously, the banks that held the CDOs are the main gainers. The stockholders, bondholders, and depositors of these banks gain. The stock of Deutsche Bank was falling between September 10 and 17. It fell from $85.61 to $70.40. On September 18, the stock jumped to $83.86, a very unusual price increase. Deutsche Bank has been a large beneficiary of the Fed’s largesse. This is not the whole story, however. The results of the Fed’s action had more general effects. All or almost all banks showed similar price movements at these dates, even banks that probably would not be selling CDOs to the Fed. The Fed’s action had a systemic impact. For example, the regional bank index in the U.S. rallied from $35 to $41 on September 18. Despite the Fed’s actions, it appears that the impact has been temporary or that other events since September have dragged down bank stock values again. Deutsche Bank stock is now $36.75, and the regional bank index (KRE) has fallen from $41 to $28. Bank of America is now $16.69, down from $36.65 on September 19. Who loses? Everyone who holds Federal Reserve notes loses. This Fed operation is like a company that gives away its stock to a select group of recipients. The rest of the stockholders discover that the stock has been, in effect, split. There are more shares outstanding but the firm's assets haven't changed. The result is that the share price falls. In this case, the value of the dollar falls. Did the value of the dollar fall? Yes! The AIG takeover and Fed's participation occurred around September 16–17, 2008. On September 17, the price of gold had an extraordinary price rise from about $770 to almost $860. The following day, it settled back to $825. (It is common in financial research to use a two-day window to evaluate the impact of an event.) Traders in markets are generally quick to evaluate and impound public information into speculative prices. This is an example. The traders attempt to assess the implications of events. If the Fed issued $65 billion of new currency as compared with its $832 billion at that time, the dilution would be 7.8 percent in the value of a dollar. At the $825 price, gold went up by 7.1 percent. We are in the ballpark of understanding why this jump in gold price occurred when it did and in the amount that it did. Mind you, traders would be attempting to evaluate not just this particular bailout but also future bailouts. Suppose that the Fed’s holdings of CDOs work out to be even worse investments than expected. The Fed will then be writing off bad debts, and they will show up as reductions in its capital account. This will make the price of gold rise further. On the other hand, if these holdings turn out to provide better payoffs than expected, then gold may fall in reflection of that fact. This analysis gives us some confidence in understanding the pricing of gold versus the dollar. The Fed has exploded its balance sheet. This means it has taken on a huge increase in loans. How good are those loans? That is what traders are evaluating. If these are bad loans or if traders get information that these loans are worse than they thought, then it means dilution of the currency. The result will be that gold’s price will rise. If these are good loans or if traders evaluate ongoing information as suggesting that these loans are better than they expected, then gold’s price will fall. The existing price of gold reflects the market’s current consensus expectations about the strength of the loans that the Fed has made. The gold price will move up and down on any news about the quality of these loans and on any news that the Fed is making new loans. It will be evaluating the quality of any new loans. These considerations are by no means the only events that affect the price of gold against the dollar, but they are important ones as the reaction to the AIG bailout shows. December 12, 2008 Michael S. Rozeff is a retired Professor of Finance living in East Amherst, New York.Copyright © 2008 LewRockwell.com
-- Posted Friday, 12 December 2008
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\ Horlick falls victim to Madoff ‘fraud’
By James Mackintosh
Published: December 12 2008 15:16 | Last updated: December 12 2008 15:16
Nicola Horlick’s Bramdean Alternatives emerged on Friday as a prominent victim of the alleged $50bn fraud by Bernard Madoff, when the listed investment fund revealed almost 10 per cent of its investments were exposed to the New York broker. Bramdean, founded by Ms Horlick – known as “superwoman” when she ran SG Asset Management after having five children – said it had 9.5 per cent of its assets in two funds which placed money with Bernard L Madoff Investment Securities. EDITOR’S CHOICE
Madoff faces securities fraud charge - Dec-12 FT Alphaville: He Madoff with how much? - Dec-12 Madoff complaint - Dec-12 SEC release - Dec-12 SEC statement - Dec-12 Mr Madoff, chairman of the Nasdaq stock market in the early 1990s, was charged with a multi-billion dollar fraud on Thursday in the US. According to prosecutors he told staff the fraud was at least $50bn through a Ponzi scheme, similar to a pyramid scheme. Several hedge fund investors said they had examined more than a dozen funds which invested with Madoff Securities – such as Fairfield Sentry, Kingate and Herald USA – but rejected them because Madoff did its own valuations and its own custody. “We always knew there was a problem,” said one hedge fund investor who declined to put money in. “The numbers were too good.” But many others invested in Madoff, including Tremont, the fund of hedge funds. Fairfield Sentry had $7.28bn of assets last month, according to industry data, while Kingate Global had $2.76bn. Both reported profits for the year, with Fairfield up 5.48 per cent for the year to last week, and Kingate Global up 7.6 per cent. Structured “notes”, typically sold to wealthy individuals, with returns linked at least in part to funds which invested with Madoff were sold by Spanish bank BBVA, Zurich-based Neue Privat Bank and Vienna’s Bank Medici, among others. Bramdean said it invested in Defender and Rye Select Broad Market XL, both of which invested with Madoff Securities. The $380m Defender fund placed the majority of its assets with Mr Madoff’s firm, according to Bramdean. In its annual report it described the fund as a “low-risk, high-liquidity” way to use cash waiting to commit to private equity. The $330m Rye Select Broad Market XL was part of Bramdean’s core portfolio of hedge funds, and was described as a three times leveraged version of a “very conservative split-strike strategy – which consists of the purchase of a basket of equities, the purchase of a put option and the sale of a call option”. There was no mention of Mr Madoff’s firm, although hedge fund investors said Rye was well-known as one of a plethora of funds which invested in Madoff. According to Bramdean, “Madoff Securities implements a strategy that consists of a long position in a basket of S&P 100 shares and an index option strategy against these shares (bull spread).” Bramdean, BBVA and Neue Privat Bank did not immediately return calls. Bank Medici said it was “evaluating facts working together with our legal counsel”. Copyright The Financial Times Limited 2008
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So will Manchester have to vote again?
John Redwood's Diary 12/12/2008 16:24 John Redwood Blog Comments
People are so often great. This time they have voted down the Congestion charge in Manchester. They dared to vote down a £1.6 billion “bribe” - more public spending which of course would all be borrowed and which the people of Manchester and elsewhere would have to pay back with interest sometime. Great news. All this will come as a huge surprise to many of my MP colleagues who still bellieve people want all this public spending on the never never, more than they want more money in their own pocket to pay the gas bill, the mortgage and for the family car. Labour especially is always complaining if Conservatives do not approve every extra penny of borrowed money, even when it is being wasted in a most obvious way as with the VAT cut, unelected regional government, ID computers and the like. They need to think again. Or will the people of Manchester have to vote again, as they got it wrong.? Will Labour adopt EU style democracy, where you have ballot by exhaustion till they get the result they want? Or will we have Lab style democracy, where you vote down regional government one day, and are told they will keep it on an unelected basis the next ! \
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http://www.24hgold.com/viewarticle.aspx?rss=true&langue=en&articleid=353436_Trending+Toward+Success
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Investor Steinhardt asks who are the villains?
Wed Dec 10, 2008 3:20pm EST
By Herbert Lash
NEW YORK (Reuters) - A failure to prosecute the "villains" responsible for the financial crisis that brought the United States to its knees will leave the country without the moral compass needed to avert future crises, a Wall Street luminary said. Pioneer hedge fund manager Michael Steinhardt is angry that the bailout of America is eroding the nation's capitalist ethos while those whose deeds crippled the U.S. economy suffer scant opprobrium, their names still untarnished. "Something really went wrong here. We're about to enter a period where our budget deficit will dwarf anything we've seen before," Steinhardt told the Reuters Investment Outlook Summit in New York. "What we really needed a long time ago was a recognition that there were villains apace. The evils of the financial system should have been recognized long before this," said Steinhardt, who no longer manages billions of dollars but whose counsel is sought on Wall Street and among select politicians. While scornful of the financial executives who should have known better, he also belittled Washington for its lack of leadership and for not spelling out what the future beholds. The current and former Federal Reserve chairmen have proved ill-prepared for the job, said Steinhardt, a former chairman of the Democratic Leadership Council, where he helped promote the career of Bill Clinton before he became president. Of former Fed Chairman Alan Greenspan, often criticized for keeping interest rates so low that they sparked the housing bubble, Steinhardt said he may have been stupid for a long time, "but he wasn't pernicious." Current Fed chief Ben Bernanke is little better. "When you see what Bernanke said five, four months ago, it's laughable," he said. "So Bernanke is not a villain but was he prepared for what has happened here? Not in the slightest." Steinhardt, however, said Americans themselves must share the blame for running away from the debacle and for not questioning the enormous public debt the U.S. government is about to assume. "If you cannot accept short-term pain, then you do all sorts of things to coat reality, to pretend, to fabricate, to lie. That is what has happened in American business in the last 10 years," he said. Steinhardt, who now dedicates his time to philanthropy, still hues to the almost impossible standards that made him a legend. His Steinhardt Partners hedge fund returned an annual 24.5 percent after fees over 28 years before he shut the fund in 1995. Steinhardt is aware of scandal and reputation. His firm was stung by a federal investigation into allegations he and others, including Salomon Brothers, tried to corner the two-year U.S. Treasury market in the early 1990s. Steinhardt denied any wrongdoing, and paid a fine and fees of more than $70 million to settle the case. Steinhardt asked that if the government and Americans are unwilling to prosecute by law, what are the consequences of not being responsible and holding the culprits up for contempt? "The question is, What's going to come of this, if there are going to be no villains?" he said. "Is Hank Greenberg a villain?" Steinhardt said, referring to the former chief executive of insurer American International Group (AIG.N: Quote, Profile, Research, Stock Buzz), recipient of a $152 billion federal bailout after it suffered massive losses mainly on complex securities tied to mortgages that had declined in value. He rattled off other names: James "Jimmy" Cayne, former CEO and chairman of defunct investment bank Bear Stearns Cos, whose unsustainable leverage in two failed hedge funds sparked the crisis in summer 2007. And Richard Fuld, ex CEO of failed investment bank Lehman Brothers Holdings Inc. (LEHMQ.PK: Quote, Profile, Research, Stock Buzz), whom Steinhardt said he saw last week in a restaurant "happy as a hero, blowing kisses." Finally, he asked, referring to the senior counselor of Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and a former Treasury secretary under Clinton. "Is Bob Rubin a villain? Still at Citibank? Is he a villain? You can't name a villain? Is this a villain-less debacle?" Although a friend of Clinton, Steinhardt knocked Barack Obama's pick of ex-Clinton officials for key positions in his administration. The choices reveal a deep lack of substance on the president-elect's part, he said. "We have a new president who I find to be an absolute tabula rasa in terms of his knowledge of anything," he said, referring to Obama as a blank slate. "Pay attention to what Obama says and you will find he hardly ever says anything of consequence." Steinhardt also railed against Congress, where the quality of intellect "is not exactly awing." "It seems to me that the intellectual level that we are surrounded with both in government and in the industry is exceptionally low at the moment, it makes me angry." (Editing by Leslie Adler \
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http://news.goldseek.com/Zealllc/1229102465.php
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\ Madoff: Effectively Unaudited
Portfolio.com: Market Movers 12/12/2008 17:00 Felix Salmon
Floyd Norris asks, of Bernie Madoff: I assume his funds' books claimed to be audited. Who were the auditors? How were they fooled? It turns out that investor Jim Vos already looked into that: Madoff's auditor, Friehling & Horowitz, operated from a 13-by-18-foot office in Rockland County, New York, a small operation for the auditor of such a large firm. In other words, Madoff might as well have got a chimpanzee to audit the books, for all the checks and balances that Friehling & Horowitz provided. Which, of course, is why he chose them in the first place. I'm sure they were well compensated for not asking too many awkward questions; it would be nice if they, too, go to jail. Related Links
Madoff: The 0-and-0 Hedge Fund Manager
Where Was the S.E.C.?
It's a Mad, Mad, Mad, Madoff World
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Duncan |
13-Dec-08, 05:06 AM (GMT)
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6. "Bamboozled" |
Dec 12 2008 12:39PMMore on Gold Backwardation Over the last few weeks, there have been a lot of articles on the Internet about backwardation, i.e., when the price of commodities for delivery today is higher than the price of commodities for delivery in the future. Like nearly all the things on the Internet, most of what was written is useful, but some of it is total rubbish, and it takes time to sort through to find the gems from the rest. I offer the following in the hope that it clears up some of the confusion that has arisen about backwardation as well as to provide some insight into today’s gold market. Backwardations are no big deal in most commodities, but they are indeed a very big deal for gold. Since I started following gold in the 1970s, I can recall seeing a gold backwardation against the US dollar only three times. Fortunately, we can pinpoint the exact dates from data made available by the London Bullion Market Association, which regularly posts the “GoFo” (gold forward) interest rate at its website. http://www.lbma.org.uk/?area=stats&page=gofo/2008gofo
http://www.lbma.org.uk/stats/goldfwds The first occurrence was November 29, 1995. That backwardation lasted for a day and was probably the result of a hedge buy-back by Barrick Gold completed then (one was announced by it shortly thereafter). The next occurrence lasted for two days, September 29-30, 1999, after several central banks announced the Washington Agreement on Gold. That accord set off a mad rush for physical gold to cover short positions in the wake of the price surge triggered by their announcement. The third occurrence happened last month, and continued for three business days, November 20, 21 and 24. There was not any apparent event triggering this latest backwardation as there was with the two previous occurrences. But it probably reflects the exceptionally strong demand recently for physical metal. We can reasonably conclude from the above observations that gold rarely trades in backwardation. It almost always trades in contango, i.e., the price for delivery today is lower than the price for delivery in the future. Therefore, gold is very different from other commodities, all of which frequently trade in backwardation. Why is gold different? Gold is money. In other words, gold’s usefulness does not arise from its consumption, but rather, from its accumulation. In contrast to all other commodities, gold does not get used up and consumed in its applications. Rather, gold is hoarded, or as I like to say it because it is money, gold is saved. Gold therefore contrasts to all other commodities because it has a huge aboveground stock of inventory that is available to come back into the market in exchange for national currencies if the price is right. This aboveground stock is comprised of essentially all the gold mined throughout history. Other commodities have very little aboveground stock relative to the amount consumed, with the result that shortages in these other commodities can and do occur. These shortages make it difficult if not impossible to arbitrage any backwardation that appears in these other commodities. If there were a huge aboveground inventory, one could sell their inventory today and buy it back in the future at a cheaper price, profiting from the difference. Gold’s huge aboveground stock makes it different from other commodities. Backwardation in gold does not occur in practice because there are always people willing to profit by selling some of their hoard in the spot market and buying back gold at a lower price in the future, except the three rare instances noted above. In the first two instances, the market for physical gold was temporarily disrupted. The reasons for the third backwardation are not yet certain, but it is important to consider its possible causes. The demand for physical gold has been strong recently for a number of reasons, but perhaps the two most important are relatively low US dollar interest rates and the growing concern about counterparty risk. These factors make holding physical gold an increasingly attractive alternative compared to holding US dollars in particular and national currencies generally, and as a result, it is possible that November’s backwardation may be the precursor of a fundamental change in the gold market. What could that change be? We don’t need to speculate here because there are only two possible answers. The first is that gold goes into backwardation because no one who owns gold is willing to sell their hoard at the current price. I noted this possibility in my August 17th alert http://www.goldmoney.com/en/commentary/2008-08-17.html posted on the GoldMoney website. I wrote back then: “The extraordinary demand for coins and small bars can be viewed as an early sign that the market is moving into backwardation. In other words, the backwardation is in effect being reflected by higher premiums above spot for physical metal, rather than spot itself rising and going into backwardation. Central banks do not transact in small bars and their coin transactions are inconsequential compared to the size of the market. So the market for fabricated product is relatively free from government influence. But central banks of course exert a dominant influence on the market for LBMA-sized bars by using their existing gold stocks, and they can keep the spot price for gold (which is determined by the buying/selling of LBMA-sized bars) artificially low by dishoarding gold from their vaults. So my thought is that if gold does not climb back above at least $900 quickly, a shortage of LBMA-sized bars will develop unless central banks allow their vaults to be cleaned out, much like Ft. Knox was drained in the weeks leading up to the 2-tiered London gold price created in March 1968.” The 3-day backwardation in November indicates that a shortage of LBMA bars seems to be developing. The implication is that the gold cartel is about to lose its grip on the gold market, and can no longer cap the gold price at current levels. The second possible answer is more ominous. If gold does trade in backwardation against US dollar for a protracted period (again, barring a very short-term and ephemeral event like the first two instances noted above in which a temporary demand for physical gold disrupts normal market activity), it will mean that a collapse of the dollar has begun. Think about it. How could gold go into backwardation for any prolonged period? If it does, it would mean that no one is willing to take the risk of selling their hoard and instead hold US dollars. It would mean that no one is willing to accept the risks that come with holding dollars while waiting until they can be used at a future date to exchange back into gold. Those risks are: the dollar can be created out of thin air by governments, and
holding dollars has counterparty risk.
The trillions of dollars of newly created bail-out money highlight the first risk, and the sad state of the banking industry today makes clear the second. Physical gold has neither of these risks. So because of the greater risk of holding dollars, dollar interest rates are higher than gold's interest rates. In short, the higher interest rate currency is always in backwardation when the forwards are measured against a currency with lower interest rates. In recent years, the politically correct thing to do is to call gold's interest rate a “lease rate”, which is unfortunate. If people recognized that gold has an interest rate because it is money, they would more quickly grasp the significance of a gold backwardation if it were to occur. The contango is gold's interest rate. For more information about gold backwardation, I recommend the following: a monograph entitled “Golden Sextant” by Reg Howe, which is available at the following link:
http://www.goldensextant.com/goldensextant.html an article by Doug Pollitt, of Pollitt & Co. in Toronto, which can be downloaded by clicking here
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In summary, the market for physical gold is tight. The extraordinarily high premiums now being charged on coins and small bars is the most visible aspect of this incredible tightness. The negative GoFo rate for three days in November is another example. This tightness in the physical market for gold could be a passing phenomenon, but then again, maybe not. It may be any indication that the gold market is profoundly changing, which will cause the price of gold to soar because the gold cartel is unable or unwilling to use any of its remaining inventory to cap the gold price at current levels, or because US dollar is becoming suspect. Then again, it is not unreasonable to conclude that both factors may be at work here. After all, the collapse in the US Dollar Index this month strongly suggests that the dollar’s 4-month bear market rally ended in November. In any case, we’ll know for sure that the gold price is ready to soar if GoFo goes negative and remains negative. If that happens, take note of the old saying that a bird in the hand is worth two in the bush. Own physical metal and not paper. by James Turk ***** James Turk is the Founder & Chairman of GoldMoney.com <http://goldmoney.com/>;. He is the co-author of The Coming Collapse of the Dollar, which has been updated for a newly released paperback version, now entitled The Collapse of the Dollar <www.dollarcollapse.com>. Copyright © 2008 by James Turk. All rights reserved. \
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http://www.investegate.co.uk/invarticle.aspx?id=68374
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Fed Refuses to Disclose Recipients of $2 Trillion (Update2)
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By Mark Pittman
Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression. The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests. “If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets. The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP. Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA. ‘Been Bamboozled’ Congress is demanding more transparency from the Fed and Treasury on bailout, most recently during Dec. 10 hearings by the House Financial Services committee when Representative David Scott, a Georgia Democrat, said Americans had “been bamboozled.” Bloomberg News, a unit of New York-based Bloomberg LP, on May 21 asked the Fed to provide data on collateral posted from April 4 to May 20. The central bank said on June 19 that it needed until July 3 to search documents and determine whether it would make them public. Bloomberg didn’t receive a formal response that would let it file an appeal within the legal time limit. On Oct. 25, Bloomberg filed another request, expanding the range of when the collateral was posted. It filed suit Nov. 7. In response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” in which “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.” Data Provider The Fed supplied copies of three e-mails in response to a request that it disclose the identities of those supplying data on collateral as well as their contracts. While the senders and recipients of the messages were revealed, the contents were erased except for two phrases identifying a vendor as “IDC.” One of the e-mails’ subject lines refers to “Interactive Data -- Auction Rate Security Advisory May 1, 2008.” Brian Willinsky, a spokesman for Bedford, Massachusetts- based Interactive Data Corp., a seller of fixed-income securities information, declined to comment. “Notwithstanding calls for enhanced transparency, the Board must protect against the substantial, multiple harms that might result from disclosure,” Jennifer J. Johnson, the secretary for the Fed’s Board of Governors, said in a letter e-mailed to Bloomberg News. ‘Dangerous Step’ “In its considered judgment and in view of current circumstances, it would be a dangerous step to release this otherwise confidential information,” she wrote. New York-based Citigroup Inc., which is shrinking its global workforce of 352,000 through asset sales and job cuts, is among the nine biggest banks receiving $125 billion in capital from the TARP since it was signed into law Oct. 3. More than 170 regional lenders are seeking an additional $74 billion. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would meet congressional demands for transparency in a $700 billion bailout of the banking system. The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg lawsuit, filed in New York, doesn’t seek money damages. ‘Right to Know’ “There has to be something they can tell the public because we have a right to know what they are doing,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press. “It would really be a shame if we have to find this out 10 years from now after some really nasty class-action suit and our financial system has completely collapsed,” she said. The Fed’s five-page response to Bloomberg may be “unprecedented” because the board usually doesn’t go into such detail about its position, said Lee Levine, a partner at Levine Sullivan Koch & Schulz LLP in Washington. “This is uncharted territory,” said Levine during an interview from his New York office. “The Freedom of Information Act wasn’t built to anticipate this situation and that’s evident from the way the Fed tried to shoehorn their argument into the trade-secrets exemption.” The Fed lent cash and government bonds to banks that handed over collateral including stocks and subprime and structured securities such as collateralized debt obligations, according to the Fed Web site. Borrowers include the now-bankrupt Lehman Brothers Holdings Inc., Citigroup and New York-based JPMorgan Chase & Co., the country’s biggest bank by assets. Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, Scott Talbott, senior vice president of government affairs for the Financial Services Roundtable, a Washington trade group, said in an interview last month. ‘Complete Truth’ “Americans don’t want to get blindsided anymore,” Mendez said in an interview. “They don’t want it sugarcoated or whitewashed. They want the complete truth. The truth is we can’t take all the pain right now.” The Bloomberg lawsuit said the collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression.” In response, the Fed argued that the trade-secret exemption could be expanded to include potential harm to any of the central bank’s customers, said Bruce Johnson, a lawyer at Davis Wright Tremaine LLP in Seattle. That expansion is not contained in the freedom-of-information law, Johnson said. “I understand where they are coming from bureaucratically, but that means it’s all the more necessary for taxpayers to know what exactly is going on because of all the money that is being hurled at the banking system,” Johnson said. The Bloomberg lawsuit is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan). To contact the reporters on this story: Mark Pittman in New York at mpittman@bloomberg.net; Last Updated: December 12, 2008 17:12 EST
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Duncan |
13-Dec-08, 05:32 AM (GMT)
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7. "Germany's bank bailout has failed, MPs say" |
By Bertrand Benoit in Berlin and James Wilson in Frankfurt
Published: December 12 2008 13:35 | Last updated: December 12 2008 17:34
Germany’s banking sector rescue has failed and should be modified urgently if lasting damage to the economy is to be avoided, the MPs who oversee the €500bn ($668bn, £449bn) of funds warned on Friday.In a letter to Peer Steinbrück, the finance minister, obtained by the Financial Times, the MPs said a €400bn fund set up by the government to guarantee bank debt had not led to a resumption of inter-bank lending and that German banks were not providing companies with sufficient credit. In addition to the €400bn fund, the bail-out also includes €80bn for capital injections and €20bn for the purchase of so-called “toxic assets”. The MPs’ appeal will add to pressure on Angela Merkel, chancellor, to reconsider her government’s financial markets stabilisation fund. The appeal may also add to international doubts about Germany’s handling of the financial crisis in the week that Mr Steinbrück harshly criticised the British economic strategy. “Although . . . we can expect that will have been used up in the near future, there is serious concern that the expected revival of the inter-bank lending market will not take place,” Albert Rupprecht, chairman of the parliament’s financial markets committee, wrote to the finance minister.Speaking to the FT in a telephone interview, Mr Rupprecht said: “The expectation that stabilising a few financial institutions would kickstart interbank lending has not materialised. I fear the debt guarantees could soon be exhausted without this having happened.” Soffin, the body set up to run the financial sector rescue fund, said on Friday that it had approved €90bn of guarantees to Commerzbank, BayernLB, HSH Nordbank and Hypo Real Estate, and was considering requests from 11 other banks. It said it believed it had enough margin to cover all requests. Ms Merkel is known to be concerned about the availability of credit after receiving alarming reports that long-term investment in sectors ranging from shipbuilding to renewable energy was being being put on hold due to the absence of funding. Although small and mid-sized companies are still obtaining day-to-day financing from savings and co-operative banks, lending for larger projects has dried up. The issue is likely to come up at a meeting at the chancellery on Sunday where Ms Merkel will discuss the state of the economy with cabinet ministers, economists, banking representatives, and business and union leaders. Mr Rupprecht urged Mr Steinbrück to consider setting up a central clearing house for interbank lending, whereby banks would lend to a government-managed body that would in turn provide short-term financing to other banks. The Bundesbank, which co-manages the stabilisation fund with the finance ministry, is known to be considering creating such a clearing-house. Copyright The Financial Times Limited 2008
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Duncan |
13-Dec-08, 05:32 AM (GMT)
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8. "view any relief rallies from these oversold levels merely as intermission" |
http://www.signalwatch.com/markets/markets-dow.asp
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Former Fed governor hints at big upward revaluation of gold
Submitted by cpowell on 06:25PM ET Friday, December 12, 2008. Section: Daily Dispatches
9:21p ET Friday, December 12, 2008 Dear Friend of GATA and Gold: Interviewed Monday this week on the "Trading Day" program of Business News Network in Canada, former Federal Reserve Governor Lyle Gramley hinted that a big upward revaluation of gold may figure heavily in the Fed's attempt to rescue the U.S. economy. The program's guest host, Niall Ferguson, an author and history professor at Harvard, asked Gramley, now senior adviser at Stanford Group in Houston, about the seemingly grotesque expansion of the Fed's balance sheet in recent months. Ferguson asked: "I've heard it said that the Fed has turned into a government-owned hedge fund, leveraged at 50 to 1. Do you feel nervous about what this might actually do to the Fed's reputation?" Gramley replied: "I think you have to reckon with the fact that one of the Fed's assets is gold certificates, which are priced, as I remember, at $42 an ounce, and if we were to price them at market prices, the Fed's leverage would look a lot less than it is now." While valuing the U.S. government's claimed gold reserves at today's Comex closing price of around $822 per ounce instead of the government antique bookkeeping entry of $42.22 per ounce would indeed vastly expand the government's monetary assets, it might not be enough to offset the liabilities and guarantees the government lately has taken on. But the job might be done by revaluing the gold to $5,000 or $10,000 per ounce, as the British economist Peter Millar speculated two years ago might be necessary to prevent debt deflation: http://www.gata.org/node/4843 You can watch BNN's interview with Gramley here: http://watch.bnn.ca/trading-day/december-2008/trading-day-december-8-200... CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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Comex said warning brokers about December gold squeeze Submitted by cpowell on 08:11PM ET Friday, December 12, 2008. Section: Daily Dispatches
From "Midas" Commentary
by Bill Murphy
LeMetropoleCafe.com
Friday, December 12, 2008 I received a call this morning from a commodities broker who told me that the Comex is alerting various futures firms about the potential of a squeeze on the December contract and is advising the $840 December shorts to exit their positions. That is the remaining open position. There have been 12,636 notices of delivery. The shorts have until December 31 to make delivery. Normally they deliver early to take in cash and earn the interest. They must be delaying. As I understand the situation, that represents about 40 percent of the gold available at the Comex, and of course someone could enter the scene late, buy February gold, and then spread into December, which would stun the shorts. My broker friend said his back office said this sort of alert is highly unusual and that the concern is real, not only for gold, but for other commodities too, like copper and palladium, as there is a good deal of talk of taking deliveries there too. But gold is the one for which the advice to cover went out. This is an extremely productive development and could spur the price of gold up quickly as word spreads. As we all know, buying Comex gold and silver (the cheapest way to buy precious metals) makes all the sense in the world in this financial environment. \
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http://www.financialsense.com/Market/wood/2008/1212.html
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